nep-ene New Economics Papers
on Energy Economics
Issue of 2023‒11‒13
48 papers chosen by
Roger Fouquet, National University of Singapore

  1. Comparison of policy instruments in the development process of offshore wind power in North Sea countries By Zhang, H.; Pollitt, M.
  2. Renewable Energy Support Through Feed-in Tariffs: A Retrospective Stakeholder Analysis By Majid Hashemi; Glenn P. Jenkins; Frank Milne
  3. Can Social Comparisons and Moral Appeals Induce a Modal Shift Towards Low-Emission Transport Modes? By Johannes Gessner; Wolfgang Habla; Ulrich J. Wagner
  4. Greenwashing: Do Investors, Markets and Boards Really Care? By Erdinc Akyildirim; Shaen Corbet; Steven Ongena; Les Oxley
  5. A Framework for Climate Change Mitigation in India By Jean Chateau; Geetika Dang; Ms. Margaux MacDonald; John A Spray; Sneha D Thube
  6. Medium-term Projections of Vehicle Ownership, Energy Demand and Vehicular Emissions in India By B. Ajay Krishna
  7. The Distributional Impact of Price Inflation in Pakistan: A Case Study of a New Price Focused Microsimulation Framework, PRICES By Cathal ODonoghue; Beenish Amjad; Jules Linden; Nora Lustig; Denisa Sologon; Yang Wang
  8. Impact énergétique et environnemental du futur mega-datacenter sur le territoire Ivoirien By Souleymane Kone
  9. Determinants of renewable energy consumption in Madagascar: Evidence from feature selection algorithms By Ramaharo, Franck Maminirina; RANDRIAMIFIDY, Michael Fitiavana
  10. A New Electrification Model to End Energy Poverty: An example from a novel rural electrification approach in Madagascar By Lucas Richard; Nicolas Saincy; Nolwenn Le Saux; David Frey; Marie-Cécile Alvarez-Herault; Bertrand Raison
  11. Une approche d'analyse basée sur la théorie des parties prenantes pour la gestion durable du cycle de vie des véhicules en Afrique subsaharienne. By Souleymane Kone
  12. Fiscal Policy Regimes in Resource-Rich Economies By Hilde C. Bjørnland; Roberto Casarin; Marco Lorusso; Francesco Ravazzolo
  13. Is the Price Cap for Gas Useful? Evidence from European Countries By Ravazzolo, Francesco; Rossini, Luca
  14. Bidding and Investment in Wholesale Electricity Markets: Discriminatory versus Uniform-Price Auctions By Willems, Bert; Yu, Yueting
  15. The Persistence of Volumetric Pricing By Brennan, Tim
  16. Oil price shocks and energy transition in Africa By Tii N. Nchofoung
  17. Direct Air Carbon Capture and Storage: A game changer in climate policy? By Breitschopf, Barbara; Dütschke, Elisabeth; Duscha, Vicki; Haendel, Michael; Hirzel, Simon; Kantel, Anne; Lehmann, Sascha; Marscheider-Weidemann, Frank; Riemer, Matia; Tröger, Josephine; Wietschel, Martin
  18. Direct Air Carbon Capture and Storage: Ein Gamechanger in der Klimapolitik? By Breitschopf, Barbara; Dütschke, Elisabeth; Duscha, Vicki; Haendel, Michael; Hirzel, Simon; Kantel, Anne; Lehmann, Sascha; Marscheider-Weidemann, Frank; Riemer, Matia; Tröger, Josephine; Wietschel, Martin
  19. The Drivers of Emission Reductions in the European Carbon Market By Hilde C. Bjørnland; Jamie L. Cross; Felix Kapfhammer
  20. Environnement : la sobriété comme levier essentiel de la transition By Stéphanie Monjon
  21. Operating-Envelopes-Aware Decentralized Welfare Maximization for Energy Communities By Ahmed S. Alahmed; Guido Cavraro; Andrey Bernstein; Lang Tong
  22. Skills and human capital for the low-carbon transition in developing and emerging economies By Francesco Vona
  23. Implications of fuel subsidy removal on the Nigerian economy By Ozili, Peterson K
  24. Climate Risk, Bank Lending and Monetary Policy By Carlo Altavilla; Marco Pagano; Miguel Boucinha; Andrea Polo
  25. Risk valuation of quanto derivatives on temperature and electricity By Aur\'elien Alfonsi; Nerea Vadillo
  26. The effects on the economy and environment caused by electric cars compared to the conventional ones By Bledea, Cosmin Codruț; Pop, Izabela Luiza; Toader, Rita Monica
  27. The Unintended Consequences of Trade Protection on the Environment By Taipeng Li; Lorenzo Trimarchi; Guohao Yang; Rui Xie
  28. Mitigating Exposure and Climate Change Impacts from Transportation Projects: Environmental Justice-Centered Decision-Support Framework and Tool By Horvath, Arpad PhD; Greer, Fiona PhD; Apte, Joshua PhD; Rakas, Jasenka PhD
  29. Disentangling the Roles of Growth Uncertainty, Discounting, and the Climate Beta on the Social Cost of Carbon By Prest, Brian C.
  30. Klimapolitik 2023: Widersprüchliche Signale By Lerch, Achim
  31. Impact of Economic Growth, Energy Consumption and Urbanization on Carbon Dioxide Emissions in the Kingdom of Saudi Arabia By Ali, Amjad; Sumaira, Sumaira; Siddique, Hafiz Muhammad Abubakar; Ashiq, Saima
  32. Making renewable energies drivers of competitiveness in the EU Outermost Regions By OECD
  33. The Infrastructure Cost for Depot Charging of Battery Electric Trucks By Wang, Guihua; Miller, Marshall; Fulton, Lewis
  34. Must Pollution Abatement Harm the Supplier in a Multi-Echelon Supply Chain? By Saglam, Ismail
  35. Relationship between inequality and economic growth in countries highly dependent on oil exports By Shapor, Maria (Шапор, Мария)
  36. Incentivizing Data Sharing for Energy Forecasting: Analytics Markets with Correlated Data By Thomas Falconer; Jalal Kazempour; Pierre Pinson
  37. Impact of Innovation on CO2 Emissions in South Asian Countries By Ashiq, Saima; Ali, Amjad; Siddique, Hafiz Muhammad Abubakar; Sumaira, Sumaira
  38. Skills and human capital for the low-carbon transition in developing and emerging economies By Vona, Francesco
  39. Banning short-haul domestic flights: A preliminary assessment for France By Bonilla, Xavier; Ivaldi, Marc
  40. The imperative for integrative low emissions development:evaluating integrative fit of low emissions development strategies across eight countries By Annette Zou
  41. The climate implications of government support in aluminium smelting and steelmaking: An Empirical Analysis By Grégoire Garsous; Donal Smith; Dylan Bourny
  42. In brief... How citizens help expose environmental wrongdoing By Jonathan Colmer; Mary F. Evans; Jay Shimshack
  43. Global energy crisis: impact on the global economy By Ozili, Peterson K
  44. Climate Change and Government Borrowing Costs: A Triple Whammy for Emerging Market Economies By Benedict Clements; Sanjeev Gupta; João Jalles; Bernat Adrogue
  45. Assessing the data challenges of climate-related disclosures in european banks. A text mining study By Ángel Iván Moreno; Teresa Caminero
  46. Power outages and firm performance: a hydro-IV approach for a single electricity grid By Elliott, Robert J.R.; Nguyen-Tien, Viet; Strobl, Eric A.
  47. Recessions, the energy mix and environmental policy By Pragyan Deb; Davide Furceri; Jonathan Ostry; Nour Tawk
  48. Housing cooperatives facing the energy transition. Insights from Poland and Czechia By Jan Frankowski; Tomasz Œwietlik; Aleksandra Prusak; Jakub Sokolowski; Joanna Mazurkiewicz; Wojciech Be³ch; Nicol Staòková

  1. By: Zhang, H.; Pollitt, M.
    Abstract: Offshore wind power has made remarkable strides over the past decade, establishing itself as a financially viable technology with substantial potential to drive the energy transition of North Sea countries. The energy crisis commencing in 2021 further underscored the critical role of offshore wind in attaining net zero climate (or climate neutrality) objectives, prompting North Sea countries to adopt comprehensive strategies, including a fundamental energy system overhaul centred around offshore wind. Consequently, these countries have set ambitious offshore wind installation targets for both 2030 and 2050. To assess the attainability of these targets, this paper conducts an extensive policy analysis of the eight nations surrounding the North Sea, focusing primarily on the development stage, a crucial determinant of project success. Notably, competitive tenders and Contract for Difference (CfD) mechanisms are becoming standard tools across the region, indicating a collective shift towards efficient subsidy frameworks. Historical data and disparities suggest the formidable challenges in achieving the 2030 and 2050 targets, with streamlining the approval process emerging as a top priority. The emergence of negative subsidies in conjunction with zero-bid scenarios is reshaping industry paradigms is significantly impacting offshore wind project economics.
    Keywords: Offshore wind, Contract for Difference, North Sea
    JEL: L94 Q25
    Date: 2023–10–20
  2. By: Majid Hashemi (Department of Economics Queen’s University Canada); Glenn P. Jenkins (Department of Economics, Queens University, Kingston, Ontario, Canada and Cyprus International University, North Cyprus); Frank Milne (Department of Economics, Queens University, Kingston, Ontario, Canada)
    Abstract: This study develops a generalized evaluation framework that can be used to quantify the financial, economic, stakeholder, and environmental impacts of renewable energy support programs. The application of this framework is demonstrated by evaluating the Feed-In Tariff (FIT) program for solar distributed energy resources (DER) in Ontario, Canada. Our analysis reveals that although Ontario’s FIT program has successfully promoted the adoption of solar DER across communities, considering all the criteria of cost-benefit analysis, including optimal timing, economic resource efficiency, environmental cost-effectiveness, and distributional impacts, this policy has been a complete failure. The program has led to a significant cross-subsidization from program non-participants to participants and losses to the Canadian economy in return for insignificant environmental benefits. The losses would have been reduced by approximately 50 percent if the program had been delayed and implemented in 2016 instead of 2010. The lessons from this analysis provide insights for designing future policies to reduce greenhouse gas emissions.
    Keywords: renewable energy subsidy; distributed energy resources; feed-in tariff; stakeholder analysis; benefit-cost analysis; Ontario; Canada.
    JEL: O2 D61 Q42 Q48
    Date: 2023–10–17
  3. By: Johannes Gessner; Wolfgang Habla; Ulrich J. Wagner
    Abstract: To reduce CO2 emissions, some companies have introduced mobility budgets that employees can spend on leisure and commuting trips, as an alternative to subsidized company cars. Given their novelty, little is known about how mobility budgets should be designed to encourage sustainable transportation choices. Since prices play a limited role in this subsidized setting, our study focuses on behavioral interventions. In a field experiment with 341 employees of a large German company, we test whether social comparisons, either in isolation or in combination with a climate-related moral appeal, can change the use of different means of transportation. We find strong evidence for a reduction in car-related mobility in response to the combined treatment, which is driven by changes in taxi and ride-sharing services. This is accompanied by substitution towards micromobility, i.e., transport modes such as shared e-scooters or bikes, but not towards public transport. We do not find robust evidence for effects of the social comparison alone. Furthermore, survey evidence suggests that effects may be driven by a climate-aware minority and that participants indeed felt a moral obligation to comply with the social norm. Our results demonstrate that small, norm-based nudges can change transportation behavior, albeit for a limited time.
    Keywords: mobility behavior, randomized experiment, nudging, descriptive norm, injunctive norm, social norms, moral appeal, habit formation
    JEL: C93 D04 D91 L91
  4. By: Erdinc Akyildirim (Bogazici University and University of Zurich); Shaen Corbet (Dublin City University ; University of Waikato); Steven Ongena (University of Zurich; Swiss Finance Institute; KU Leuven; NTNU Business School; CEPR); Les Oxley (University of Waikato)
    Abstract: What are the financial repercussions of corporate greenwashing? To answer this question, we focus on the impact of such ethically flawed practices on corporate stock market performance. We find a broad devaluation, with an average abnormal stock return of -0.63%, indicating investor disapproval of deceptive environmental claims. We further find a shift in investor sentiment in parallel with the growth of social media, underscoring the potential for future swift and extensive reputational damage. National regulatory power is also identified as a determinant of market response intensity. Industries inherently associated with environmental concerns, particularly energy and manufacturing, experienced more pronounced market reactions, pointing to heightened stakeholder scrutiny. Furthermore, nations with robust environmental values and consciousness witnessed intensified market penalties for greenwashing, revealing the interplay of societal values, national rules and investor sentiment.
    Keywords: Greenwashing; ESG; CSR; Regulation; Reputational Risk
    JEL: G01 G14 G38
    Date: 2023–10
  5. By: Jean Chateau; Geetika Dang; Ms. Margaux MacDonald; John A Spray; Sneha D Thube
    Abstract: Climate change poses challenging policy tradeoffs for India. The country faces the challenge of raising living standards for a population of 1.4 billion while at the same time needing to be a critical contributor to reducing global GHG emissions. The government has implemented numerous policies to promote the manufacturing and use of renewable energy and shift away from coal, but much still needs to be done to reach India’s 2070 net zero goal. Reducing GHG emissions will almost certainly have a negative impact on growth in the short run and have important distributional consequences for individuals and communities who today rely on coal. But with the right policies, these costs—which are non-negligible but dwarfed by the cost of climate change over the next decade if no action is taken—can be significantly curtailed. This paper provides an in depth review of the current climate policy landscape in India and models emissions trajectories under different policy options to reduce GHG emissions.
    Keywords: Climate; IMF-ENV; India; net zero
    Date: 2023–10–20
  6. By: B. Ajay Krishna (Phd Research Scholar(Corresponding author), Madras School of Economics)
    Abstract: Rapid growth of private vehicle ownership in emerging economies like India has serious implications on its existing transport infrastructure, future energy demands and emission reduction targets. While vehicle ownership in India is considerably low compared to advanced economies, an expected economic growth, along with rising population and inability of public transport to meet the travel demands would lead to increase in future private vehicle stock, subsequent fuel demand and resulting vehicular emissions. This study contributes to the literature by projecting various medium-term future scenarios of vehicle stock, fuel demand and vehicular emission projections based on multiple economic growth rate and electric vehicle (EV) adoption scenarios. A non-linear Gompertz function has been estimated to describe the association between economic growth and vehicle ownership using time series data ranging from 1960 to 2019. Using an incremental addition to the vehicle stock based on past vehicle registration, study forecasts 107-145 million new vehicles will be added to existing stock by 2030. Subsequently, private transport fuel demand is predicted to peak around 60 million metric tons per annum during this period. Correspondingly, CO2 emission from private vehicle use is estimated to peak at 174 million tons per annum. Further, appropriate transport policy measures and investment spheres in terms of road network requirement have been explored which would facilitate reducing private vehicles dependency and regulate vehicular emissions.
    Keywords: Vehicle Ownership; Carbon Emissions; Fuel Demand; Gompertz Function; Transport Policy
    JEL: Q47 Q54 R48 R49
  7. By: Cathal ODonoghue; Beenish Amjad; Jules Linden; Nora Lustig; Denisa Sologon; Yang Wang
    Abstract: This paper developed a microsimulation model to simulate the distributional impact of price changes using Household Budget Survey data, Income Survey data and an Input-Output Model. We use the model to assess the distributional and welfare impact of recent price changes in Pakistan. Particular attention is paid to price changes in energy goods and food. We firstly assessed the distributional pattern of expenditures, with domestic energy fuels concentrated at the bottom of the distribution and motor fuels at the top. The budget share of electricity and motor fuels is particularly high, while domestic fuels is relatively low. While the distributional pattern of domestic fuel and electricity consumption is similar to other countries, there is a particularly high budget elasticity for motor fuels. The analysis shows that despite large increases in energy prices, the importance of energy prices for the welfare losses due to inflation is limited. The overall distributional impact of recent price changes is mildly progressive, but household welfare is impacted significantly irrespective of households position along the income distribution. The biggest driver of the welfare loss at the bottom was food price inflation, while other goods and services were the biggest driver at the top of the distribution. To compensate households for increased living costs, transfers would need to be on average 40 percent of disposable income. Behavioural responses to price changes have a negligible impact on the overall welfare cost to households.
    Date: 2023–09
  8. By: Souleymane Kone (UPGC - Université Péléforo Gon Coulibaly)
    Abstract: Cette étude est exploratoire et aborde la question des conséquences négatives des technologies de l'information sur l'environnement. Il existe encore assez peu de travaux centrés en management des systèmes d'information traitant de la problématique énergétique et de pollution de l'industrie du numérique en Afrique subsahariennes. C'est bien l'objet de cette recherche qui expose dans un premier temps une revue de la littérature sur les enjeux énergétique environnementaux des TIC, notamment les centre de données contraints de fonctionner sans interruption à l'énergie fossile avec un appui sur la théorie institutionnelle et ensuite une étude empirique sur la politique managériale et les pratiques mises en place par les acteurs du nouveau méga-datacenter à Abidjan afin de réduire l'impact énergétique et écologique du numérique aux conséquences incalculables, eu égard à la forte croissance des besoin en ressources numériques.
    Keywords: énergie, pollution, Green IT, Ecoresponsabilité, Sustainable IT, data centers, eco-responsabilité, Afrique sub saharienne, Datacenter, numérique
    Date: 2023
  9. By: Ramaharo, Franck Maminirina (Ministry of Economy and Finance (Ministère de l'Economie et des Finances)); RANDRIAMIFIDY, Michael Fitiavana
    Abstract: The aim of this note is to identify the factors influencing renewable energy consumption in Madagascar. We tested 12 features covering macroeconomic, financial, social, and environmental aspects, including economic growth, domestic investment, foreign direct investment, financial development, industrial development, inflation, income distribution, trade openness, exchange rate, tourism development, environmental quality, and urbanization. To assess their significance, we assumed a linear relationship between renewable energy consumption and these features over the 1990–2021 period. Next, we applied different machine learning feature selection algorithms classified as filter-based (relative importance for linear regression, correlation method), embedded (LASSO), and wrapper-based (best subset regression, stepwise regression, recursive feature elimination, iterative predictor weighting partial least squares, Boruta, simulated annealing, and genetic algorithms) methods. Our analysis revealed that the five most influential drivers stem from macroeconomic aspects. We found that domestic investment, foreign direct investment, and inflation positively contribute to the adoption of renewable energy sources. On the other hand, industrial development and trade openness negatively affect renewable energy consumption in Madagascar.
    Date: 2023–10–26
  10. By: Lucas Richard (G2Elab-EP - G2Elab-Electronique de puissance - G2ELab - Laboratoire de Génie Electrique de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes, G2Elab-SYREL - G2Elab-SYstèmes et Réseaux ELectriques - G2ELab - Laboratoire de Génie Electrique de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes); Nicolas Saincy; Nolwenn Le Saux; David Frey (G2Elab-EP - G2Elab-Electronique de puissance - G2ELab - Laboratoire de Génie Electrique de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes); Marie-Cécile Alvarez-Herault (G2Elab-SYREL - G2Elab-SYstèmes et Réseaux ELectriques - G2ELab - Laboratoire de Génie Electrique de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes); Bertrand Raison (G2Elab-SYREL - G2Elab-SYstèmes et Réseaux ELectriques - G2ELab - Laboratoire de Génie Electrique de Grenoble - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes)
    Abstract: Highlighted by the United Nations Sustainable Development Goals to ensure universal access to clean, reliable and modern energy services by 2030, the world is increasingly getting concerned by the energy poverty and its consequences on human development and the environment. Yet, even if numerous initiatives and a significant amount of money are directly addressed to tackle the energy-access challenges, a billion people are still denied access to basic and modern electricity services, especially in rural places of Sub-Saharan Africa and SouthEast Asia. The African continent has seen in the past two decades an encouraging improvement as the number of people gaining access to electricity rose from 9 million per year between 2000 and 2013 to 20 million per year between 2014 and 2019, outpacing for the first time population growth. However, the vast majority of those recent improvements are mainly restricted to urban and peri-urban areas of a small number of countries located in Eastern or Western Africa and the population without access to electricity in Africa is expected to increase in the coming years following the health crisis and economic downturn caused by Covid-19. This definitely proves the fragility and the poor resilience of the electrification solutions favored nowadays. While grid extension and conventional microgrids suffer from low inclusivity and replicability, Solar Home Systems are only a stopgap measure failing to boost socioeconomic development. A third way must be proposed to combine quick and affordable access to basic electricity services and a community uplift through socioeconomic development, answering both greatest challenges that the developing countries are struggling to cope with nowadays. With this objective in mind, Nanoé, a French-Malagasy social company, is developing the Lateral Electrification model based on the collaborative and progressing building of electric infrastructures, which is presented in this article, first from a general point of view then through a focus on Nanoé's experience in Madagascar.
    Date: 2023
  11. By: Souleymane Kone (UPGC - Université Péléforo Gon Coulibaly)
    Abstract: Cette communication est exploratoire et aborde la question des conséquences négatives des déchets automobiles sur l'environnement. Il existe encore assez peu de travaux centrés en management des systèmes d'information traitant de la problématique de la pollution de l'écosystème automobile et de l'impact des relations complexes entre les principaux acteurs du secteur de l'automobile sur la gestion du cycle de vie. Cette recherche vise à adopter la théorie des partie prenantes dans le champ du green IT pour comprendre la dynamique de la gestion du cycle de vie, modéliser les actions menées par différentes entités dans le but de trouver des solutions adaptées aux déchets de véhicules usagés, afin de réduire leur impact écologique dans le secteur actuellement en forte croissance en Afrique subsaharienne. Nous terminerons par quelques recommandations managériales et technologiques
    Keywords: Afrique subsaharienne, automobile, pollution, Green IT, Ecoresponsabilité, cycle de vie des véhicules
    Date: 2023
  12. By: Hilde C. Bjørnland; Roberto Casarin; Marco Lorusso; Francesco Ravazzolo
    Abstract: We analyse fiscal policy in resource-rich economies using a novel Bayesian regime-switching panel model. The identified regimes capture pro- or countercyclical fiscal behaviour, while the switches between the regimes have the interpretation of changes in fiscal policy. Applying the model to sixteen oil-producing economies, we show that fiscal policy has alternated between a procyclical and countercyclical regime multiple times over the sample. Furthermore, we find fiscal policy to be more volatile in the procyclical regime and that the probability of being in the procyclical regime is higher for OPEC countries rather than non-OPEC countries. We also show that following either an increase or decrease in oil revenues, the growth in government expenditure mostly increases, suggesting there is an upward bias in expenditures in oil-producing countries. These are new findings in the literature.
    Date: 2023–10
  13. By: Ravazzolo, Francesco; Rossini, Luca
    Abstract: Since Russia’s invasion of Ukraine, many countries have pledged to end or restrict their oil and gas imports to curtail Moscow’s revenues and hinder its war effort. Thus, the European ministers agreed to trigger a cap on the gas price. To detect the importance of the price cap for gas, we provide a mixture representation for the gas price to detect the presence of outliers made by a truncated normal distribution and a uniform one. We focus our analysis on Germany and Italy, which are major Russian gas importers by exploiting the response of the different commodities to a gas shock through a Bayesian vector autoregressive (VAR) model. As a result, including a lower gas price cap smooths the impact of a gas shock on electricity prices, while not considering a price cap will increase exponentially this impact.
    Keywords: Public Economics, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy
    Date: 2023–10–30
  14. By: Willems, Bert (Université catholique de Louvain, LIDAM/CORE, Belgium); Yu, Yueting (Tilburg University)
    Abstract: We compare uniform and discriminatory-price auctions in wholesale electricity markets, studying both long-run investment incentives and short-run bidding behaviors. We develop a monopolistic competition model with a continuum of generation technologies ranging from base load to peak load, free entry and uncertain elastic demand. Our findings reveal that discriminatory-price auctions are inefficient because consumers’ willingness to pay exceeds the marginal costs and investment incentives are distorted. Despite having an equal total installed capacity, the generation mix under discriminatory-price auctions skews towards a shortage of base-load technologies. Consequently, this results in a lower long-run consumer surplus.
    JEL: D44 D47 L94
    Date: 2023–08–31
  15. By: Brennan, Tim (Resources for the Future)
    Abstract: How to recover the costs of electricity distribution has become a prominent and controversial issue in the wake of California Public Utilities Commission proposals to reform compensation for solar electricity homeowners who sell into the grid, with subsequent proposals to recover more of the distribution costs through fixed charges based on household income. This debate raises questions about the ubiquity of volumetric pricing for fixed-cost recovery in regulated industries. Ideal cost recovery entails marginal cost pricing of kilowatt-hours delivered, per-user connections, and capacity needed to handle coincident peak use. Remaining uncovered costs of distribution should be recovered by fixed charges. Equity and efficiency considerations suggest assigning fixed charges on the basis of willingness to pay or income, although neither is perfect. Nevertheless, volumetric recovery of fixed costs has persisted for several reasons: mistaken analogies to competitive markets, simplicity, network effects, incumbent resistance, and fairness and rights. Getting pricing right matters not just for general efficiency but also to remove pricing barriers to decarbonization. For this reason, electricity regulators should consider recovering more fixed costs through fixed charges.
    Date: 2023–10–20
  16. By: Tii N. Nchofoung (University of Dschang, Cameroon)
    Abstract: When commodity prices rise in international markets, Africa's economic performance scarcely improves, and when commodity prices fall, its economic performance suffers substantially. This study examines the effect of oil price shocks on Africa’s energy transition (ET). Data is obtained for 53 African countries between 2000 and 2020, with the Driscoll and Kraay and Panel VAR regression procedures used. The results reveal that oil price shocks have an adverse influence on Africa's ET, with the findings being strong in both rural and urban contexts. Furthermore, the results expose that the adverse effect is visible only in net crude oil exporting countries, whereas net oil importing countries have no significant effect. Moreover, oil price shocks cannot explain Africa's urban-rural differences in clean energy access. As policy implications, African policymakers should reduce the rural-urban gap in clean energy by investing more in clean energy and technologies in rural areas, which help enhance the resilience of the energy sector to oil price shocks.
    Keywords: Crude oil price shocks, energy transition; Panel VAR, Africa
    Date: 2023–01
  17. By: Breitschopf, Barbara; Dütschke, Elisabeth; Duscha, Vicki; Haendel, Michael; Hirzel, Simon; Kantel, Anne; Lehmann, Sascha; Marscheider-Weidemann, Frank; Riemer, Matia; Tröger, Josephine; Wietschel, Martin
    Abstract: What is Direct Air Carbon Capture and Storage (DACCS) and could it be a game changer in climate policy? In this policy brief, we answer these and further questions.
    Date: 2023
  18. By: Breitschopf, Barbara; Dütschke, Elisabeth; Duscha, Vicki; Haendel, Michael; Hirzel, Simon; Kantel, Anne; Lehmann, Sascha; Marscheider-Weidemann, Frank; Riemer, Matia; Tröger, Josephine; Wietschel, Martin
    Abstract: Was ist Direct Air Carbon Capture and Storage (DACCS) und kann die Methode ein Gamechanger in der Klimapolitik werden? Diese und weitere Fragen beantworten wir in diesem Policy Brief .
    Date: 2023
  19. By: Hilde C. Bjørnland; Jamie L. Cross; Felix Kapfhammer
    Abstract: This paper studies the drivers of emission reductions in the carbon market of the European Union Emission Trading System (EU ETS) since its inception in 2005. We introduce a novel empirical framework that facilitates the joint identification of simultaneous demand and supply shocks underlying the European carbon market. We find that emission supply restrictions of the EU ETS were the dominant driver of emissions reductions, reducing emissions by 46%. However we also find that two opposing emission demand factors also played an important role. Demand from industrial economic activity increased emissions by 15%, while other demand-side factors, primarily reflecting the transition to low-carbon economies, reduced emissions by 21%.
    Keywords: climate policy, carbon pricing, emission trading system, cap and trade, demand and supply
    JEL: Q41 Q54 Q58
    Date: 2023–10
  20. By: Stéphanie Monjon (LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique)
    Abstract: En lien avec de nombreuses notions comme la frugalité, le minimalisme, le low tech, ou encore le zéro déchet, la sobriété est portée par des acteurs de la société civile depuis les années 2000. Pourtant, elle a été pendant longtemps absente de la sphère politique, jusqu'à ce que l'urgence actuelle l'impose.
    Keywords: Sobriété énergétique, transition énergétique, facture énergétique, consommation énergétique, gaz, électricité, pétrole, France
    Date: 2023
  21. By: Ahmed S. Alahmed; Guido Cavraro; Andrey Bernstein; Lang Tong
    Abstract: We propose an operating-envelope-aware, prosumer-centric, and efficient energy community that aggregates individual and shared community distributed energy resources and transacts with a regulated distribution system operator (DSO) under a generalized net energy metering tariff design. To ensure safe network operation, the DSO imposes dynamic export and import limits, known as dynamic operating envelopes, on end-users' revenue meters. Given the operating envelopes, we propose an incentive-aligned community pricing mechanism under which the decentralized optimization of community members' benefit implies the optimization of overall community welfare. The proposed pricing mechanism satisfies the cost-causation principle and ensures the stability of the energy community in a coalition game setting. Numerical examples provide insights into the characteristics of the proposed pricing mechanism and quantitative measures of its performance.
    Date: 2023–10
  22. By: Francesco Vona (University of Milan and Fondazione Eni Enrico Mattei)
    Abstract: Developing and emerging economies face enormous challenges to reconcile economic development and job creation with decarbonization. An essential aspect of such “early-stage” decoupling of growth and carbon emissions is to develop a skill base that favours the diffusion of green productions and technologies. This paper sheds light on the role of the adjustments in the skill supply and of labour market institutions to pursue such early stage decoupling in developing and emerging economies. The paper begins by defining green growth strategies and the associated green skill requirement. To overcome measurement issues and data limitations, it then assesses the advantages and disadvantages of the task-based approach to green labour markets, emphasizing critical issues for developing countries as well as the opportunities to collect original data. Finally, it derives some policy recommendations to solve the coordination failure between investments in skills, particularly technical skills, and green technology adoption.
    Keywords: Skills, tasks, green economy, developing and emerging economies, structural change, green technological change, labour market institutions
    JEL: J24 Q56 O13 O14
    Date: 2023–10
  23. By: Ozili, Peterson K
    Abstract: Using the discourse analysis methodology, we offer some insight into the macroeconomic and microeconomic implications of the 2023 fuel subsidy removal in Nigeria. The positive implications are that fuel subsidy removal would free up financial resources for other sectors of the economy, incentivize domestic refineries to produce more petroleum products, reduce Nigeria’s dependence on imported fuel, increase employment, channel funds for the development of critical public infrastructure, reduce the budget deficit and generate a budget surplus in the near future, reduce government borrowing, curb corruption associated with fuel subsidy payments, increase competition, reinvigorate domestic refineries and reduce pressure on the exchange rate. The negative implications are that fuel subsidy removal may decrease economic growth in the short term, increase inflation, increase poverty, increase fuel smuggling, increase crime, increase the prices of petroleum products and loss of jobs in the informal sector. It is recommended that the government should carefully evaluate the impact of fuel subsidy removal on individuals and businesses and provide palliatives and other economic relief programs to cushion the adverse effect on individuals and firms.
    Keywords: fuel subsidy removal, Nigeria, economic growth, poverty, unemployment, corruption, fiscal deficit
    JEL: Q40 Q48
    Date: 2023
  24. By: Carlo Altavilla (European Central Bank, CSEF and CEPR.); Marco Pagano (University of Naples Federico II, CSEF, EIEF, and CEPR.); Miguel Boucinha (European Central Bank); Andrea Polo (Luiss University, EIEF, CEPR and ECGI.)
    Abstract: Combining euro-area credit register and carbon emission data, we provide evidence of a climate risk-taking channel in banks’ lending policies. Banks charge higher interest rates to firms featuring greater carbon emissions, and lower rates to firms committing to lower emissions, controlling for their probability of default. Both effects are larger for banks committed to decarbonization. Consistently with the risk-taking channel of monetary policy, tighter policy induces banks to increase both credit risk premia and carbon emission premia, and reduce lending to high emission firms more than to low emission ones. While restrictive monetary policy increases the cost of credit and reduces lending to all firms, its contractionary effect is milder for firms with low emissions and those that commit to decarbonization.
    Keywords: climate risk, carbon emissions, interest rate, lending, monetary policy.
    JEL: E52 G21 Q52 Q53 Q54 Q58
    Date: 2023–10–18
  25. By: Aur\'elien Alfonsi; Nerea Vadillo
    Abstract: This paper develops a coupled model for day-ahead electricity prices and average daily temperature which allows to model quanto weather and energy derivatives. These products have gained on popularity as they enable to hedge against both volumetric and price risks. Electricity day-ahead prices and average daily temperatures are modelled through non homogeneous Ornstein-Uhlenbeck processes driven by a Brownian motion and a Normal Inverse Gaussian L\'evy process, which allows to include dependence between them. A Conditional Least Square method is developed to estimate the different parameters of the model and used on real data. Then, explicit and semi-explicit formulas are obtained for derivatives including quanto options and compared with Monte Carlo simulations. Last, we develop explicit formulas to hedge statically single and double sided quanto options by a portfolio of electricity options and temperature options (CDD or HDD).
    Date: 2023–10
  26. By: Bledea, Cosmin Codruț; Pop, Izabela Luiza; Toader, Rita Monica
    Abstract: From year to year, the environment situation is worsening at an alarming rate. Air pollution has reached record levels, which is why ozone layer have come to be seriously affected. All these aspects lead to the warming of Earth and had a negative impact on people’s health. Therefore, humanity has begun to focus more and more on remedying these adverse effects through various methods, which are more or less effective. In the case of CO2 emissions that are higher than ever, the solution is a very complex one and difficult to achieve. For this reason, various alternatives have appeared: electric cars, hybrid cars, as well as those with hydrogen, compressed natural gas and bioethanol. Since electric cars are the first choice as an alternative and they have shown a great potential, the purpose of this paper is to present whether or not this alternative is really a “greener” choice or not. To achieve this purpose, a literature review and a data analysis provided by Eurostat, U.S. Department of Energy and the Organization of the Petroleum Exporting Countries were performed. The results of this study highlight that the sustainability of the electric cars is influenced by the geographical area where they are used.
    Keywords: Economy, Environment, Electric Cars, Sustainability
    JEL: O10 O13
    Date: 2022–05–31
  27. By: Taipeng Li (Hunan University); Lorenzo Trimarchi (Development Finance and Public Policies, University of Namur); Guohao Yang (University College Dublin); Rui Xie (Hunan University)
    Abstract: We analyze the impact of a rise in protectionism on environmental regulation. Using the 2018 US-China trade war as a quasi-natural experiment, we find that higher exposure to Trump tariffs leads to less stringent regulation targets in China, increasing air pollution and carbon emissions. Politically motivated changes in environmental policies rationalize our results: the central government and local party secretaries relax environmental regulations to mitigate the negative consequences of trade protection for the polluting industries. We find heterogeneous effects depending on politicians’ characteristics: younger, recently appointed, and more connected local politicians are more likely to ease environmental regulation if their prefecture is more exposed to the tariff shock. This policy reaction benefits politicians: prefectures with the most considerable easing in environmental regulation manage to curb the negative economic consequences of the trade war, while their mayors have a relatively larger probability of promotion to a higher level of government. This paper presents the first empirical evidence documenting politicians manipulating environmental regulation to curb negative economic shocks.
    Date: 2023–10
  28. By: Horvath, Arpad PhD; Greer, Fiona PhD; Apte, Joshua PhD; Rakas, Jasenka PhD
    Abstract: California must operate and maintain an effective and efficient transportation infrastructure while ensuring that the health of communities and the planet are not compromised. By assessing transportation projects using a life-cycle perspective, all relevant emission sources and activities from the construction, operation, maintenance, and end-of-life phases can be analyzed and mitigated. This report presents a framework to assess the life-cycle human health and climate change impacts from six types of transportation projects: (1) Roadways; (2) Marine ports; (3) Logistical distribution centers; (4) Railyards; (5) Bridges and overpasses; and (6) Airports. The framework was applied using an integrated model to assess fine particulate matter (PM2.5) and greenhouse gas (GHG) emissions, noise impacts, and monetized damages (Value of Statistical Life, Social Cost of Carbon) from two case studies: routine resurfacing and vehicle operations on road segments within the San Francisco Bay Area using 2019 data, and annual marine, cargo, rail, trucking, and infrastructure maintenance operations at the Port of Oakland in 2020. The results suggest that emission sources in a project’s supply chain and construction (material production and deliveries, construction activities, fuel refining) can significantly contribute to the full scope of impacts from transportation systems. Equitable mitigation policies (e.g., electrification, pollution control technologies) need to be tailored to address the sources that impact communities the most.
    Keywords: Engineering, Environmental justice, life cycle analysis, decision support systems, greenhouse gases, particulates, emissions, highways, ports, railroad yards
    Date: 2023–10–01
  29. By: Prest, Brian C. (Resources for the Future)
    Abstract: Getting the discount rate right is essential for estimating the social cost of carbon (SCC). Changing the discount rate from 3 to 2 percent—a change approximately consistent with recently proposed updates to federal guidance (OMB 2023a, b)—can more than double the SCC (see, e.g., Rennert et al. 2022; Barrage and Nordhaus 2023). Further, when estimating the SCC, it is common to adjust discount rates to account for uncertainty in future consumption growth and its covariance with uncertain climate impacts (or, alternatively, climate impacts’ covariance with market returns), often called the “climate beta” (Gollier 2014; Dietz et al. 2018). Yet disagreement remains as to whether this adjustment should result in a higher or lower discount rate, largely due to disagreement about the magnitude and sign of the climate beta (see, e.g., Groom et al. 2022; Drupp et al. 2023; Lemoine 2021; Dietz et al. 2018). While major integrated assessment models (IAMs) like William Nordhaus’s DICE model feature a positive climate beta and therefore employ a higher discount rate (Barrage and Nordhaus 2023), others have argued for a negative beta, implying lower discount rates (e.g., Howard and Schwartz 2022; Lemoine 2021). This debate has major consequences for estimates of the SCC, wherein a positive risk adjustment to the discount rate (positive beta) is commonly presumed to correspond to a lower SCC (e.g., Barrage and Nordhaus 2023), whereas a negative risk adjustment to the discount rate (negative beta) is presumed to correspond to a higher one (e.g., Howard 2023).This paper demonstrates that those presumptions are generally incorrect because they consider only one side of the ledger—how uncertainty affects discount rates—while ignoring the offsetting effect of how the same uncertainty affects the value of the object being discounted: expected marginal damages from an incremental ton of carbon dioxide (CO2) emissions. In short, this paper shows that uncertainty in future consumption growth generally increases the SCC, except in one edge case where the effect is zero. This result arises because with a nonzero climate beta, uncertainty in economic growth affects not only the variance but also the expected value of climate impacts, and amid persistent growth uncertainty, this effect is particularly large for impacts occurring far in the future. As I show in this paper, this effect on expected values easily dominates the effect on the discount rate. This result implies that using risk-adjusted discount rates to discount expected climate impacts without accounting for growth uncertainty’s effect on those same expected impacts will yield highly biased estimates of the SCC. In models with a positive beta, this bias leads to substantial underestimates of the SCC, whereas in models with a negative beta, the bias leads to substantial overestimates.Despite this result, the economic literature and applied analysis both give disproportionate and often exclusive attention to risk adjustments to the discount rate, with little or no attention to corresponding adjustments to the expected values being discounted. Indeed, it is common in cost-benefit analysis to calculate costs and benefits in a deterministic model, but then apply risk-adjusted discount rates to those deterministic values based on the idea that those costs and benefits are, in reality, uncertain with some risk profile. This approach is correct only if the deterministically modeled costs and benefits are representative of expected values embodying the same uncertainties that motivate risk adjustments in discount rates, but analysts typically do not seem to consider this in practice.For example, recently proposed revisions to Circulars A-4 and A-94 (OMB 2023a, b) dedicate entire sections to accounting for effects of uncertainty and risk aversion, but those discussions focus principally on risk adjustments to discount rates. There is no mention of how those same uncertainties may similarly affect expected values. This is also true of Nordhaus’s (2023) critique of the US Environmental Protection Agency’s treatment of risk and uncertainty in the discount rate (EPA 2022). The only study I am aware of that acknowledges the effect of growth uncertainty on expected values is that of Ni and Maurice (2021), who note that uncertainty affects the growth rate of expected impacts in a manner governed by the beta; nonetheless, they focus on the discount rate. In general, the common inattention in the literature to growth uncertainty’s effect on expected values has likely contributed to its widespread omission in applied analysis.To derive these results, this paper begins by defining risk-adjusted and certainty-equivalent (also sometimes referred to risk-free) discount rates in the consumption capital asset pricing model, illustrates various conceptual features of those rates, derives analytical expressions for them under certain structural assumptions, and shows how key parameters affect the levels and trajectories of each discount rate. While many of the expressions derived herein are not completely new to the literature (e.g., related expressions are derived in Weitzman 1998; Gollier 2014; and Dietz et al. 2018), this paper synthesizes key insights from across the literature to illuminate the drivers of the term structures of risk-free and risk-adjusted discount rates and their implications for the SCC. Further, it shows the certainty-equivalent and risk-adjusted rates implied by the Greenhouse Gas Impact Valuation Estimator (GIVE; Rennert et al. 2022), demonstrating that GIVE’s relatively high central estimate of the SCC at $185 per ton of carbon dioxide is nonetheless consistent with a risk-adjusted discount rate that rises over time, with a risk premium reaching 2.7 percent by the end of its time horizon (2300).
    Date: 2023–10–23
  30. By: Lerch, Achim
    Abstract: Im März 2023 wurden auf europäischer und deutscher Ebene weitreichende Entscheidungen zur Klimapolitik getroffen: Eine Sanierungspflicht für ältere Wohngebäude und ein Verbot von Verbren- nungsmotoren in der Europäischen Union (EU) sowie ein Verbot des Einbaus neuer Gas- und Ölheizungen in Deutschland. Diese Entscheidungen konterkarieren allerdings eine andere wichtige Entschei- dung aus dem Dezember 2022: Die Ausdehnung des europäischen Emissionshandels auf die Sektoren Gebäude und Verkehr.
    Keywords: Klimapolitik, Emissionshandel, politische Reformen, Preislösung, Mengenlösung, Effizienz
    Date: 2023
  31. By: Ali, Amjad; Sumaira, Sumaira; Siddique, Hafiz Muhammad Abubakar; Ashiq, Saima
    Abstract: The Kingdom of Saudi Arabia has witnessed unprecedented economic growth in recent decades, propelling it onto the global stage. However, this rapid growth is often associated with a notable increase in carbon dioxide emissions, which carry significant environmental ramifications. In light of this pressing concern, this research undertakes a comprehensive examination of the intricate relationships between economic growth, energy consumption, urbanization, and carbon dioxide emissions within the Kingdom of Saudi Arabia from 1980 to 2020. This study employs autoregressive distributed lag approach to uncover the multifaceted dynamics at play. The empirical findings of the study reveal a compelling narrative about the Kingdom's natural landscape. Particularly noteworthy is the revelation that economic growth, urbanization, and energy consumption emerge as pivotal long-term drivers of escalating pollution. These findings underscore the critical necessity for policies that strike a balance between economic development and environmental preservation. Furthermore, the study disentangles the intricate web of causation among these factors. It becomes evident that economic growth and pollution exhibit bidirectional causality, illuminating the intricate connection between economic prosperity and environmental consequences. Additionally, commercial activities have been empirically shown to exert a substantial influence on pollution levels in the Kingdom of Saudi Arabia. To address these challenges, a pivotal shift towards a low-carbon technological revolution is proposed as a means of achieving sustained economic development. This transition towards environmentally friendly technologies holds the potential to decouple economic growth from environmental degradation, paving the way for a greener and more prosperous future for the Kingdom of Saudi Arabia.
    Keywords: Economic Growth, Energy Consumption, Urbanization, Kingdom of Saudi Arabia
    JEL: O4 Q4 R0
    Date: 2023
  32. By: OECD
    Abstract: This paper provides a snapshot of the development of renewable energies in the European Union Outermost Regions (EU ORs), focusing on their potential to contribute to the green transition while creating sustainable economic development opportunities. It reviews the policy frameworks and tools in place in EU ORs with respect to renewable energies, and provides specific policy recommendations. The paper is developed within the framework of the EU-OECD project on Global Outermost Regions.
    Keywords: Alternative Energy Sources, EU Outermost Regions, Global Value Chains, Renewable Energy
    JEL: O52 O54 O55 P45 R11 R58 Q42
    Date: 2023–10–31
  33. By: Wang, Guihua; Miller, Marshall; Fulton, Lewis
    Abstract: Electric vehicle (EV) depot charging increases the feasibility for fleet operators to convert fleets from internal combustion engine vehicles to zero-emission vehicles (ZEVs). This study considers two example cases: a fleet of medium-duty delivery trucks and a fleet of heavy-duty short-haul trucks. In both cases, trucks are charged at a depot by direct current (DC) fast chargers (50 kW, 150 kW, or 350 kW), and we estimate charging infrastructure cost as a function of the EV fleet size. Results indicate that per-vehicle infrastructure cost will decrease substantially as the fleet size increases, though infrastructure cost is very sensitive to charger utilization rates. The higher the charger utilization, the lower the infrastructure cost will be, as the depot will need fewer chargers installed given a certain number of vehicles being charged. Therefore, one cost reduction strategy is to improve daily utilization rates to reduce the charger count demand and eventually reduce the infrastructure cost (the capital cost). Finally, results show that the annualized infrastructure cost is dwarfed by the annual cost of the electricity dispensed to the EV fleet.
    Keywords: Engineering, Social and Behavioral Sciences, electric vehicle, fleet charging, infrastructure cost, direct current fast charger, delivery truck, heavy-duty truck
    Date: 2023–10–26
  34. By: Saglam, Ismail
    Abstract: This paper studies the welfare effects of the abatement cost burden of a supplier in a multi-echelon supply chain. We theoretically show that the profits of all echelons other than the supplier become lower when the supplier contributes more to the abatement. Also, we computationally show that the profit of the supplier may be higher when it makes a small amount of contribution to the abatement provided that the demand curve faced by the retailer is sufficiently linear.
    Keywords: Supply chain; multi-echelon; abatement cost.
    JEL: D43 L11 Q52
    Date: 2023–08
  35. By: Shapor, Maria (Шапор, Мария) (The Russian Presidential Academy of National Economy and Public Administration)
    Abstract: This section of the work is devoted to the analysis of the relationship between inequality and economic growth in countries with a high dependence on oil exports. In this section, as in the first part of the study, approaches to modeling the relationship of various types of inequality, mainly related to income inequality in countries with a high dependence on oil exports, are considered, but not from the point of view of the quality of the institutional development of the countries under study, but in the context of dependence of the formation of the revenue part of the country's budget on the export of hydrocarbon energy. Thus, the purpose of this study was to determine the place and role of oil revenues in modeling the relationship between income inequality and economic growth in oil exporting countries and to quantify their significance in reducing inequality in the country and increasing economic growth rates.
    Keywords: inequality, economic growth, resource availability, natural wealth, modeling the relationship between the level of natural wealth and the level of well-being of the country's population
    JEL: F41 F43 F47
    Date: 2023–03–18
  36. By: Thomas Falconer; Jalal Kazempour; Pierre Pinson
    Abstract: Reliably forecasting uncertain power production is beneficial for the social welfare of electricity markets by reducing the need for balancing resources. Describing such forecasting as an analytics task, the current literature proposes analytics markets as an incentive for data sharing to improve accuracy, for instance by leveraging spatio-temporal correlations. The challenge is that, when used as input features for forecasting, correlated data complicates the market design with respect to the revenue allocation, as the value of overlapping information is inherently combinatorial. We develop a correlation-aware analytics market for a wind power forecasting application. To allocate revenue, we adopt a Shapley value-based attribution policy, framing the features of agents as players and their interactions as a characteristic function game. We illustrate that there are multiple options to describe such a game, each having causal nuances that influence market behavior when features are correlated. We argue that no option is correct in a general sense, but that the decision hinges on whether the market should address correlations from a data-centric or model-centric perspective, a choice that can yield counter-intuitive allocations if not considered carefully by the market designer.
    Date: 2023–10
  37. By: Ashiq, Saima; Ali, Amjad; Siddique, Hafiz Muhammad Abubakar; Sumaira, Sumaira
    Abstract: Across the globe, human lifestyles are accelerating carbon emissions, and this phenomenon is especially pronounced in developing nations. As the world grapples with the compelling imperative to address severe environmental challenges, technology has emerged as a steadfast ally. Over recent decades, the advancement of cutting-edge technology and the granting of patent rights have ignited a profound discourse on novel approaches to mitigating environmental threats. In recent years, there has been a growing interest in investigating how innovations might assist in reducing carbon emissions. The current study looks at how innovation affects carbon dioxide emissions in South Asian nations. The goal of this study is to use panel OLS and fixed effects methodologies to examine the influence of innovation on CO2 emissions in five South Asian nations from 1980 to 2019. The study's findings show that carbon dioxide emissions are negatively impacting environmental quality, while technological developments help to lower these carbon emissions. The findings argue for the development of initiatives to foster and expand technical innovation, particularly in South Asian countries. This research underscores the imperative of harnessing innovation to confront the immediate environmental challenges that loom large in the twenty-first century, as we strive for a more sustainable and environmentally responsible future.
    Keywords: Innovation, CO2 emissions, environment, South Asia
    JEL: O3 Q5
    Date: 2023
  38. By: Vona, Francesco
    Abstract: Developing and emerging economies face enormous challenges to reconcile economic development and job creation with decarbonization. An essential aspect of such “early-stage” decoupling of growth and carbon emissions is to develop a skill base that favours the diffusion of green productions and technologies. This paper sheds light on the role of the adjustments in the skill supply and of labour market institutions to pursue such early stage decoupling in developing and emerging economies. The paper begins by defining green growth strategies and the associated green skill requirement. To overcome measurement issues and data limitations, it then assesses the advantages and disadvantages of the task-based approach to green labour markets, emphasizing critical issues for developing countries as well as the opportunities to collect original data. Finally, it derives some policy recommendations to solve the coordination failure between investments in skills, particularly technical skills, and green technology adoption.
    Keywords: Labor and Human Capital, Research and Development/Tech Change/Emerging Technologies, Resource /Energy Economics and Policy
    Date: 2023–10–25
  39. By: Bonilla, Xavier; Ivaldi, Marc
    Abstract: In the midst of an increasing debate concerning the environmental repercussions of transportation decisions in France, this study employs nationally representative data from the 2018-2019 Mobility Survey to investigate the determinants shaping French citizens' preferences for long-distance travel modes. Emphasis is placed on assessing potential CO2 emissions reductions resulting from government-proposed flight bans when a train alternative with a travel time of less than 2 hours and 30 minutes exists (notably, the Paris Orly - Nantes, Paris Orly - Bordeaux, and Paris Orly - Lyon routes). Descriptive analysis reveals a pre-ban inclination among travellers to favour non-flight modes, with just 4% of trips between these cities relying on air travel. Subsequently, econometric analysis challenges the conventional wisdom that income significantly influences air travel choices, instead highlighting its impact on car trip preferences up to a specific income threshold. Additionally, it underscores the expected inverse relationship between travel distance and train travel adoption, coupled with a corresponding increase in flight preference.
    Date: 2023–10
  40. By: Annette Zou (Crawford School of Public Policy, Australian National University)
    Abstract: The Paris Agreement encourages nations to develop long term low emissions strategies to articulate their pathways to achieve net zero by 2050. While mitigating global temperature increase and shifting to low emissions development are integrated challenges (defined by complex relationships between dynamic factors that need to be considered together to understand the whole), integrative approaches are not consistently used and not well understood in the governance of social-ecological systems. This study presents a Framework for Integrative Strategy that highlights key dimensions required for national strategies to have integrative fit with shifting nations to low emissions development. When applied to the national strategies of eight high greenhouse gas emitting countries, only Germany, Japan and South Africa scored a ‘fit’ score well above their ‘gap’. Collectively, there are significant gaps in six out of seven dimensions, where four have gaps greater than fit. This significant integrative gap suggests low likelihood of achieving a sustainable low emissions future.
    Date: 2023–10
  41. By: Grégoire Garsous; Donal Smith; Dylan Bourny
    Abstract: This report combines multiple novel datasets to provide evidence that government support has contributed to increased carbon emissions from aluminium and steelmaking activities through an increase in production output and by shifting production to more emission intensive plants. While improvements in technology have driven overall emissions downward, there is no evidence that government support in this sector has been targeted at, or has contributed to, developing techniques that improve environmental performance. Removing such support could therefore contribute to a cost-effective decarbonisation strategy. For example, removing government support to aluminium smelting and steel making worldwide would reduce carbon emissions by 75% more than the reduction observed in 2020 resulting from COVID-related restrictions. In addition, the removal of such support would free up scarce public resources for alternative uses.
    Keywords: Emissions-intensive industries, Greenhouse gas emissions
    JEL: H24 L61 Q5 H32
    Date: 2023–10–27
  42. By: Jonathan Colmer; Mary F. Evans; Jay Shimshack
    Abstract: Does enabling citizens to complain about public services provide an effective way of improving government services, or should we be concerned about the accuracy and reliability of such reports? Jonathan Colmer, Mary Evans and Jay Shimshack find that complaints about environmental quality are linked to an increase in an investigation being carried out - and far more likely to uncover harm to the local environment than routine investigations.
    Keywords: citizen complaints, environmental regulation, compliance, monitoring and enforcement, pollution
    Date: 2023–06–20
  43. By: Ozili, Peterson K
    Abstract: This paper explores the 2021-2022 global energy crisis. The 2021-2022 energy crisis was caused by many factors including the global campaign to reduce carbon emission, the shortage in fossil fuel reserves due to divestment from fossil fuels, the halt in oil production due to the COVID-19 pandemic and the Ukraine and Russia conflict. The empirical results show that gasoline prices rose in Asia, Europe, Africa, the Middle East and the Americas. The rise in gasoline prices occurred during the period when COVID-era restrictions were lifted in 2021 and also during the Russia-Ukraine conflict in early 2022. The correlation results show that gasoline prices in Middle East, Europe, Asia and the Americas were significantly correlated but not in Africa. The findings have implications.
    Keywords: COVID-19 pandemic, gasoline, energy crisis, Asia, Europe, Africa, Middle East
    JEL: Q40 Q41 Q42 Q43 Q47 Q48 Q49
    Date: 2023
  44. By: Benedict Clements; Sanjeev Gupta; João Jalles; Bernat Adrogue
    Abstract: Climate change is a systemic risk to the global economy. While there is a large body of literature documenting the potential economic consequences of climate change, there is relatively little research on the link between vulnerabilities to climate change, the buildup of climate debt by countries with historically large carbon dioxide emissions, and how well financial markets incorporate (or not) these risks to sovereign governments. This paper investigates the impact of both climate debt and climate vulnerabiities/resiliency on sovereign bond yields and spreads in advanced and emerging market economies, using a novel dataset. We find that changes in climate debt are an important determinant of spreads, but only in emerging market economies. Countries with high vulnerabilities and low resilency to climate change also pay higher spreads. This implies a triple whammy of challenges for emerging market economies as they confront the economic damages of climate change, the high fiscal costs of climate adaptation, and high borrowing costs.
    Keywords: climate change vulnerability; government bond spreads; sovereign risk; panel data; social cost of carbon.
    JEL: C23 E21 H5 H63 H74 Q54
    Date: 2023–10
  45. By: Ángel Iván Moreno (Banco de España); Teresa Caminero (Banco de España)
    Abstract: The Intergovernmental Panel on Climate Change (IPCC) estimates that global net-zero should be achieved by 2050. To this end, many private firms are pledging to reach net-zero emissions by 2050. The Climate Data Steering Committee (CDSC) is working on an initiative to create a global central digital repository of climate disclosures, which aims to address the current data challenges. This paper assesses the progress within European financial institutions towards overcoming the data challenges outlined by the CDSC. Using a text-mining approach, coupled with the application of commercial Large Language Models (LLM) for context verification, we calculate a Greenhouse Gas Disclosure Index (GHGDI), by analysing 23 highly granular disclosures in the ESG reports between 2019 and 2021 of most of the significant banks under the ECB’s direct supervision. This index is then compared with the CDP score. The results indicate a moderate correlation between institutions not reporting to CDP upon request and a low GHGDI. Institutions with a high CDP score do not necessarily correlate with a high GHGDI.
    Keywords: ESG, sustainability, environment, climate change, carbon emissions, natural language processing, climate data challenges, OpenAI’s ChatGPT, Google’s text-bison
    JEL: C88 G32 Q56
    Date: 2023–09
  46. By: Elliott, Robert J.R.; Nguyen-Tien, Viet; Strobl, Eric A.
    Abstract: We estimate the impact of power outages on firm performance using a hydro-instrumental variable strategy which integrates a river flow with a hydropower generation model and an electricity-grid-based distance interpolation technique. Comparing World Bank Enterprise Surveys in 2005 and 2015 for Vietnam, we find that despite considerable economic progress, firms have become more susceptible to power outages. Our estimates suggest that reducing the length of power cuts by 1% would have increased revenues by 4.66 billion USD. Other results show that firms with less reliable electricity have lower productivity and use less flexible inputs, which is not mitigated by backup generators.
    Keywords: firm performance; growth; instrumental variables; power outages; Vietnam
    JEL: O13 Q54 R11 N55
    Date: 2021–11–01
  47. By: Pragyan Deb; Davide Furceri; Jonathan Ostry; Nour Tawk
    Abstract: This paper highlights that recessions result in permanent increases in energy efficiency and in the share of renewables in total electricity.
    Date: 2023–10
  48. By: Jan Frankowski; Tomasz Œwietlik; Aleksandra Prusak; Jakub Sokolowski; Joanna Mazurkiewicz; Wojciech Be³ch; Nicol Staòková
    Abstract: This study constitutes preliminary analytical material concerning the adaptative capacity of housing cooperatives to accommodate energy transition in Poland and Czechia. This report comprehensively utilises administrative data from Polish and Czech national registers for the first time. These data have been employed to (1) compare Polish and Czech housing cooperatives based on their type, age, and size, as well as (2) to provide an initial assessment of the support offered to housing cooperatives in the field of energy efficiency (3) and an initial evaluation of their susceptibility to energy crises. The results indicate that Polish and Czech housing cooperatives are at different stages of institutional transformations, which may influence their flexibility in response to crises and capacity to implement solutions related to energy transition.
    Keywords: housing cooperatives, energy transition, energy crisis, Poland, Czechia
    JEL: J21 L71 Q43
    Date: 2023–10

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