nep-ene New Economics Papers
on Energy Economics
Issue of 2023‒11‒20
48 papers chosen by
Roger Fouquet, National University of Singapore

  1. Induced Innovation, Inventors, and the Energy Transition By Eugenie Dugoua; Todd D. Gerarden
  2. China’s Nationwide CO2 Emissions Trading System: A General Equilibrium Assessment By Lawrence H. Goulder; Xianling Long; Chenfei Qu; Da Zhang
  3. Environmental policy stringency and CO2 emissions: Evidence from cross-country sector-level data By Erik Frohm; Filippo Maria D’Arcangelo; Tobias Kruse; Mauro Pisu; Urban Sila
  4. Household Carbon Dioxide Emissions Engel Curve Dynamics By Robert Huang; Matthew E. Kahn
  5. Electricity Market Crisis in Europe and Cross Border Price Effects: A Quantile Return Connectedness Analysis By Do, Hung Xuan; Nepal, Rabindra; Pham, Son Duy; Jamasb, Tooraj
  6. Does financial development influence renewable energy consumption to achieve carbon neutrality in the USA? By Amine Lahiani; Salma Mefteh-Wali; Muhammad Shahbaz; Xuan Vinh Vo
  7. Road to Net Zero: Greenness of LEED and CAL-Green Properties By Jeonghyun Chung; Michael Cusumano; Dongshin Kim; Abraham Park
  8. The fiscal implications of stringent climate policy By Richard S.J. Tol
  9. Is the Price Cap for Gas Useful? Evidence from European Countries By Francesco Ravazzolo; Luca Rossini
  10. Evidence of supply security and sustainability challenges in Nigeria's power sector By Magazzino, Cosimo; Drago, Carlo; Schneider, Nicolas
  11. Modeling and Contribution of Flexible Heating Systems for Transmission Grid Congestion Management By David Kr\"oger; Milijana Teodosic; Christian Rehtanz
  12. Capturing variation in daily energy demand profiles over time with cluster analysis in British homes (September 2019 – August 2022) By Pullinger, Martin; Zapata-Webborn, Ellen; Kilgour, Jonathan; Elam, Simon; Few, Jessica; Goddard, Nigel; Hanmer, Clare; McKenna, Eoghan James; Oreszczyn, Tadeusz; Webb, Lynda
  13. Trilemma or Trinity? The Nexus of Economic Growth, Circular Economy and Net Zero By Basu, Parantap; Jamasb, Tooraj; Sen, Anupama
  14. Climate Activism Favors Pro-environmental Consumption By Marini, A. Marco; Nocito, Samuel
  15. Dirty Air and Green Investments: The Impact of Pollution Information on Portfolio Allocations By Raymond Fisman; Pulak Ghosh; Arkodipta Sarkar; Jian Zhang
  16. Impacto de los contaminantes por gases de efecto invernadero en el crecimiento económico en 86 países (1990-2019): Sobre la curva inversa de Kuznets By Torres-Brito, David Israel; Cruz-Aké, Salvador; Venegas-Martínez, Francisco
  17. Maximum Return on Investment for a Domestic Photovoltaic Installation By Tom Nonnenmacher; Jenny Nelson; Benedict Winchester
  18. Divestment and Engagement: The Effect of Green Investors on Corporate Carbon Emissions By Matthew E. Kahn; John Matsusaka; Chong Shu
  19. Do carbon taxes affect economic and environmental efficiency? The case of British Columbia’s manufacturing plants By Kumbhakar, Subal C.; Badunenko, Oleg; Willox, Michael
  20. The Impact of Industrial Opt-Out from Utility Sponsored Energy Efficiency Programs By Gale Boyd; Matthew Doolin; Yu Ma; Jennifer Weiss
  21. The Social Cost of Carbon By Richard S. J. Tol
  22. The Unintended Consequences of Trade Protection on the Environment By Taipeng LI; Lorenzo Trimarchi; Rui XIE; Guohao YANG
  23. What Do Firm Managers Tell Us About the Transmission Channels of Oil Price Shocks? By Dirk Drechsel; Heiner Mikosch; Samad Sarferaz
  24. Think Globally, Act Globally: Opportunities to Mitigate Greenhouse Gas Emissions in Low- and Middle-Income Countries By Rachel Glennerster; Seema Jayachandran
  25. Optimal Timing of Carbon-Capture Policies Among Different Countries Under Markovian Competition By Yiwen Chen; Xi Wan; Benteng Zou
  26. A Deep Learning Analysis of Climate Change, Innovation, and Uncertainty By Michael Barnett; William Brock; Lars Peter Hansen; Ruimeng Hu; Joseph Huang
  27. Do wind turbines have adverse health impacts By Christian Krekel; Johannes Rode; Alexander Roth
  28. Approaches to enhance the market functionality of the K-ETS By Yoon, Yeochang
  29. Is A 15-minute City within Reach in the United States? An Investigation of Activity-Based Mobility Flows in the 12 Most Populous US Cities By Tanhua Jin; Kailai Wang; Yanan Xin; Jian Shi; Ye Hong; Frank Witlox
  30. Are friends electric? Valuing the social costs of power lines using house prices By Stephen Gibbons; Cheng Keat Tang
  31. The impact of justice attitudes on air quality valuation: a study combining factorial survey and choice experiment data. By Anna Bartczak; Wiktor Budziński; Ulf Liebe; Jurgen Meyerhoff
  32. Climate Change and Government Borrowing Costs: A Triple Whammy for Emerging Market Economies By Benedict Clements; Sanjeev Gupta; João Jalles; Bernat Adrogue
  33. General Equilibrium Theory for Climate Change By Robert M. Anderson; Haosui Duanmu
  34. Persistent and Transient Energy Poverty: A Multi-Level Analysis in Spain By Pourkhanali, Armin; Kholghi, Donya; Llorca, Manuel; Jamasb, Tooraj
  35. Brunei Darussalam: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Brunei Darussalam By International Monetary Fund
  36. Overcoming the Barriers for Commercial Cargo Bike Goods Movement By Fitch-Polse, Dillon; Jaller, Miguel
  37. Characteristics of Green Loan Users and the Green Policy Mix By Anna L. SOBIECH; UCHIDA Hirofumi
  38. Walk the Talk: Measuring Green Preferences with Social Media Data By Bram De Rock; Florine Le Henaff
  39. Critical Mineral Depletion and Recycling: From the Perspective of the Cooperation and Open-Loop Competition By Weihua Ruan; Benteng Zou
  40. Thách thức của quá trình xây dựng các tiêu chuẩn cho thị trường carbon tự nguyện By Phương, Lã Việt; Hoàng, Nguyễn Minh
  41. Thách thức của quá trình thiết lập tiêu chuẩn hàng hóa và mậu dịch trên thị trường carbon tự nguyện By La, Viet-Phuong; Nguyen, Minh-Hoang
  42. Kẽ hở chứng nhận trung hòa carbon tại Úc By Yen, Nguyen Thi Quynh
  43. Sustainable University Building and Students’ Academic Performance and Wellbeing By Piet Eichholtz; Stefan Flagner; Nils Kok; Rick Kramer; Steffen Kuenn; Wouter van Marken Lichtenbelt; Guy Plasqui; Xudong Sun
  44. Strategic Considerations of Critical Mineral Depletion and Recycling Under Markovian Competition By Weihua Ruan; Benteng Zou
  45. Geoeconomic Fragmentation and Commodity Markets By Mr. Jorge A Alvarez; Mehdi Benatiya Andaloussi; Chiara Maggi; Alexandre Sollaci; Martin Stuermer; Petia Topalova
  46. Automation, digitalization and decarbonization in the European automotive industry: a roadmap towards a just transition By Armanda Cetrulo; Giovanni Dosi; Angelo Moro; Linnea Nelli; Maria Enrica Virgillito
  47. Biodigester and Biogas Technology as Veritable Tool for Poultry Waste Management in the Federal Capital Territory, Abuja, Nigeria By Kehinde Abraham Ogunsanya
  48. Regional Industrial Effects in Germany from a Potential Gas Deficit By Robert Lehmann; Christoph Schult

  1. By: Eugenie Dugoua; Todd D. Gerarden
    Abstract: We study how individual inventors respond to incentives to work on “clean” electricity technologies. Using natural gas price variation, we estimate output and entry elasticities of inventors and measure the medium-term impacts of a price increase mirroring the social cost of carbon. We find that the induced clean innovation response primarily comes from existing clean inventors. New inventors are less responsive on the margin than their average contribution to clean energy patenting would indicate. Our findings suggest a role for policy to increase the supply of clean inventors to help mitigate climate change.
    Keywords: inventors, energy technology, induced innovation
    JEL: O31 Q55 Q40
    Date: 2023
  2. By: Lawrence H. Goulder; Xianling Long; Chenfei Qu; Da Zhang
    Abstract: China’s recently launched CO2 emissions trading system, already the world’s largest, aims to contribute importantly toward global reductions in greenhouse gas emissions. The system, a tradable performance standard (TPS), differs importantly from cap and trade (C&T), the principal emissions trading approach used in other countries. This paper presents the structure and results from a multi-sector, multi-period equilibrium model tailored to evaluate China’s TPS. The model incorporates distinctive features of China’s economy, including state-owned enterprises and electricity market regulation. It distinguishes between the TPS and C&T and considers a wide range of potential future TPS designs. Key findings include the following. The TPS’s environmental benefits exceed its costs by a factor of five when only the climate-related benefits are considered and by a significantly higher factor when health benefits from improved air quality are included. The TPS’s interactions with China’s fiscal system substantially affect its costs relative to those of C&T. Employing a single benchmark (standard) for the electricity sector would lower costs by 34 percent relative to the four-benchmark system that is actually in place but increase the standard deviation of percentage income losses across provinces by more than 60 percent. Introducing an auction as a complementary source of allowance supply can lower economy-wide costs by at least 30 percent.
    JEL: D58 D61 H23 Q52 Q54 Q58
    Date: 2023–10
  3. By: Erik Frohm; Filippo Maria D’Arcangelo; Tobias Kruse; Mauro Pisu; Urban Sila
    Abstract: This paper provides empirical evidence on the short and long-term sectoral effect of environmental policy stringency on CO2 emissions, exploiting longitudinal data covering 30 OECD countries and more than 50 sectors. The analysis relies on the OECD Environmental Policy Stringency (EPS) index, a composite index tracking climate change and air pollution mitigation policies. Estimates obtained from panel regressions suggest that more stringent environmental policies are associated with lower emissions, that the effect builds over time and differs across sectors depending on their fossil fuel intensity. A one unit increase in the EPS index (about one standard deviation), is associated with 4% lower CO2 emissions in the sector with median fossil fuel intensity after two years and by 12% after 10 years. For sectors in the top decile of the fossil fuel intensity distribution, the estimates point to a decline in emissions by 11% after two years and 19% after ten years. Environmental policies targeted at energy, manufacturing and transport sectors have the largest potential impact on emissions. Illustrative policy scenarios based on these results indicate that achieving emission reductions consistent with net-zero targets will require raising the stringency of environmental policies more drastically and rapidly than in the past.
    Keywords: climate change, CO2 emissions, cross-country regression, Environmental Policy Stringency
    JEL: Q54 Q58 C23
    Date: 2023–11–06
  4. By: Robert Huang; Matthew E. Kahn
    Abstract: Household carbon dioxide emissions have been an increasing function of income and distance from the city. Richer suburbanites drive more and consume more electricity and natural gas at home. In recent years, richer people in California have been more likely to buy electric vehicles and to install solar panels in their homes. The electricity grid has become less carbon intensive over time. Using several California datasets, we document that these ongoing shifts in consumer behavior have flattened household transportation carbon dioxide Engel curves over the years 2018 to 2022. While household electricity emissions as a function of income have flattened, the natural gas Engel curves have not. We explore the political economy implications of the ongoing decarbonization of the private vehicle fleet. Based on voting data from California, we document that communities tend to support higher fuel taxes when their vehicle fleet is more fuel efficient.
    JEL: H23 Q54 R40
    Date: 2023–10
  5. By: Do, Hung Xuan (School of Economics and Finance, Massey University); Nepal, Rabindra (Faculty of Business and Law, University of Wollongong); Pham, Son Duy (Finance, University of Aberdeen Business School); Jamasb, Tooraj (Department of Economics, Copenhagen Business School)
    Abstract: Despite the massive impacts of the COVID-19 pandemic and the Russia-Ukraine war on the European energy market, little is known about their effects on the transmission of risks between member states’ electricity markets and key electricity sources. In this paper, we first employ the quantile connectedness approach to quantify the return connectedness between eleven European electricity markets, natural gas, and carbon market, then examine the impacts of the two crises on the interconnectedness. We find a significant return interconnectedness of the system, mainly driven by the spillover effects among European electricity markets. An investigation of the connectedness across quantiles shows that the spillover effects are much stronger at the tails of conditional distribution and the natural gas and carbon markets are net recipients of return shocks across quantiles. More importantly, our results reveal opposite effects of the two crises on interconnectedness. While the COVID-19 pandemic reduces the interconnectedness, the Russia-Ukraine war intensifies the return shock transmission.
    Keywords: Natural gas; European Emission Allowance; Electricity markets; COVID-19; Russia-Ukraine war; Quantile connectedness
    JEL: D04 L94 Q43
    Date: 2023–06–02
  6. By: Amine Lahiani (LEO - Laboratoire d'Économie d'Orleans - UO - Université d'Orléans - UT - Université de Tours); Salma Mefteh-Wali; Muhammad Shahbaz; Xuan Vinh Vo
    Date: 2021–11
  7. By: Jeonghyun Chung; Michael Cusumano; Dongshin Kim; Abraham Park
    Abstract: According to the U.S. Energy Information Administration (EIA), the real estate sector is associated with about 39% of national total energy consumption, with an attendant share of energy-related greenhouse gas emissions. To support sustainability in the built environment, those certified under platforms such as LEED, BREEAM, Energy Star, Green Star, and CAL-Green, purport to promote responsible environmental design in reducing scarce resource consumption. In the past, lack of access to actual energy consumption data, especially in the multi-family housing sector, has hindered efforts to determine the true effectiveness of sustainability designs and certifications. This research investigates the effectiveness of LEED and CAL-Green certifications in California by analyzing actual energy consumption data from large scale sustainably designed housing developments that have been built under LEED and/or CAL-Green design criteria and comparing them to a benchmark set of non-sustainably designed housing projects in the same general geographic location. Under California Assembly Bill AB 802, California is the first state in the US with a benchmarking program that requires the reporting of energy consumption for certain large size multi-family housing projects starting in 2019. The benchmark energy data provides the total annual carbon dioxide associated with building operations on a square foot basis when the consumption of all fuel sources is accounted for. The benchmark data provides approximately 7, 092 multifamily buildings’ energy emission information from 2019 to 2021 and the sum of gas and energy usage level per square footage of building size (total greenhouse gas (GHG) emission intensity) is our key variable of interest. We additionally use the United States Green Building Council (USGBC) data to identify whether or not a building is LEED-certified. USGBC provides the LEED certified building information such as LEED application date, LEED certified status (approved or not), LEED class (Platinum, Gold, Silver, Certified), building address, building type, building size, and built year. There are 670 LEED-certified multifamily and multifamily affordable housing projects in the state of California. However, 113 buildings are classified as confidential, which does not provide any property information other than LEED-certified status. While benchmark data provides data at a project level, USGBC provides data at the building level: one project can have multiple buildings (e.g., Building A, Building B). Thus, we sort the USGBC LEED data using building address and key property characteristics to bundle buildings to project level. Specifically, we assume that buildings are identified as the same project if building’s project name, zip code, and LEED-certified level (Platinum, Gold, Silver, Certified) are the same. After cleaning the data, we find 298 unique projects that are LEED certified, of which 101 projects are matched with the benchmark data using project name, address, and building characteristics. The results from our empirical examinations show that LEED buildings do not produce significantly lower levels of GHG emissions compared to non-LEED buildings. More interestingly, we find that LEED buildings generate 17.30 to 20.81% higher levels GHG emissions than non-LEED buildings during post-Cal-Green period (from year 2015). These results are robust even after considering the occupancy rates (stabilization period). We also propensity-score match the data between LEED and non-LEED and the results are still consistent. On the other hand, Cal-Green is effective in reducing the GHG emissions by 7.16% to 7.88% compared to pre Cal-Green period. In addition, we find that smaller buildings consume considerably more energy and emit more greenhouse gas per square foot than larger buildings. The final consideration from this research is that to achieve the Net–Zero greenhouse gas emissions that California and the world has targeted, the building industry and the regulators must reexamine and improve the design standards for built environments.
    Keywords: Green House Gas; LEED; Multifamily; Sustainable Design
    JEL: R3
    Date: 2023–01–01
  8. By: Richard S.J. Tol (Department of Economics, University of Sussex, BN1 9SL Falmer, United Kingdom)
    Abstract: Stringent climate policy compatible with the targets of the 2015 Paris Agreement would pose a substantial fiscal challenge. Reducing carbon dioxide emissions by 95% or more by 2050 would raise 7% (1-17%) of GDP in carbon tax revenue, half of current, global tax revenue. Revenues are relatively larger in poorer regions. Subsidies for carbon dioxide sequestration would amount to 6.6% (0.3-7.1%) of GDP. These numbers are conservative as they were estimated using models that assume first-best climate policy implementation and ignore the costs of raising revenue. The fiscal challenge rapidly shrinks if emission targets are relaxed.
    Keywords: climate policy
    JEL: O44 Q54
    Date: 2023–07
  9. By: Francesco Ravazzolo (Norwegian Business School and Free-University of Bozen-Bolzano); Luca Rossini (University of Milan and Fondazione Eni Enrico Mattei)
    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: Bayesian time series, Forecasted error variance decomposition, Gas price cap, Impulse response function, Mixture representation
    JEL: C11 C32 Q41 Q43
    Date: 2023–10
  10. By: Magazzino, Cosimo; Drago, Carlo; Schneider, Nicolas
    Abstract: The increasing mismatch between the demand and supply of power in Nigeria raises concerns about the ability of this country to meet its vital energy security and sustainability targets in a demography-growing environment. This paper assesses how these three factors comove over the long run. While Nigeria provides an illustrative case, a multivariate framework including population dynamics, the demand for electricity, and CO2 emissions from the power and heating sector is set with actual time-series data spanning the last five decades. Two independent estimation strategies are conducted: a time-series analysis (i.e., Least Squares with breaks regression) is complemented with Machine Learning experiments (i.e., ML Clustering method). In general, both methodologies’ outputs stress the engine role of the population in driving the demand for power over the long run.
    Keywords: CO2 emissions; electricity; energy security; machine Learning; population; sustainability; time series
    JEL: R14 J01
    Date: 2023–06–01
  11. By: David Kr\"oger; Milijana Teodosic; Christian Rehtanz
    Abstract: The large-scale integration of flexible heating systems in the European electricity market leads to a substantial increase of transportation requirements and consecutively grid congestions in the continental transmission grid. Novel model formulations for the grid-aware operation of both individual small-scale heat pumps and large-scale power-to-heat (PtH) units located in district heating networks are presented. The functionality of the models and the contribution of flexible heating systems for transmission grid congestion management is evaluated by running simulations for the target year 2035 for the German transmission grid. The findings show a decrease in annual conventional redispatch volumes and renewable energy sources (RES) curtailment resulting in cost savings of approximately 6 % through the integration of flexible heating systems in the grid congestion management scheme. The analysis suggests that especially large-scale PtH units in combination with thermal energy storages can contribute significantly to the alleviation of grid congestion and foster RES integration.
    Date: 2023–10
  12. By: Pullinger, Martin (University College London); Zapata-Webborn, Ellen (University College London); Kilgour, Jonathan; Elam, Simon; Few, Jessica; Goddard, Nigel; Hanmer, Clare; McKenna, Eoghan James; Oreszczyn, Tadeusz; Webb, Lynda
    Abstract: This study investigates typical domestic energy demand profiles and their variation over time. It draws on a sample of 13, 000 homes from Great Britain, applying k-means cluster analysis to smart meter data on their electricity and gas demand over a three-year period from September 2019 to August 2022. Eight typical demand archetypes are identified from the data, varying in terms of the shape of their demand profile over the course of the day. These include an ‘All daytime’ archetype, where demand rises in the morning and remains high until the evening. Several other archetypes vary in terms of the presence and timing of morning and/or evening peaks. In the case of electricity demand, a ‘Midday trough’ archetype is notable for its negative midday demand and high overnight demand, likely a combination of the effects of rooftop solar panels exporting to the grid during the day and overnight charging of electric vehicles or electric storage heating. The prevalence of each archetype across the sample varies substantially in relation to different temporally-varying factors. Fluctuations in their prevalence on weekends can be identified, as can Christmas Day. Among homes with gas central heating, the prevalence of gas archetypes strongly relates to external temperature, with around half of homes fitting the ‘All daytime’ archetype at temperatures below 0°C, and few fitting it above 14°C. COVID-19 pandemic restrictions on work and schooling are associated with households’ patterns of daily demand becoming more similar on weekdays and weekends, particularly for households with children and/or workers. The latter group had still not returned to pre-pandemic patterns by March 2022. The results indicate that patterns of daily energy demand vary with factors ranging from societal weekly rhythms and festivals to seasonal temperature changes and system shocks like pandemics, with implications for demand forecasting and policymaking.
    Date: 2023–10–19
  13. By: Basu, Parantap (Department of Economics, Durham University); Jamasb, Tooraj (Department of Economics, Copenhagen Business School); Sen, Anupama (Smith School for Enterprise and the Environment, University of Oxford)
    Abstract: How can economies achieve economic growth without causing negative environmental externalities? There are two aspects to the long-standing debate on 'sustainable growth'. A first-best solution is for economies to replace fossil fuels with renewable energy sources, mitigating carbon emissions. A second-best solution is for economies to also adopt efficient waste management, recycling residual waste and pollutants (including hard-to-abate carbon) from production (circular economy). We establish a simple growth model that integrates three fundamental pillars of economics: (i) the net-zero carbon target in environmental economics (ii) the circular economy, dealing with waste management in resource economics, and (iii) sustainable growth, in growth economics. We argue that growth, circularity and net zero emissions present a trinity of solutions to the sustainable growth problem, showing that the circular economy is a necessary condition for achieving net zero. We show that an economy with 'active' environmental policy achieves net-zero faster than one with 'passive' policy, and also eliminates carbon.
    Keywords: Net zero; Growth; Circular economy; Pollution; Capital; Recycling
    JEL: O44 Q43 Q52 Q55 Q58
    Date: 2023–10–17
  14. By: Marini, A. Marco; Nocito, Samuel
    Abstract: We investigate whether climate activism favors pro-environmental consumption by examining the impact of Fridays for Future (FFF) protests in Italy on second-hand automobile transactions in the strike-affected areas. Leveraging data on 10 million automobile transactions occurring before and after FFF, we exploit rainfall on the day of the events as exogenous source of attendance variation. Our findings reveal that local participation to the events is associated with a reduction in the per capita CO2 emissions of purchased cars, an uptick in the market share of low-emission vehicles and a corresponding decrease in the market share of high-emission counterparts. Notably, we uncover heterogeneous effects across gender and age groups. Results are primarily driven by a rise in the purchase of petrol cars, with electric cars contributing to a lesser extent, thereby displacing the demand for diesel vehicles. This evidence indicates substitution effects between goods prospectively subject to more stringent environmental regulations toward those obeying milder restrictions. The study provides valuable insights into the mechanisms underlying individuals’ consumption choices under the influence of social protests.
    Keywords: Consumer/Household Economics, Environmental Economics and Policy
    Date: 2023–11–08
  15. By: Raymond Fisman; Pulak Ghosh; Arkodipta Sarkar; Jian Zhang
    Abstract: We study exposure to pollution information and investment portfolio allocations, exploiting the rollout of air quality monitoring stations in India. Using a triple-differences framework, we show that retail investors' investments in "brown" stocks are negatively related to local air pollution after a monitoring station appears nearby, with particularly pronounced effects on ``alert'' dates when air quality is listed as harmful to the general population. The effect of pollution information on investment choices is most prominent amongst tech-savvy investors who are most plausibly "treated" by real-time pollution data, and by younger investors who tend to be more sensitive to environmental concerns. Overall, our results provide micro-level support for the view that salience of environmental conditions affect investors' tastes for green investments, and preferences for environmental amenities more generally.
    JEL: D91 G11 G41 Q51
    Date: 2023–10
  16. By: Torres-Brito, David Israel; Cruz-Aké, Salvador; Venegas-Martínez, Francisco
    Abstract: La presente investigación indaga en la relación entre emisiones de gases de efecto invernadero (GEI) y crecimiento económico; en particular, busca medir el impacto de estas emisiones en el Producto Interno Bruto (PIB), a partir de la identificación de las fuentes contaminantes y sus costos asociados, mediante la construcción de un panel de datos anuales para 86 países distribuidos en 4 niveles de ingreso y 6 regiones, a través del periodo de 30 años 1990-2019. La relación de interés se contextualiza en un marco de estructura de mercado, por lo que se consideran datos del crecimiento de los sectores más grandes de la economía, así como datos demográficos para cada país y año. También se toma la información del mercado energético, así como la participación de los recursos renovables en este, y la generación de energía por tipo de combustible. A su vez, se explora la relación entre ingreso y la participación de los recursos naturales en la economía, con lo que se identifica la eficiencia energética y el aprovechamiento de los recursos como proxy de la tecnología disponible para cada grupo de ingreso. Además de un análisis exploratorio (descriptivo) de los datos, se emplea un modelo de regresión cuantílico para datos de panel con efectos fijos aditivos (QRPD), el cual es un caso especial del estimador de regresión cuantílica generalizado (GQR). En el uso del modelo se aplica el método de optimización adaptativa de Montecarlo basado en cadenas de Markov (MCMC). Se verifica la hipótesis de la investigación tanto a nivel descriptivo como econométrico: una relación inversa entre crecimiento económico y emisiones de GEI. Se devela una curva ambiental de Kuznets, al observarse que las emisiones de GEI se incrementan a mayores niveles de ingreso de los países, pero alcanzan un punto de inflexión, de modo que los países de ingreso alto emiten menores emisiones de CO2eq que el resto. Asimismo, el modelo estimado revela que las emisiones de GEI contribuyen de manera positiva en el crecimiento económico, pero en el largo plazo, al considerar la variable cuadrática, se alcanza un punto de inflexión a partir del cual las emisiones presentan un estimador negativo. También se identifica una curva tecnológica de Kuznets (CTK) a partir del análisis de la eficiencia energética de cada grupo de ingreso, la cual responde al desarrollo tecnológico, cambios en la estructura económica internacional y la caída en los precios de las energías limpias. / This research inquiries into the relationship between greenhouse gas emissions (GHG) and economic growth; in particular, it seeks to measure the impact of these emissions on the Gross Domestic Product (GDP), based on the identification of polluting sources and associated costs, through the construction of an annualized data panel for 86 countries distributed in 4 income levels and 6 regions, through the 30-year period 1990-2019. The relationship of interest is contextualized within a market structure framework, for which there were taken growth rates for each major economic sector, as well as demographic data for each country and year. Information on the energy market is also considered, including the share of renewable resources and the generation of energy by type of fuel, which helps to identify the efficiency of energy consumption and use of natural resources as a proxy of technology availability by income group. In addition to an exploratory (descriptive) analysis of the data, a quantile regression model for panel data with additive fixed effects (QRPD) is used, as a special case of the generalized quantile regression (GQR) estimator. In the use of the model, the adaptive optimization of Markov chain Monte Carlo Method (MCMC) is applied. The research hypothesis is verified both at a descriptive and econometric level: an inverse relationship between economic growth and GHG emissions. An Environmental Kuznets curve is observed (EKC), revealing that GHG emissions increase with income levels reaching a turning point, so that high-income countries emit fewer CO2eq emissions than the rest. Likewise, the estimated model reveals that GHG emissions contribute positively to economic growth, but in the long term, by considering the quadratic variable, a turning point is reached from which emissions present a negative estimator. Finally, a Kuznets technology curve (CTK) is also identified from the energy efficiency analysis of each income group that responds to technological development, changes in the international economic structure and the drop in clean energy prices.
    Keywords: Gases de Efecto Invernadero, Crecimiento económico, Curva Ambiental de Kuznets, Datos de panel, Regresión cuantílica / Greenhouse Gases, Economic Growth, Environmental Kuznets curve, Panel data, Quantile regression
    JEL: Q51
    Date: 2023–11–02
  17. By: Tom Nonnenmacher; Jenny Nelson; Benedict Winchester
    Abstract: The rising energy prices in Europe and the urgent need to address global warming have sparked a significant increase in the installation of domestic photovoltaic systems to harness solar energy. However, since solar energy is available only during daytime hours and its availability varies daily, effectively shifting energy use becomes crucial. Whilst batteries can assist in storing excess energy, their high prices hinder their widespread adoption. In this study, we explore the importance of load to maximise return on investment. We propose an incremental approach to fitting load profiles into the production envelope, allowing for practical implementation. We compare different meter resolutions: 1 second, 5 minutes, 15 minutes, and 1 hour. Our analysis reveals that making real-time decisions (per second) leads to significant energy savings of 16\% compared to hourly decisions. Furthermore, we explore three types of device management strategies: ON/OFF management independent of PV production, ON/OFF management based on the current PV production, ON/OFF management based on both current and forecasted PV production, utilising an optimal fit algorithm. Through our study, we demonstrate that our implementation of the third approach outperforms a standard management approach, resulting in more than 17% cost savings. This study provides insights into the optimisation of load-shifting strategies in domestic photovoltaic installations, highlighting the importance of load control and the potential benefits in maximising the utilisation of solar energy while minimising energy costs and environmental impact.
    Date: 2023–10
  18. By: Matthew E. Kahn; John Matsusaka; Chong Shu
    Abstract: This paper studies whether green investors can influence corporate greenhouse gas emissions through capital markets, either by divesting their stock and limiting polluters’ access to capital, or holding polluters’ stock and engaging with management. We focus on public pension funds, classifying them as green or non-green based on which political party controlled the fund. To isolate the causal effects of green ownership, we use exogenous variation caused by state-level politics that shifted control of the funds and portfolio rebalancing in response to returns on non-equity investment. Our main finding is that companies reduced their greenhouse gas emissions when stock ownership by green funds increased and did not alter their emissions when ownership by non-green funds changed. We find evidence that ownership and constructive engagement was more effective than confrontational tactics such as voting or shareholder proposals. We do not find that companies with green investors were more likely to sell off their polluting facilities (greenwashing). Overall, our findings suggest that (a) corporate managers respond to the environmental preferences of their investors; (b) divestment in polluting companies may be counterproductive, leading to greater emissions; and (c) private markets may be able to address environmental challenges without explicit government regulation.
    JEL: G11 G12 Q54
    Date: 2023–10
  19. By: Kumbhakar, Subal C.; Badunenko, Oleg; Willox, Michael
    Abstract: This paper evaluates the impact of British Columbia’s carbon tax on manufacturers’ economic and environmental performance in a unified modeling framework that allows for making critical distinctions between efficiency, technical change, and total factor productivity as performance measures. In contrast to most papers that examine environmental policy impacts on either the economy or the environment, our approach combines a by-production model within a stochastic frontier framework to evaluate the tax’s impacts on both economic and environmental efficiency. Our findings suggest that a 1.0% increase in the carbon tax improved manufacturers’ efficiency in producing desirable output (real sales of manufactured goods) by 0.5%. In addition, the same 1.0% increase in the carbon tax improved manufacturers’ environmental efficiency for greenhouse gas (GHGs) and carbon monoxide (CO) emissions by the same amount, 0.2%. However, the carbon tax led to lower environmental efficiency for emissions of nitrogen oxides (NOx), -0.3%. In addition, our use of a rich plant-level dataset reveals considerable heterogeneity in manufacturers’ efficiency responses to the tax. Finally, we suggest that lower efficiency levels for undesirable outputs than desirable outputs indicate that the relative cost of adjusting production processes to improve efficiency favors economic efficiency over environmental efficiency
    Keywords: Efficiency; Carbon tax; Stochastic frontier model; By-production model
    JEL: D24 Q51 Q58
    Date: 2022–12
  20. By: Gale Boyd; Matthew Doolin; Yu Ma; Jennifer Weiss
    Abstract: Industry accounts for one-third of energy consumption in the US. Studies suggest that energy efficiency opportunities represent a potential energy resource for regulated utilities and have resulted in rate of return regulated demand-side management (DSM) and energy efficiency (EE) programs. However, many large customers are allowed to self-direct or opt-out. In the Carolinas (NC and SC), over half of industrial and large commercial customers have selected to opt out. Although these customers claim they invest in EE improvements when it is economic and cost-effective to do so, there is no mechanism to validate whether they actually achieved energy savings. This project examines the industrial energy efficiency between the program participants and non participants in the Carolinas by utilizing the non-public Census of Manufacturing data and the public list of firms that have chosen to opt out. We compare the relative energy efficiency between the stay-in and opt-out plants. The t-test results suggest opt-out plants are less efficient. However, the opt-out decisions are not random; large plants or plants belonging to large firms are more likely to opt out, possibly because they have more information and resources. We conduct a propensity score matching method to account for factors that could affect the opt-out decisions. We find that the opt-out plants perform at least as well or slightly better than the stay-in plants. The relative performance of the opt-out firms suggest that they may not need utility program resources to obtain similar levels of efficiency from the stay-in group.
    Keywords: Demand-side management, energy efficiency, energy policy
    Date: 2023–10
  21. By: Richard S. J. Tol
    Abstract: The social cost of carbon is the damage avoided by slightly reducing carbon dioxide emissions. It is a measure of the desired intensity of climate policy. The social cost of carbon is highly uncertain because of the long and complex cause-effect chain, and because it quantifies and aggregates impacts over a long period of time, affecting all people in a wide range of possible futures. Recent estimates are around $\$$80/tCO$_2$.
    Date: 2023–10
  22. By: Taipeng LI; Lorenzo Trimarchi; Rui XIE; Guohao YANG
    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 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 tariffs for 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. 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. This paper presents the first empirical evidence of political incentives to manipulate environmental regulation to curb negative economic shocks.
    Keywords: Political Cycles, Environmental Regulation, Trade Protection, US-China Trade War
    Date: 2023–10
  23. By: Dirk Drechsel (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Heiner Mikosch (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Samad Sarferaz (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: In this paper, we investigate the transmission channels of oil price shocks using a factorial survey. We confront CEOs and CFOs of a representative sample of firms with a hypothetical vignette in which the oil price rises exogenously above managers’ baseline expectations. The managers then estimate the short- and medium-term cost, price, and output effects of the shock on their firms. We find that the managers expect the shock to have very different effects on their firms: the cross-sectional distributions of the responses are large, skewed, and have fat tails. Higher firm-specific energy input costs lead managers to expect greater output losses and sales price increases. Higher market power accelerates this input cost effect. Another important determinant is managers’ pre-shock uncertainty about business prospects. The importance of the three channels varies considerably across industries.
    Keywords: Oil price shocks, Transmission channel, firms, expectations, surveys, Vignette
    JEL: E31 E5 L11
    Date: 2022–11
  24. By: Rachel Glennerster (University of Chicago); Seema Jayachandran (Princeton University)
    Abstract: Reductions in greenhouse gas emissions are a global public good, which makes it efficient to act globally when addressing this challenge. We lay out several reasons that high-income countries seeking to mitigate climate change might have greater impact if they invest their resources in opportunities in low- and middle-income countries. Specifically, some of the easiest and cheapest options have already been tapped in high-income countries, land and labor costs are lower in low- and middle-income countries, it is cheaper to build green than to retrofit green, and global targeting matters in integrated economies. We also discuss economic counterarguments such as the challenge of monitoring emissions levels in low and middle-income countries, ethical considerations, the importance of not double counting mitigation funding as development aid, and policy steps that might help to realize this opportunity.
    Keywords: Climate change, mitigation, Paris Agreement, greenhouse gas emissions
    JEL: F18 O13 Q54 Q56
    Date: 2023–06
  25. By: Yiwen Chen (Shandong Agricultural University, CH); Xi Wan (Nanjing Audit University, CH); Benteng Zou (DEM, Université du Luxembourg)
    Abstract: Carbon capture and storage (CCS) is considered one of the most important and efficient tools in fighting against greenhouse gas emissions. Countries differ in terms of the level CCS processes implemented, with the main barrier to CCS adoption being its high cost. This paper introduces a differential game model with heterogeneous countries to investigate the optimal timing for countries to initiate CCS projects, taking into account CCS costs. We show that (i) the thresholds for the triggering of CCS projects depend not only on one's own CCS costs but also those of others, in addition to the pollution damage costs; (ii) the optimal timing for different countries to initiate their CCS projects is the moment when their threshold level of pollution stock is reached; (iii) countries are more inclined to free-ride by both reducing pollutant emissions and deploying CCS when pollution damage costs are symmetric rather than asymmetric; finally, (iv) we provide sufficient conditions under which some countries never deploy CCS even though they bear the same pollution damage as the others.
    Keywords: Carbon capture and storage, optimal timing, Markovian perfect equilibrium.
    JEL: Q53 Q58 C61 C72
    Date: 2023
  26. By: Michael Barnett; William Brock; Lars Peter Hansen; Ruimeng Hu; Joseph Huang
    Abstract: We study the implications of model uncertainty in a climate-economics framework with three types of capital: "dirty" capital that produces carbon emissions when used for production, "clean" capital that generates no emissions but is initially less productive than dirty capital, and knowledge capital that increases with R\&D investment and leads to technological innovation in green sector productivity. To solve our high-dimensional, non-linear model framework we implement a neural-network-based global solution method. We show there are first-order impacts of model uncertainty on optimal decisions and social valuations in our integrated climate-economic-innovation framework. Accounting for interconnected uncertainty over climate dynamics, economic damages from climate change, and the arrival of a green technological change leads to substantial adjustments to investment in the different capital types in anticipation of technological change and the revelation of climate damage severity.
    Date: 2023–10
  27. By: Christian Krekel; Johannes Rode; Alexander Roth
    Abstract: While wind power is considered key in the transition towards net zero, there are concerns about adverse health impacts on nearby residents. Based on precise geographical coordinates, we link a representative longitudinal household panel to all wind turbines in Germany and exploit their staggered rollout over two decades for identification. We do not find evidence of negative effects on general, mental, or physical health in the 12-Item Short Form Survey (SF-12), nor on self-assessed health or doctor visits. We also do not find evidence for effects on suicides, an extreme measure of negative mental health outcomes, at the county level.
    Keywords: wind turbines, externalities, health, renewable energy, difference-in-differences, event study, Wellbeing
    Date: 2023–10–10
  28. By: Yoon, Yeochang
    Abstract: South Korea has set ambitious greenhouse gas (GHG) emission reduction targets. However, the country currently confronts a decline in the price of emission permits. This downward trend could obstruct the successful realization of GHG objectives through market mechanisms. The current emissions trading scheme (ETS) restricts banking of excess emission allowances, which has been identified as the main reason of the ongoing price decline. Consequently, this restriction hinders the adequate reflection of updated targets within the emissions trading market. To address this issue and avert potential shocks from a substantial reduction in emission allowance supply during Phase IV, it is necessary to relax the banking restrictions. At the same time, to proactively manage potential price escalations resulting from eased restrictions on permit banking, supplementary measures are required. These measures could include the introduction of explicit market stability mechanisms utilizing allowance reserves and the expansion of allowance supply channels.
    Date: 2023
  29. By: Tanhua Jin; Kailai Wang; Yanan Xin; Jian Shi; Ye Hong; Frank Witlox
    Abstract: Enhanced efforts in the transportation sector should be implemented to mitigate the adverse effects of CO2 emissions resulting from zoning-based planning paradigms. The innovative concept of the 15-minute city, with a focus on proximity-based planning, holds promise in minimizing unnecessary travel and advancing the progress toward achieving carbon neutrality. However, an important research question that remains insufficiently explored is: to what extent is a 15-minute city concept within reach for US cities? This paper establishes a comprehensive framework to evaluate the 15-minute city concept using SafeGraph Point of Interest (POI) check-in data in the 12 most populous US cities. The results reveal that residents are more likely to rely on cars due to the fact that most of their essential activities are located beyond convenient walking, cycling, and public transit distances. However, there is significant potential for the implementation of the 15-minute city concept, as most residents' current activities can be accommodated within a 15-minute radius by the aforementioned low-emission modes of transportation. Our findings can offer policymakers insight into how far US cities are away from the 15-minute city and the potential CO2 emission reduction they can expect if the concept is successfully implemented.
    Date: 2023–10
  30. By: Stephen Gibbons; Cheng Keat Tang
    Abstract: Overhead electrical power lines and pylons have long raised concerns regarding the effects of electromagnetic fields on health, noise pollution and the visual impact on rural landscapes. These issues are once again salient because of the need for new lines to connect sources of renewable energy to the grid. In this study we provide new evidence on the cost implied by these externalities, as revealed in house prices. We use a spatial difference-in-difference approach that compares price changes in neighbourhoods that are close to overhead power lines, before and after they are constructed, with price changes in comparable neighbourhoods further away. Our findings suggest that the construction of new overhead pylons reduces prices by 3.6% for properties up to 1200 meters away, suggesting the impacts extend further than previously estimated.
    Keywords: externalities, overhead power lines, pylons, house prices, revealed preferences
    Date: 2023–08–16
  31. By: Anna Bartczak (University of Warsaw, Faculty of Economic Sciences); Wiktor Budziński (University of Warsaw, Faculty of Economic Sciences); Ulf Liebe (University of Warwick, Departement of Sociology); Jurgen Meyerhoff (Berlin School of Economics and Law)
    Abstract: In this paper, we investigate the effect of respondents’ attitudes concerning distributive justice in payments on their stated preferences for programmes reducing ambient air pollution in four cities in Poland. By combining two multi-factorial survey experiments, we propose a novel approach of incorporating justice attitudes into non-market valuation. In the first experiment – a factorial survey experiment (FSE) – we record justice attitudes towards payments. In the second experiment – a choice experiment (CE) – we elicit stated preferences for air pollution reduction programmes. As a modelling framework, we employ a hybrid choice model. The same respondents undertook both experiments in separate surveys one to two weeks apart, minimising the likelihood of biased estimates of the effect of justice attitudes on stated preferences. The results indicate a substantial effect of the justice attitude on the stated willingness to pay. The proposed approach could be used for joint modelling of justice attitudes and preferences in a wide range of fields, contributing further insights into their interactions.
    Keywords: air pollution, choice experiment, distributive justice attitude, factorial survey experiment, hybrid choice model, willingness to pay
    JEL: D63 I18 Q51 Q53
    Date: 2023
  32. 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
  33. By: Robert M. Anderson; Haosui Duanmu
    Abstract: We propose two general equilibrium models, quota equilibrium and emission tax equilibrium. The government specifies quotas or taxes on emissions, then refrains from further action. Quota equilibrium exists; the allocation of emission property rights strongly impacts the distribution of welfare. If the only externality arises from total net emissions, quota equilibrium is constrained Pareto Optimal. Every quota equilibrium can be realized as an emission tax equilibrium and vice versa. However, for certain tax rates, emission tax equilibrium may not exist, or may exhibit high multiplicity. Full Pareto Optimality of quota equilibrium can often be achieved by setting the right quota.
    Date: 2023–10
  34. By: Pourkhanali, Armin (Economics Finance & Marketing, Royal Melbourne Institute of Technology); Kholghi, Donya (Department of Mathematics, Institute for Advanced Studies in Basic Sciences); Llorca, Manuel (Department of Economics, Copenhagen Business School); Jamasb, Tooraj (Department of Economics, Copenhagen Business School)
    Abstract: This empirical analysis investigates the determinants and dynamics of energy poverty in Spain using a combination of traditional regression models and machine learning techniques. The study identifies significant determinants of energy poverty, including income, housing type, education level, and health conditions. Findings demonstrate that lower income, specific housing types, and lower education levels increase the likelihood of energy poverty. This study also investigates the dynamics of energy poverty, and the results show the coexistence of both transient and persistent aspects of energy poverty. 35% of Spanish households struggled to maintain adequate warmth in their homes during at least one period from 2016 to 2021. While a small portion (5%) experienced chronic energy poverty, indicating their inability to maintain their home adequate warmth throughout the 70% sample period. Finally, the study offers valuable insights into the dynamics and drivers of energy poverty. It underscores both its temporary and persistent characteristics, in addition to the impact of socioeconomic factors.
    Keywords: Transient and persistent energy poverty; Self-assessed health; Dynamic random effects probit; Machine learning
    JEL: C01 D63 I14 I32
    Date: 2023–10–17
  35. By: International Monetary Fund
    Abstract: Context and Recent Developments. Brunei’s high vaccination rates have allowed for the removal of COVID-19 restrictions and reopening of borders; however, reduced oil and gas (O&G) production have undermined the recovery. The financial sector remains liquid and well-capitalized. High fuel prices helped strengthen the fiscal and external positions in 2022. Inflation hit a historical high but has recently declined. The 2023 Article IV consultation took place in the context of a volatile O&G market, and a difficult external environment. Key policy challenges include the narrowing fiscal space, the need to shield the economy against O&G price and output volatility, global decarbonization pressures, and ensuring inter-generational equity. The government is committed to diversifying towards a low-carbon economy.
    Date: 2023–10–06
  36. By: Fitch-Polse, Dillon; Jaller, Miguel
    Abstract: The use of cargo bikes for last-mile deliveries has seen renewed interest, as more sustainable modes are needed to meet the carbon reduction strategies. Furthermore, cargo-bikes contain possibly the greatest co-benefits of any emission reduction strategies for the freight sector. With the goal of informing state, regional, and local government efforts for transforming local goods movement, researchers at the University of California, Davis synthesized the literature on cargo bikes for goods movement with a specific focus on the challenges facing California. Key findings from the research are summarized in this brief.
    Keywords: Law, Social and Behavioral Sciences, Cargo bikes, last-mile delivery, urban goods movement
    Date: 2023–08–01
  37. By: Anna L. SOBIECH; UCHIDA Hirofumi
    Abstract: We analyse the usage of green loans under a public green loan program and document a positive link with borrower financial health. Green loan users have better credit ratings, higher sales growth, and lower leverage. The link remains stable in face of significantly changing conditions for green investments and heightened green policy uncertainty induced by changes in governments’ green policy mix. Green loan users also exhibit better ex-post performance and lower default probability. The results imply that the screening undertaken by the lender matters for efficient green loan provision and highlight the important role of public loan programs in the green policy mix.
    Date: 2023–10
  38. By: Bram De Rock; Florine Le Henaff
    Abstract: We created a unique data set based on social media data by collecting and geo-localising all the tweets of 54 thousand Swedish citizens from January 2019 to June 2019. This allows us to construct an attractive individual-level measure of preferences for pro-environmental behavior. We demonstrate this by using our measure in two applications. We first document a subjective well-being gap between individuals with and without green preferences, using the average sentiment scores in tweets as a proxy of individuals’ subjective well-being. We then investigate the existence of a gender gap in green preferences and the propensity to act for the environment, relating our measure to publicly available data on electric and hybrid car registrations and political support for environmental policies in Sweden.
    Keywords: Individual preferences, social media, pro-environmental behavior, subjective well-being, gender identities
    Date: 2023–10
  39. By: Weihua Ruan (Purdue University Northwest, USA); Benteng Zou (DEM, Université du Luxembourg)
    Abstract: Critical minerals are essential to the success of the transition to clean and sustainable technology. However, critical minerals face supply chain disruption, resource depletion, a lack of recycling technology and minimum demand, which may be increasing over time, at least in the short run. This paper models critical mineral extraction and recycling strategies under international cooperation and open-loop commitment competition. We show that (1) recycling technology can only partially reduce dependence on the virgin supply of critical minerals, given that recycling essentially relies on the accumulated supply from depletable resources; (2) the social planner's Markovian optimal market supply is based on either virgin or recyclable resources, with the more socially desirable being used first; (3) if the recyclable resource is exhausted, the social planner does not have an optimal choice regarding how to exploit the remaining virgin resource; but (4) under open-loop commitment, the two resources can coexist until the virgin resource is exhausted
    Keywords: critical mineral, recycling, import and export, differential game.
    JEL: Q34 C61 D4 L72 L12
    Date: 2023
  40. By: Phương, Lã Việt; Hoàng, Nguyễn Minh
    Abstract: Một trong những thách thức lớn, mà thị trường carbon phải đối mặt là sự tồn tại của nhiều tiêu chuẩn và đôi khi xung đột với nhau. (Tạp chí Kinh tế & Dự báo; ngày 2-10-2023)
    Date: 2023–10–01
  41. By: La, Viet-Phuong; Nguyen, Minh-Hoang
    Abstract: Thị trường carbon toàn cầu đã trở thành một yếu tố quan trọng trong cuộc chiến chống biến đổi khí hậu, cung cấp cơ hội cho các chính phủ, doanh nghiệp và tổ chức giảm lượng khí thải khí nhà kính. Tuy nhiên, với sự gia tăng về tầm quan trọng của thị trường carbon, sự phức tạp trong quản lý nó cũng tăng lên. Một trong những thách thức lớn mà thị trường carbon phải đối mặt là sự tồn tại của nhiều tiêu chuẩn đa dạng và đôi khi xung đột với nhau. Mặc dù các tiêu chuẩn này được phát triển để phục vụ các bên liên quan cho mục tiêu khác nhau, nhưng chúng cũng tạo ra sự hỗn loạn, làm giảm hiệu suất và gây ra các vấn đề tiềm ẩn. Bài viết này sẽ xem xét các vấn đề xung quanh sự tồn tại quá nhiều tiêu chuẩn trên thị trường carbon và thảo luận về sự cần thiết của việc hài hòa hóa chúng một cách hợp lý hơn.
    Date: 2023–10–01
  42. By: Yen, Nguyen Thi Quynh
    Abstract: Chứng nhận trung hòa carbon thường được các chính phủ trao cho các doanh nghiệp và tổ chức đã đạt được trạng thái trung hòa carbon một cách đáng tin cậy. Vì thế, những doanh nghiệp và tổ chức đạt được chứng nhận được ghi nhận là có tham gia vào nỗ lực chung để giảm bớt tác động tiêu cực của con người đối với môi trường. Một số doanh nghiệp đã cố gắng có được chứng nhận này và sử dụng nó như một phương tiện truyền thông để “tẩy xanh” và quảng bá cho sản phẩm.
    Date: 2023–10–19
  43. By: Piet Eichholtz; Stefan Flagner; Nils Kok; Rick Kramer; Steffen Kuenn; Wouter van Marken Lichtenbelt; Guy Plasqui; Xudong Sun
    Abstract: Academic achievement of students is a major determinant for their subsequent professional careers. Thus, university classrooms should offer optimal learning environments fostering students’ cognitive performance and development. However, university buildings are often poorly ventilated and in need of renovation. Past studies have shown that poor indoor environmental quality in terms of the thermal environment and air quality impairs cognitive performance. This study uses a quasi-experimental setup to investigate the effects of a sustainable university building on students’ academic performance and wellbeing. We randomly assigned a sample of about 1200 first-year Maastricht University bachelor students in economics and business into a control and treatment group. The treatment group had their four weekly 2-hour tutorials in a newly renovated building certified with the WELL Building Silver Standard. The control group stayed in the old building, which has been in service for the university since 1976, with the most recent renovation in 2002. In each of the tutorial rooms, we measured indoor temperature, relative humidity, the concentration of carbon dioxide (CO2), fine particulate matter (PM) and volatile organic compounds (VOC) during two course periods from November to December 2022 and from February to March 2023, each lasting seven weeks. We recorded the grades, the course evaluations, and student survey responses on their perception of the indoor environment during each course. Each tutor taught classes in both buildings, allowing a natural tutor-fixed effect. Preliminary results from the first period showed that CO2 and VOC concentrations were significantly lower in the certified building. No substantial differences in students’ grades were found. However, students reported a better mood, a higher satisfaction, and believed that the certified building had a positive impact on their performance. Contrarily, they reported that the lighting conditions and noise levels of the certified building hindered their performance. The next step will be to incorporate the data from the second test period examining possible longitudinal effects. All data collection will be finished by the end of March 2023, and we will do the remaining analysis and the paper write-up in April and May.
    Keywords: Cognition; Green Building; Indoor Environmental Quality; Well-Being
    JEL: R3
    Date: 2023–01–01
  44. By: Weihua Ruan (Purdue University Northwest, USA); Benteng Zou (DEM, Université du Luxembourg)
    Abstract: With the exhaustion of non-renewable resources and the increasing importance of criti- cal materials for the transition to clean technology, recycling is being called into action. Fulfilling demand for critical minerals involves challenges such as supply chain disruption, resource depletion and positive minimum demand, however. Under Markovian competi- tion between an exporting cartel and an importing country, we demonstrate that (i) if both virgin and recyclable resources are abundant, multiple subgame perfect Markovian Nash equilibria arise; (ii) if the exporting cartel can choose which Nash equilibrium to follow, when the cost of exploiting the non-renewable resource is sufficiently high, stopping the supply of virgin resource to the market is the Nash equilibrium; (iii) the consequence of this choice is that when the recyclable resource is exhausted, there is no Nash equilibrium anymore, although there remains virgin resource to exploit.
    Keywords: critical minerals, recycling, import and export, differential game, Hamilton-Jacobi-Bellman.
    JEL: Q34 C61 D4 L72 L12
    Date: 2023
  45. By: Mr. Jorge A Alvarez; Mehdi Benatiya Andaloussi; Chiara Maggi; Alexandre Sollaci; Martin Stuermer; Petia Topalova
    Abstract: This paper studies the economic impact of fragmentation of commodity trade. We assemble a novel dataset of production and bilateral trade flows of the 48 most important energy, mineral and agricultural commodities. We develop a partial equilibrium framework to assess which commodity markets are most vulnerable in the event of trade disruptions and the economic risks that they pose. We find that commodity trade fragmentation – which has accelerated since Russia’s invasion of Ukraine – could cause large price changes and price volatility for many commodities. Mineral markets critical for the clean energy transition and selected agricultural commodity markets appear among the most vulnerable in the hypothetical segmentation of the world into two geopolitical blocs examined in the paper. Trade disruptions result in heterogeneous impacts on economic surplus across countries. However, due to offsetting effects across commodity producing and consuming countries, surplus losses appear modest at the global level.
    Keywords: Commodities; international trade; sanctions; spillovers; prices; geoeconomic fragmentation; trade disruption; price change; commodity producer; net-commodity-importing country; trade fragmentation; Commodity markets; Commodity price fluctuations; Agricultural commodities; Inflation; Global
    Date: 2023–10–03
  46. By: Armanda Cetrulo; Giovanni Dosi; Angelo Moro; Linnea Nelli; Maria Enrica Virgillito
    Abstract: This position paper outlines the characteristics of the trends at stake in affecting the twin transition in the European automotive industry, and the political economy of the actors behind such transition. We first describe the automation and digitalization processes in the automotive sector and their effects on employment. Possible scenarios are analysed, illustrating actual cases of electrification conversion of some European plants of the key OEMs companies as practical examples to understand the employment effects. We then consider the role of the regulatory push in fostering the transition of the automotive sector towards electrification, highlighting the non-neutrality of the process and the risk of a quite limited space for decarbonization. Finally, we discuss the space and capacity of trade unions' actions to orient the twin transition toward social and climate justice.
    Keywords: Social dialogue; trade unions; employment; political economy.
    Date: 2023–10–25
  47. By: Kehinde Abraham Ogunsanya
    Abstract: Poultry waste managementis multidimensional and involves public health, waste management, utilization of fertilizing value, and fuel and energy production issues. The poultry industry in FCT Abuja, Nigeria, faces significant challenges in managing the large quantities of organic waste generated, which can have detrimental effects on the environment and public health if not properly handled. This thesis explores the potential of biodigester and biogas production as a sustainable and efficient technology for poultry waste management in FCT Abuja, Nigeria. The study aims to assess the feasibility, economic viability, benefits, and limitations of biodigester and biogas technology in managing poultry waste, providing valuable insights for policymakers, poultry farmers, and environmental stakeholders. The intent of the study is also to show that the chicken waste used as feed material to produce biogas can tap additional energy from the otherwise wasted energy and make the poultry industry co-exist with the environment of the neighbours. This research will identify and evaluate the economic feasibility of producing biogas from poultry waste. The research is of particular interest to the poultry farmers and to Waru community of Federal Capital Territory, Abuja, Nigeria, as the people are becoming very conscious of the environmental impact due to pollution. This will also solve the crisis of offensive smell emanating from the poultry farm, causing disputes between the poultry farmer and the host Waru Community.
    Keywords: Bio-digestion; Biogas; biomass; Poultry Waste; Renewable Energy; Slurry
    JEL: R3
    Date: 2023–01–01
  48. By: Robert Lehmann; Christoph Schult
    Abstract: We estimate potential regional industrial effects in case of a threatening gas deficit. For Germany, the reduction leads to a potential decrease in industrial value added by 1.6%. The heterogeneity across German states is remarkable, ranging from 2.2% for Rhineland-Palatinate to 0.7% for Hamburg. We emphasize the need for regional input-output tables to conduct economic analysis on a sub-national level, particularly when regional industrial structures are heterogeneous. The approximation with national figures can lead to results that differ both in magnitude and relative regional exposure. Our findings highlight that more accurate policy guidance can be achieved by improving the regional database.
    Keywords: gas shortage, input-output analysis, regional economic impacts, Germany
    JEL: R11 R15 R19
    Date: 2023

This nep-ene issue is ©2023 by Roger Fouquet. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.