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on Energy Economics |
| By: | Hong Yuan; Minda Ma |
| Abstract: | The transportation sector is the third-largest global energy consumer and emitter, making it a focal point in the transition toward the net-zero future. To accelerate the decarbonization of passenger cars, this work is the first to propose a bottom-up charging demand model to estimate the operational electricity use and associated carbon emissions of best-selling battery electric vehicles (BEVs) in various climate zones in China during the 2020s. The findings reveal that (1) the operational energy demand of the top-20 selling BEV models in China, such as Tesla, Wuling Hongguang, and BYD, increased from 601 to 3054 giga-watt hours (GWh) during 2020-2022, with BEVs in South China contributing more than half of the total electricity demand; (2) from 2020 to 2022, the energy and carbon intensities of the best-selling models decreased from 1364 to 1095 kilowatt-hour per vehicle and from 797 to 621 kilograms of carbon dioxide (CO2) per vehicle, respectively, with North China experiencing the highest intensity decline compared to that in other regions; and (3) the operational energy demand of BEV stocks in China increased from 4774 to 12, 048 GWh during 2020-2022, while the carbon emissions of BEV stocks rose to 6.8 mega-tons of CO2 in 2022, reflecting an annual growth rate of ~50%. In summary, this work delves into the examination and contrast of benchmark data on a nation-regional scale, as well as performance metrics related to BEV chargings. The primary aim is to support nationwide efforts in decarbonization, aiming for carbon mitigation and facilitating the swift evolution of passenger cars toward a carbon-neutral future. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.10851&r= |
| By: | Tayarani, Hanif; Nitta, Christopher J.; Tal, Gil |
| Abstract: | To maximize the greenhouse gas (GHG) emission reduction potential of Battery Electric Vehicles (BEVs), it is critical to develop EV dynamic charging management strategies. These strategies leverage the temporal variability in emissions associated with generated electricity to align EV charging with periods of low-carbon power generation. This study introduces a deep neural network tool to enable BEV drivers to make charging sessions align with the availability of cleaner energy resources. This study leverages a Long Short-Term Memory network to forecast individual BEV vehicle miles traveled (VMT) up to two days ahead, using a year-long dataset of driving and charging patterns from 66 California-based BEVs. Based on the predicted VMT, the model then estimates the vehicle's energy needs and the necessity of a charging session. This allows drivers to charge theirvehicles strategically, prioritizing low-carbon electricity periods without risking incomplete journeys. This framework empowers drivers to actively contribute to cleaner electricity consumption with minimal disruption to their daily routines. The tool developed in this project outperforms benchmark models such as recurrent neural networks and autoregressive integrated moving averages, demonstrating its predictive capabilities. To enhance the reliability of predictions, confidence intervals are integrated into the model, ensuring that the model does not disrupt drivers' daily routine trips when skipping non-critical charging events. The potential benefits of the tool are demonstrated by applying it to real-world EV data, finding that if drivers follow the tool’s predictive suggestion, they can reduce overall GHG emissions by 41% without changing their driving patterns. This study also found that even charging in regions with higher carbon-intensity electricity than California can achieve Californian emission levels for EV charging in the short term through strategic management of non-critical charging events. This findingreveals new possibilities for further emissions reduction from EV charging, even before the full transition to a carbon-neutral grid. View the NCST Project Webpage |
| Keywords: | Engineering, Social and Behavioral Sciences, Charging behavior, forecasting, machine learning |
| Date: | 2024–06–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsdav:qt77t9p8sf&r= |
| By: | Sharma, Anjali; Peng, Wei; Urpelainen, Johannes; Dai, Hancheng; Purohit, Pallav; Wagner, Fabian |
| Abstract: | Transitioning to electric vehicles (EVs) is a central strategy for reducing carbon dioxide and air pollutant emissions. Although the emission impacts of reduced gasoline combustion and increased power generation are well recognized, the impacts of growing EV manufacturing activities remain understudied. Here we focus on China and India, two of the fastest growing EV markets. Compared to a 2030 baseline scenario, we find national emissions of air pollutants could increase in certain high EV penetration scenarios as a result of the emission-intensive mineral production and battery manufacturing processes. Notably, national sulfur dioxide emissions could increase by 16%-79% if all batteries have nickel- and cobalt-based cathodes and are produced domestically. Subnational regions that are abundant in battery-related minerals might emerge as future pollution hotspots. Our study thus highlights the importance of EV supply chain decisions and related manufacturing processes in understanding the environmental impacts of the EV transition. |
| Date: | 2024–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:osf:osfxxx:27hvu&r= |
| By: | Rose, Julian; Ankel-Peters, Jörg; Hodel, Hanna; Sall, Medoune; Bensch, Gunther |
| Abstract: | Claims for removing fossil fuel subsidies in the Global South are based on climate and equity concerns, but they can be at odds with improving access to Liquefied Petroleum Gas (LPG) as a clean cooking fuel. We examine the case of urban Senegal where LPG usage rates were among the highest in sub-Saharan Africa in the late 2000s. Using Demographic and Health Survey (DHS) data, we show that LPG usage declined sharply following the removal of subsidies in 2009. Counterintuitively, the decline was not reversed when falling world market prices led to a local price decrease. To explore this puzzle, we use detailed cooking data from surveys we conducted in 2009 and 2019. We find that households change to charcoal after the subsidy removal, but they increasingly use newly promoted energy-efficient charcoal stoves. These stoves make charcoal cooking cheaper and hence the switch back to LPG less attractive. Our results underscore that the energy transition of the poor is highly price responsive - an important insight not only for the debate about fossil fuel subsidies but also carbon taxation. |
| Abstract: | Die Forderungen nach einer Abschaffung der Subventionen für fossile Brennstoffe im globalen Süden basieren auf Klima- und Gerechtigkeitsaspekten, können jedoch im Widerspruch zu einem verbesserten Zugang zu Flüssiggas (LPG) als sauberem Kochbrennstoff stehen. Wir untersuchen den Fall des urbanen Senegal, wo die LPG-Nutzungsraten in den späten 2000er Jahren zu den höchsten in Subsahara-Afrika gehörten. Anhand von Daten aus der Demographic and Health Survey (DHS) zeigen wir, dass die LPG-Nutzung nach der Abschaffung der Subventionen im Jahr 2009 drastisch zurückging. Interessanterweise führten fallenden Weltmarktpreise und einer damit einhergehenden lokalen Preissenkung nicht zu einer Rückkehr zum vorherigen Nutzungsniveau. Um diese Entwicklung zu untersuchen, verwenden wir detaillierte Kochdaten aus Umfragen, die wir 2009 und 2019 durchgeführt haben. Wir stellen fest, dass die Haushalte nach der Abschaffung der Subvention auf Holzkohle umsteigen, aber zunehmend neu geförderte energieeffiziente Holzkohleherde verwenden. Diese Öfen machen das Kochen mit Holzkohle billiger und damit den Wechsel zurück zu Flüssiggas weniger attraktiv. Unsere Ergebnisse unterstreichen, dass die Energiewende der Armen in hohem Maße preisabhängig ist - eine wichtige Erkenntnis nicht nur für die Debatte über Subventionen für fossile Brennstoffe, sondern auch für die Besteuerung von Kohlenstoff. |
| Keywords: | Energy subsidies, air pollution, energy transition, clean cooking, climate policy |
| JEL: | O13 Q41 Q56 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:295229&r= |
| By: | Lionel Fontagné; Stephen Karingi; Simon Mevel; Cristina Mitaritonna; Yu Zheng |
| Abstract: | The African Continental Free Trade Area (AfCFTA) Agreement aims to create a single market for goods and services, increase intra-Africa trade and promote sustainable socioeconomic development in Africa. African countries need to balance efforts to address these goals with the urgency of climate change. As of the 27th session of the Conference of Parties of the United Nations Framework Convention on Climate Change in 2022, most African countries had submitted their Nationally Determined Contributions (NDCs) to mitigate the impact of climate change. Establishing a carbon market is now on the policy agenda. This paper uses a dynamic general equilibrium model with different sources of energy (including renewable energy) and an in-depth presentation of greenhouse gas emissions to assess the economic and environmental impacts of implementing the AfCFTA Agreement and adopting various climate policies in Africa, including those NDCs and the International Monetary Fund’s proposal of carbon price floors. It shows that implementing the agreement and achieving Africa’s climate objectives are compatible. Continental coordination of emissions reduction among African countries proves most efficient for climate action. |
| Keywords: | International Trade;Climate Change;AfCFTA |
| JEL: | F13 F17 F18 Q56 |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepidt:2024-04&r= |
| By: | Rainald Borck (University of Potsdam, CESifo, CEPA); Peter Mulder (Netherlands Organization for Applied Scientific Research (TNO), Utrecht University) |
| Abstract: | We study the effect of energy and transport policies on pollution in two developing country cities. We use a quantitative equilibrium model with choice of housing, energy use, residential location, transport mode, and energy technology. Pollution comes from commuting and residential energy use. The model parameters are calibrated to replicate key variables for two developing country cities, Maputo, Mozambique, and Yogyakarta, Indonesia. In the counterfactual simulations, we study how various transport and energy policies affect equilibrium pollution. Policies may be induce rebound effects from increasing residential energy use or switching to high emission modes or locations. In general, these rebound effects tend to be largest for subsidies to public transport or modern residential energy technology. |
| Keywords: | pollution, energy policy, discrete choice, developing country cities |
| JEL: | Q53 Q54 R48 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:pot:cepadp:78&r= |
| By: | Huntington, Hillard |
| Abstract: | This study measures the response of gasoline consumption to improved vehicle fuel efficiency (miles per gallon). Although an inverse relationship exists, the percentage decline is always less than the percentage efficiency improvement. As usually measured by past researchers, the long-run response in this study is approximately 80% of the efficiency improvement. The remaining 20% is the direct rebound effect and comports well with previous estimates. However, this rebound estimate escalates to 40-50% if horsepower or vehicle size are controlled. Even larger estimates (about 70%) are possible if carmakers change both fuel efficiency and horsepower when required to meet energy efficiency standards. Larger rebound effects are also possible when VFE improvements also reduce gasoline prices, but these price reductions may also improve welfare. |
| Keywords: | Gasoline; Energy efficiency; Technological change |
| JEL: | O33 Q41 Q48 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121095&r= |
| By: | Xiwang Xiang; Minda Ma |
| Abstract: | The building sector is the largest emitter globally and as such is at the forefront of the net-zero emissions pathway. This study is the first to present a bottom-up assessment framework integrated with the decomposing structural decomposition method to evaluate the emission patterns and decarbonization process of global residential building operations and commercial building operation simultaneously over the last two decades. The results reveal that (1) the average carbon intensity of global commercial building operations has maintained an annual decline of 1.94% since 2000, and emission factors and industrial structures were generally the key to decarbonizing commercial building operations; (2) the operational carbon intensity of global residential buildings has maintained an annual decline of 1.2% over the past two decades, and energy intensity and average household size have been key to this decarbonization; and (3) the total decarbonization of commercial building operations and residential buildings worldwide was 230.28 and 338.1 mega-tons of carbon dioxide per yr, respectively, with a decarbonization efficiency of 10.05% and 9.4%. Overall, this study assesses the global historical progress in decarbonizing global building operations and closes the relevant gap, and it helps plan the stepwise carbon neutral pathway of future global buildings by the mid-century. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.13327&r= |
| By: | Salem, Leila Ben (University of Sousse); Nouira, Ridha (University of Sousse); Saafi, Sami (University of Sousse); Rault, Christophe (University of Orléans) |
| Abstract: | Revealing the precise thresholds at which fluctuations in oil prices start to affect gross domestic product and its various components (consumption, investment, expenditure and exports) holds significant implications for policymakers in both oil-importing and oil-exporting countries. Existing studies assessing the effects of oil prices on economic activity typically assume constant or stable threshold values. However, recent evidence suggests that this restrictive assumption may not accurately capture the dynamic nature of these relationships. We address this issue by adopting a more realistic framework that allows for the possibility that oil prices will have a time-varying effect on economic activity. We also employ the innovative time-varying threshold regression kink model of Yang and Su (2018). Our analysis focuses on a sample of 20 top oil-importing and oil-exporting countries during the period 1995Q1 to 2023Q2. The findings of our investigation provide compelling evidence to support the existence of time-varying threshold levels in the relationship between oil prices and macroeconomic activity for most countries in our sample. Notably, our research unveils a substantial heterogeneity in the oil price thresholds across the investigated countries, thereby challenging the notion of a universal threshold applicable to all. |
| Keywords: | oil price, GDP and its components, time-varying threshold, oil-importing countries, oil-exporting countries |
| JEL: | C5 Q4 Q43 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16970&r= |
| By: | Kruse, Tobias; Mohnen, Myra; Sato, Misato |
| Abstract: | This study investigates whether financial markets respond to firms’ climate actions. We exploit the signing of the Paris Agreement, which required governments to commit to ambitious climate action, as a quasi-natural experiment. Using a proprietary green revenue database, we find that firms deriving a significant fraction of their revenues from green goods and services experience on average a 10% increase in cumulative abnormal returns following the agreement. The empirical evidence indicates that financial markets are responding to opportunities associated with new green markets, and strengthening climate policies can reallocate capital to support green private sector investment. |
| Keywords: | green revenues; Paris Agreement; event study; corporate financial performance; green finance; H2020-MSCA-RISE project GEMCLIME-2020 (GA number 681228; Future Research Leaders (ES/N016971/1); Centre for Climate Change Economics and Policy (CCCEP) (ES/R009708/1); and PRINZ (ES/W010356/1 |
| JEL: | D20 G14 G18 Q50 Q58 |
| Date: | 2024–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:121969&r= |
| By: | Michiel Kenis; Vladimir Dvorkin; Tim Schittekatte; Kenneth Bruninx; Erik Delarue; Audun Botterud |
| Abstract: | Policy makers are formulating offshore energy infrastructure plans, including wind turbines, electrolyzers, and HVDC transmission lines. An effective market design is crucial to guide cost-efficient investments and dispatch decisions. This paper jointly studies the impact of offshore market design choices on the investment in offshore electrolyzers and HVDC transmission capacity. We present a bilevel model that incorporates investments in offshore energy infrastructure, day-ahead market dispatch, and potential redispatch actions near real-time to ensure transmission constraints are respected. Our findings demonstrate that full nodal pricing, i.e., nodal pricing both onshore and offshore, outperforms the onshore zonal combined with offshore nodal pricing or offshore zonal layouts. While combining onshore zonal with offshore nodal pricing can be considered as a second-best option, it generally diminishes the profitability of offshore wind farms. However, if investment costs of offshore electrolyzers are relatively low, they can serve as catalysts to increase the revenues of the offshore wind farms. This study contributes to the understanding of market designs for highly interconnected offshore power systems, offering insights into the impact of congestion pricing methodologies on investment decisions. Besides, it is useful towards understanding the interaction of offshore loads like electrolyzers with financial support mechanisms for offshore wind farms. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.13169&r= |
| By: | Octavio Bertín (CEDLAS-IIE-FCE-UNLP & CEFIP-IIE-FCE-UNLP); Thomas García (CEFIP-IIE-FCE-UNLP); Francisco Pizzi (CEFIP-IIE-FCE-UNLP & UC Davis (California)); Alberto Porto (CEFIP-IIE-FCE-UNLP & ANCE); Julian Puig (CEFIP-IIE-FCE-UNLP); Jorge Puig (CEDLAS-IIE-FCE-UNLP & CEFIP-IIE-FCE-UNLP) |
| Abstract: | We review the distributional incidence of residential energy subsidies using the attractive case of Argentina, a developing country that has massively subsidized electricity in recent decades. Using multiple data sources, we explore two central dimensions, usually omitted in previous research. On the one hand, we focus on geography given that previous studies mostly focus on the Buenos Aires Metropolitan Area (i.e., AMBA), the most populated region in the country. However, Argentina’s territorial heterogeneity demands further analysis, given that the stage of electricity distribution introduces heterogeneities between jurisdictions. On the other hand, we focus on the subsidies’ financing given that previous studies do not focus on the net incidence. Our results indicate that: regional disparities in the costs of electricity distribution and the prices set by the distribution companies are key drivers of the distributional incidence. Also omitting subsidies’ financing may lead to overestimating the belief about their redistributive effect. |
| JEL: | H22 D31 D78 Q48 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:dls:wpaper:0331&r= |
| By: | Tang, H.; Reiner, D M.; Chen, W. |
| Abstract: | The deep decarbonization of China’s hard-to-abate industries requires urgent expansion of clean hydrogen deployment, which is still in its infancy ascribed to its weak cost-competitiveness compared with the fossil-based counterparts and uncertain diffusion prospects. To address this problem, this study evaluates the supply potential and levelized cost of hydrogen production from onshore wind and solar PV on a 1 km-grid level, which collaborates with the established bottom-up plant-level hydrogen demand inventory to reveal the spatial heterogeneity and sectoral disparity of the hydrogen layouts for the first time. A total maximum hydrogen demand potential of 108.9 Mt H2/yr is identified considering industrial layouts nowadays, which can be fed by 313 hydrogen hubs with the weighted-average levelized cost of 1.26 – 4.53 USD/kg H2 in 2060. Furthermore, a top-level strategy for scaling up shared hydrogen infrastructure networks is envisaged built upon the multi-criteria and multi-scale comparison of these hydrogen hubs, which may provide insights into the design of policy instruments tailored to specific hydrogen hubs. |
| Keywords: | Green hydrogen, hard-to-abate industries, supply, end-use |
| JEL: | D24 Q21 Q41 Q42 |
| Date: | 2024–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2426&r= |
| By: | Simshauser, P.; Gohde, N. |
| Abstract: | All credible scenarios of a decarbonising Australian power system with high levels of renewables rely on a portfolio of flexible, dispatchable storage and firming assets. Given our current understanding of costs and prices, such portfolios are thought to include short-duration batteries, intermediate-duration pumped hydro, with gas turbines providing the last line of defence. The stochastic intermittency of wind, the synchronicity of rooftop and utility-scale solar PV, and stubbornly inelastic aggregate final demand – at least over the medium term – only serve to underscore this point. Wind and solar output need to be moved through space (networks) and time (storage). The storage asset class with by far the highest energy density, pumped hydro, appears to be facing structurally high capital costs with most recent estimates given via high profile projects under development (viz. Snowy 2.0, Borumba) being ~$5000-$6000/kW in real terms. Yet under-development of pumped hydro will result in sharply rising renewable curtailment rates and a greater reliance on gas turbines – with the latter likely to be intractable. In this article, we focus on material reductions in the carrying cost of capital-intensive, ultra-long-lived pumped hydro assets through a 3-Party Covenant (3PC) financing structure between governments, the consumer base and plant investors. Our modelling suggests this reduces the annual capital costs and imputed cost of storage during operations by more than 35%. Our 3PC model is orchestrated through a semi-regulated business model and issuance of 10-year Commonwealth Government Bonds with a zero ‘credit spread’ – all of which are critical to minimise costs to consumers. |
| Keywords: | Pumped hydro, energy storage, energy-only markets |
| JEL: | D52 D53 G12 L94 Q40 |
| Date: | 2024–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:2425&r= |
| By: | Catherine Marchewitz; Fernanda Ballesteros; Franziska Schütze; Nesrine Hadj Arab |
| Abstract: | A plethora of sustainable finance taxonomies are emerging worldwide to support shifting trillions for climate action. Employing a qualitative research approach, we use document analysis to assess 26 sustainable finance taxonomy frameworks worldwide that are in the developing phase or have been published and/or adopted. Based on literature and data we build a transition score (TS) to evaluate the framework’s contribution to transition to climate neutrality. We find that only few taxonomies meet most of our criteria for supporting the transition to carbon neutrality, although they are well embedded in environmental policy goals and cover the most important sectors in terms of emissions. The screening approach for economic activities is often not dynamic or aligned with a clear path to climate neutrality and the frameworks target often only specific financial products or a limited group of market participants. Most sustainable finance taxonomies do not carry disclosure and reporting obligations. |
| Keywords: | Sustainable Finance Taxonomy, Green Finance, Transition Finance, EU Taxonomy, climate policy, transition plans |
| JEL: | G18 P00 Q01 Q58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2083&r= |
| By: | Qin, Botao; Xie, Siyuan; Xu, Chenyang |
| Abstract: | Non-monetary incentives are increasingly being studied in encouraging energy conservation. In light of this, we conducted a natural field experiment in student dormitories to assess the effect of honor-based incentives and goal setting on electricity saving and the intrinsic motivation to save energy. Using a difference-in-difference model, we found that goal setting reduced the dormitories' electricity consumption by 15.93\% on average compared to the control group. However, the honor-based incentives were not effective on average. In addition, the study found that both honor-based incentives and goal setting, on average, did not crowd out or crowd in the intrinsic motivation to save electricity in dormitories. The heterogeneity analysis showed that the more the dormitory values honor incentives, the more its intrinsic motivation was crowded in by honor incentives. We also found dormitory characteristics affect the crowding effect on the intrinsic motivation. |
| Keywords: | Honor; Goal setting; Electricity use; Crowding effect |
| JEL: | C93 D10 Q41 |
| Date: | 2024–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120869&r= |
| By: | Lamentillo, Anna Mae Yu |
| Keywords: | carbon tax; carbon pricing; emissions trading system |
| JEL: | R14 J01 |
| Date: | 2024–03–15 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:122913&r= |
| By: | Chang, Simon (University of Western Australia); Chatterjee, Ishita (University of Western Australia Business School); Yu, Li (Central University of Finance and Economics) |
| Abstract: | We conducted a large-scale lost letter experiment with a novel design across all seasons in Beijing to study whether ambient air pollution influences helping behavior. We assessed air pollution by PM2.5 and PM10. Our novel design allowed us to collect real-time granular data from the streets. To mitigate endogeneity bias, we used the occurrence and intensity of thermal inversion as instrumental variables. We found that ambient air pollution increased the probability for a lost letter to be posted. Our finding suggests that when exposed to ambient air pollution, individuals may cope with the resulting adverse mental states by helping others. |
| Keywords: | air pollution, helping behavior, particulate matter, thermal inversion, China |
| JEL: | D9 Q5 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp17011&r= |
| By: | Pablo, Elverdin; Said, Andrés D. |
| Abstract: | Since the Industrial Revolution, the concentration of greenhouse gases (GHG) has consistently risen, leading to a 1.15°C increase in global mean temperatures by 2022. The Intergovernmental Panel on Climate Change (IPCC) confirms human activities as the primary cause of global warming, with emissions continuing to rise. Climate change has resulted in adverse impacts on various fronts, disproportionately affecting vulnerable communities. International efforts, including the United Nations Frame-work Convention on Climate Change (UNFCCC) and its Kyoto Protocol, aimed at stabilizing green-house gas concentrations. These efforts were followed by the Paris Agreement in 2015, focusing on limiting global temperature increases and relying on Nationally Determined Contributions (NDC) from countries. The United Nations Framework Convention on Climate Change mandates Countries to develop and regularly update national inventories of greenhouse gas emissions and removals. These inventories, aligned with IPCC methodologies, serve as crucial tools for transparent reporting, building mutual trust among countries for effective climate change agreements. National GHG inventories play a vital role in policy development, monitoring impact, and tracking progress toward achieving NDCs outlined in inter-national agreements, such as the Paris Agreement. Varying capacities for GHG inventory development among developing and developed countries, coupled with diverse reporting requirements, create challenges in data comparability. Developed countries face rigorous annual submission requirements, producing comprehensive National Inventory Reports and Common Reporting Format tables. In contrast, developing countries submit their national GHG inventories through Biennial Update Reports (BURs), and flexibility is granted to Least Developed Country Parties (LDCs) and Small Island Developing States (SIDS) regarding submission timelines. The re-porting landscape is progressing, with the introduction of the biennial transparency report (BTR) for Paris Agreement Parties. The BTR, due by December 31, 2024, will convergence in methodologies be-tween countries. |
| Keywords: | climate change; emissions from agriculture; global warming; greenhouse gases |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:lacwps:33&r= |
| By: | Paul Waidelich; Joscha Krug; Bjarne Steffen |
| Abstract: | Policymakers regularly rely on public financial institutions and government offices to provide loans for clean energy projects. However, both the market failures that public loan provision addresses and its role in a policy strategy that also features instruments directly addressing environmental and innovation externalities remain unclear. Here, we develop a model of banks providing loans for clean energy projects that use a novel technology. This early-stage lending builds up banks’ financing experience, which spills over to peers and hence is undersupplied by the market. In addition to this cooperation problem, bankability requirements can result in a coordination failure whereby the banking sector remains stuck in an equilibrium with no loans for the novel technology even when a preferable equilibrium with loans exists. Public provision of early-stage loans is inferior to de-risking instruments in solving this cooperation problem because it crowds out private banks’ loan provision. However, public loan provision—ideally in combination with additional de-risking measures to support banks in internalizing learning spillovers—can more effectively resolve the coordination failure by pushing the banking sector to a better equilibrium. |
| Keywords: | climate policy, credit guarantees, government loans, multiple equilibria, renewable energy, state investment bank |
| JEL: | G21 H81 Q48 Q55 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_11118&r= |
| By: | Provenzano, Sandro; Roth, Sefi; Sager, Lutz |
| Abstract: | Recent research suggests that short-term exposure to air pollution is associated with an elevated prevalence of respiratory infectious disease. In this paper, we examine the relationship between the air quality index and weekly cases of COVID-19 and influenza-like illnesses (ILI) in the United States. We address potential bias from omitted variables and measurement error with an instrumental variable approach using atmospheric temperature inversions. Unlike other recent studies, we find no relationship between air quality and either COVID-19 or ILI cases. |
| Keywords: | air pollution; respiratory disease; influenza; COVID-19; ES/P000622/1 |
| JEL: | I18 Q51 Q53 |
| Date: | 2024–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:122154&r= |
| By: | Lutz Kilian; Michael D. Plante; Alexander W. Richter |
| Abstract: | This paper seeks to understand the general equilibrium effects of time-varying geopolitical risk in oil markets. Answering this question requires simultaneously modeling several features including macroeconomic disasters and geopolitically driven oil production disasters, oil storage and precautionary savings, and the endogenous determination of uncertainty about output and the price of oil. We find that oil price uncertainty tends to be driven by macroeconomic uncertainty. Shifts in the probability of a geopolitically driven major oil supply disruption have meaningful effects on the price of oil and the macro economy, but the resulting oil price uncertainty is not a major driver of fluctuations in macroeconomic aggregates. |
| Keywords: | geopolitical risk; macroeconomic risk; time-varying uncertainty; rare disasters; oil; endogeneity; shock propagation; economic fluctuations; precautionary savings; inventories |
| JEL: | E13 E22 E32 Q43 |
| Date: | 2024–05–28 |
| URL: | https://d.repec.org/n?u=RePEc:fip:feddwp:98321&r= |
| By: | Marín Díazaraque, Juan Miguel; Romero, Eva; Lopes Moreira Da Veiga, María Helena |
| Abstract: | The paper proposes the use of Laplace approximation (LA) to estimate complex univariate symmetric and asymmetric stochastic volatility (SV) models with flexible distributions for standardized returns. LA is a method for approximating integrals, especially in Bayesian statistics, and is often used to approximate the posterior distribution of the model parameters. This method simplifies complex problems by focusing on the most critical areas and using a well-understood approximation. We show how easily complex SV models can be estimated and analyzed using LA, with changes to specifications, priors, and sampling error distributions requiring only minor changes to the code. The simulation study shows that the LA estimates of the model parameters are close to the true values in finite samples and that the proposed estimator is computationally efficient and fast. It is an effective alternative to existing estimation methods for SV models. Finally, we evaluate the in-sample and out-of-sample performance of the models by forecasting one-day-ahead volatility. We use four well-known energy index series: two for clean energy and two for conventional (brown) energy. In the out-of-sample analysis, we also examine the impact of climate policy uncertainty and energy prices on the volatility forecasts. The results support the use of asymmetric SV models for clean energy series and symmetric SV models for brown energy indices conditional on these state variables. |
| Keywords: | Asymmetric Volatility; Laplace Approximation; Stochastic Volatility |
| Date: | 2024–06–06 |
| URL: | https://d.repec.org/n?u=RePEc:cte:wsrepe:43947&r= |
| By: | Alexandra Hüttel; Judith Lehner |
| Abstract: | The transition of the steel sector to carbon neutrality requires significant investment. In this study, we aim to better understand the scale of investment required for a transition to hydrogen-based steelmaking and the ability of listed steelmakers to finance this investment. First, we analyze how capital expenditures are estimated in the academic literature and compare them with reported investment costs of green steel projects. Second, we focus on how a targeted transition to carbon neutrality would affect the balance sheet and leverage of listed steelmakers operating in the EU-27 and compare the required investments with the companies’ past capital expenditures. The study concludes that capital expenditure may be underestimated in the academic literature and derives recommendations for referencing and contextualizing capital expenditure estimates. Based on the identified impacts at the company level, we conclude with a discussion of the capabilities of listed steel producers to achieve carbon-neutral production, also from an industrial policy perspective. |
| Keywords: | Steel, investment cost, capital expenditure, CAPEX, decarbonization |
| JEL: | G31 G32 L61 Q54 Q55 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp2082&r= |
| By: | Linian Wang; Anlan Yu; Jianghong Liu; Huibing Zhang; Leye Wang |
| Abstract: | In day-ahead electricity market, it is crucial for all market participants to have access to reliable and accurate price forecasts for their decision-making processes. Forecasting methods currently utilized in industrial applications frequently neglect the underlying mechanisms of price formation, while economic research from the perspective of supply and demand have stringent data collection requirements, making it difficult to apply in actual markets. Observing the characteristics of the day-ahead electricity market, we introduce two invariance assumptions to simplify the modeling of supply and demand curves. Upon incorporating the time invariance assumption, we can forecast the supply curve using the market equilibrium points from multiple time slots in the recent period. By introducing the price insensitivity assumption, we can approximate the demand curve using a straight line. The point where these two curves intersect provides us with the forecast price. The proposed model, forecasting suppl\textbf{Y} and demand cUrve simplified by Invariance, termed as YUI, is more efficient than state-of-the-art methods. Our experiment results in Shanxi day-ahead electricity market show that compared with existing methods, YUI can reduce forecast error by 13.8\% in MAE and 28.7\% in sMAPE. Code is publicly available at https://github.com/wangln19/YUI. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2405.14893&r= |
| By: | Robin Sogalla; Joschka Wanner; Yuta Watabe |
| Abstract: | This paper investigates the elusive role of productivity heterogeneity in new trade models in the trade and environment nexus. We contrast the Eaton-Kortum and the Melitz models with firm heterogeneity to the Armington and Krugman models without heterogeneity. We show that if firms have a constant emission share in terms of sales — as they do in a wide range of trade and environment models — the three models’ emission predictions exactly coincide. Conversely, if firms have a constant emission intensity per quantity — a prominent alternative in the literature — the emission equivalence between the three models breaks. We provide a generalization that nests both constant emission shares in sales and constant quantity emission intensities as special cases. We calibrate the models to global production and trade data and use German firm-level data to estimate the key elasticity of how emission intensity changes with productivity. Our multi-industry quantification demonstrates that the role of firm heterogeneity depends both on the model and the estimated parameters. Moving from the Armington model to the EK model increases the emissions effect on trade, while moving from the Krugman model to the Melitz model decreases the emission effects on trade. |
| Keywords: | International trade; carbon emissions; firm heterogeneity |
| JEL: | F11 F12 F18 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp2077&r= |
| By: | Rrukaj, Ritvana (School of Economics and Business, Norwegian University of Life Sciences); Steen, Frode (Dept. of Economics, Norwegian School of Economics and Business Administration) |
| Abstract: | Estimating non-linear autoregressive distributed lag models, we establish shortrun cost pass-through in the Swedish retail gasoline market. Our findings reveal a slower correction of disequilibrium error in volume-adjusted prices compared to average pump prices, suggesting that oil companies are more focused on pricing on days and at stations with larger sales. Our results also suggest that earlier studies of pass-through using average prices underestimates the price asymmetry. Exploring heterogeneity in price responses we find that gasoline stations less exposed to local competition impose larger and more prolonged asymmetry on retail gasoline prices. Full-service stations have a higher and more prolonged asymmetry in pricing than automated self-service stations. Despite indicating only roughly three percent rise in consumer prices, this asymmetry accounts for nearly 40% of firms’ gross margins, carrying significant implications for market regulation and business strategies. |
| Keywords: | Gasoline markets; asymmetric short- and long-run cost pass-through; market power; volume-adjusted prices; station heterogeneity; local competition |
| JEL: | C12 C13 F14 L11 L71 |
| Date: | 2024–05–30 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhheco:2024_008&r= |
| By: | Stephie Fried; Kevin Novan; William B. Peterman |
| Abstract: | This paper develops a general equilibrium lifecycle model to explore the welfare and inequality implications of different ways to return carbon tax revenue back to households. We find that the welfare maximizing rebate uses two thirds of carbon-tax revenue to reduce the distortionary tax on capital income while using the remaining one third to increase the progressivity of the labor-income tax. This recycling approach attains higher welfare and more equality than the lump-sum rebate approach preferred by policymakers as well as the approach originally prescribed by economists __ which called exclusively for reductions in distortionary taxes. |
| Keywords: | Carbon tax; inequality; overlapping generations; Revenue recycling |
| JEL: | Q58 E62 H21 H23 |
| Date: | 2024–05–02 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedfwp:98314&r= |
| By: | Echebarria, Koldo |
| Abstract: | The nations that signed the Paris Agreement periodically submit Nationally Determined Contributions (NDCs) with climate mitigation and adaptation goals. Complementarily, countries should also formulate and implement National Adaptation Plans (NAP) and periodically update them. This means that every country is required by law to outline a course of action in response to global warming and submit a pledge with specific objectives it is committed to achieving. These pledges are then reviewed and renewed every five years. Every round of pledges is meant to intensify the level of commitment and is negotiable, meaning that other parties can offer concessions or support in return for a more robust pledge. The pledge and review method were introduced first in 1991; however, in 1997, the international community chose to adopt legally binding emission reduction targets in the Kyoto Protocol. The pledge and review methods were reintroduced in the 2009 Copenhagen Accord, following its limited success and the inability to reach an agreement on new targets. The NDC wording took the place of the pledge-and-review expression in the negotiations that resulted in the Paris Agreement. The fact that NDCs rely on voluntary commitments from signatory nations—many of whom lack the financial, technological, or institutional means to effectively combat climate change—has drawn criticism. Setting top-down targets, however, results in a distributional problem among nations that has proven unsolvable. Furthermore, targets are by no means a good solution in the absence of efficient review and compliance procedures. Since pledges—both in terms of the degree of commitment and the methods used—are subject to review and are not legally binding, NDCs offer a more practical strategy for international collaboration on mitigating climate change.1 The "naming and shaming" process—a form of peer and reputational pressure—is the foundation of the NDC method. Climate change politics have gradually changed because of the rise of bottom-up society initiatives and transnational networks of non-govern-mental actors, placing increased pressure on national governments and international organizations. |
| Keywords: | capacity development; climate change mitigation; global warming; Sustainable Development Goals; Latin America and the Caribbean |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:lacwps:32&r= |
| By: | Julia Jadin; Florine Le Henaff |
| Abstract: | This study investigates the impact of Covid-19 containment measures on household carbon footprints, with a focus on gender dynamics and redistributive effects. Using data from the Belgian Household Budget Survey for 2018 and 2020, we find that households with male breadwinners experienced a more substantial decrease in carbon footprints. This reduction is primarily due to a significant decline in the consumption of carbonintensive goods and services, such as transportation and dining out, which these households utilize more extensively. Our findings emphasize the importance of incorporating gender considerations in the assessment of carbon reduction policies. By understanding the link between gender and consumption behaviors, policymakers can design more equitable and effective interventions to mitigate household carbon emissions. Understanding this link also presents opportunities for targeted policies and incentives, particularly in transportation, ensuring that decarbonization efforts address the distributive nature ofcarbon footprints. |
| Keywords: | Covid-19, Household, Carbon Footprint: Gender |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:eca:wpaper:2013/374567&r= |
| By: | Shaheen, Susan A.; Pan, Alexandra |
| Abstract: | The growth of carsharing in North America since the service was first introduced in 1994 has had notable impacts on travel behaviour, including vehicle ownership and modal shift. Existing forms of carsharing (e.g., roundtrip, one-way, and peer-to-peer) alter the conventional cost structure of driving from one of fixed cost to variable cost. Multiple studies have shown that overall, carsharing users increase public transit and non-motorized modal use, with some users also selling their vehicle or postponing future vehicle purchases as a result of being a carsharing member. These modal impacts have led to a reduction in greenhouse gas emissions associated with driving. Further, research has shown that carsharing may provide additional accessibility to individuals without a personal vehicle. In this chapter, we provide an overview of the travel behaviour impacts of carsharing and findings on the demographics of carsharing users. |
| Keywords: | Social and Behavioral Sciences |
| Date: | 2024–04–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsrrp:qt9qf5h094&r= |
| By: | Efrem Castelnuovo; Lorenzo Mori; Gert Peersman |
| Abstract: | We employ a structural VAR model with global and US variables to study the relevance and transmission of oil, food commodities, and industrial input price shocks. We show that commodi-ties are not all alike. Industrial input price changes are almost entirely endogenous responses to other shocks. Exogenous oil and food price shocks are relevant drivers of global real and financial cycles, with food price shocks exerting the greatest influence. We then conduct counterfactual estimations to assess the role of systematic monetary policy in shaping these effects. The results reveal that pro-cyclical policy reactions exacerbate the real and financial effects of food price shocks, whereas counter-cyclical responses mitigate those of oil shocks. Finally, we identify dis-tinct mechanisms through which oil and food shocks affect macroeconomic variables, which could also justify opposing policy responses. Specifically, along with a sharper decrease in nondurable consumption, food price shocks raise nominal wages and core CPI, intensifying inflationary pres-sures. Conversely, oil price shocks act more like adverse aggregate demand shocks absent mone-tary policy reactions, primarily through a decrease in durable consumption and spending on goods and services complementary to energy consumption, which are amplified by financial frictions. |
| Keywords: | commodity price shocks, transmission mechanisms, monetary policy |
| JEL: | E32 E52 F44 G15 Q02 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2024-36&r= |
| By: | Meiyi Zhuang; Xinyi Zhang; Hisahiro Naito |
| Abstract: | Health is one of the most critical factors that affects retirement behavior, and poor health may lead to early retirement among middle-aged and older adults. In China, where the population is aging rapidly, early retirement has significant implications for the economy. Recent studies have shown that air pollution, particularly PM2.5, can cause various illnesses, such as respiratory diseases, cardiovascular diseases, high blood pressure, and diabetes. In this paper, we analyze the effects of PM2.5 on the retirement and health of middle-aged and elderly people, assuming that the effects of air pollution on retirement are highly nonlinear and different for farmers and non-farmers. To control for potential endogeneity, we use 2SLS estimation. The regression results for non-farmers show that higher PM2.5 concentrations increase the probability of heart-related diseases and early retirement behavior. Specifically, we found that a 10 microgra per cubic meters(about one standard deviation) per cubic meter increase in PM2.5 concentration is associated with a 58% increase in the probability of heart-related diseases and a 57% increase in early retirement. This implies that roughly 12.1 million people could continue participating in the labor market if the government can reduce PM2.5 concentration by 10 microgram per cubic meter across the country. For farmers, we found that higher PM2.5 concentration is associated with a higher probability of lung-related diseases, but we did not find evidence that it increases early retirement. For both non-farmers and farmers, we did not find evidence that a higher PM2.5 concentration decreases financial wealth. These findings suggest that higher air pollution deteriorates the health of non-farmers, increases the disutility of work, and induces early retirement but does not affect the financial wealth of farmers and non-farmers. |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:tsu:tewpjp:2024-001&r= |
| By: | Vianney Dequiedt (FERDI - Fondation pour les Etudes et Recherches sur le Développement International, CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Audrey-Anne De Ubeda (FERDI - Fondation pour les Etudes et Recherches sur le Développement International); Édouard Mien (FERDI - Fondation pour les Etudes et Recherches sur le Développement International) |
| Abstract: | Regularly the subject of international discussions over the last two decades without reaching a consensus, taxation on maritime transport has been on the agenda of international negotiations since the Summit for a New Global Financing Pact held in Paris in June 2023 and the Paris Pact for People and the Planet (4P). The past year has been marked by strong political declarations and signals, including the launch of a taskforce on international taxation1 to tackle the joint development, climate and nature agenda. It has further affirmed the opening of an unprecedented window of opportunity, which many countries in the South and North are eager to seize. |
| Keywords: | Tax, Taxation, Tax coordination |
| Date: | 2024–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04573848&r= |
| By: | Stephie Fried |
| Abstract: | This paper develops a macro heterogeneous-agent model to quantify the distributional impacts of higher temperatures in the US. Households adapt to temperature by using energy and equipment for heating and cooling. A key insight is that temperature acts as a transfer from nature, augmenting household income by the value of heating or cooling provided by nature. The welfare effects of climate change vary substantially with income, increasing welfare inequality in the colder parts of the US. This heterogeneity results from the effects of climate change on transfers from nature and on households’ extensive-margin decisions to purchase heaters and air conditioners. |
| Keywords: | climate change; heterogeneous-agent model; temperature; welfare effects |
| Date: | 2024–05–24 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedfwp:98315&r= |
| By: | Hernando, Andres; Villena, Mauricio; Apablaza, Valentina |
| Abstract: | We put forward an optimal bidding mechanism for a bundle of power transmission infrastructure works. Specifically, the regulator auctions two works altogether: one is to be developed and operated by the winning bidder, while the other is an owner-operated and financed expansion of an existing work. Participants bid jointly for both contracts, and the package is awarded based on the lowest total bid. The costs are divided into a common developing part for all participants and a private part related to financing. The optimal bidder offers the expected value of the costs, adjusted for the cost advantage over the second lowest bidder. This approach efficiently allocates the works to the firm with the lowest combined costs. However, rents persist due to the informational and cost advantage in financing. When a bidder expects higher costs, it requests a higher payment, which reduces its chances of winning the bid. |
| Keywords: | Auctions, Procurement bidding, Infrastructure works bundling, Electric transmission infrastructure |
| JEL: | D44 H42 H57 L94 |
| Date: | 2023–12–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120849&r= |
| By: | Afia Malik (Pakistan Institute of Development Economics); Ghulam Mustafa (Pakistan Institute of Development Economics) |
| Abstract: | The electricity sector’s financial stability is crucial for the smooth functioning of power systems. However, in Pakistan, circular debt is holding the sector and the entire economy hostage. To quantify the impact of this problem, a study is conducted using standard econometric techniques to investigate circular debt effects on the industrial sector at both the firm and macro levels. The study also measured the impact of circular debt on different sectors, sub-sectors, and factor inputs in the economy using a Computed General Equilibrium model through cost of production path. The study revealed that circular debt hurts real GDP and all sectors, increasing fiscal deficit and trade imbalance. The study also estimated a total public welfare loss of US$13 billion due to a 10 percent growth in circular debt. At the firm level, circular debt via an increase in tariffs is causing a reduction in profitability due to a significant increase in production costs. At the macro level, this is causing a decrease in industrial output and export competitiveness. |
| Keywords: | Circular Debt, Electricity Tariff, Pakistans Economy |
| JEL: | C68 D22 Q43 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pid:wpaper:2024:2&r= |
| By: | Vianney Dequiedt (FERDI - Fondation pour les Etudes et Recherches sur le Développement International, CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Audrey-Anne De Ubeda (FERDI - Fondation pour les Etudes et Recherches sur le Développement International); Édouard Mien (FERDI - Fondation pour les Etudes et Recherches sur le Développement International) |
| Abstract: | Sujet régulier des discussions internationales ces deux dernières décennies sans avoir fait l'objet d'aucun consensus, la taxation du transport maritime est à l'agenda des négociations internationales depuis le Sommet pour un nouveau pacte financier mondial qui s'est tenu à Paris en juin 2023 et le Pacte de Paris pour les peuples et la planète (4P). Rythmée par des déclarations et signaux politiques forts, dont la mise en place d'une task force sur la fiscalité internationale1 pour renforcer l'action en faveur du développement, du climat et de la nature, l'année écoulée n'a cessé de confirmer l'ouverture d'une fenêtre d'opportunité inédite, dont de nombreux pays du Sud et du Nord entendent bien se saisir. |
| Keywords: | taxation, Fiscalité, Coordination fiscale |
| Date: | 2024–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04573855&r= |
| By: | Babur Kocaoglu; Martín Almuzara; Argia M. Sbordone |
| Abstract: | In the aftermath of the COVID-19 pandemic, inflation rose almost simultaneously in most economies around the world. After peaking in mid-2022, inflation then went into decline—a fall that was just as universal as the initial rise. In this post, we explore the interrelation of inflation dynamics across OECD countries by constructing a measure of the persistence of global inflation. We then study the extent to which the persistence of global inflation reflects broad-based swings, as opposed to idiosyncratic country-level movements. Our main finding is that the spike and subsequent moderation in global inflation in the post-pandemic period were driven by persistent movements. When we look at measures of inflation that include food and energy prices, most of the persistence appears to be broad-based, suggesting that international oil and commodity prices played an important role in global inflation dynamics. Excluding food and energy prices in the analysis still shows a broad-based persistence, although with a substantial increase in the role of country-specific factors. |
| Keywords: | global inflation; persistence; OECD |
| JEL: | E31 |
| Date: | 2024–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednls:98275&r= |