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on Energy Economics |
| By: | Jun He; Andrew L. Liu |
| Abstract: | The integration of distributed energy resources (DERs) into wholesale energy markets can greatly enhance grid flexibility, improve market efficiency, and contribute to a more sustainable energy future. As DERs -- such as solar PV panels and energy storage -- proliferate, effective mechanisms are needed to ensure that small prosumers can participate meaningfully in these markets. We study a wholesale market model featuring multiple DER aggregators, each controlling a portfolio of DER resources and bidding into the market on behalf of the DER asset owners. The key of our approach lies in recognizing the repeated nature of market interactions the ability of participants to learn and adapt over time. Specifically, Aggregators repeatedly interact with each other and with other suppliers in the wholesale market, collectively shaping wholesale electricity prices (aka the locational marginal prices (LMPs)). We model this multi-agent interaction using a mean-field game (MFG), which uses market information -- reflecting the average behavior of market participants -- to enable each aggregator to predict long-term LMP trends and make informed decisions. For each aggregator, because they control the DERs within their portfolio under certain contract structures, we employ a mean-field control (MFC) approach (as opposed to a MFG) to learn an optimal policy that maximizes the total rewards of the DERs under their management. We also propose a reinforcement learning (RL)-based method to help each agent learn optimal strategies within the MFG framework, enhancing their ability to adapt to market conditions and uncertainties. Numerical simulations show that LMPs quickly reach a steady state in the hybrid mean-field approach. Furthermore, our results demonstrate that the combination of energy storage and mean-field learning significantly reduces price volatility compared to scenarios without storage. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.00107 |
| By: | Jüppner, Marcus; Martin, Anika; Radke-Arden, Lucas |
| Abstract: | Energy efficiency improvements are a key component on the road towards a carbonneutral economy. We identify the development of energy efficiency in the data and show that in recent decades it has increased at the aggregate level. At the sectoral level, however, the development in energy efficiency was highly heterogenous. We, then, analyse the effects of exogenous improvements in energy saving technology by means of Environmental Multi-Sector Model EMuSe. According to the model, sustained exogenous gains in energy saving technology increase output while, at the same time, reduce emissions energy use and energy intensity. Thereby, they attenuate the model-implied negative co-movement of output and emissions that results from the introduction or an intensified increase of an emission price schedule. However, if energy efficiency evolves as during the last decades and the emission price follows the currently intended schedule in the national and EU-wide emissions trading system, the model predicts that the emissions reduction by 2030 set by the German Federal Climate Change Act cannot be met. It additionally requires a higher emission price or larger (exogenous) energy efficiency gains. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bubtps:303049 |
| By: | Joanna Mazurkiewicz; Aleksandra Prusak; Jan Frankowski |
| Abstract: | Some households in energy poverty cannot rely on support from other people. Also, the effectiveness of programs combating energy poverty is limited due to difficulties in reaching households in crisis. Without institutional, material, and emotional support, people experiencing energy poverty cannot improve their situation. We argue for broader usage of social support networks to tackle energy poverty. Involving local leaders, community groups and organizations will facilitate reaching energy-poor people and enhance the effectiveness of public policy. We recommend three actions: 1) harnessing the potential of local organizations to reach energy-poor households, 2) extending the scope of support in implementing the investments through the assistance provided by social organizations, and 3) considering specific energy needs in the designing instruments to address energy poverty. |
| Keywords: | energy poverty, social inequalities, social networks |
| JEL: | D10 I14 I32 R29 |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:ibt:ppaper:pp012024 |
| By: | Jan Frankowski; Jakub Sokolowski; Joanna Mazurkiewicz; Aleksandra Prusak |
| Abstract: | The study includes a procedure and recommendations for collecting data on energy poverty at the building level, available in national and local government registers. The adopted analytical process allowed for developing various energy renovation scenarios for municipal buildings in Warsaw, considering a balance between social, environmental and economic goals in urban policy and identifying locations with the highest exposure to energy poverty. As a result of the analysis, we propose establishing an intracity working group to discuss issues related to the residential energy transition as well as criteria, weights and indicators of intervention; developing a city definition of energy retrofit, along with the introduction of measurable criteria for the energy efficiency of buildings; ensuring the completeness, interoperability, and further development of the city's internal data monitoring system. |
| Keywords: | energy poverty, retrofits, multi-family buildings, administrative data, Warsaw |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:ibt:report:rr012024 |
| By: | Simplice A. Asongu (Johannesburg, South Africa); Amarachi O. Ogbonna (Yaoundé, Cameroon); Mariette C. N. Mete (Yaoundé, Cameroon) |
| Abstract: | The present research extends the extant literature by investigating the hypothesis on whether marriage can be a substitute for financial inclusion in energy poverty reduction in Ghana. Pooled data and two stage least squares techniques are used in the estimation process and the validity of the tested hypothesis (i.e., that marriage is a substitute for financial inclusion in energy poverty mitigation) is based on two main criteria: (i) a positive interactive effect relative to the negative unconditional effect of marriage; (ii) a marriage net effect lower in magnitude compared to the unconditional effect of marriage and (iii) an insignificant interactive effect when both unconditional effects are negative. The investigated hypothesis is not valid in the full sample, urban sub-sample and female sub-sample while it is valid in the rural and male sub-samples. Policy implications are discussed. |
| Keywords: | Energy poverty; financial inclusion; consumption poverty; education; household income |
| JEL: | D03 D12 D14 I32 Q41 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:aak:wpaper:24/007 |
| By: | Vincent P. Roberdel (Eindhoven University of Technology); Ioulia V. Ossokina (Eindhoven University of Technology); Vladimir A. Karamychev (Erasmus University Rotterdam); Theo A. Arentze (Eindhoven University of Technology) |
| Abstract: | Energy efficiency improvements in low income housing are increasingly used as a policy instrument to alleviate poverty. Our paper shows that this may come at the expense of reduced environmental benefits. We follow 125, 000 Dutch low-income households during eight years and exploit a quasi-experimental policy that diminished the heat losses in their homes. We pay specific attention to the policy effects at the very left tail of the income distribution. While the average after-policy reduction in natural gas consumption for heating amounts to 22%, the poorest only save 16%. We build and calibrate a microeconomic model explaining this pattern from substitution between thermal comfort and other goods, and use it to compute welfare trade-offs of the policies. |
| Keywords: | Energy-efficient homes, Social housing, Poverty, Quasi-experiment, Retrofit, Welfare effects |
| JEL: | D12 Q4 Q48 Q5 |
| Date: | 2023–12–22 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20230082 |
| By: | Gabriel Felbermayr (Austrian Institute of Economic Research (WIFO); Kiel Institute for the World Economy); Klaus Friesenbichler (Austrian Institute of Economic Research (WIFO); Supply Chain Intelligence Institute Austria (ASCII)); Julian Hinz (Kiel Institute for the World Economy); Hendrik Mahlkow (Austrian Institute of Economic Research (WIFO); Kiel Institute for the World Economy) |
| Abstract: | On 12 June, the European Commission announced provisional countervailing tariffs of 21% on battery electric vehicles (BEVs) imported from China. This paper uses a large-scale trade model (KITE) to assess the impact of the tariffs, showing that while short-term effects may be larger, long-term effects are likely to be moderate. BEV imports from China are projected to fall by 42%, with limited impacts on EU car exports. This policy brief also analyzes potential retaliatory measures from China, including tariffs on EU pork exports, and highlights the need for careful negotiation to avoid escalation. |
| Keywords: | BEVs, Trade Policy, Countervailing Tariffs, EU-China Relations, Retaliatory Measures, KITE Model |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:bdt:asciis:004 |
| By: | Antoine Ebeling |
| Abstract: | This paper study the impact of the European Central Bank’s (ECB) climate related speeches on European stock markets. Using the database of 2594 speeches between 1997 and 2022 of the European Central Bank, we employ advanced textual analysis techniques, including keyword identification and topic modeling, to isolate speeches related to climate change. We then conduct an event study to estimate the differences in abnormal returns of a large panel of listed companies in response to the European Central Bank’s speeches on climate change. Our analysis reveals that the ECB’s communication on climate issues has intensified significantly since 2015. Using topic modelling methods, we classify climate speeches into two main themes: (i) green finance and economic policies, and (ii) climate-related risks The event study shows that financial markets tend to reallocate portfolios towards greener ones in the days following the ECB’s climate speeches. Our results show that following a climatic speech by the ECB, green financial markets are benefiting from positive abnormal returns by around 1 percentage point. More specifically, we find that climate speeches dealing with green monetary policy and other economic policy instruments have a larger effect on green stock prices than speeches dealing with different types of climate risk. |
| Keywords: | Central bank communication ; Climate change ; Event Study ; Textual Analysis. |
| JEL: | E52 G14 Q54 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ulp:sbbeta:2024-38 |
| By: | Beata Cichocka (Center for Global Development); Ian Mitchell (Center for Global Development) |
| Abstract: | This paper quantifies and evaluates China's bilateral, regional, and multilateral climate-related development finance from the Belt and Road Initiative's inception in 2013 until 2021, shedding light on its substantial but often opaque contributions. Our analysis suggests that China has provided an annual average of nearly $4 billion for climate to developing countries since 2013, totalling over $34 billion by 2021, primarily through bilateral channels through lending from its policy banks. Recently, China's climate finance through multilateral institutions has substantially increased. However, this increase has been coupled with declines in China’s bilateral climate-relevant finance, which fell from over $6 billion in 2017 to under $1 billion in 2021, outpacing the decline of China’s overall development finance. Separately, we find China has made significant ongoing fossil fuel investments in developing countries, amounting to over double its climate-relevant finance over the period. Since 2017, the Chinese government has made commitments to “green” its outward cooperation, and outbound fossil fuel finance fell below climate-related finance for the first time in 2021. Although China remains a “developing” country and recipient of climate finance, it is now a net provider of climate support, suggesting it is already positioned to contribute to a new UN climate finance goal to be agreed for beyond 2025. Overall, this paper seeks to contribute to debates on China’s role in the international climate finance architecture and emphasizes the potential for other development actors to further engage China in multilateral climate cooperation. |
| Date: | 2024–09–11 |
| URL: | https://d.repec.org/n?u=RePEc:cgd:ppaper:339 |
| By: | Léon-Gómez, Carlos R.; Teixidó, Jordi J.; Verde, Stefano F. |
| Abstract: | We study the local distortionary effects of notches in Spain’s CO2-based vehicle registration tax on the distribution of new car CO2 performance. These effects are the smoking gun of carmaker strategic behaviour and affect in turn tax revenue and CO2 emissions. Using model-level data on all car registrations in Spain 2010-2020, we apply the bunching approach to the three thresholds of the tax scheme: 120, 160, and 200 gCO2/km. We find that the tax notches strongly affected market outcomes, resulting in the sale of about 388, 000 more cars (overall) at or just below the thresholds compared to the respective counterfactuals without the thresholds. This translates into about €335 million of foregone tax revenue and only very limited extra abatement of CO2 emissions. Over 90-95% of all estimated bunching took place at the first threshold (120 gCO2/km). Over 60% of all estimated bunching took place before 2015. Bunching diminished over time, which reflects diminished effectiveness of the tax in both reducing CO2 emissions and generating revenue. Taking the interactions with both EU vehicle emission standards and similar CO2-related policies in other Member States into consideration is important for interpreting these results. |
| Keywords: | CO2-based vehicle taxes, Notches, Bunching, Carmakers, Strategic behaviour, Emissions, Tax revenue, Policy interactions |
| JEL: | H23 H30 Q58 |
| Date: | 2024–09–14 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122103 |
| By: | Anwar Gasim; Walid Matar; Abdelrahman Muhsen (King Abdullah Petroleum Studies and Research Center) |
| Abstract: | Measuring and monitoring greenhouse gas (GHG) emissions are crucial to address climate change and fulfill Paris Agreement objectives. This paper explores the potential of satellite technology in measuring and tracking CH4, CO2, and N2O emissions in Saudi Arabia, collaborating with environmental intelligence company Kayrros. The satellite estimates reveal significant disparities with other data providers, particularly in the oil and gas sector. The paper advocates for a combination of bottom-up and satellite methods to enhance comprehensiveness, transparency, accuracy, and timeliness in emission measurements. The study provides policy recommendations for Saudi Arabia, demonstrating how satellite technology can detect super-emitting events and offering solutions for regulatory action. Finally, it discusses limitations and calls for further investment in satellite technology to refine GHG emission estimates for better global climate action. |
| Keywords: | Air conditioning, Applied general model, Article 6, Blockchain |
| Date: | 2023–12–07 |
| URL: | https://d.repec.org/n?u=RePEc:prc:dpaper:ks--2023-dp29 |
| By: | Giovanni Bernardo; Pasquale Commendatore; Giovanni Fosco |
| Abstract: | People move for various reasons, including economic, social, political, demographic, and environmental factors. Environmental quality, in particular, plays a crucial role in migration decisions. This study examines the relationship between air pollution (measured as the maximum number of days in which at least one monitoring station detects an excess of 50 µg/m3 of PM10 above the established limit) and internal migration in Italy. Employing a difference-in-differences (diff-in-diff) strategy, our analysis reveals a negative relationship between air pollution and internal migration. We exploit two major legislative interventions in environmental regulation — LD 152/2006 and LD 155/2010 — as exogenous shocks affecting air pollution. We find that these environmental regulations significantly reduced the number of pollution exceeding days in municipal areas, thereby enhancing the attractiveness of those areas more committed to reducing urban emissions. Specifically, the combined effect of the two decrees led to an increase of approximately three new citizens per 1, 000 inhabitants in the more committed areas, highlighting the importance of proactive environmental policies in influencing migration patterns and improving urban livability. |
| Keywords: | Air pollution, Migration, Environmental policy |
| JEL: | O15 Q53 Q56 J24 |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:pie:dsedps:2024/312 |
| By: | Manaka, Kyoko; Kikuchi, Hinata; Nakamura, Akihiro |
| Abstract: | Efforts to promote the widespread adoption of electric vehicles (EVs), which contribute to the realization of a carbon-neutral society, are being discussed. According to the Japan Automobile Dealers Association, the share of EVs in new passenger car sales was approximately 1.16% in the period ending December 2024, with a total share of about 1.85%. Past surveys related to Battery Electric Vehicles (BEVs)indicate that factors such as driving range and vehicle specifications, as well as the availability of charging facilities, are key to their widespread adoption (Pysalska et al., 2022; Phillipsen et al., 2020; Khan et al., 2017; Kudoh and Motose, 2010). There are different types of EV charging facilities, such as regular recharging facilities which take several hours to charge for a 100 km drive and fast charging facilities which take about 30 minutes to charge for a 100 km drive. The installation cost of the former is relatively low, and it can be installed in individual homes using subsidies. In contrast, the installation cost of the latter ranges from 10 to 20 million yen, making it impractical for individual homes and used by the public in a manner similar to current gasoline stations. Additionally, there are Super-fast charging facilities called Superchargers, dedicated to Tesla vehicles, which allow significantly faster charging than fast charging facilities. Currently, fast charging facilities are mainly installed in locations such as automobile dealerships, convenience stores, roadside stations, and expressways (SA/PA), with 40% of installations at automobile dealerships, while only 10% are at convenience stores and roadside stations/highways (Source: March 2023, e-mobility power charging spot list). On the other hand, regular recharging facilities are installed mainly in destinations with long stay times such as hotels and shopping malls, in addition to individual home installations. The necessity for adequate recharging facilities is evident as BEV usage can only become widespread if users have convenient access to recharging options. In Japan, over 29, 000 recharging facilities exist, with approximately 70% being regular recharging facilities and 30% being fast recharging facilities. It is relatively easy to install in detached houses but challenging in apartment buildings. According to the "Housing and Land Statistics Survey" by the Statistics Bureau of Japan in 2018, 53.6% of households live in detached houses, and 43.5% live in apartment buildings, with the percentage of apartment dwellers reaching 71% in Tokyo. This higher ratio in urban areas presents a challenge to the widespread installation of charging facilities. While installing regular recharging facilities in individual homes is relatively easy, in apartment-type residences, it is necessary to obtain approval from the residents' association, which is organized by the inhabitants, to install charging facilities in communal parking areas. these households face significant constraints in installing personal recharging stations in their parking spaces. This is one reason why apartment dwellers hesitate to purchase BEVs. Charging facilities remain idle when not in use and are suitable for shared use. In fact, public fast recharging facilities are used as shared infrastructure. While regular recharging facilities are generally installed in individual homes and are not typically considered for shared use, the advancement of ICT and the widespread ownership of smartphones suggest that shared use of regular recharging facilities in individual homes would be quite feasible. Previous studies highlight the critical role of ICT in optimizing various services and systems, including transportation. For instance, Benevolo et al. (2016) and Jittrapirom et al. (2017) emphasize how ICT can enhance smart mobility and user-centered mobility services. Breidbach and Brodie (2017) discuss the sharing economy's reliance on ICT for facilitating value co-creation and engagement. Billhardt et al. (2019) demonstrate how ICT improves the matching efficiency of cab dispatch services. These studies would indicate that ICT may contribute the matching efficiency of recharging facilities online. In Japan, currently, it is possible to search for recharging facilities online, but there are not many facilities that can be reserved via apps. If recharging facilities become more widely available, and if it becomes possible to check their real-time availability and make reservations using a smartphone app, this is likely to increase the willingness to purchase EVs. Especially in Japanese urban areas with a high ratio of apartment dwellers, the efficient use of infrastructure, including regular recharging facilities, is essential for high EV adoption rates. Based on this awareness, this study aims to explore the impact of enhanced availability of charging facilities, such as through sharing and online reservations, on the intention to purchase BEVs in urban areas of Japan with high apartment dwelling ratios. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:itsb24:302467 |
| By: | Clasen, Thomas F.; Pillarisetti, Ajay; Gill-Wiehl, Annelise Marie; Kwong, Layla; Daouda, Misbath; Kammen, Daniel M. |
| Abstract: | The use of liquefied petroleum gas (LPG), a World Health Organization (WHO)-designated “clean” fuel, dominates household fuel expansion in low- and middle-income countries. This is due largely to support by the oil and gas industry, government policies, and claims of health and climate benefits over traditional biomass. However, recent randomized controlled trials, though confirming that switching from biomass to LPG cooking reduces exposure to air pollutants, have found little evidence of improved health outcomes. LPG offers reductions in greenhouse gas emissions compared to biomass, but its role as a by-product of fossil fuel production and its increasing use in the fossil fuel supply chain compromises the goal of universal access to sustainable energy. We propose a set of policies that the WHO, governments, funders, researchers, and non-governmental organizations can pursue to promote and assess alternative fuels as part of the continued effort to implement and ensure a clean, healthful, equitable, and sustainable energy future for all. |
| Date: | 2024–09–06 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:qu5bd |
| By: | Saigh Malika (UMBB - Université M'Hamed Bougara Boumerdes) |
| Abstract: | OPEC continued its efforts to strengthen and stabilize the global oil market in the 2000. Increasing market volatility and the collapse of the global financial sector have unfortunately led to an economic recession. The Organization then began to support the oil sector to address the crisis. The purpose of this article is to provide an explanation from the Organization of Petroleum Exporting Countries. To begin with, we will give some general information on this organization and with the help of statistical data we will give an analysis of the evolution of the price of oil correlatively with the events which marked the oil industry which will enable us to see that the principle of supply and demand is respected in the form, because oil prices fluctuate with supply and demand levels. |
| Keywords: | OPEC Global Production Oil reserves Oil production . JEL Classification Codes: D51 E23 L11 R32 R48, OPEC, Global Production, Oil reserves, Oil production . JEL Classification Codes: D51, E23, L11, R32, R48 |
| Date: | 2023–12–30 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04680606 |
| By: | El Weriemmi, Malek; Bakari, Sayef |
| Abstract: | This study aims to investigate the impact of CO2 emissions, domestic investment, and trade openness on economic growth in North African countries over the period 1998 to 2022. Utilizing a panel static gravity model, the results reveal that domestic investment exerts a negative influence on economic growth, while CO2 emissions and exports demonstrate a positive contribution. Furthermore, the analysis suggests that imports have an adverse, though statistically insignificant, effect on economic growth. The findings underscore the importance of fostering policies that promote exports and mitigate CO2 emissions, while carefully considering the potential negative implications of imports on the economic growth of North African countries. |
| Keywords: | CO2 Emissions, Domestic Investment, Trade Openness, Economic Growth, North African Countries, Panel Data, Gravity Model. |
| JEL: | C33 F43 O13 O55 Q56 |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122152 |
| By: | Anthony Harding; Juan Moreno-Cruz |
| Abstract: | With the rapid expansion of Artificial Intelligence, there are expectations for a proportional expansion of economic activity due to increased productivity, and with it energy consumption and its associated environmental consequences like carbon dioxide emissions. Here, we combine data on economic activity, with early estimates of likely adoption of AI across occupations and industries, to estimate the increase in energy use and carbon dioxide emissions at the industry level and in aggregate for the US economy. At the industry level, energy use can increase between 0 and 12 PJ per year, while emissions increase between 47 tCO$_2$ and 272 ktCO$_2$. Aggregating across industries in the US economy, this totals an increase in energy consumption of 28 PJ per year, or around 0.03% of energy use per year in the US. We find this translates to an increase in carbon dioxide emissions of 896 ktCO$_2$ per year, or around 0.02% of the CO$_2$ emissions per year in the US. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.06626 |
| By: | Ms. Mitali Das; Manuel Linsenmeier; Gregor Schwerhoff |
| Abstract: | Climate policy at the subnational level is sometimes framed as being counterproductive, because climate change is considered a collective action problem that can be best addressed in a coalition that should be as large as possible. Using comprehensive data from US states on climate policy and policy outcomes, we show that state-level policy is effective in accelerating the adoption of solar energy. Crucially, however, state policies also have positive spillovers to other states, by making it more likely that neighboring states adopt climate policy as well. By proportionally attributing the spillover effects, we find that many US states achieve more climate benefits through the spillovers to other states than within their own jurisdiction. In a further step, we distinguish between climate policies in the energy sector and policies addressed either at other sectors or greenhouse gas emission (GHG) reductions generally. We find that climate policies in the energy sector are distinct from other climate policies in two ways: They have a significant effect on solar capacity growth and they diffuse more broadly. |
| Keywords: | Climate policy; policy diffusion; policy evaluation; subnational; spillovers |
| Date: | 2024–09–13 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/198 |
| By: | Chanel, Olivier; Prati, Alberto; Raux, Morgan |
| Abstract: | We provide an estimate of the environmental impact of the recruitment system in the economics profession, known as the “international job market for economists”. Each year, most graduating PhDs seeking jobs in academia, government, or companies participate in this job market. The market follows a standardized process, where candidates are pre-screened in a short interview which takes place at an annual meeting in Europe or in the United States. Most interviews are arranged via a non-profit online platform, econjobmarket.org, which kindly agreed to share its anonymized data with us. Using this dataset, we estimate the individual environmental impact of 1057 candidates and one hundred recruitment committees who attended the EEA and AEA meetings in December 2019 and January 2020. We calculate that this pre-screening system generated the equivalent of about 4800 tons of avoidable CO2-eq and a comprehensive economic cost over €4.4 million. We contrast this overall assessment against three counterfactual scenarios: an alternative in-person system, a hybrid system (where videoconference is used for some candidates) and a fully online system (as it happened in 2020–21 due to the COVID-19 pandemic). Overall, the study can offer useful information to shape future recruitment standards in a more sustainable way. |
| Keywords: | carbon footprint; comprehensive economic cost; environmental impact; international job market; job market for economists |
| JEL: | A11 J44 Q51 Q56 |
| Date: | 2022–11–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:116463 |
| By: | MAIER Sofia (European Commission - JRC); DE POLI Silvia (European Commission - JRC); AMORES Antonio F (European Commission - JRC) |
| Abstract: | Carbon taxes on household consumption can simultaneously increase public funding and promote greener consumption habits, an appealing combination for the just transition plans of the European Union (EU). However, concerns about equity and public support pose challenges. This paper assesses the distributional and budgetary effects of various designs for an EU-wide hypothetical carbon tax on households consumption. To this end, we extend the EU tax-benefit microsimulation model, EUROMOD, with greenhouse gas (GHG) emissions data from input-output tables and estimate households’ carbon footprints. We show that a carbon tax on households GHG emissions would be regressive, thereby inequality-increasing. This is primarily due to the low income elasticity of highly GHG-intense necessity goods, such as food and heating, which represent larger shares of income at the bottom of the distribution. Still, we demonstrate that this inequality-increasing impact can be offset with compensatory cash transfers (though these may be challenging to implement), and at least partially reverted with more progressive (and presumably feasible) tax designs, including rate differentiation by products and tax allowances. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:taxref:202409 |
| By: | Robson, Sally (Resources for the Future); Russell, Ethan (Resources for the Future); Shawhan, Daniel (Resources for the Future) |
| Abstract: | Electricity from offshore wind is considered important for reducing energy-related emissions because of its ability to serve coastal areas and complement other nonemitting electricity sources. However, there are open questions about the degree to which it will replace emitting versus other nonemitting generation, improve public health, and affect the total cost of the electricity supply. In the face of recent input cost increases and project cancellations, governments are deciding how strongly to support offshore wind development. To help with such decisions, we project and evaluate several effects of a set of 32 planned or proposed offshore wind farms along the Atlantic and Gulf coasts of the United States, which would produce approximately 2.5 percent of US and Canadian electricity generation. We examine how those offshore wind farms would affect other electricity generation capacity, generation, emissions, health, costs for electricity and natural gas customers, profits of the electricity and natural gas supply industries, and net government revenues, in the year 2035. We include capital expenditure recovery and financing among the costs.In our modeling results, from a detailed power sector capacity expansion and dispatch model, the offshore wind farms’ estimated net benefits are positive, with an estimated benefit-to-cost ratio of 14 to 1. Generation from the offshore wind farms disproportionately reduces natural gas and coal-fueled generation, causing large emissions reductions. Further, the emissions reductions tend to be upwind of densely populated areas. Consequently, the offshore wind farms reduce annual estimated US premature deaths from airborne particulate matter and ground-level ozone by 520 per year. Black, Hispanic, and low-income Americans account for a disproportionately large share of the premature deaths avoided, as do residents of the New York City area. The offshore wind farms reduce worldwide projected future deaths from climate change by 1, 600 per year of their operation. The offshore wind farms increase the overall nonenvironmental costs of the electricity supply but reduce customer electricity and natural gas bills. Though our study is relatively comprehensive, it, like others, does not include all benefits and costs. Notably, it does not include estimates of the likely downward effect of the 32 offshore wind farms on the cost of subsequent offshore wind development or the benefits of the increased future development that is likely to result. |
| Date: | 2024–09–26 |
| URL: | https://d.repec.org/n?u=RePEc:rff:dpaper:dp-24-17 |
| By: | Nduka, Eleanya (University of Warwick and UK Energy Research Centre); Jimoh, Modupe (University of Warwick and UK Energy Research Centre) |
| Abstract: | This study utilizes novel data to investigate the impact of cooking energy sources and indoor air pollution on the happiness, life satisfaction, physical, and mental health of women in Nigeria. The existing body of literature relies on ambient air pollution data, which can be limiting in resource-constrained settings. To address this gap, we employ a direct approach, measuring Carbon Monoxide (CO) levels in participants’ blood using the Rad-57 CO-oximeter. Our analysis reveals strong positive correlations between the utilization of clean cooking energy and women’s reported happiness and life satisfaction. Additionally, the study finds that clean cooking energy usage is associated with a significant reduction in mental health problems among women. These findings highlight a substantial disparity in wellbeing based on access to clean cooking energy sources. Furthermore, exposure to carbon monoxide, as measured in this study, demonstrates a detrimental effect on women’s health and overall well-being. Consequently, policymakers and stakeholders should prioritize initiatives that promote household energy access and facilitate the transition to clean cooking practices, especially in rural areas where the use of polluting fuels and exposure to indoor air pollution remain prevalent concerns. |
| Keywords: | Air pollution ; Clean Cooking ; Dirty Cooking ; Energy ; Health ; Happiness ; Mental health ; Well-being ; Women; Poverty. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1515 |
| By: | Anton Pichler; Jan Hurt; Tobias Reisch; Johannes Stangl; Stefan Thurner |
| Abstract: | The Russian invasion of Ukraine on February 24, 2022 entailed the threat of a drastic and sudden reduction of natural gas supply to the European Union. This paper presents a techno-economic analysis of the consequences of a sudden gas supply shock to Austria, one of the most dependent countries on imports of Russian gas. Our analysis comprises (a) a detailed assessment of supply and demand side countermeasures to mitigate the immediate shortfall in Russian gas imports, (b) a mapping of the net reduction in gas supply to industrial sectors to quantify direct economic shocks and expected relative reductions in gross output and (c) the quantification of higher-order economic impacts through using a dynamic out-of-equilibrium input-output model. Our results show that potential economic consequences can range from relatively mild to highly severe, depending on the implementation and success of counteracting mitigation measures. We find that securing alternative gas imports, storage management, and incentivizing fuel switching represent the most important short-term policy levers to mitigate the adverse impacts of a sudden import stop. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.07981 |
| By: | Fetzer, Thiemo (Warwick University and University of Bonn); Palmou, Christina (Office for National Statistics (ONS)); Schneebacher, Jakob (Competition and Markets Authority (CMA)) |
| Abstract: | We study how businesses adjust to significant rises in energy costs. This matters for both the current energy crisis and the longer-term shift towards Net Zero. Using firm-level real-time survey and administrative data backed by a pre-registered analysis plan, we examine how firms respond to the energy price shock triggered by Russia’s invasion of Ukraine along output, price, input, process and survival margins. We find that, on average, firms pass on some cost increases, build up cash reserves, and face higher debt, but do not yet see layoffs or bankruptcies. However, effects are highly heterogeneous by size and industry: for instance, small firms tend to increase cash reserves and prices, while large firms invest more in capital. We estimate separate elasticities for many small industry cells and subsequently use kmeans clustering techniques on the estimated effects to identify high-dimensional firm-adaptation archetypes. These estimates can help tailor firm support in the energy transition both in the short and the long term. More generally, the machinery developed in this paper enables policymakers to evaluate and adjust economic policy in near-real time. |
| Keywords: | energy price shock ; firm dynamics ; climate change ; high-dimensional analysis JEL Codes: D22 ; D24 ; H23 ; L11 ; O30 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1517 |
| By: | Paliński, Michał (University of Warsaw); Aşık, Gunes A. (TOBB University of Economy and Technology); Gajderowicz, Tomasz (University of Warsaw); Jakubowski, Maciej (University of Warsaw); Nas Özen, Efşan (World Bank); Raju, Dhushyanth (World Bank) |
| Abstract: | This study expands the inventory of green job titles by incorporating a global perspective and using contemporary sources. It leverages natural language processing, specifically a retrieval-augmented generation model, to identify green job titles. The process began with a search of academic literature published after 2008 using the official APIs of Scopus and Web of Science. The search yielded 1, 067 articles, from which 695 unique potential green job titles were identified. The retrieval-augmented generation model used the advanced text analysis capabilities of Generative Pre-trained Transformer 4, providing a reproducible method to categorize jobs within various green economy sectors. The research clustered these job titles into 25 distinct sectors. This categorization aligns closely with established frameworks, such as the U.S. Department of Labor's Occupational Information Network, and suggests potential new categories like green human resources. The findings demonstrate the efficacy of advanced natural language processing models in identifying emerging green job roles, contributing significantly to the ongoing discourse on the green economy transition. |
| Keywords: | AI, text mining, occupational classification, green jobs, green economy |
| JEL: | J23 Q52 O14 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17286 |
| By: | Philippe Aghion; Lint Barrage; David Hémous; Ernest Liu |
| Abstract: | We analyze a model of green technological transition along a supply chain. In each layer, a good is produced with a dirty technology, or, if the required “electrification” innovation has occurred, with a clean technology which uses the immediate upstream good. We show that the economy is characterized by a single equilibrium but multiple steady-states, and that even in the presence of Pigouvian environmental taxation, a targeted industrial policy is generally necessary to implement the social optimum. We also show that: (i) small, targeted, industrial policy may bring large welfare gains; (ii) a government which is constrained to focus its subsidies to electrification on one particular sector, should primarily target downstream sectors; (iii) when extending the model so as to allow for supply chains also for the dirty technology, overinvesting in electrication in the wrong upstream branch may derail the overall transition towards electrication downstream. Finally, we illustrate our model with a calibration to decarbonization of global iron and steel production via hydrogen direct reduction, and show that, absent industrial policy, the economy can get stuck in a “wrong” steady-state with CO2 emissions vastly above the social optimum even with a carbon price in place. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:zur:econwp:450 |
| By: | Maximilian Fuchs; Johannes Stroebel; Julian Terstegge |
| Abstract: | We study the effects of carbon price uncertainty on firms' decisions to decarbonize their operations. We first use information on the pricing of options on emission allowances in the European Emissions Trading System to create the Carbon VIX, a market-based high-frequency measure of carbon price uncertainty. Carbon price uncertainty is high, varies substantially over time, and experiences persistent shocks around major climate policy events. To explore the effects of carbon price uncertainty on expected aggregate decarbonization investments, we analyze its effect on the stock returns of firms that help other businesses decarbonize. To identify these "carbon solution providers, " we extract common types of decarbonization investments from a large survey of firms, and then identify companies that offer the associated goods and services. We find that the stock returns of these carbon solution providers vary positively with carbon prices, but negatively with carbon price uncertainty. The effect of increases in carbon price uncertainty on our proxy for expected decarbonization investments is economically large and of similar magnitude as the effect of declines in carbon prices. These findings support predictions from real options theory that firms may delay investments in decarbonization when faced with uncertainty about the future costs of emissions. |
| JEL: | G0 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32937 |
| By: | Peter Klimek (Supply Chain Intelligence Institute Austria; Medical University of Vienna, Section for Science of Complex Systems, CeDAS; Complexity Science Hub Vienna; Division of Insurance Medicine, Department of Clinical Neuroscience, Karolinska Institutet); Maximilian Hess (Supply Chain Intelligence Institute Austria); Markus Gerschberger (Supply Chain Intelligence Institute Austria; Josef Ressel Centre for Real-Time Value Network Visibility, Logistikum, University of Applied Sciences Upper Austria); Stefan Thurner (Supply Chain Intelligence Institute Austria; Medical University of Vienna, Section for Science of Complex Systems, CeDAS; Complexity Science Hub Vienna; Santa Fe Institute) |
| Abstract: | The steel industry is a significant contributor to global CO2 emissions, accounting for 7% of emissions. The European steel industry aims to reduce emissions by transitioning towards electric arc furnaces (EAFs), which can produce steel from scrap, a crucial step towards a circular steel economy. This paper uses trade and business intelligence data to show that this shift necessitates a profound restructuring of global and European scrap trade and a significant expansion of the business ecosystem. We find that scrap imports in European countries with major EAF installations have steadily decreased since 2007, while global scrap trade has recently increased. Statistical modeling indicates that for every 1, 000 tonnes of EAF capacity installed, annual scrap imports increase by 550 tonnes and exports decrease by 1, 000 tonnes, suggesting increased competition for scrap metal as EAF capacity expands. Furthermore, each scrap company supports around 79, 000 tonnes of EAF-based steel production per year in the EU. Extrapolating current EAF expansion plans, we estimate that an additional 730 companies may be required, creating approximately 35, 000 jobs and generating USD 35 billion in turnover. This analysis suggests that scrap metal is likely to become a strategic resource, highlighting the need for a major restructuring of the industry’s supply networks and identifying growth opportunities for companies. |
| Keywords: | Electric Arc Furnaces, Circular Economy, Trade Networks, Ferrous Waste, Steel Industry, Supply Chain, European Steel |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:bdt:wpaper:003 |
| By: | António Afonso; José Alves; João Jalles; Sofia Monteiro |
| Abstract: | This study examines the effects of geopolitical risk and global uncertainty on energy prices, conditioned by different exchange rate regimes, for 185 economies over the period 1980-2023. The central question is how uncertainty impacts energy prices and whether exchange rate flexibility mediates these effects. Using panel data techniques, including OLS and Panel VAR, we assess both demand and supply-side channels, exploring country-specific differences. Our key findings indicate that uncertainty shocks significantly raise energy prices, particularly in countries with flexible exchange rates, where currency depreciation amplifies global price fluctuations. Asymmetric results are found regarding emerging markets, with flexible exchange rates, which tend to have lower energy prices, while oil-exporting countries and OPEC members experience distinct pricing dynamics. These results underscore the importance of exchange rate policy choices in shaping energy market responses to global shocks. Policymakers may need to adopt complementary measures to manage the volatility arising from global uncertainty. |
| Keywords: | Geopolitical Risk; World Uncertainty Index; Global Energy Markets; Exchange Rate Regimes; Asymmetric Effects. |
| JEL: | C23 E44 G32 H63 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:ise:remwps:wp03442024 |
| By: | Jesús Fernández-Villaverde; Kenneth Gillingham; Simon Scheidegger |
| Abstract: | There is a rapidly advancing literature on the macroeconomics of climate change. This review focuses on developments in the construction and solution of structural integrated assessment models (IAMs), highlighting the marriage of state-of-the-art natural science with general equilibrium theory. We discuss challenges in solving dynamic stochastic IAMs with sharp nonlinearities, multiple regions, and multiple sources of risk. Key innovations in deep learning and other machine learning approaches overcome many computational challenges and enhance the accuracy and relevance of policy findings. We conclude with an overview of recent applications of IAMs and key policy insights. |
| JEL: | C61 E27 Q5 Q51 Q54 Q58 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32963 |
| By: | Ioana-Ancuta Iancu; Patrick Hendrick; Micu DDM Dan Doru; Adrian Cote |
| Abstract: | This research explores the impact of the COVID-19 pandemic on consumer behavior and preferences related to household energy consumption through actions to fight climate change in Belgium, Romania, Italy, and Sweden. Using data from two Eurobarometer surveys conducted in 2019 and 2021, the study examines shifts in climate change perception, actions to combat climate change, and the influence of socio-economic and demographic variables on these actions. Depending on the country, the findings reveal significant pandemic-induced changes in public perceptions of climate change and personal actions to combat it. Age, gender, and education level were found to influence climate change actions. Financial constraints also significantly influenced the adoption of energy-efficient behaviors. Our research enriches existing knowledge by exploring the influence of the COVID-19 pandemic on climate change perceptions and actions across diverse European countries, shedding light on the interplay between global crises and sustainability. The research methodology, including chi-square tests, logistic regression, and effect size measurements, provides a robust framework for understanding how economic factors and consumer behaviors are contributing to the development of effective energy policies. |
| Date: | 2023–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/377982 |
| By: | Wasim Ahmad; Mohammad Arshad Rahman; Suruchi Shrimali; Preeti Roy |
| Abstract: | This article develops multiple novel climate risk measures (or variables) based on the television news coverage by Bloomberg, CNBC, and Fox Business, and examines how they affect the systematic and idiosyncratic risks of clean energy firms in the United States (US). The measures are built on climate related keywords and cover the volume of coverage, type of coverage (climate crisis, renewable energy, and government and human initiatives), and media sentiments. We show that an increase in the aggregate measure of climate risk, as indicated by coverage volume, reduces idiosyncratic risk while increasing systematic risk. When climate risk is segregated, we find that systematic risk is positively affected by the \textit{physical risk} of climate crises and \textit{transition risk} from government and human initiatives, but no such impact is evident for idiosyncratic risk. Additionally, we observe an asymmetry in risk behavior: negative sentiments tend to increase idiosyncratic risk and decrease systematic risk, while positive sentiments have no significant impact. This asymmetry persists even when considering print media variables, climate policy uncertainty, and analysis based on the COVID-19 period. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.08701 |
| By: | Pauline Lam; Jeffrey Wurgler |
| Abstract: | Green finance emphasizes “additionality, ” meaning funded projects should offer distinct environmental benefits beyond standard practice. Analysis of U.S. corporate and municipal green bonds, however, indicates that the vast majority of green bond proceeds is used for refinancing ordinary debt, continuing ongoing projects, or initiating projects without green aspects that are novel for the issuer. Only 2% of corporate and municipal green bond proceeds initiate projects with clearly novel green features. Investors and market participants also do not distinguish among levels of additionality: Offering yields, announcement effects, green bond index inclusion, and green bond fund holdings are uncorrelated with additionality. |
| JEL: | G10 G32 Q50 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32960 |
| By: | Sérgio Cruz |
| Abstract: | Discussion on the decoupling between income and energy demand has been sur- ging in the last years with focus on the eects of energy eciency policies, renewable self-consumption and structural economic changes. On the other hand, electrica- tion and declining of shadow economy may be putting inertia to this decoupling. Using a time-varying parameters framework, this paper provides insights on the de- coupling nature between income and electricity demand supplied by the network in Portugal, disaggregated by economic sectors and using regional data between 1995 and 2022. Results suggest a declining, but positive, income elasticity of aggreg- ated electricity demand and in the residential, services and industry sectors. For agriculture there is time invariant decoupling. The results enable to determine the importance of sensitivity analysis for electricity consumption in the context of en- ergy transition, particularly useful for investment decisions in electricity generation and grid planning and development. |
| Keywords: | electricity demand, decoupling, time-varying parameters, sector level data, regional data. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:ise:remwps:wp03422024 |
| By: | Sanglin Zhao; Hao Deng; Bingkun Yuan |
| Abstract: | China accounts for one-third of the world's total carbon emissions. How to reach the peak of carbon emissions by 2030 and achieve carbon neutrality by 2060 to ensure the effective realization of the "dual-carbon" target is an important policy orientation at present. Based on the provincial panel data of ARIMA-BP model, this paper shows that the effect of energy consumption intensity effect is the main factor driving the growth of carbon emissions, per capita GDP and energy consumption structure effect are the main factors to inhibit carbon emissions, and the effect of industrial structure and population size effect is relatively small. Based on the research conclusion, the policy suggestions are put forward from the aspects of energy structure, industrial structure, new quality productivity and digital economy. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.00039 |
| By: | Cesar Barreto; Jonas Fluchtmann; Alexander Hijzen; Stefano Lombardi; Patrick Bennett; Antoine Bertheau; Winnie Chan; Andrei Gorshkov; Jonathan Hambur; Nick Johnstone; Benjamin Lochner; Jordy Meekes; Tahsin Mehdi; Balázs Muraközy; Gulnara Nolan; Kjell Salvanes; Oskar Nordström Skans; Rune Vejlin |
| Abstract: | This paper provides a comprehensive analysis of the costs of job displacement in energy-intensive industries in selected OECD countries. Based on harmonised linked employer-employee data from 14 OECD countries, we estimate the effect of job displacement in three energy-intensive industries, namely energy supply, heavy manufacturing and transport, compared to other industries. We find that workers displaced from the energy supply and heavy manufacturing, experience larger earnings losses compared with workers in non-energy-intensive and transport sectors. Larger earnings losses mainly result from weaker re-employment outcomes in terms of wages and job instability but also challenges with finding another job. They reflect significant differences in the composition of workers and firms in energy supply and heavy manufacturing and the rest of the economy. Displaced workers in these sectors tend to be older, are less skilled and more likely to be previously employed in high-wage firms. |
| Keywords: | dismissal, just transition, linked employer-employee data |
| JEL: | J31 J63 Q43 |
| Date: | 2024–09–27 |
| URL: | https://d.repec.org/n?u=RePEc:oec:elsaab:310-en |