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on Energy Economics |
| By: | Vincent Joguet |
| Abstract: | Namibia is on the brink of a major change which is set to radically transform its economy.Indeed, the recent discoveries of vast oil reserves could propel the country among the leading African producers. The country has geared up for this windfall by setting up a sovereign wealth fund based on the Norwegian model. The objective is to invest these revenues over the long term, thereby cushioning the economy from global fluctuations in commodity prices and contributing to a better distribution of wealth. These discoveries are already transforming its balance of payments, with the massive flows of foreign direct investment and the imports of goods and services related to this activity. However, this course is likely to increase the country’s vulnerability to the low-carbon transition by maintaining the economy in its extractive framework. |
| Keywords: | Namibie |
| JEL: | E |
| Date: | 2025–01–15 |
| URL: | https://d.repec.org/n?u=RePEc:avg:wpaper:en17740 |
| By: | Puig Julian; Navajas Fernando |
| Abstract: | The paper models the implementation of increasing block pricing (IBP) coupled with household group segmentation by incomes (high, middle and low) and find necessary conditions for use of progressive block prices and fixed charges based on the distributional characteristics of blocks. It evaluates the recent combination of IBP and group segmentation in residential electricity and natural gas in Argentina using current rate schedules for the Metropolitan Area of Buenos Aires and microdata from the latest Household Expenditure Survey. The findings indicate that those conditions are not validated by the data and estimates and do not justify IBP of fixed charges and marginal prices across blocks within a given household group. Additionally, inconsistencies are observed across groups, with the rate structure (fixed charges for both electricity and natural gas, and block prices for electricity) of the middle-income group being unduly close to that of the low-income group. The analysis provides some justification for the discrimination in natural gas (distribution) prices between Buenos Aires City and Greater Buenos Aires within a given group, due to income disparities between households in both areas. The study suggests a direction of reform towards smaller dispersion of energy prices across groups so as to reduce subsidies and advocate for a shift from IBP to a Two-Part Tariff, incorporating lump sum redistribution across groups. |
| JEL: | D31 H23 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:aep:anales:4755 |
| By: | Paul Simshauser |
| Keywords: | Renewable energy zones, renewables, spilled energy, marginal curtailment, battery storage |
| JEL: | D52 D53 G12 L94 Q40 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:enp:wpaper:eprg2419 |
| By: | LPEM FEB UI; Australian National University; IESR; The SMERU Research Institute |
| Keywords: | energy transition, inclusive, decarbonization, welfare, vulnerable groups |
| URL: | https://d.repec.org/n?u=RePEc:agg:wpaper:4222 |
| By: | Dhruv Suri; Jacques de Chalendar; Ines Azevedo |
| Abstract: | Wind and solar generation constitute an increasing share of electricity supply globally. We find that this leads to shifts in the operational dynamics of thermal power plants. Using fixed effects panel regression across seven major U.S. balancing authorities, we analyze the impact of renewable generation on coal, natural gas combined cycle plants, and natural gas combustion turbines. Wind generation consistently displaces thermal output, while effects from solar vary significantly by region, achieving substantial displacement in areas with high solar penetration such as the California Independent System Operator but limited impacts in coal reliant grids such as the Midcontinent Independent System Operator. Renewable energy sources effectively reduce carbon dioxide emissions in regions with flexible thermal plants, achieving displacement effectiveness as high as one hundred and two percent in the California Independent System Operator and the Electric Reliability Council of Texas. However, in coal heavy areas such as the Midcontinent Independent System Operator and the Pennsylvania New Jersey Maryland Interconnection, inefficiencies from ramping and cycling reduce carbon dioxide displacement to as low as seventeen percent and often lead to elevated nitrogen oxides and sulfur dioxide emissions. These findings underscore the critical role of grid design, fuel mix, and operational flexibility in shaping the emissions benefits of renewables. Targeted interventions, including retrofitting high emitting plants and deploying energy storage, are essential to maximize emissions reductions and support the decarbonization of electricity systems. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2501.01954 |
| By: | Rim Berahab |
| Abstract: | The energy sector faces many challenges that undermine economic growth, energy security and access, and environmental sustainability. To address these challenges, Atlantic Basin countries need to improve access to reliable energy, diversify their energy mix with low-carbon alternatives and improve energy efficiency in the long term. However, the transition to clean energy will also create new risks and challenges that differ from one Atlantic country to another, requiring additional risk mitigation measures and raising the question about the appropriate pace of energy transition. Therefore, the key to managing these risks, lies in robust, equitable, and interdependent global markets and supply chains coupled with strong regional partnerships and national alliances. Therefore, a new energy security paradigm for the Atlantic Basin must emerge to address current and future challenges and ensure that energy security for some does not create massive insecurity for others. However, this new paradigm will require making explicit the new geopolitical risks and trade-offs of sustainable energy systems. "This Paper is prepared within the framework of the Jean Monnet Atlantic Network 2.0. The European Commission's support for the production of this publication does not constitute an endorsement of the contents, which reflect the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein." |
| Date: | 2023–05 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpcoen:rpnn_72 |
| By: | Saadaoui, Jamel; Smyth, Russell; Vespignani, Joaquin |
| Abstract: | Ensuring a stable supply of critical minerals at reasonable prices is essential for the clean energy transition. The security of supply of critical minerals is particularly susceptible to geopolitical risk. In this paper, we use constant and time-varying parameter local projection (TVP-LP) regression models to examine the effect of geopolitical risk on prices of six critical minerals: aluminium, copper, nickel, platinum, tin and zinc. We propose a conceptual framework in which we make two predictions. The first is that the responsiveness of prices for critical minerals to geopolitical risk will depend on the non-technical risk associated with procuring each critical mineral, which will be reflected in the elasticity of supply. The second is that geopolitical threats will have a bigger effect on critical mineral prices than geopolitical acts. With the exception of platinum prices, which have suffered a downward structural demand side shock associated with the growth of the electric vehicle market, we find empirical support for the first prediction. Our results are also consistent with the second prediction. We find considerable evidence that the effect of geopolitical risk on the prices of critical minerals are time varying with time-varying effects of geopolitical shocks observed during the Gulf War, following the 9/11 terrorist attacks and during the COVID-19 pandemic with the time varying effects generally being stronger for geopolitical threats than geopolitical acts. |
| Keywords: | Critical Minerals; Energy Security; Geopolitical Risk |
| JEL: | E00 Q40 Q43 |
| Date: | 2024–11–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122858 |
| By: | Rim Berahab; Hamza Mjahed et Camellia Mahjoubi |
| Abstract: | The current decade is critical for global decarbonization. The ongoing energy transition will bring about changes in technology, commodities, infrastructure, supply chains, as well as geopolitical factors, which could give rise to new energy security challenges. It is therefore important to undertake a thorough re-evaluation of energy security dynamics, with a view to enhancing the resilience of power systems. In this paper, we examine North Africa’s energy transition trajectory through the lens of the international energy crisis in order to address the energy trilemma and propose a reflection on the paradigm of energy security, which continues to evolve against the backdrop of a changing global governance landscape. The paper also proposes recommendations on how to align energy security with the energy transition and build a regional common ground to achieve a secure, affordable and sustainable energy future for all. This paper has been prepared as a collaborative effort between RES4Africa Foundation and the Policy Center for the New South. |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpcoen:rpnn_79 |
| By: | Afaf Zarkik |
| Abstract: | This paper was originally published on iai.it Europe’s natural gas system experienced unprecedented stress following Russia’s invasion of Ukraine. Since the outbreak of the war, the European Union has strived to secure alternative supplies, fill its gas storage facilities and reduce consumption. Success on these fronts was enabled by fundamental market changes that the bloc unlocked during a long period of low gas prices over the past two decades, in addition to emergency and diplomatic initiatives launched by the European Commission to seek alternative energy supplies. North Africa stood out as a key partner to secure additional volumes, owing to its geographic proximity, existing pipeline interconnections and natural resources. In this regard, the energy crisis has served as a catalyst to re-launch EU–North Africa cooperation, with natural gas – recognised as a transition fuel – set to play an important role well into the future. More needs to be done in the region in terms of efficiency, declining domestic demand and improved green energy resources, however, if the full potential of this opportunity is to be achieved. A revived EU–North Africa relationship, based on genuine and equal footing, could help resolve future energy predicaments, while generating growth, high-value jobs and spurring innovation. |
| Date: | 2023–09 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpcoen:rpnn_76 |
| By: | Aghion, Philippe (INSEAD); Bergeaud, Antonin (HEC Paris); De Ridder, Maarten (University of Cambridge); Van Reenen, John (London School of Economics) |
| Abstract: | Green innovation offers a solution to climate change without compromising living standards. Yet the share of climate-enhancing innovations in total patents, after booming for two decades, has seized to grow since the Global Financial Crisis. We develop a quantitative framework in which firms direct innovation towards green or polluting technologies, and become better at innovating in technologies that they have previously succeeded in. This causes mature, incumbent firms to predominantly innovate in polluting technologies. When green technologies become more attractive, e.g. due to a carbon tax, young firms are responsible for a large share of the transition to green innovation. As young firms are financially constrained, a credit shock harms their innovation, bringing the green transition to a halt. We validate the theory with two empirical exercises. First, we use micro data to provide causal evidence that tight credit disproportionately affects green innovation, through its effect on young firms. Second, we show that contractionary monetary policy shocks have a significantly larger effect on green patenting than non-green patenting, in line with the model. Quantifying the model, we find that tight credit can explain around 60% of the recent slowdown in the rise of green patenting. This translates to a cumulative increase in emissions by half a year of the initial (high pollution) steady state. |
| Keywords: | Climate Change; Productivity; Endogenous Growth; Innovation; Creative Destruction |
| JEL: | A10 |
| Date: | 2024–03–25 |
| URL: | https://d.repec.org/n?u=RePEc:ebg:heccah:1512 |
| By: | Christian A. Vossler (Department of Economics, University of Tennessee); Timothy N. Cason; James J. Murphy; Paul J. Ferraro; Todd L. Cherry; George Loewenstein; Peter Martinsson; Jason F. Shogren; Leaf van Boven; Daan van Soest |
| Abstract: | Motivated by the fact that few academic publications document the links between behavioral experiments and public decision making, this paper compiles and describes many studies that were used to inform environmental policy and natural resource management decisions. These experiments informed or changed the designs of emissions trading programs, recreational fishing regulations, conservation auctions, pro-environmental initiatives directed at households, and regulatory enforcement and compliance schemes, and produced nonmarket demand estimates that informed government regulatory analyses. We highlight the context and conditions that produced these experiment-policy links and discuss how researchers can better engage with the policymaking process and increase the impact of experimental research on policy. |
| JEL: | C9 D04 D47 Q28 Q48 Q51 Q58 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:ten:wpaper:2024-05_1 |
| By: | Sibongile Zwane |
| Abstract: | The paper studied the relationship between macroeconomic variables and the returns of REITs listed on the São Paulo and Johannesburg Stock Exchanges between January 2014 and December 2017. The study utilises a multi-linear regression model, estimated via ordinary least squares (OLS), to assess the impact of macroeconomic factors on REIT returns. Additionally, the Intertemporal Capital Asset Pricing Model (ICAPM) is employed to analyse the effects of time-varying factors such as interest rates, money supply, and oil price fluctuations on REIT returns. The findings reveal an insignificant negative relationship between interest rates and REIT returns in both South Africa and Brazil, and an insignificant positive relationship between money supply and REIT returns in both markets. South African REIT returns negatively correlate with crude oil prices, while Brazilian REIT returns show a significant positive relationship with crude oil prices. This study enhances empirical knowledge on how macroeconomic variables affect REIT performance within BRICS economies. It provides valuable insights for policymakers and regulators in shaping monetary policy, monitoring market stability, and forecasting financial risks in REIT markets. Additionally, it informs arbitrage and hedging strategies to optimise returns, while paving the way for further comparative research among BRICS countries. |
| Keywords: | BRICS; Macroeconomic variables; REIT returns |
| JEL: | R3 |
| Date: | 2024–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:afr:wpaper:2024-034 |
| By: | Flamand, Marina; Frigant, Vincent; Miollan, Stéphane; Dimitrova, Zlatina; Sauve, Henri |
| Abstract: | At the heart of the Technological Innovation Systems (TIS) approach is the knowledge production function. Its evaluation requires the study and characterization of the TIS knowledge base and its evolution. Although patents are often used to study this knowledge production function, current techniques for mobilizing these data can be improved. In this article, we propose to work in two directions. Firstly, most studies focus on a singular knowledge base associated with the focal TIS. However, the knowledge spaces associated with a technology are themselves plural, comprising a variety of constituent elements that must be considered separately. In this way, we have broken down the knowledge base required to develop the focal TIS into different technological building blocks. These building blocks have been classified according to three different levels of analysis: type of technological solution, challenges to be met and field of application. Secondly, most studies measure the knowledge production function by the number of patents applications. However, the sheer volume of patents is a biased indicator. A more comprehensive approach to patent analysis is recommended, based on cross-checking several indicators to ensure the accuracy of patent statistics. From this perspective, we evaluate three sets of patent indicators - persistence, commitment, and coherence - to determine, for each subset, whether there is a sufficient level of knowledge created to promote the development of the TIS. All in all, this article proposes a new method of multi-criteria analysis of the knowledge production function in four stages. The relevance and operability of this method is illustrated in the case of hydrogen storage TIS. |
| Keywords: | Technological Innovation System, Knowledge production, Metrics, Patent, Hydrogen storage technologies |
| JEL: | O31 O33 Q55 |
| Date: | 2024–12–19 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123050 |
| By: | Abena Tweneboah Danso; Emmanuel Kofi Gavu; Kwabena Obeng Asiamah |
| Abstract: | Sustainability defines the ability to preserve an object, result or development over time while making sure the resources that are the bedrock of the object are not depleted. In response to the international call for action on the need to reduce global greenhouse gas (GHG) emissions, forums were organised including the 2015 Paris Agreement with a long-term ambition of keeping the global temperature below 2°C and towards 1.5°C. Numerous sustainability and certification assessment tools have been launched to measure the efficiency and carbon emissions of buildings. They include Building Research Establishment Environmental Assessment Method (BREEAM), Leadership in Energy and Environmental Design (LEED), Comprehensive Assessment System for Building Environmental Efficiency (CASBEE) and Excellence in Design for Greater Efficiency (EDGE). EDGE was employed to measure the sustainability and Paris alignment of 3 purposively selected buildings in an institution of Higher learning, KNUST. The findings suggest that none of the new buildings completely passed the EDGE standards, and all 3 buildings passed 2 out of the 3 main sustainability assessment metrics. The findings, however, indicate that a heightened awareness of sustainability principles has positively impacted post-Paris buildings constructed at KNUST. As a key recommendation, the research proposes that vegetated components such as green roofs, green facades and green interior walls can be integrated into buildings in higher learning institutions to aid in reducing carbon emissions and cooling off buildings. |
| Keywords: | EDGE; institutions of higher learning; Paris Agreement; sustainability |
| JEL: | R3 |
| Date: | 2024–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:afr:wpaper:2024-019 |
| By: | Evžen Kočenda; Daniel Bartušek; Evžen Kocenda |
| Abstract: | Reported news events frequently influence the pricing dynamics of oil-based commodities. We analyze almost 900 oil-related events from 1987 to 2022, categorizing them based on recurring characteristics. We quantify dynamic connectedness among energy commodities and apply a novel bootstrap-after-bootstrap testing procedure to identify 21 statistically significant historical events that triggered abrupt and enduring increases in volatility connectedness. Geopolitical events are more consistently associated with elevated connectedness than economic events, while natural events do not exhibit a similar impact. Events share prevailing characteristics: their negativity, unexpected nature, and the introduction of concerns about oil supply shortages. |
| Keywords: | energy commodities, crude oil, volatility connectedness, systemic events, bootstrap-after-bootstrap procedure |
| JEL: | C32 C58 G15 Q02 Q35 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11494 |
| By: | Hanzhe Xing; Stuart Scott; John Miles |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:enp:wpaper:eprg2418 |
| By: | Federico M. Accursi; Raúl Bajo-Buenestado; Raul Bajo-Buenestado |
| Abstract: | Cooperatives, formally established to enhance social welfare and local economic development, often face pressures that divert them from these foundational goals and lead to their transformation into profit-driven entities that exploit market power. Leveraging an unexpected tax change following a vote of no confidence, we examine the pass-through to retail prices as a test for market power, using data from over 250 cooperatives operating in the Spanish fuel market. Our findings reveal a complete pass-through of the tax increase to retail prices. Additionally, descriptive evidence suggests that cooperatives consistently offer lower prices than their for-profit counterparts. These results are indicative of the absence of markup adjustments and market power exertion among cooperatives and are consistent with their prioritization of consumer welfare over profit maximization, thereby justifying the regulatory advantages they enjoy. |
| Keywords: | cooperatives, pass-through to prices, market power, firm conduct, retail fuel market |
| JEL: | D22 H22 H32 L21 L29 P13 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11473 |
| By: | Khondaker Golam Moazzem; Helen Mashiyat Preoty; Mashfiq Ahsan Hridoy; Jebunnesa; Faisal Quiayyum |
| Abstract: | The national budget for FY2025 holds critical importance for Bangladesh’s power and energy sector as it seeks to address the sector’s numerous challenges while moving towards sustainable energy and energy transition goals. This study critically examines the national budget’s reflection on key priorities in the power and energy sector, including overgeneration capacity, frequent power outages, slow progress in renewable energy, and financial vulnerabilities of public authorities |
| Keywords: | Power and Energy Sector, National Budget, FY2024-25, Energy transitiony, Bangladesh |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:pdb:opaper:155 |
| By: | Esther Ann Bøler; Katinka Holtsmark; Karen Helene Ulltveit-Moe; Katinka Kristine Holtsmark |
| Abstract: | We analyze how a major negative shock to the producers of fossil fuels may lead to a shift from dirty to clean R&D along the supply chain. First, we develop a theoretical framework of directed technical change, showing that adjustment costs in R&D activity can lead fossil energy sector suppliers to shift their R&D activity towards clean innovation more than other firms, as a consequence of a negative oil price shock. Second, we investigate the impact of a major drop in the oil price in 2014 on clean R&D. Relying on rich firm level trade data, we propose a novel method of identifying firms’ exposure to the price shock. We find that more exposed firms increased their clean R&D investments more than less exposed firms. Our findings contribute to the understanding of the drivers of clean technological change, which is vital to assess the effectiveness of different climate policy measures, including carbon pricing. |
| Keywords: | clean innovation, supply chains, carbon pricing |
| JEL: | D25 F18 O31 Q55 Q58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11550 |
| By: | Deza Matias; Saracho Abril |
| Abstract: | Energy price elasticities for residential consumers is probably the most important variable to define policies regarding concerns about sustainability, efficiency and equitability. However, estimating consumer response to price changes is complex due to simultaneous demand shocks, regulatory constraints and complex consumer response for this market. This paper estimates the short- and long-term price elasticity of residential energy consumption using a natural experiment from the implementation of the Social Electricity Tariff in Tucumán, Argentina. This policy, aimed at assisting vulnerable households, provided a subsidy to the fixed charge of the electricity tariff. A difference-in-differences approach is employed, using non-beneficiary households as the control group. This allows us to calculate the price elasticity of electricity consumption across different consumption levels. Our findings show that, in general, the price elasticity of consumption is inelastic, with a more pronounced effect among lower consumption users. Additionally, the long-term effect is greater for highly vulnerable users. This study provides the first estimates of short- and long-term price elasticity for Latin America using this identification strategy, offering valuable insights for the design of energy policies. |
| JEL: | Q4 H3 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:aep:anales:4727 |
| By: | Michael Bauer; Daniel Huber; Eric Offner; Marlene Renkel; Ole Wilms; Michael D. Bauer |
| Abstract: | We identify corporate commitments for reductions of greenhouse gas emissions—green pledges—from news articles using a large language model. About 8% of U.S. firms have made green pledges, and these companies tend to be larger and browner than those without pledges. Announcements of green pledges significantly and persistently raise stock prices, consistent with reductions in the carbon premium. Firms that make green pledges subsequently reduce their CO2 emissions. Our evidence suggests that green pledges are credible, have material new information for investors, and can reduce perceived transition risk. |
| Keywords: | climate finance, decarbonization commitments, text classification, event study, transition risk, carbon premium |
| JEL: | G14 G32 Q54 Q56 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11507 |
| By: | Federica Cappelli (Università degli studi di Ferrara) |
| Abstract: | The European Union's energy security is increasingly challenged by its heavy dependence on imported oil, which exposes the region to geopolitical risks and market vulnerabilities. This study explores the role of trade dynamics in exacerbating this dependency, leading to what we term trade lock-in. Additionally, we assess the effectiveness of environmental policies in reducing oil import dependence, investigating whether these policies foster a shift toward greener investments (divestment effect) or inadvertently drive increased oil extraction (green paradox effect). We use network analysis to represent the international oil trade network and use this information in an econometric framework covering the period from 1999 to 2019, accounting for the presence of cross-sectional dependence. We identify two main factors that lock energy systems into an oil-based path: technological (represented by the level of energy intensity) and trade (represented by the existence of privileged trade relations with major oil-exporting countries) lock-ins. Furthermore, we find evidence of the divestment effect for some specific environmental policy instruments, but the effect is not uniform across instruments characterised as either demand-pull or technology-push. Finally, we find that an efficient eco-innovation system can effectively reduce oil import dependence only in countries with a comparative advantage in exporting clean technologies. |
| Keywords: | oil dependence; network analysis; environmental policy; technological change; European Union |
| JEL: | F18 O32 Q32 Q37 Q48 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:srt:wpaper:0125 |
| By: | Fries, Christian P. |
| Abstract: | This paper investigates the fair share of GDP required to mitigate climate change costs, using an extended DICE model. A dedicated fund, supplied annually by a fixed fraction of GDP, is introduced to cover abatement and damage costs. Numerical analysis reveals that a funding rate of 2.4% of GDP is sufficient to meet all costs, enabling faster early abatement and reducing total emissions significantly. The proposed approach promotes intergenerational equity by distributing climate-related costs evenly across generations, overcoming the classical DICE model's limitations. We investigate the interplay of the model's discount rate and the required funding rate. For low to moderate discount rates the required funding rate is largely independent of the discount rate, while high discount rate lead to higher funding rates as nominal cost increase. |
| Keywords: | Integrated Assessment Models; CO2-Price; Social Cost of Carbon; Interest Rate of Carbon; Intergenerational Equity; GDP |
| JEL: | E17 Q54 |
| Date: | 2024–11–30 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123001 |
| By: | Pascal Haser |
| Abstract: | This paper examines the financing structures and environments for energy infrastructure in four selected Sub- Saharan African countries: Cote d'Ivoire, Ghana, Zambia, and Kenya. These nations and the entire continent are poised for significant population growth in the coming years, driving increased energy demand. This is particularly critical for the real estate sector, which has been set to expand dramatically. Therefore, besides the volume of new real estate developments, it is of central qualitative concern whether sufficiently robust energy infrastructure will be in place to support them adequately when realised. Key findings highlight that, while political and economic conditions are often conducive, the primary barriers to investment, especially private investment, often stem from higher perceived risks than other assets or global regions. These risks vary widely across political, financial, and technical clusters but frequently manifest institutionally or through regulatory challenges. The four case studies reveal several recurring barriers: noncommercial tariff structures influenced by high generation costs and subsequent subsidy dependencies, monopolistic market structures leading to transmission and distribution inefficiencies, and difficulties securing capital investment due to insurance challenges. Consequently, addressing the specified risks requires a suitable combination of policy measures comprising adequate governance measures that foster institutional, regulatory, and macroeconomic stability. Understanding these dynamics is crucial for policymakers and stakeholders seeking to attract and sustain energy infrastructure investments across these regions. By addressing these barriers, policymakers can mitigate risks, encourage private sector participation, and foster sustainable development aligned with expanding energy demands driven by demographic and economic growth. |
| Keywords: | energy infrastructure; Financing; Governance; real estate; Sub-Saharan Africa; Sustainable Development |
| JEL: | R3 |
| Date: | 2024–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:afr:wpaper:afres2024-007 |
| By: | Elias Hasler |
| Abstract: | This paper explores the global economic and climate spillovers of the European Union Emissions Trading System (EU ETS), leveraging exogenous variations in carbon prices identified through a carbon policy surprise series. Findings reveal that higher EU carbon prices lead to significant and sustained reductions in greenhouse gas (GHG) emissions, both within the Euro Area (EA) and globally, with no evidence of carbon leakage. Structural Scenario Analysis confirms that these reductions are driven by energy efficiency improvements rather than solely by declines in industrial production. The results highlight the transmission of the shock trough the Brussels Effect, where EU carbon policies influence global standards, evidenced by stricter carbon policies abroad and shifts in investor behavior favoring green industries. Furthermore no region benefits economically from EU carbon pricing. Overall, the EU ETS proves effective in reducing emissions without being undermined by carbon leakage. |
| Keywords: | Carbon Leakage, Spillovers, Carbon Pricing, Brussels Effect |
| JEL: | E32 F42 F64 Q54 Q58 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:inn:wpaper:2025-01 |
| By: | Poggiese Milena; Ibáñez Martín María María |
| Abstract: | In Argentina, energy subsidies play a central role in the National Treasury’s expenditures. After the pandemic, changes were made to two of the most significant subsidy policies: the Zona Fria Law and the universal residential subsidy. The Zona Fria Law was extended in 2021, and residential tariffs began to be segmented in 2022. Both subsidies and their respective modifications have distributive effects on the population and have a substantial impact on energy deprivation. The primary objective of this study is to examine whether the changes in subsidy policies have contributed to alleviating energy poverty in Argentina and reducing territorial inequalities. By applying a distributive incidence analysis of energy expenditure using various indicators, it is found that the combination of subsidy policies—each with different motivations—creates distorting effects. |
| JEL: | H22 D31 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:aep:anales:4752 |
| By: | Shaheen, Susan PhD; Martin, Elliot PhD; Ju, Mengying |
| Abstract: | Transportation network companies (TNCs) play an increasingly prominent role providing on-demand mobility for consumers across California. The California Public Utilities Commission (CPUC) and the California Air Resources Board (CARB) adopted and are implementing Senate Bill 1014 (Clean Miles Standard), which establishes an annual increase in the percent of zero-emission passenger miles traveled and greenhouse (GHG) emission reduction targets for TNCs. This regulation requires TNC drivers to acquire and operate an electric vehicle (EV). In collaboration with the Rideshare Drivers United, a grassroots driver advocacy group, we collected data to understand the total cost of EV ownership for TNC drivers. This included two TNC driver group discussions, ten expert interviews, an in-depth driver survey (n=436), and a dataset of 150 million TNC trips from the CPUC. The driver survey was distributed in December 2023 and April 2024, investigating driver perceptions and any changes to their driving due to operating an EV. The CPUC dataset reports trip-level TNC activities from September 2019 to October 2020, including data on trip location, time, driver pay, and other variables. We also evaluated vehicle price and fuel economy data to investigate the economic feasibility of purchasing, leasing, or renting EVs for ridehailing use. One of our key metrics is the net TNC driver earnings, or the total TNC income subtracted by service fees, fuel costs, monthly vehicle payments, etc. |
| Keywords: | Physical Sciences and Mathematics |
| Date: | 2024–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsrrp:qt4rf2191v |
| By: | Wojcik, Adrian Dominik; Glińska-Neweś, Aldona; Jurgiel, Dominika; Milfont, Taciano L (University of Waikato); Brzustewicz, Paweł; Glinka, Beta; Łuka, Alicja; Szostek, Dawid |
| Abstract: | The advancement of research on employee pro-environmental behaviors (PEBs) is hindered by inconsistent terminology, fragmented behavior taxonomies, and incoherent measurement methods. Our research focuses on the concept of employee green behaviors (EGB) and seeks to empirically validate a set of EGB items derived from the Green Five Taxonomy. Through three surveys of full-time office workers in Poland (Ntotal = 2, 985), the study identifies six distinct categories of EGB: reducing, recycling, reusing, prioritizing environmental concerns, counterproductive green behavior, and other behaviors beyond the 3R (reduce, reuse, recycle) framework. These findings refine the initial taxonomy and offer a consolidated measurement tool. |
| Date: | 2024–12–06 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:wknhs |
| By: | Saheed Bello; David M Reiner |
| Keywords: | Green hydrogen technology, experience curves, RD&D spending, global and OECD, cost reductions |
| JEL: | O30 C50 Q42 Q55 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:enp:wpaper:eprg2420 |
| By: | Elsenberger, Sebastian |
| Abstract: | This thesis examines, quantifies, and ranks the influence of various factors of activity, structure, and intensity on passenger transport energy consumption to assess the progression of energy efficiency. For this purpose, four logarithmic mean Divisia index (LMDI) decomposition analyses are conducted employing continuous data from 2000 to 2016, one each for the land passenger transport sector and one for the LDV sector. In particular, the question of to what extent gross efficiency gains can be attributed to technical efficiency improvements versus behavioral factors is answered. The analyses on land passenger transport solely feature gross energy intensity, whereas the subsequent analyses on LDV energy consumption further decompose gross efficiency into fuel share, average occupancy, and technical energy intensity. Beyond that, population factors are introduced to obtain results normalized per capita. The results of the full decomposition analyses highlight that technical energy efficiency enhancements are always substantially offset by behavioral factors, such as passenger activity per capita or LDV average occupancy. What is more, modal split is of the least significance even though it holds an enormous energy savings potential. However, passenger transport energy consumption per capita decreases throughout all scenarios. Ultimately, a successful policy response must address behavioral and personal utility factors since measures exclusively focused on technical energy efficiency improvements are likely to induce rebound effects. |
| Keywords: | Energy Efficiency; Decomposition Analysis; LMDI; Energy Efficiency Indicators; Rebound Effect; Transport Policy; Fuel Switching; Energy Economics; Energy Policy; Germany; Netherlands; Factor Decomposition |
| JEL: | C82 R4 R49 |
| Date: | 2023–07–28 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122147 |
| By: | Stefano Carattini; Garth Heutel; Givi Melkadze; Inès Mourelon |
| Abstract: | Transition risk – the financial stability risk related with decarbonization – is a major source of concern. The literature has so far only studied transition risk caused by carbon tax shocks. This paper explores other potential sources of transition risk: two other policy sources – subsidies to abatement or to green producers – and two preference-based sources – a shock to consumer preferences and a shock to investor preferences. We develop an environmental dynamic stochastic general equilibrium model that includes a frictional financial sector, and we consider macroprudential policy responses to transition risks. These different shocks have different effects on the possibility of transition risk and lead to different macroprudential policy implications. |
| JEL: | E32 E60 G18 Q43 Q58 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33275 |
| By: | Frikk Nesje; Moritz A. Drupp; Mark C. Freeman; Ben Groom |
| Abstract: | We critically assess an almost universal Benefit-Cost Analysis (BCA) practice. In addition to the central Net Present Value (NPV), analysts frequently also report multiple additional values in what is commonly referred to as ‘NPV sensitivity analysis’. This practice is generally justified with reference to the future net benefits to the asset being risky, or because the correct discounting model is difficult to identify. We explain why, despite the fact that this is recommended as best practice across multiple prestigious and influential sources, the reporting of more than one NPV either lacks sufficient theoretical support or reflects decisions taken at an inappropriate level within the organizational hierarchy. As a consequence, this practice may confuse decision-makers more than help them. We illustrate this point in relation to a number of current guidelines across the public and private sectors and with particular focus on the US Environmental Protection Agency’s latest estimates of the Social Cost of Carbon. |
| Keywords: | benefit-cost analysis, net present value, sensitivity analysis, social cost of carbon, regulatory analysis |
| JEL: | H43 G31 L51 Q51 Q54 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11547 |
| By: | Andrea Xamo (Department of Economics (University of Verona)); Roberto Ricciuti (Department of Economics (University of Verona)) |
| Abstract: | Italy, a latecomer country to industrialization, faced the hurdles of lacking coal in the age of steam. When the technology for long-distance electricity transmission became available, it invested heavily in hydropower. By 1911, 42.7% of Italy’s installed industrial power came from hydroelectricity. Using methodologies rooted in New Economic Geography (NEG) and factor endowment theories, we analyze the location of industrial activity across Italian provinces during the census years 1901 and 1911. We evaluate the influence of electric power as a distinct factor alongside traditional determinants such as market potential, human capital, and energy intensity. Our approach incorporates new data on GDP, literacy, and energy stocks, enabling a fine-grained analysis at the NUTS-3 level. Dependent variables include provincial shares of industrial employment and GDP, regressed on interactions between industrial and provincial characteristics. Baseline OLS findings highlight the role of electricity in industrial location, with its influence growing markedly between 1901 and 1911. Alternative specifications and instrumental variable techniques confirm these results, underscoring electricity’s transformative role in reducing Italy’s dependence on water-powered manufacturing. These findings align with broader interpretations of electrification’s role in enabling industrial diversification and regional economic development during the Second Industrial Revolution. |
| Keywords: | Electrification, industry location, Italian manufacturing, market potential, factor endowments, Liberal Italy. |
| JEL: | N73 N93 O18 R30 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:ver:wpaper:01/2025 |
| By: | Sebastian Leutner; Benedikt Gloria; Sven Bienert |
| Abstract: | The study examined whether green buildings enjoy more favourable financing terms than their non-green counterparts, exploring the presence of a green discount in commercial real estate lending. Despite the extensive research on green premiums on the equity side, lending has received limited attention in the literature, although regulations have increased and ambitious net-zero targets have been set in the banking sector. The authors used a unique dataset comprising European commercial loan data from 2018 to 2024, with a total loan value exceeding €30 billion. Hedonic regression analysis was used to isolate a potential green discount. Property assessments conducted by lenders were used to investigate whether green properties exhibit lower interest rate spreads and higher loan-to-value (LTV) ratios. The findings reveal the existence of a green discount in European commercial real estate lending, with green buildings enjoying a 5.35% lower contracted loan spread and a 3.92% lower target spread compared to their non-green counterparts. The analysis indicated no distinct advantage regarding LTV ratios for green buildings. The research contributes to a deeper understanding of the interaction between green properties and commercial real estate lending, offering valuable insights for lenders and investors. The study represents the first of its kind in Europe and provides empirical evidence for a green discount’s presence. |
| Keywords: | Commercial real estate lending; Financing; Green Buildings; loan-to-value ratio |
| JEL: | R3 |
| Date: | 2024–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:afr:wpaper:2024-006 |
| By: | Théo Aphecetche |
| Abstract: | This paper examines the fiscal implications of the global transition to climate neutrality, focusing on government expenditures, revenues, and the need for a comprehensive fiscal strategy within country-level transition plans. The paper analyses the impact of climate change and policy responses on public finances, highlighting the potential for decreased public revenues and increased expenditures due to climate-related damages and the implementation of mitigation policies. While carbon pricing strategies can initially boost revenues, their long-term success in reducing emissions may lead to lower fiscal income. The paper explores the necessity of investments to support the economic transformation towards a net-zero emission future and discusses the varying degrees of fiscal impact across different regions and policy mixes. The paper stresses the importance of broadening the tax base and incorporating innovative financing strategies to ensure fiscal sustainability during the transition. Through continuous assessment and international coordination, particularly within the G20, the paper suggests approaches to minimise the fiscal risks associated with a disorderly climate transition and to enhance the effectiveness of climate action for the collective global good. |
| Keywords: | Green Transition, Fiscal Sustainability, Carbon Pricing, Nationally Determined Contributions, Country-level Transition Plans, Climate Mitigation. |
| JEL: | E6 H2 |
| URL: | https://d.repec.org/n?u=RePEc:euf:ecobri:081 |
| By: | Khondaker Golam Moazzem; Helen Mashiyat Preoty; Mashfiq Ahsan Hridoy |
| Abstract: | The Integrated Energy and Power Master Plan (IEPMP) 2023 lays out the plan to adapt hydrogen and ammonia along with carbon capture units and nuclear as clean energy and attain the 40 per cent clean energy goal by 2041. Such technologies are comparatively new and the efficiency level of reducing emissions has not been tested appropriately. |
| Keywords: | Clean Energy, IEPMP, Power and Energy Sector, Renewable energy, Bangladesh |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:pdb:opaper:154 |
| By: | Srdelic, Leonarda; Barisic, Radoslav |
| Abstract: | This paper investigates the existence of sector-specific Environmental Kuznets Curves (EKC) in Croatia from 1995 to 2021. Using Autoregressive Distributed Lag (ARDL) and Error Correction Models (ECM), the relationship between greenhouse gas (GHG) emissions and Gross Domestic Product (GDP) is analysed across key climate-policy relevant sectors (CPRS). A stable long-term relationship with significant short-term adjustments was found in the energy-intensive sector, which is regulated under the European Union Emissions Trading System (EU ETS). Long-term cointegration, but with non-significant short-term adjustments, was observed in the buildings, transportation, and utility/electricity sectors. Among sectors with a significant long-term relationship, an inverted U-shaped Environmental Kuznets Curve (EKC)—where emissions initially rise and then, after reaching a certain GDP threshold, decline—was identified in the buildings and energy-intensive sectors. In contrast, a U-shaped relationship was found in the utility/electricity sector, where emissions initially decrease but start to increase again as GDP grows. The transportation sector shows a positive linear relationship with GDP, with emissions rising consistently with economic growth, highlighting the need for targeted interventions like carbon pricing. Conversely, the fossil fuel sector shows no significant GDP-emissions relationship, pointing to external factors like geopolitical risks as primary influences. |
| Keywords: | Environmental Kuznets Curve (EKC), greenhouse gas emissions (GHG), climate- policy relevant sectors (CPRS), European Union Emissions Trading System (EU ETS), Croatia. |
| JEL: | O11 Q53 Q56 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122841 |
| By: | Nerlich, Carolin; Köhler-Ulbrich, Petra; Andersson, Malin; Pasqua, Carlo; Abraham, Laurent; Bańkowski, Krzysztof; Emambakhsh, Tina; Ferrando, Annalisa; Grynberg, Charlotte; Groß, Johannes; Hoendervangers, Lucia; Kostakis, Vasileios; Momferatou, Daphne; Rau-Goehring, Matthias; Rariga, Erzsebet-Judit; Rusinova, Desislava; Setzer, Ralph; Spaggiari, Martina; Tamburrini, Fabio; Simon, Josep Maria Vendrell; Vinci, Francesca |
| Abstract: | The green transition of the EU economy will require substantial investment to 2030 and beyond. Estimates of green investment needs vary between institutions and are surrounded by high uncertainty, but they all point to a requirement for faster and more ambitious action. Green investment will need to be financed primarily by the private sector. While banks are expected to make a key contribution to funding the green transition, capital markets need to deepen further, especially to support innovation financing. Progress on the capital markets union would support the green transition. Public funds will be vital to complement and de-risk private green investment. Structural reforms and enhanced business conditions should be tailored to encourage firms, households and investors to step up their green investment activities. JEL Classification: E22, E44, G21, Q41, Q50, Q58 |
| Keywords: | financing, fiscal policy, green transition, investment, structural policy |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbops:2025367 |
| By: | Hauer, Mathew; Hardy, Dean (University of Maryland College Park); Zagheni, Emilio; Jorgenson, Andrew |
| Abstract: | Rarely are those most impacted by climate change the same as those most responsible for global carbon emissions. Assignment of responsibility for carbon emissions typically differentiates emissions across space and time but not birth cohort. Including young birth cohorts complicates assessments as they have yet to emit as much as older cohorts. Using formal demographic methods, we develop an approach to estimate carbon emissions across space, across time, and across the life course, creating a unified carbon emissions identity, comparable to other well-known carbon identities. We estimate the birth cohorts born between 1850 and 2020 with the highest lifetime carbon emissions. We show that globally, cohorts born between 1970 and 1990 have the highest lifetime emissions under a moderate carbon emissions pathway and those born since 2000 under a high emissions pathway. Our results suggest that carbon emissions pathways play the strongest role in determining which cohorts will be associated with the highest lifetime carbon emissions, with lower pathways suggesting earlier cohorts and higher pathways suggesting later cohorts. |
| Date: | 2024–12–07 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:pv2n5 |
| By: | Viral V. Acharya; Robert F. Engle III; Olivier Wang |
| Abstract: | We study how government policies and corporate commitments to decarbonize interact under two externalities: environmental damages and green innovation spillovers. Unconstrained carbon taxes and innovation subsidies could achieve first-best outcomes, but when government policies face constraints, commitments by large firms and institutional investors can serve as profit-driven coordination devices that spur green innovation and technology adoption, and thereby reduce overall transition costs. Firm commitments also enhance government policy credibility by lowering the need for high future carbon taxes. Our empirical evidence confirms that firm size and green common ownership drive Net Zero commitments and decarbonization investments. |
| JEL: | G3 H2 Q5 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33335 |
| By: | Qu, Chunzi (Dept. of Business and Management Science, Norwegian School of Economics); Bang, Rasmus Noss (SNF - Centre for Applied Research at NHH); Sandal, Leif K. (Dept. of Business and Management Science, Norwegian School of Economics); Steinshamn, Stein Ivar (Dept. of Business and Management Science, Norwegian School of Economics) |
| Abstract: | This paper examines the integration of hydrogen storage in renewable-intensive energy sys tems. Current hydrogen storage technology is too costly and inefficient, but reducing hydrogen costs to 12.5% of current levels and increasing round-trip efficiency to 70% could make it com petitive. These are challenging targets but feasible given positive predictions on cost reduction and efficiency attainability currently. Hydrogen storage reduces total energy system costs by partly replacing lithium batteries to lower storage costs, due to its suitability for long-term storage, while increasing grid flexibility to lower transmission costs. Moreover, integrating hydrogen can decrease the share of nuclear and fossil fuels in the generation mix, reducing generation costs. Italy and Germany are identified as primary targets for hydrogen expansion in Europe. In scenarios of limited lithium supply, hydrogen becomes more competitive and essential to compensate for system storage capacity shortages, though it may not reduce total system costs. |
| Keywords: | European energy system; Hydrogen storage; Optimization model; Storage capacity expansion |
| JEL: | Q40 Q50 |
| Date: | 2025–01–13 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhhfms:2025_001 |
| By: | Mohamed Ismail Sabry (Erasmus University Rotterdam) |
| Abstract: | This paper investigates how the comparative power of various state and society actors and their collective utilities from the green transition—as reflected in their perceived losses or gains from the transition—affect the prospects of the energy transition in the Arab region. The paper begins with a theoretical discussion that maps out the important actors related to the green transition and their comparative power, identifying them as the state, labor, big business tycoons, and small and medium enterprise (SME) entrepreneurs. Then, the various actors’ utilities from the green transition are considered, where the sources of the different utilities are derived from the effect of industrial policies that impact the green transition. The main focus here is on the development of linkages, structural transformation, and energy subsidization policies. This discussion leads to the formulation of a theoretical mathematical model, from which several hypotheses are derived. After the theoretical model is translated into a regression model, the paper discusses the results and how they compare to the hypotheses, followed by a brief analysis of some case studies to better understand the results. The paper concludes that in countries with a more dominant state and weaker social actors, the green transition is more likely to primarily follow the interests of the state regardless of social actors’ interests. In more balanced state-society relations, however, the higher the interests of the various social actors, the more likely the green transition will proceed. In these settings, the green transition should be supported by tycoons and entrepreneurs through more innovation-fostering policies, labor through better structural transformation policies, and both tycoons and labor through lower energy subsidies. |
| Date: | 2024–09–20 |
| URL: | https://d.repec.org/n?u=RePEc:erg:wpaper:1724 |
| By: | Saul Nurick; Isobella van der Merwe; Aiden van Wyk |
| Abstract: | The certification of green residential buildings is in its infancy in the South African property market, compared to the commercial property sector. The Green Building Council South Africa (GBCSA) uses EDGE to certify residential buildings. The purpose of the research was to identify if electricity savings in EDGE-certified residential units could be converted into some form of wealth creation. A single case study was analysed comprising an EDGE-certified residential estate containing 503 units in Gauteng, South Africa. A quantitative analysis method was conducted in the form of descriptive statistics, where electricity usage was analysed. The reduced electricity (KWh) usage was converted into a monetary amount (Rands) for one-, two- and three-bedroom units. The electricity savings were invested into either government bonds (risk-free investment), or the property’s mortgage/loan to reduce the repayment period. The duration of the original loan period where no payments were required (due to a reduced payment period) was used to invest the sum of the electricity savings and the notional loan repayments into a fictional balance fund – EDGE Alternative Investment Fund (EDGE AIF). The research found that real-world savings are experienced by property owners, which is critical in developing real estate markets. |
| Keywords: | EDGE; Green Buildings; real-world savings (RWS); Residential; wealth creation |
| JEL: | R3 |
| Date: | 2024–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:afr:wpaper:2024-031 |
| By: | Otrachshenko, Vladimir (National Bank of Slovakia (NBS)); Popova, Olga (Leibniz Institute for East and Southeast European Studies (IOS)) |
| Abstract: | This paper contributes to a better understanding of the drivers of electoral support for Green parties and the environmental actions they promote, which is key to ensuring the long-term feasibility of environmental policies. We examine whether individual environmental preferences translate into voting for Green parties and analyze the mechanisms behind this effect. Employing an individual-level survey from developed and developing economies matched with the political parties' programs globally, we find that individuals who prefer environmental protection over economic growth are likely to translate their preferences into voting and supporting Green parties. These findings are robust to alternative definitions of Green parties and environmental preferences and to potential endogeneity concerns. The key mechanisms behind this relationship are changes in the stringency of environmental regulations, individual economic and social insecurity, and individual- and country-level exposure to environmental changes. The effect of environmental preferences on Green party voting is less pronounced among individuals living in rural areas and economically disadvantaged individuals, including those with lower education and income. These results suggest that support for Green parties and environmental policies is contingent on voters' economic security even when environmental preferences are strong, emphasizing the need for Green parties to address voters' economic concerns. |
| Keywords: | environmental preferences, Green parties, sustainable development, voting |
| JEL: | D72 H11 Q56 Q58 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17475 |
| By: | Di Carlo, Donato; Hassel, Anke; Höpner, Martin |
| Abstract: | Since the introduction of the euro, German growth has been primarily based on exports. Signs of an exhaustion of Germany's export-led growth model were already evident before the energy crisis of 2022–23, which hit the country hard. German elites could have capitalized on the shock to rebalance their growth strategy. But the opposite happened: the government's adjustment strategy has aimed at doubling down on export-led growth and protecting the core export industries. This article investigates the politics of Germany's economic policymaking in hard times. We show that the government's economic policy responses were driven largely by an export sector growth coalition led by cross-class alliances in the chemical, metalworking, and engineering sectors. In contrast to previous corporatist decision-making, which aimed to include broader societal concerns in peak-level concertation, German corporatism has undergone a functional transformation toward the predominance of export sector distributive coalitions. This article's findings contribute to the emerging literature on the politics of growth models in comparative political economy. |
| Keywords: | corporatism; energy crisis; growth models; inflation; policy networks |
| JEL: | F14 F52 H10 L52 P16 |
| Date: | 2024–11–26 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126301 |
| By: | Lorenzo Mori; Gert Peersman |
| Abstract: | A common approach for estimating the macroeconomic effects of oil supply news employs SVAR-IV models identified using changes in oil futures prices around OPEC quota announcements as an instrument. However, we show that the reduced-form oil price innovations, structural shocks, and the instrumental variable in these estimations are all Granger-caused by financial variables, indicating informational deficiencies in the VAR model and contamination of the instrument. To resolve these issues, we incorporate financial indicators into the econometrician’s information set, yielding significantly different results. These include a sharper short-term output decline, lower and less persistent inflationary effects, and a reversal of the monetary policy response. Our results also show greater stability over time and the disappearance of puzzling responses. Finally, we identify similar issues in other prominent oil-market SVAR models, suggesting that informational deficiencies are a pervasive issue in oil-market research. |
| Keywords: | oil supply news shocks, OPEC announcements, SVAR-IV, informational deficiencies |
| JEL: | C32 C36 E31 E32 F31 Q43 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11532 |
| By: | Njideka Aguome; Nonso Ewurum; Phenyo Mpolokang; Fidelis Emoh |
| Abstract: | This study employs a discrete choice analysis to investigate homeowners' risk-time preferences for energy efficiency upgrades, considering both upfront costs and future savings. The study's objectives are to understand trade-offs homeowners are willing to make between upfront costs and expected savings for energy efficiency upgrades and to identify the tipping point where homeowners switch preferences between discounted long-term savings and higher upfront costs amongst household demographic characteristics. A quantitative methodology is employed to achieve these objectives, utilising discrete choice analysis. This methodology allows for examining homeowners' preferences by presenting them with various hypothetical scenarios that include different combinations of upfront costs and expected savings for energy efficiency upgrades. Using a dataset of 461 homeowners in Nigeria, we estimate latent class, multinomial logit models, and conjoint analysis to analyse the preference heterogeneity in the population. Our results provide a comprehensive understanding of homeowners' risk-time preferences for energy efficiency upgrades, and the tipping point where they switch preferences between discounted long-term savings and higher upfront costs. The findings elicit insights that direct policymakers to tailor their interventions consistent with demographic variances towards effectively incentivising energy efficiency upgrades. |
| Keywords: | discrete choice experiment; Energy Efficiency; household preferences; smart homes; sustainable transition |
| JEL: | R3 |
| Date: | 2024–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:afr:wpaper:2024-035 |
| By: | Ignacio Garr\'on; Andrey Ramos |
| Abstract: | Accurate tracking of anthropogenic carbon dioxide (CO2) emissions is crucial for shaping climate policies and meeting global decarbonization targets. However, energy consumption and emissions data are released annually and with substantial publication lags, hindering timely decision-making. This paper introduces a panel nowcasting framework to produce higher-frequency predictions of the state-level growth rate of per-capita energy consumption and CO2 emissions in the United States (U.S.). Our approach employs a panel mixed-data sampling (MIDAS) model to predict per-capita energy consumption growth, considering quarterly personal income, monthly electricity consumption, and a weekly economic conditions index as predictors. A bridge equation linking per-capita CO2 emissions growth with the nowcasts of energy consumption is estimated using panel quantile regression methods. A pseudo out-of-sample study (2009-2018), simulating the real-time data release calendar, confirms the improved accuracy of our nowcasts with respect to a historical benchmark. Our results suggest that by leveraging the availability of higher-frequency indicators, we not only enhance predictive accuracy for per-capita energy consumption growth but also provide more reliable estimates of the distribution of CO2 emissions growth. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2501.03380 |
| By: | Alfonso Medinilla; Afaf Zarkik; Larabi Jaïdi |
| Abstract: | This paper was originally published on ecdpm.org COP27 reached a breakthrough agreement on a new loss and damage fund for vulnerable countries and opened the door for a review of the international financial architecture. Ahead of COP28 at the end of 2023, the AU-EU partnership can help drive global climate change and energy transition agendas forward. A fruitful collaboration between the two continents starts with the following: • Africa and Europe must find common ground to maximise the benefits and minimise the costs of combating climate change and the green transition. Both must move from dogmatic positions on renewable energy and fossil fuels to focus on green transition business opportunities. • Both continents must acknowledge, address and alleviate tensions between Europe and Africa over decarbonisation. Failure to do so will slow the progress of promoting a just energy transition in Africa. • African and European representatives should avoid the trap of ‘policy signalling’ or ideal-type solutions but focus on delivering rapid results on climate finance, energy and industrialisation, as well as communicating more effectively on their progress. |
| Date: | 2023–09 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbcoen:pbnn_34 |
| By: | David L. Kelly; Christopher Paik |
| Abstract: | We assess the feasibility, optimality, and policy implications of Environmental, Social, and Corporate Governance (ESG)-linked or “green” lending in a credit market where banks incorporate such non-financial data in credit allocation decisions. We identify an asymmetric information problem: borrowers signal low financial risk to banks who are uncertain about borrower risk levels by engaging in green investments. We derive conditions under which banks segment the market into green and brown loan products and evaluate market efficiency. We find borrowers prioritize signaling over the environmental impact of green investments, and the market sustains only limited green lending, since if all borrowers make green investments, no signaling value exists. The optimal carbon tax policy replaces the signaling value of green investments with the marginal damage and outperforms a brown reserve requirement aimed at discouraging brown lending. However, both policies also can sustain only a limited amount of green investments. We conclude that while green lending by banks can enhance welfare relative to an unregulated market, the resulting market segmentation can make the social optimum infeasible, even with carbon tax regulation. |
| Keywords: | competitive screening, ESG, environmental risk, climate risk, sustainable banking, sustainable finance, stranded assets |
| JEL: | D80 D81 Q54 Q56 Q58 G21 E58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11522 |
| By: | Hege, Ulrich; Li, Kai; Zhang, Yifei |
| Abstract: | We study the effect of climate-related innovation on carbon emissions by analyzing supply chain networks. We find that climate innovation reduces carbon emissions at customer firms, driven by product innovations. The effect is economically significant, dominated by the most emission-intensive customer firms, gradually increases over a five-year horizon, and is significant for Scope 1 and Scope 2 emissions. We then look at the diffusion of climate innovation to new customers. We find that customers ex-hibit a strong preference for suppliers with new climate patents, that climate patents allow suppliers to attract new customers, especially customers with high environmental ratings or a large carbon footprint, and that these new customers subsequently also reduce their emissions. We use the quasi-random assignment of patent examiners and the exogenous technological obsolescence of climate patents as instruments to suggest a causal interpretation of the main findings. |
| Keywords: | climate innovation; supply chains; new customer firms; business stealing; carbon emissions; environmental scores; patent examiner leniency; technology obsoles-cence. |
| JEL: | L14 O31 O33 Q54 Q55 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:130108 |
| By: | Ottmar Edenhofer; Max Franks; Friedemann Gruner; Matthias Kalkuhl; Kai Lessmann |
| Abstract: | Carbon dioxide removal (CDR) is becoming an emerging topic in climate policy. We review the nascent economic literature on the governance of CDR and discuss policy design and institutions. We first assess the role of CDR in climate policy portfolios that include abatement and adaptation. Cost saving technological progress could make CDR a game changer in climate policy: CDR creates new sectoral, intertemporal and international flexibilities, which reduce overall costs and allow returning to a temperature target after temporary overshooting. Moreover, carbon removal can reduce the problem of international cooperation due to substantially lower supply-side leakage via fossil fuel markets. A key challenge lies in its governance and incentive structure that is complicated by non-permanence of carbon storage and default risks of the firms committed to future CDR. For CDR governance, we survey approaches that incentivize removals by price instruments or include CDR in (modified) emissions trading schemes. |
| JEL: | H23 Q54 Q58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11516 |
| By: | Raphael Madzingaidzo; Louie van Schalkwyk; Saul Nurick |
| Abstract: | The construction industry has long been criticised for significantly contributing to global carbon emissions and a large energy consumer. Economies around the world, however, have taken an active role in addressing the construction industry’s carbon footprint and high energy demands by incorporating green technologies and practices in construction projects. Green Building Features and Initiatives (GBFIs) have solved the construction industry’s challenges. The Green Building Council of South Africa (GBCSA) manages and applies tools such as Green Star SA, EDGE, and Net- Zero to assist in incorporating and certifying GBFIs in buildings. A literature review was conducted to identify key drivers and barriers to adopting GBFIs to ensure that the research contributes to a better understanding of these factors in the context of South Africa. The study employed a qualitative research approach comprising multiple case study analyses, where semi-structured interviews were conducted with key stakeholders in the construction industry. The case studies involved five major residential developments in municipalities in the Western Cape and Gauteng Provinces. The study highlighted factors such as client awareness and developer initiative as the key drivers of adopting GBFIs, followed by increased international investment. However, the study yielded many barriers, including financial and government-related barriers in the form of legislation. |
| Keywords: | Energy; Green building features and initiatives (GBFIs); Residential Property; South Africa |
| JEL: | R3 |
| Date: | 2024–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:afr:wpaper:2024-030 |
| By: | Brueckner, Markus; Haidi Hong, Haidi; Vespignani, Joaquin |
| Abstract: | This paper presents estimates of the effects that government regulation of diesel and petrol prices has on GDP growth. Theory suggests that when supply curves are convex, a decrease in the regulatory price has a larger effect on output than a tantamount increase. Motivated by this theoretical insight, we specify VAR models with asymmetric effects of positive and negative changes in the regulatory prices of diesel and petrol. We estimate the VAR models on quarterly data from China’s national accounts during the period Q1 1998 to Q4 2018. Our main findings are that: (i) negative growth rates of regulatory diesel and petrol prices significantly reduce GDP growth; (ii) positive growth rates of regulatory diesel and petrol prices have a positive, but quantitatively small and statistically insignificant effect on GDP growth. |
| Keywords: | GDP growth, energy price regulation |
| JEL: | E0 E00 Q4 Q43 |
| Date: | 2023–06–06 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122869 |
| By: | Christina Anderl; Guglielmo Maria Caporale |
| Abstract: | This paper investigates the role of shipping costs in global crude oil and refined petroleum markets and their effects on regional and country-level inflation and real activity. For this purpose a Global VAR (GVAR) model is estimated jointly for the oil and refined petroleum markets; this includes the Baltic Dirty Tanker Index (BDTI) and the Baltic Clean Tanker Index (BCTI) as measures of the cost of shipping crude oil and refined petroleum commodities, respectively. The results suggest that shocks to the cost of shipping petroleum commodities have a particularly severe negative impact on real economic activity and on petroleum consumption in most regions, while shocks to the price of crude oil and petroleum have inflationary effects, especially in oil-importing countries. Further, it appears that the relationship between commodity prices and their respective shipping costs has broken down since the beginning of the Covid-19 pandemic. Specifically, a counterfactual analysis shows that the pandemic moved the prices of crude oil and petroleum and their costs of shipping in opposite directions. |
| Keywords: | oil markets, petroleum prices, shipping costs, Baltic Dirty Tanker Index (BDTI), Baltic Clean Tanker Index, Global VAR (GVAR), real economic activity, inflation, Covid-19 counterfactual |
| JEL: | C32 F47 O50 Q43 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11551 |
| By: | Adam Masotya; Prisca Simbanegavi; Malcolm Weaich; Yewande Adewunmi; Pride Ndlovu; Faranani Gethe |
| Abstract: | This study compares occupant satisfaction in green versus conventional residential real estate in South Africa. It investigates the benefits and satisfaction levels related to green developments, particularly in terms of energy savings and socio-economic impacts. The research aimed to determine if there is a significant difference in occupant satisfaction between green and conventional residential developments. A quantitative approach was employed, utilizing stratified random sampling to survey 160 occupants from two developments: Crossberry Central (green) and Little Manhattan (conventional). Data was analysed using the Mann-Whitney U and Wilcoxon W tests due to non- normal data distribution. The findings indicate that occupants of green developments report significantly higher satisfaction levels. Key areas of satisfaction include air quality, utility savings, and environmental benefits. Green developments demonstrate higher levels of satisfaction regarding reduced utility bills, improved indoor air quality, and contributions to environmental conservation. The study concludes that green residential developments significantly enhance occupant satisfaction compared to conventional housing. This suggests a socio-cultural shift towards valuing sustainable living environments, emphasising the importance of promoting green building practices to improve both environmental and occupant well-being. |
| Keywords: | Green Buildings; occupant satisfaction; residential developments; South Africa |
| JEL: | R3 |
| Date: | 2024–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:afr:wpaper:2024-044 |
| By: | Michael D. Bauer; Eric A. Offner; Glenn D. Rudebusch |
| Abstract: | Policymakers and researchers worry that the low-carbon transition may be inadvertently delayed by higher global interest rates. To examine whether green investment is especially sensitive to interest rate increases, we consider the effect of unanticipated monetary policy changes on the equity prices of green and brown European firms. We find that brown firms, measured in terms of carbon emission levels or intensities, are more negatively affected than green firms by tighter monetary policy. This heterogeneity is robust to different monetary policy surprises, emission measures, econometric methods, and sample periods, and it is not explained by other firm characteristics. This evidence suggests that higher interest rates may not skew investment away from a sustainable transition. |
| Keywords: | monetary transmission, carbon premium, ESG, climate finance |
| JEL: | E52 G14 Q54 Q58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11552 |
| By: | Paul Ghelasi; Florian Ziel |
| Abstract: | Power prices can be forecasted using data-driven models or fundamental models. Data-driven models learn from historical patterns, while fundamental models simulate electricity markets. Traditionally, fundamental models have been too computationally demanding to allow for intrinsic parameter estimation or frequent updates, which are essential for short-term forecasting. In this paper, we propose a novel data-driven fundamental model that combines the strengths of both approaches. We estimate the parameters of a fully fundamental merit order model using historical data, similar to how data-driven models work. This removes the need for fixed technical parameters or expert assumptions, allowing most parameters to be calibrated directly to observations. The model is efficient enough for quick parameter estimation and forecast generation. We apply it to forecast German day-ahead electricity prices and demonstrate that it outperforms both classical fundamental and purely data-driven models. The hybrid model effectively captures price volatility and sequential price clusters, which are becoming increasingly important with the expansion of renewable energy sources. It also provides valuable insights, such as fuel switches, marginal power plant contributions, estimated parameters, dispatched plants, and power generation. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2501.02963 |
| By: | Tengjiao Chen; Daniel H. Karney |
| Abstract: | This study constructs a novel analytical general equilibrium model to compare environmental policies in a setting where oligopolistic energy firms engage in third-degree price discrimination across residential consumers and industrial firms. Closed-form solutions demonstrate the impact on prices and quantities. The resulting welfare change is decomposed across three distortions: output, price discrimination, and externality. This study finds that the output distortion and price discrimination welfare effects generally move in opposite directions under policies such as an emission tax or a two-part instrument. Numerical analysis compares policies and finds scenarios where the output distortion and price discrimination welfare changes fully offset and thus leaves the net welfare gain of the externality correction. In this way, environmental policy can be designed to mitigate output distortion welfare concerns when firms have market power. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2501.03114 |
| By: | Natalia Turdyeva (Bank of Russia, Russian Federation) |
| Abstract: | We are considering the introduction of climate policy in Russia under conditions of quantitative export restrictions. We have enhanced the model employed in the article (Burova et al., 2023) by incorporating a mechanism for quantitative trade restrictions. We demonstrate that in the case of deterioration in external economic conditions, such as a decline in the prices of Russian exports, the significance of quantitative export restrictions becomes secondary. The reason is that at low export prices the optimal physical volume of exports only marginally exceeds or may even be less than the quantitative restrictions. Without unrestricted access to global green technologies, ambitious climate policy goals may become excessively costly in terms of economic impact. In the presented model, attempting to achieve a 70% reduction in CO2-equivalent emissions from the 2016 level, coupled with decreasing prices for Russian exports and quantitative trade restrictions, could result in a deviation of GDP in 2040 by 11% from the baseline scenario, which implies maintaining the current status quo in climate policy both in Russia and globally. A more economically viable approach seems to be a moderate climate policy: achieving a 36% reduction in emissions from combustion compared to the 2016 level results in a 4.7% downward deviation of real GDP in 2040 from the baseline scenario. Only 0.3% of this decrease is attributed to the impact of domestic climate policy through an emissions trading system. The remaining 4.4% is explained by the deterioration of external economic conditions, stemming from the climate policies of other countries and quantitative restrictions on Russian exports. In the absence of a proactive climate policy, the carbon intensity of Russian GDP rises, amplifying transitional and physical risks of addressing the consequences of climate change. Essential measures to mitigate these risks involve the promotion and development of green industries, particularly those oriented towards exports. |
| Keywords: | Russia, climate policy, NGFS scenarios, export restrictions, CGE, emissions trading, ETS |
| JEL: | C68 F13 Q52 Q54 Q58 |
| Date: | 2024–02 |
| URL: | https://d.repec.org/n?u=RePEc:bkr:wpaper:wps125 |
| By: | Jiayue Zhang; Tony S. Wirjanto; Lysa Porth; Ken Seng Tan |
| Abstract: | This paper investigates strategic investments needed to mitigate transition risks, particularly focusing on sectors significantly impacted by the shift to a low-carbon economy. It emphasizes the importance of tailored sector-specific strategies and the role of government interventions, such as carbon taxes and subsidies, in shaping corporate behavior. In providing a multi-period framework, this paper evaluates the economic and operational trade-offs companies face under four various decarbonization scenarios: immediate, quick, slow, and no transitions. The analysis provides practical insights for both policymakers and business leaders, demonstrating how regulatory frameworks and strategic investments can be aligned to manage transition risks while optimizing long-term sustainability effectively. The findings contribute to a deeper understanding of the economic impacts of regulatory policies and offer a comprehensive framework to navigate the complexities of transitioning to a low-carbon economy. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2501.02383 |
| By: | Ben Hoehn; Yannick Schmidt; Sven Bienert |
| Abstract: | We introduce a comprehensive scoring model designed for both listed and non-listed companies within the real estate sector, offering a systematic approach to evaluate and benchmark their progress in achieving Net Zero commitments. The guide encompasses five distinct implementation categories: Targets, Strategies, Organisational Structure, Operational Measures, and Tracking/Monitoring/Reporting. These categories are identified through a prior qualitative study, which extensively examines Net Zero strategies and expert interviews. Utilising these identified measures, we have developed a framework and executed an extensive survey involving ESG professionals in the industry representative of companies exceeding $1, 000 billion in AuM. The goal is to establish a ranking system for these measures, ultimately creating a robust scoring system to assess holistic strategies. The implemented scoring system contributes to this initiative in three significant ways. Firstly, it streamlines the process for companies seeking to commit to net-zero carbon emissions by providing a structured evaluation framework. Secondly, it aids in pinpointing potential gaps in green actions within the strategies of these companies. Lastly, it enhances the transparency surrounding the quality of net-zero commitments, thereby mitigating the risk of (unintentional) greenwashing practices. |
| Keywords: | Environmental Sustainability; net-zero carbon emissions; real estate; scoring and evaluation, decarbonisation management |
| JEL: | R3 |
| Date: | 2024–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:afr:wpaper:afres2024-010 |
| By: | Joshua Graff Zivin; Gregor Singer |
| Abstract: | We examine how exogenous changes in exposure to air pollution over the past two decades have altered the disparities in home values between Black and White homeowners. We find that air quality capitalization rates are significantly lower for Black homeowners. In fact, they are so much lower that, despite secular reductions in the Black-White pollution exposure gap, disparities in housing values have increased during this period. An exploration of mechanisms suggests that roughly two-thirds of this difference is the result of direct discrimination while the remaining one-third can be attributed to systemic discrimination. |
| Keywords: | house prices, environmental justice, air pollution, race, discrimination |
| JEL: | Q51 R30 J15 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11555 |
| By: | Putri, Schalke Anindya |
| Abstract: | This study investigates Indonesia's green complexity at the provincial level, examining the country's capabilities to produce sophisticated environmental goods while pursuing its 2060 net-zero emissions target. The research uniquely contributes by applying Green Complexity Index (GCI) analysis at the subnational level, revealing critical intra-country differences in green development potential. The study analyzes 493 green products identified from IMF, OECD, and WTO data, categorized into renewable energy, pollution management, clean technologies, and resource management. Trade competitiveness data from WITS and BPS covers 34 Indonesian provinces and 226 countries, using 2022 trade data. The methodology employs Economic Complexity Index (ECI) calculation, Green Complexity Index (GCI) derivation, and Product Distance measurement to assess regional green capabilities and development trajectories. DKI Jakarta leads in green product exports (370 products) and competitive exports (48 products), with a weak positive correlation between ECI and GCI across provinces. While Jawa Barat leads in ECI (1.48), Jakarta tops GCI rankings (13.12). Regional disparities show Kepulauan Riau leading in renewable energy (GCI: 3.05) and clean technologies (GCI: 8.34), while Jakarta dominates pollution management (GCI: 4.53). The study reveals substantial regional variations in green complexity across Indonesian provinces, concentrated in developed regions. The findings suggest the need for province-specific strategies, knowledge transfer mechanisms, and innovative green finance solutions to promote sustainable development. |
| Keywords: | Green Complexity Index, Economic Complexity, Product Distance, Regional Development |
| JEL: | Q56 |
| Date: | 2024–11 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123139 |
| By: | Hong, Jifeng; Kazakis, Pantelis; Strieborny, Martin |
| Abstract: | Utilizing a staggered Difference-in-Differences (DID) approach, we investigate the impact of green bond issuance on the probability of default among Chinese firms from 2016 to 2022. We find that issuing a green bond significantly reduces the firm’s default probability, highlighting the joint advantage of financial stability and environmental sustainability. The effect is particularly strong for firms that lack strong external monitoring by financial analysts and media, for high-polluting firms, and for firms facing a high level of competition. Our results also suggest that the transmission from green bond issuance to improved financial resiliency works both through alleviating financial constraints and through increasing stock liquidity. |
| Keywords: | green bond issuance; default probability; analyst and media coverage; financial constraints; stock liquidity |
| JEL: | G14 G32 G33 |
| Date: | 2024–12–19 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:123049 |
| By: | Smyth, Russell; Vespignani, Joaquin |
| Abstract: | We thank the Department of Industry, Science and Resources (DISR) for the opportunity to contribute to the development of a national critical minerals strategy. We agree with the DISR that Australia has a narrow window of opportunity to capitalize on the very high demand and prices of critical minerals in order to become the world leader in clean energy production. While the Discussion Paper touches on several issues relevant to developing a critical minerals sector in Australia, our submission focuses on achieving a level of investment and output in the sector, consistent with global decarbonization and global net zero by 2050. Specifically, we proffer a tax reform proposal in the form of a Decarbonization Corporate Bond that, we believe, would mitigate, or eliminate, most of the factors inhibiting investment in critical minerals. |
| Keywords: | Critical minerals, energy, Australia |
| JEL: | E0 E00 Q40 Q42 |
| Date: | 2023–06–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:122868 |
| By: | Jonathan Colmer; Suvy Qin; John Voorheis; Reed Walker |
| Abstract: | This paper explores the relationships between air pollution, income, wealth, and race by combining administrative data from U.S. tax returns between 1979–2016, various measures of air pollution, and sociodemographic information from linked survey and administrative data. In the first year of our data, the relationship between income and ambient pollution levels nationally is approximately zero for both non-Hispanic White and Black individuals. However, at every single percentile of the national income distribution, Black individuals are exposed to, on average, higher levels of pollution than White individuals. By 2016, the relationship between income and air pollution had steepened, primarily for Black individuals, driven by changes in where rich and poor Black individuals live. We utilize quasi-random shocks to income to examine the causal effect of changes in income and wealth on pollution exposure over a five year horizon, finding that these income–pollution elasticities map closely to the values implied by our descriptive patterns. We calculate that Black-White differences in income can explain ∼10 percent of the observed gap in air pollution levels in 2016. |
| Keywords: | income, wealth, air pollution, inequality |
| JEL: | H00 H40 Q50 R00 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11465 |
| By: | Katinka Holtsmark; Katinka Kristine Holtsmark |
| Abstract: | Carbon tax revenue recycling – returning tax revenue to firms or households that are covered by the carbon tax – can potentially increase political acceptance for carbon taxation and prevent undesirable distributional outcomes and off-shoring. This paper uses a stylized theoretical model to analyze the long-run effects of carbon tax revenue recycling in a sector where there are knowledge spillovers between firms. The paper shows that recycling tax revenue to polluting firms can impede incentives to invest in green technologies and, in some settings, completely curb green investment. This is the case even if the individual transfers are small relative to aggregate government revenues and not contingent on firm-level emissions or investment levels. The disincentive to invest when revenues are recycled arises because a firm investing in green technology may lower not only their own emissions, but also those of other firms, when there are knowledge spillovers between them. When revenues are recycled, the emission reductions from the rest of the industry will lower the transfer received by the investing firm. |
| Keywords: | green transition, technological development, carbon tax, revenue recycling |
| JEL: | H23 Q54 Q58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11510 |
| By: | Tobias Eibinger (University of Graz, Austria); Karl W. Steininger (University of Graz, Austria); Hans Manner (University of Graz, Austria) |
| Abstract: | Greenhouse gas emissions in Austria in 2023 were 14% below 1990 levels, matching those last observed in 1970. Particularly strong decreases occurred in 2022 and 2023, with emissions falling by 5.8% and 6.4%, respectively. The buildings sector in 2023 was over 50% below its 1990 baseline. It experienced a 20% drop in 2023, with 0.7 percentage points explained by a milder winter and the remainder driven by an increased share in renewables. Two-thirds of this uptake can be traced to high energy prices since 2021. Emissions in remaining sectors declined by 4.9% in 2023, with weak economic performance contributing 0.86 percentage points and the majority attributed to a higher share of renewables, around 60% of which can be explained by rising energy prices since 2021. A hypothetical scenario, assuming average economic conditions and winter temperatures, indicates that emissions would have been lower than the ones observed in 2021 and 2022 but slightly higher in 2023. |
| Keywords: | GHG Emissions, Mitigation, Nowcasting. |
| JEL: | C53 Q58 Q41 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:grz:wpaper:2024-23 |
| By: | Weber, Pierre-François; Afota, Amandine; Boeckelmann, Lukas; De Gaye, Annabelle; Dieppe, Alistair; Faubert, Violaine; Grieco, Fabio; Le Roux, Julien; Meunier, Baptiste; Munteanu, Bogdan; Nobletz, Capucine; Norring, Anni; Reininger, Thomas; Skackauskaite, Ieva; Suárez-Varela, Marta; Svartzman, Romain; Valadier, Cécile; Vlajie, Diana; Wilbert, Lucia; Zaghini, Andrea; Attinasi, Maria Grazia; Brüggemann, Axel |
| Abstract: | Two phenomena are increasingly reshaping the world economy. One is the growing and well-documented importance of climate transition policies that differ across countries. The other is the stark rise of geoeconomic fragmentation (GEF) concerns. While differences in climate transition policies are not new, they could amplify GEF, which is a new, growing risk. Conceptually, GEF is a policy-driven reversal of global economic integration, guided by strategic considerations such as national security, sovereignty, autonomy, or economic rivalry. It does not include reversals to global economic integration that are driven by autonomous change, such as shifts in technology, demographics or preferences, or policies motivated primarily by prudential or environmental concerns and labour or human rights. GEF propagates via all the channels through which countries engage with each other economically and politically to provide global public goods such as climate change mitigation. The steep rise in trade and investment restrictions points to coming headwinds which could be compounded by uncoordinated climate transition policies. Conversely, GEF could make transition policies more difficult as, together with their prerequisites – such as shared regulatory approaches, knowledge sharing and financial aid to less well-off countries – they hinge on effective cross-border coordination and collaboration. There is a considerable risk that GEF may hinder climate transition policies. The report is structured as follows. The first section sheds light on how climate policies may contribute to GEF. The second section analyses the extent to which GEF could hinder the green transition. The last section discusses gaps and avenues for further analytical and model-based work. JEL Classification: F52, F64, H87, Q54 |
| Keywords: | climate change, geoeconomic fragmentation, international cooperation, international public goods |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbops:2025366 |
| By: | Scott Alan Carson; Scott A. Carson |
| Abstract: | The oil and gas industry’s early 2000’s fracking and horizontal drilling revolution realigned the industry and larger economies. This study uses New Growth Theory to evaluate innovation across an industry with various integrated but distinct upstream, midstream, and downstream units. Two issues are considered. First, how did Independent returns vary within the industry by equity, commodity, and distillate risks relative to Integrated majors before and after the fracking revolution? The fracking revolution changed within-group technology that favored Independent firms who outperformed larger Integrated producers. Second, how did upstream, midstream, and downstream risks vary across the industry by equity, commodity, and distillates relative to Integrated firms before and after the fracking revolution? Exploration & production across-group Independent equity return gaps with the fracking revolution increased the most for any Independent sector, either within or across decompositions, indicating that the greatest fracking industry realignment was in equity markets as participants increased upstream exploration & production returns closer to oil and gas extraction. |
| Keywords: | New Growth Theory, hydraulic-fracturing, technology, financial, commodity markets and technological change |
| JEL: | G12 L71 L72 O13 O14 Q40 Q41 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11534 |
| By: | Nidhaleddine Ben Cheikh (ESSCA School of Management); Christophe Rault (University of Orléans) |
| Abstract: | Although financial inclusion would induce greater pollutant emissions through economic activity, improved access to financial services may facilitate investment in clean technologies. This study investigates whether financial inclusion has influenced the dynamics of carbon dioxide (CO2) emissions over the last decade using a sample of 70 countries. We implement panel threshold techniques to explore possible regime shifts in environmental quality. Our results reveal that the influence of increased financial access on air pollution depends on the economic development stage. While financial inclusion can increase CO2 emissions in lower-income regimes, environmental quality appears to be enhanced, with more inclusiveness at later developmental stages. Less-developed countries require more robust environmental policies to align their financial inclusion initiatives with sustainable economic development. |
| Date: | 2024–08–20 |
| URL: | https://d.repec.org/n?u=RePEc:erg:wpaper:1713 |