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on Energy Economics |
| By: | Neuhoff, Karsten; Sato, Misato; Ballesteros, Fernanda; Böhringer, Christoph; Borghesi, Simone; Cosbey, Aaron; Das, Katsuri; Ismer, Roland; Johnston, Angus; Linares, Pedro; Matikainen, Sini; Pauliuk, Stefan; Pirlot, Alice; Quirion, Philippe; Rosendahl, Knut Einar; Sniegocki, Aleksander; van Asselt, Harro; Zetterberg, Lars |
| Abstract: | This report argues that Europe’s climate policymakers must prepare options to ensure the resilience of its industrial strategy in a global context of increasing fragmentation, and proposes a ‘climate contribution’ approach. In particular, the EU’s Carbon Border Adjustment Mechanism (CBAM) may not be sufficient to provide a level playing field if other countries do not pursue comparable carbon pricing strategies. The report is authored by a group of academics from institutions across Europe, [i] led by Karsten Neuhoff and Misato Sato, and published by the Grantham Research Institute with DIW Berlin and the Centre for Economic Transition Expertise (CETEx). |
| JEL: | R14 J01 |
| Date: | 2025–01–22 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129054 |
| By: | Cohen, François; Glachant, Matthieu; Söderberg, Magnus |
| Abstract: | Little is known about how households adapt to climate change. Previous research has focused on geographical differences in fuel choice and air conditioning. Using a 28-year panel of homes, we conducted the first longitudinal analysis of eight categories of adaptations and their impact on electricity, gas, and water expenditures. Exposure to cold or warm days correlates with increased spending on doors, windows, equipment, insulation, energy, and water. Our findings suggest cooling costs will rise, offset by lower heating costs. We predict a significant increase in electricity and water use during summer, leading to seasonal utility adjustments. |
| Keywords: | climate change; adaptation; housing; energy; water |
| JEL: | R14 J01 |
| Date: | 2025–07–07 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129047 |
| By: | Hepburn, Cameron; Ives, Matthew C.; Loni, Sam; Mealy, Penny; Barbrook-Johnson, Pete; Farmer, J. Doyne; Stern, Nicholas; Stiglitz, Joseph |
| Abstract: | Reaching net-zero emissions will involve a structural transformation of the global economy. The transition is complicated by deep uncertainty about the new economic configurations that will emerge, coordination challenges, and non-linear dynamics amidst shifting political winds, where nation states are actively intervening to gain comparative advantage in key technologies. Here, we consider key economic questions about the net-zero transition that are of interest to finance ministries, based on a recent survey. Specifically, this paper asks: ‘What is the most effective way economic models and frameworks can help guide policy, given the complexity and uncertainty involved?’ We suggest five general criteria that models and frameworks should meet, and provide some guidance on how to select the right model for the question at hand—there is no single model to rule them all. A range of examples are offered to illustrate how models can be used and abused in the provision of economic advice to policy-makers. We conclude by noting that there are several gaps in our collective modelling capability that remain to be addressed. |
| Keywords: | carbon price; carbon tax; climate; climate policy; economy; finance ministry; integrated assessment models |
| JEL: | Q54 Q55 Q58 C63 C68 |
| Date: | 2025–07–28 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129031 |
| By: | Diego B. P. Gomes; Ms. Lisa L Kolovich; Hannah Yi Wei |
| Abstract: | This paper examines how oil shocks shape labor market outcomes across 89 countries from 1975 to 2022. Leveraging a high-frequency oil supply shock series and a rich panel of quarterly labor market data, we find that shocks raising oil prices trigger sharp and persistent employment losses, particularly in oil-importing countries, oil-intensive sectors, and among male workers. Delayed but enduring employment declines also emerge in oil-moderate sectors and among female workers, revealing broader labor market implications. In contrast, employment gains in oil-exporting countries, and following expansionary supply shocks, are comparatively modest. Labor force participation responds less consistently, with patterns displaying higher variability. These findings highlight how oil shocks transmit unevenly through labor markets, with lasting impacts across countries, sectors, and demographic groups, extending well beyond short-term macroeconomic fluctuations. |
| Keywords: | labor market; oil supply shocks; employment heterogeneity; high-frequency identification; cross-country labor adjustment |
| Date: | 2025–07–18 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/145 |
| By: | Jiawen Luo (School of Business Administration, South China University of Technology, Guangzhou 510640, China); Jingyi Deng (School of Business Administration, South China University of Technology, Guangzhou 510640, China); Juncal Cunado (University of Navarra, School of Economics, Edificio Amigos, E-31080 Pamplona, Spain); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa) |
| Abstract: | This paper investigates the predictability of supply and demand oil price shocks on U.S. Gross Domestic Product (GDP) using several Mixed Data Sampling (MIDAS) models that link quarterly GDP to monthly oil price shocks for the period 1981-2023. The main findings reveal that oil demand shocks, particularly economic activity and inventory shocks, have higher forecast ability than oil supply shocks, highlighting the importance of disentangling oil price shocks into their underlying components. Additionally, our results suggest that the Time Varying Parameter (TVP)-MIDAS model most effectively captures the dynamic relationship between oil price fluctuations and economic activity, pointing to the heterogeneous impact of oil price shocks over time. Finally, when we extend our analysis to other regions in the world, the results suggest that while oil demand shocks play a significant role in forecasting economic activity in advanced regions, the emerging regions are more vulnerable to oil supply shocks. |
| Keywords: | Oil price shocks, economic activity, Mixed-Data-Sampling (MIDAS), Time-Varying Parameter MIDAS (TVP-MIDAS), Forecast evaluation |
| JEL: | C22 C53 Q41 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:pre:wpaper:202523 |
| By: | Cloé Garnache; Elisabeth Isaksen; Maria Nareklishvili |
| Abstract: | The transition to a low-carbon economy requires a contraction of fossil fuel sectors, raising questions about the labor market costs of reallocation. We study the 2014 oil price shock as a natural experiment to examine the contraction of Norway’s oil industry. Using matched employer–employee data, we estimate long-run effects on earnings and employment using two complementary approaches. A difference-in-differences design shows moderate losses for all oil workers, while an event study reveals substantially larger and more persistent losses among displaced workers—up to 10% in earnings and 5% in employment nine years after displacement, especially for those with lower educational attainment. Although few displaced workers transition into green jobs, they are equally likely to enter green and brown (non-oil) sectors when accounting for the size of each destination sector. Earnings losses are larger for those entering green jobs rather than brown (non-oil) jobs, but smaller than for those entering other sectors. Decomposition results indicate that differences in establishment wage premiums—rather than skill mismatch—explain most of the observed gaps. |
| Keywords: | green transition, oil industry, job displacement, distributional effects, establishment wage premium, skills mismatch |
| JEL: | Q32 Q52 J24 J63 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12057 |
| By: | Maximilian Bernecker; Smaranda Sgarciu; Xiaoming Kan; Mehrnaz Anvari; Iegor Riepin; Felix M\"usgens |
| Abstract: | This study develops a capacity expansion model for a fully decarbonized European electricity system using an Adaptive Robust Optimization (ARO) framework. The model endogenously identifies the worst regional Dunkelflaute events, prolonged periods of low wind and solar availability, and incorporates multiple extreme weather realizations within a single optimization run. Results show that system costs rise nonlinearly with the geographic extent of these events: a single worst-case regional disruption increases costs by 9%, but broader disruptions across multiple regions lead to much sharper increases, up to 51%. As Dunkelflaute conditions extend across most of Europe, additional cost impacts level off, with a maximum increase of 71%. The optimal technology mix evolves with the severity of weather stress: while renewables, batteries, and interregional transmission are sufficient to manage localized events, large-scale disruptions require long-term hydrogen storage and load shedding to maintain system resilience. Central European regions, especially Germany and France, emerge as systemic bottlenecks, while peripheral regions bear the cost of compensatory overbuilding. These findings underscore the need for a coordinated European policy strategy that goes beyond national planning to support cross-border infrastructure investment, scale up flexible technologies such as long-duration storage, and promote a geographically balanced deployment of renewables to mitigate systemic risks associated with Dunkelflaute events. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.11361 |
| By: | Frances Fahy; Edina Vadovics; Bonno Pel |
| Abstract: | The first chapter introduces the concept of energy citizenship and the innovative approach this book has adopted to investigate it, as well as provides a road map for the remaining chapters. Specifically, the chapter discusses the origins of the concept of energy citizenship and the many forms in which it exists. It then briefly introduces the EnergyPROSPECTS project, the driver behind the production of this collection. This introductory chapter explains how each of the core chapters, drawing on eight national contexts, highlights the geographicaldifferences, the contextual challenges, and the socio-political histories out of which energy citizenship develops. |
| Keywords: | Energy citizenship; Energy transitions; Europe; Research approach |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/393187 |
| By: | René Kemp; Marianna Markantoni; Job Zomerplaag; Bonno Pel; Ali Crighton |
| Abstract: | This chapter traces the dynamic history of energy citizenship in the Netherlands, an evolution from grassroots protests to partnerships with businesses and government entities. Through a comprehensive analysis of historical events, case studies, and policy developments, the study shows how energy citizenship in the Netherlands has evolved from opposition to nuclear power in the early 1970s to today’s diverse and multifaceted initiatives. The research employs a mix of qualitative methods, including interviews, document analysis, and workshops, focusing on Dutch energy citizenship initiatives such as Weert Energie, Ameland, LSA, and Loenen Energie. These examples not only showcase transformative goals and agency but also reflect the Poldermodel, a consensus-based decision-making process prevalent in the Netherlands characterised by collaboration and negotiation between multiple stakeholders, including the government, employers, labour unions, and other relevant parties. The paper also examines the role of intermediaries in enhancing energy citizenship and how changing power dynamics and institutional structures have influenced the energy transition. By comparing the rise and nature of energy cooperatives from the 1980s to the present day, the study highlights significant shifts in citizen engagement, technological adoption, and policy influence. The findings reveal that while energy citizenship in the Netherlands has achieved notable successes, it continues to navigate complex challenges in pursuit of a more sustainable and democratic energy future. |
| Keywords: | Chequered history; Energy citizenship; Protests; Public-civic partnerships; The Netherlands |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/393056 |
| By: | Bonno Pel; Jönne Huhnt |
| Abstract: | This chapter explores the forms, contexts, and conditions of energy citizenship that have emerged in Belgium. Regarding the forms, it presents data from a large-scale mapping of energy citizenship initiatives throughout Europe. For Belgium, this comprises 21 initiatives differing in objective, size, and organisational form. Regarding the contexts and conditions, the analysis discusses the factors that shape the development of energy citizenship in Belgium. It reflects on the energy citizenship potential of the Belgian context and its apparent paradoxes: energy citizenship is a universalist concept, yet related practices tend to develop around rather particularistic understandings of citizenship. Second, energy citizenship is developing thanks to a seriously energy-inefficient building stock, which creates awareness and urgency. This adverse material context also renders many energy-citizenship-related agencies ineffective, invisible, and unrewarding, however—thus the material context is at once a ‘driver’ and a barrier. Third, energy citizenship revolves around the activation of citizens, yet this tends to be successful only through the intermediation of institutions—ultimately leaving citizens relatively passive. These universality, materiality, and agency paradoxes represent important reality checks for energy citizenship policies. |
| Keywords: | Belgium; Energy citizenship; Energy transition; Just transition; Paradoxes; Social innovation |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/393122 |
| By: | Fix, Blair |
| Abstract: | A good way to think about human history is that it has two distinct scales. On the small scale we have the churn of daily events — the stuff of endless individual exploits. And on the large scale, we have the long-term evolution of human societies — a scale so sweeping that the actions of individuals are as insignificant as the shifting grains of desert sand. The task of social science is to somehow connect these two scales — to show how the characters of history act on a stage that they do not fully control. *** Looking at the present political spectacle, it’s clear that the world order is changing. In a matter of months, Donald Trump has taken a wrecking ball to the US-led regime that reigned since the end World War II. But here is an interesting question: if Trump had not been re-elected, to what extent would things be different? *** The answer depends on our choice of scale. In a world without Trump, the eddies of small-scale history would surely be altered. There would be no ‘department of government efficiency’, for example. Nor would their likely be an unfolding US-led trade war. But on the scale of long-term history, many tides would remain the same. Chief among them would be the inexorable decline of US empire. To put things bluntly, the ‘American century’ is over and will never return. |
| Keywords: | Britain, empire, energy, imperialism, United States |
| JEL: | P1 P5 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:323309 |
| By: | Fix, Blair |
| Abstract: | In my last post, ‘The Half Life of Empire’, I charted the rise and fall of the British and US empires, as measured by their share of world energy use. Afterwards, several readers requested that I apply the same methods to the rise and fall of the Soviet Union. Here’s my attempt to do so. |
| Keywords: | Britain, empire, energy, imperialism, Russia, Soviet Union, United States |
| JEL: | P1 P5 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:323310 |
| By: | Zehao Lin; Ying Liu; Congrong Pan; Lutz Sager |
| Abstract: | We estimate the effect of air pollution on sentiment using social media data from a panel of Japanese cities. To address concerns about potential endogeneity from unobserved simultaneous determinants of air pollution and sentiment, as well as measurement error, we instrument for air pollution using plausibly exogenous variation in atmospheric wind patterns. We find that a one-standard-deviation increase in fine (PM2.5) and small (PM10) particle concentrations reduces overall sentiment by 0.79% and 1.64% standard deviation respectively, which is composed of a more pronounced increase in negative sentiment and a smaller decrease in positive sentiment. Our unique dataset allows us to separately estimate effects on negative sentiment categories including anger, anxiety, and sadness. Our results suggest sentiment as one candidate mechanism, besides physiological and cognitive pathways, to explain the increasingly evident non-health damages from air pollution exposure on work productivity, road safety, sleep and crime. |
| Keywords: | air pollution, Twitter, sentiment, Japan |
| JEL: | I31 Q51 Q53 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12030 |
| By: | Menéndez de Medina, Maria (RS: GSBE MGSoG, Maastricht Graduate School of Governance) |
| Abstract: | Trade worldwide is being reshaped by two major megatrends: advanced digitalization of production and the transition towards environmentally sustainable goods. This chapter examines for the first time the perspective of twin transition export and import diversification within a multi-dimensional economic complexity approach (Nomaler & Verspagen, 2024b, 2024d) and investigate whether this type of productive transformation perpetuates path-dependency processes in 80 countries over 2000-2018. The results suggest that an export/import productive structure based on twin transition products exhibit different economic performance, sustainability, and inequality implications. Productive specialization in these products has been very path-dependent and with a low engagement of developing countries and hence, reinforcing the core-periphery trade division. Furthermore, results suggest that developments in digital and green technological paradigms mainly take place in a selected number of countries that are already highly developed. |
| JEL: | F14 O10 Q01 |
| Date: | 2024–11–21 |
| URL: | https://d.repec.org/n?u=RePEc:unm:unumer:2024032 |
| By: | Lu, Hongyu; Guensler, Randall |
| Abstract: | This project employs the outputs from MOVES-Matrix 4.0 to generate a data set that can be employed by users of the 2018 Fuel and Emissions Calculator (Version 3.0) to update energy use and emission rates to reflect the latest outputs from the U.S. Environmental Protection Agency’s (USEPA’s) MOVES 4.0 energy use and emission rate model for the Atlanta, Georgia summer scenario. The data employed in this project were generated as part of the National Center for Sustainable Transportation project entitled MOVES-Matrix 4.0 for High-Performance On-road Energy Use and Emission Rate Modeling Applications (Lu, et al., 2025). As described in this report, the team queried more than 90 billion cells within full MOVES-Matrix 4.0 data set to generate MOVES 4.0 data that can be substituted for the older MOVES 2014 data in Fuel and Emissions Calculator (FEC) Version 3.0 for Georgia. The query output data are contained in an Excel spreadsheet, allowing users to update their personal copies of the FEC. Should technology transfer funds become available in 2025 from another source, the research team will update and release the next full version of the FEC model, which will be accompanied by an updated user manual. View the NCST Project Webpage |
| Keywords: | Engineering, Fuel and Emissions Calculator, MOVES 4.0 Energy Use and Emission Rate Model, Energy Modeling, Environmental Assessment |
| Date: | 2025–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsdav:qt3671j460 |
| By: | Melisa Kurtis (Max Planck Institute for Research on Collective Goods, Bonn); Axel Ockenfels (Max Planck Institute for Research on Collective Goods, Bonn); Rastislav Rehák (Max Planck Institute for Research on Collective Goods, Bonn) |
| Abstract: | Despite widespread concern about climate change, voluntary mitigation efforts often fail to maximize impact. In two online experiments (n = 1, 500), we elicit willingness to mitigate (WTM) by allowing subjects to delete actual CO2 allowances and examine how they allocate the WTM between their own and another’s footprint. While 75% contribute a nonzero WTM, allocations are often inefficient, and many avoid freely available footprint information, suggesting limited efficiency concerns. Self-reported motives show that only half prioritize impact, while others cite fairness, personal responsibility, or intuition. Moreover, both WTM and efficiency are malleable by impact-unrelated nudges: a video emphasizing personal responsibility increases both, whereas social image based on the own footprint raises WTM but reduces efficiency. Our results suggest that voluntary climate action is shaped as much by psychological and social factors as by concern for impact. |
| Keywords: | climate change, pro-environmental behavior, climate action, willingness to mitigate, impact, efficiency, consequentialism, warm glow, fairness, online experiment |
| JEL: | C90 D01 D61 D62 D64 D83 D91 H41 Q51 Q54 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:mpg:wpaper:2025_13 |
| By: | Higham, Ian; Chan, Tiffanie; Reyes, Joy |
| Abstract: | This submission was made in response to an open consultation by the United Nations Special Rapporteur on climate change on advancing understanding on how to respect, protect and fulfil all human rights, as well as prevent harm and ensure non-discrimination, in the context of a just transition away from fossil fuels and the phase-out of fossil fuel subsidies. The submission is informed by research conducted at LSE, including at the Grantham Research Institute, and also the authors’ established expertise in the law and governance of climate change and human rights. It responds to questions relating to the human rights impacts of the fossil fuel-based economy, the transition away from and phase-out of fossil fuel subsidies, relevant international law, transferable insights from other sectors, contributions to the achievement of the Sustainable Development Goals, and proposals for scaling up action. |
| JEL: | N0 |
| Date: | 2025–07–03 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129040 |
| By: | Beyer, Andreas; Nobile, Lorenzo |
| Abstract: | Using a novel worldwide dataset of 5, 264 syndicated loans issued to 329 firms from 2006 to 2021, we study how climate-related litigation risk affects firm’s cost of borrowing. We find robust empirical evidence that firms targeted by climate lawsuits pay significantly higher spreads on their bank loans. These effects are more pronounced for firms with weaker environmental performance and higher ESG controversies. The results suggest that lender’s view climate litigation as a material risk factor, which is increasingly priced into debt contracts. JEL Classification: G21, G32, Q56, K32 |
| Keywords: | bank loans, climate lawsuits, litigation risk, loan spreads |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253087 |
| By: | Hao Li; Tom Coupé (University of Canterbury); Andrea Menclova (University of Canterbury); Weihong Zeng |
| Abstract: | Wintertime ambient air quality in northern China has improved markedly over the past decade, yet the role of the household sector in this improvement remains unclear. This study evaluates the impact of an energy transition policy targeting the household sector—namely, the coal-to-gas policy—on wintertime air quality in northern China. Using balanced panel data covering the period from 2015 to 2023, we adopt a staggered difference-in-differences approach as our baseline empirical strategy to examine the policy’s effects across five implementation phases, and report results using heterogeneity-robust estimators to address the “forbidden comparison” issue. The results show that the policy significantly improved the Air Quality Index (8.3–12.5 %) and reduced concentrations of PM2.5 (9.8–15.6 %, ), PM₁₀ (8.2–12.7 %), SO₂ (26.4–33.6 %), and NO₂ (7.4–10.5 %), though this was accompanied by an increase in ozone concentrations (8.3–12.9 %). To explore channels, we analyze household-level data from both urban and rural areas. We find that the policy has significantly increased urban clean energy infrastructure, promoted the expansion of centralized heating systems, and raised the likelihood of households adopting clean energy in rural areas. |
| Keywords: | Air pollution; Coal-to-gas Policy; Energy transition; China |
| JEL: | Q53 Q48 Q42 C23 |
| Date: | 2025–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:cbt:econwp:25/11 |
| By: | de Bruin, Kelly C; Henry, Loïc; Kyei, Clement Kweku; Yakut, Aykut Mert |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:esr:wpaper:wp790 |
| By: | Dertwinkel-Kalt, Markus; Wey, Christian |
| Abstract: | To support the green transition in the automotive sector, the EU has introduced CO2 emission performance standards, also known as the excess emissions premium (EEP) regulation, which will tighten until 2035. Manufacturers exceeding their average fleet emission targets must pay a penalty. The regulation also allows pooling of fleets, enabling manufacturers to combine fleets. We analyze how this affects market outcomes. The EEP creates a positive externality of electric on conventional cars. Pooling eases compliance but may weaken competition among existing market players, while simultaneously encouraging the entry of electric-only manufacturers into the EU. |
| Keywords: | Green regulation, automotive industry, excess emissions premium |
| JEL: | D04 L11 L50 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:dicedp:323231 |
| By: | Owen Kay; Michael David Ricks |
| Abstract: | Pigouvian subsidies are efficient, but output subsidies with uncertain or limited durations are not Pigouvian. We show that optimal “time-limited” policies must also subsidize investment to correct externalities generated after the output subsidy ends. Furthermore, an output subsidy’s optimal duration is characterized by the change in production when it ends. In the wind-energy industry, we find that power generation decreases by 5-10% after the end of facilities’ ten-year eligibility for the Renewable Energy Production Tax Credit. This behavioral response has implications for energy transitions and highlights how time limits could cause larger distortions in more elastic industries. |
| Keywords: | energy taxes and subsidies; renewable energy; optimal taxation; policy uncertainty |
| JEL: | H23 H21 Q48 |
| Date: | 2025–08–05 |
| URL: | https://d.repec.org/n?u=RePEc:fip:feddwp:101407 |
| By: | Lorenzo Aldeco; Lint Barrage; Matthew Turner |
| Abstract: | We assemble global, spatially disaggregated panel data on ambient particulates, population, and economic activity, and develop a macroeconomic integrated assessment model of particulate exposure for 30 countries representing 60\% of world population. The data indicate the importance of country level factors in determining particulate exposure. Model results indicate the importance of equilibrium adjustments. For example, uncompensated oil taxes and agricultural burning restrictions may unintentionally raise exposure by shifting labor to dirtier sectors or locations. Model results also showcase the importance of country heterogeneity and fiscal management. Our results suggest that effective particulates policy requires accounting for general equilibrium responses. |
| JEL: | E62 H23 Q53 Q58 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34081 |
| By: | Nicholls, Mark |
| Abstract: | In March 2024, Climate Investment Funds (CIF) approved a US$85 million investment plan to support and accelerate coal phase-out in the West Balkans nation of North Macedonia. The plan, under CIF’s Accelerated Coal Transition Investment Program (ACT IP), is designed to trigger almost US$600 million in funding from the European Bank for Reconstruction and Development (EBRD), the World Bank and other public and private investors. This in turn will mobilise a total of €3 billion (US$3.4 billion) into the country’s wider Just Energy Transition Investment Platform (JETIP) by 2030. This case study explores the just transition elements of the ACT IP in the context of its wider investments in clean energy in North Macedonia. |
| JEL: | F3 G3 E6 |
| Date: | 2025–07–18 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:128976 |
| By: | Jantos, Louisa; Thonipara, Anita; Meub, Lukas |
| Abstract: | Vor dem Hintergrund zunehmender regulatorischer Anforderungen im Bereich der Energie- und Klimapolitik, aber auch vor dem Hintergrund steigender Energiepreise gewinnen Energiemanagementsysteme und Emissionsbilanzierungssysteme auch für kleine und mittelgroße Handwerksbetriebe an Bedeutung. Der vorliegende Bericht zeigt, dass insbesondere das E-Tool eine vielversprechende Lösung für die Herausforderungen dieser Betriebe bietet. Es erfüllt zentrale Anforderungen an ein niederschwelliges, praxisnahes und kostenfreies EMS, das zudem über Funktionen zur Emissionsbilanzierung verfügt. Im Vergleich zu anderen am Markt verfügbaren Systemen überzeugt das E-Tool insbesondere durch seine Ausrichtung auf das Handwerk, welche auch einen gewerkespezifischen Vergleich ermöglicht. Auch ein individueller Betriebsentwicklungsfahrplan (iBEF) zu perspektivischen Energieeffizienzmaßnahmen kann gemeinsam mit einem Berater oder einer Beraterin erstellt werden und die systemische Verzahnung mit bestehenden Beratungsstrukturen des Handwerks sind positiv hervorzuheben. Gleichzeitig verdeutlichen die qualitativen Erkenntnisse, dass die Nutzung des E-Tools noch durch Hemmnisse wie mangelnde Bekanntheit, Unwissenheit über den Mehrwert des E-Tools, begrenzte Ressourcen im Betrieb und unvollständige Eingaben eingeschränkt wird. Trotz seiner Relevanz und des hohen Nutzens für Handwerksbetriebe wird es bislang nur selten proaktiv eingesetzt. Um das volle Potenzial des E-Tools auszuschöpfen, bedarf es daher gezielter Kommunikationsmaßnahmen, strukturierter Schulungsmöglichkeiten sowie eine Kommunikation der Vorteile - sowohl im Eigeninteresse der Betriebe als auch im Rahmen von Finanzierungen, Förderungen oder Zertifizierungsprozessen. Langfristig kann das E-Tool zu einem zentralen Bestandteil einer nachhaltigen Betriebsstrategie im Handwerk werden. Hierzu sollte die Weiterentwicklung des E-Tools konsequent auf die Anforderungen zukünftiger Berichtsstandards wie dem Voluntary SME-Standard (VSME) ausgerichtet werden. Durch eine solche Konformität mit zukünftigen Standards und die Möglichkeit zur Generierung von Energie- und Emissionsdaten kann die Grundlage für eine transparente, normgerechte und effiziente Nachhaltigkeitsberichterstattung geschaffen werden und Handwerksbetriebe damit auf ihrem Weg zur Klimaneutralität und Zukunftsfähigkeit unterstützt werden. Im Austausch mit Nachhaltigkeitsexperten des Handwerks zeigt sich, dass die formal gesehen indirekte Berichtspflicht bereits eine sehr starke Trickle-Down-Dynamik entwickelt hat, welche die Handwerksbetriebe in Zukunft zunehmend unter Druck setzen wird. So werden die Betriebe zukünftig vermehrt Nachweise sowohl an Banken - für bessere Finanzierungsbedingungen - als auch an Großunternehmen liefern müssen, welche als Auftraggeber von ihren Zulieferern Nachweise einholen müssen. Um weiterhin wettbewerbsfähig zu sein, kompetitive Finanzierungskonditionen zu erhalten und Teil einer Lieferkette zu sein, brauchen Handwerksbetriebe somit effektive Unterstützung, wobei das E-Tool hierzu einen wertvollen Beitrag leisten kann. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifhfob:323222 |
| By: | Ezeofor, Vivian Kaife |
| Abstract: | This article explores how the mineral wealth of the Democratic Republic of Congo’s (DRC), particularly its critical raw materials such cobalt, coltan and tantalum, compounded with the proliferation of demand for this minerals due to the green transition has exacerbated local conflict, environmental decadence and gross human rights abuses in the DRC. It also traces the historic genesis of armed conflict and the smokescreen behind the militarization of mining sites and thus critiques existing policy responses such as the OECD Due Diligence Guidance, Dodd-Frank Act, and ICGLR Certification Mechanism, contending that they constitute an over- focus on militarization while neglecting corruption and abuse by state actors. The article calls for more holistic, inclusive policies that address structural governance failures and protect both people and the environment amid the rush for green energy resources. |
| Date: | 2025–07–12 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:q39ph_v1 |
| By: | Zenghelis, Dimitri |
| Abstract: | Drawing on the latest evidence from a range of disciplines, this joint University of Cambridge and London School of Economics and Political Science (LSE) policy report aims to assist decision-makers in HM Treasury (HMT) and beyond by offering constructive suggestions on how to help steer the UK economy through this transition, on to a path that boosts productivity, incomes, and employment, while maintaining healthy public finances and sustainable public debt. The report asks fundamental questions: is reaching net zero a growth and prosperity plan? If so, how much do we need to invest, can we afford it, and how do we pay for it? Are there less ambitious options which might be economically expeditious? To answer this, a conceptual understanding of the nature of the challenge and the drivers of innovation and structural change is needed. This further calls for a broadening of the analytical toolkit with profound conclusions for policy recommendations. |
| Keywords: | net zero; UK policy; economic growth; green investment; UK |
| JEL: | R14 J01 E6 |
| Date: | 2024–10–24 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129072 |
| By: | Kirill Borissov; Nigar Hashimzade |
| Abstract: | We examine a green transition policy involving a tax on brown goods in an economy where preferences for green consumption consist of a constant intrinsic individual component and an evolving social component. We analyse equilibrium dynamics when social preferences exert a positive externality in green consumption, creating complementarity between policy and preferences. The results show that accounting for this externality allows for a lower tax rate compared to policy ignoring the social norm effects. Furthermore, stability conditions permit gradual tax reductions or even removal along the transition path, minimising welfare losses. Thus, incorporating policy-preference interactions improves green transition policy design. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.17415 |
| By: | Mario Liebensteiner; Alex Mburu Kimani |
| Abstract: | The gas price explosion during the 2021/22 European energy crisis prompted a shift from gas- to coal-fired electricity production. Empirical evidence on the environmental and health consequences of such a fuel-price shock - as opposed to policy reforms - is scarce. We fill this gap by quantifying how exogenous gas price surges reorder coal-gas marginal costs and, in turn, affect emissions and health outcomes. Using daily data (2015-2023) for six EU countries with substantial gas-to-coal switching potential, we estimate a two-stage residual inclusion (2SRI) model to obtain causal effects of days on which gas is more expensive than coal. During the 510 days of the 2021/22 gas price surge when coal was cheaper, coal-fired generation rose by 23% (53 TWh, 95% CI: 43-63), driving a 10% increase in CO2 (36 Mt, 95% CI: 28-45 Mt), 19% in PM2.5 (187 t, 95% CI: 152-222 t), 10% in NOx (8, 442 t, 95% CI: 6, 573-10, 715 t), and 24% in SO2 (16, 238 t, 95% CI: 10, 947-21, 658 t). Applying literature-based damage factors, we find indicative increases in premature deaths and serious illnesses, with additional external health costs exceeding one billion EUR(2021). All figures are computed relative to a model-based counterfactual in which gas remained the cheaper option and represent short-term effect that disregard longer-term structural adjustments. The results highlight the substantial welfare costs of fuel price shock-induced switching and inform the design of policies that internalize these externalities. |
| Keywords: | air pollution, CO2 emissions, energy crisis, gas price shock, gas-to-coal switch, health effects |
| JEL: | I15 Q41 Q53 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12037 |
| By: | Perez Dominguez Ignacio (European Commission - JRC); Barbosa Ana Luisa (European Commission - JRC); Fellmann Thomas (European Commission - JRC); Weiss Franz (European Commission - JRC); Hristov Jordan (European Commission - JRC); Witzke Heinz Peter; Kesting Monika; Basnet Shyam; Koeble Renate; Schievano Andrea (European Commission - JRC) |
| Abstract: | The European Climate Law mandates the European Union’s climate neutrality objectives by 2050, aligning with the European Green Deal and interim greenhouse gas (GHG) emission reduction targets. The Agriculture, Forestry, and Other Land Use (AFOLU) sectors play a crucial role due to their dual function in sequestering carbon and emitting GHGs. This report assesses the potential contribution of the AFOLU sectors to the EU's 2050 targets using CAPRI model scenarios. Recent model enhancements enable a more integrated analysis of GHG emissions and carbon removals, allowing for a detailed assessment of land-based mitigation options. The scenarios assess increased afforestation, sustainable forest management, protection of peatlands, and pricing of AFOLU GHG emissions and removals. Results indicate that reversing GHG emission trends requires significant action, particularly enhanced soil carbon sequestration and climate-smart agricultural practices. The protection of histosols and land conversion towards grassland and forest areas significantly increase carbon dioxide removals, while lower livestock and crop production reduce methane and nitrous oxide emissions. Policies strengthening forest protection and afforestation further enhance the carbon sink capacity of the AFOLU sectors, potentially achieving negative net emissions by 2050. However, it is important to note that emission leakage (i.e., increases in emissions outside the EU) could limit global net reductions. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc136684 |
| By: | Todd D. Gerarden; Mar Reguant; Daniel Xu |
| Abstract: | Renewable electricity generation technology costs have fallen dramatically, investment has grown rapidly, and renewables are now a pillar of climate and decarbonization policy. Part of the credit for these trends goes to environmental policy efforts to support renewable energy as a substitute to fossil energy. The recent rise in protectionism, industrial policy, and geopolitical tensions has the potential to either undermine or enhance these environmental policy objectives. In this paper, we provide an overview of renewable energy economics and policy, with a focus on solar and wind power. We outline theoretical rationales for industrial policy and review recent empirical research, paying particular attention to how renewable energy policies have generated spillovers across firms and countries. We close by highlighting how this recent evidence can inform ongoing industrial policy debates. |
| JEL: | L52 Q42 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34079 |
| By: | de Bruin, Kelly C; Deger, Çagaçan; Yakut, Aykut Mert |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:esr:wpaper:wp791 |
| By: | Landini, Fabio; Lunardon, Davide; Marzucchi, Alberto |
| Abstract: | We investigate the perceived meaning of green jobs. Theoretically, we extend the standard meaningful work framework, by introducing a social esteem component, which depends on both the green content of occupations and the socio-political awareness of environmental issues. To identify green jobs, we employ a task-based indicator based on ESCO data, which is then merged with individual-level data from the 2015 and 2021 waves of the European Working Conditions Survey. Moreover, we proxy the degree of environmental consciousness at the country level through the Environmental Policy Stringency index from the OECD. In line with our theoretical framework, we find that workers' perceptions of meaningful work increase with the green content of their occupation and are amplified in countries exhibiting higher levels of environmental consciousness. These results highlight the role of social esteem, derived from the contribution to what is considered a socially valuable objective (i.e. the fight against climate change), in shaping the experience of meaningful work. To allow a more 'causal' interpretation of the results, we employ an instrumental variable approach which corroborates the main findings. |
| Keywords: | Meaningful Work, Green Jobs, Social Esteem, Green Transition, EWCS |
| JEL: | J24 J28 O31 O33 Q20 Q40 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1639 |
| By: | Chan, Tiffanie; Soubeyran, Éléonore; Gannon, Kate; Heckwolf, Anika; Hizliok, Setenay; Cristancho-Duarte, Camila; Monsignori, Giorgia; Scheer, Antonina; Feyertag, Joseph; Higham, Catherine; Averchenkova, Alina; Vélez-Echeverri, Juliana |
| Abstract: | This submission draws on research conducted at the Grantham Research Institute on Climate Change and the Environment to present eight key recommendations for Parties to the UNFCCC which address the priorities of the second dialogue of the United Arab Emirates (UAE) Just Transition Work Programme (JTWP) and relate to its three focus areas: Approaches for empowering all actors and segments of the society for a fair and inclusive workforce transition to meet Paris Agreement goals. Unpacking the full range of means of implementation (finance, technology and capacity building) for a just transition of the workforce: exploring current approaches, opportunities and gaps. International cooperation and partnerships for people-centric and equitable just transitions. |
| Keywords: | gender; workers; just transition; legislation; low-carbon transition; Ministries of Finance; NDC; UAE JTWP; UNFCCC |
| JEL: | R14 J01 E6 |
| Date: | 2024–10–09 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129076 |
| By: | Ozili, Peterson K |
| Abstract: | Carbon emissions, or CO2 emissions, is an important but often overlooked factor affecting financial stability and bank profitability in non-crisis years. The effect of carbon emissions on financial stability and bank profitability in non-crisis years has not been examined in the literature. It is argued that carbon emissions can bring about changes in the environment that create health challenges and financial risks which affect bank profitability and pose a threat to the stability of the financial system in non-crisis years. This study examines the effect of carbon emissions on bank profitability and financial stability in non-crisis years. Twenty-two diverse countries were analysed in non-crisis years. The findings reveal that higher carbon emissions impair financial stability by decreasing banking sector solvency and capital buffer which impair financial stability. Institutional quality mitigates the adverse effect of carbon emissions on financial stability by ensuring greater banking sector solvency in carbon-intensive environments. Institutional quality also reinforces the positive relationship between carbon emissions and bank profitability, particularly banking sector non-interest income. Lagged nonperforming loans, institutional quality, economic growth and regulatory capital ratio are significant determinants of financial stability in non-crisis years while the determinants of bank profitability in non-crisis years are lagged return on asset, the efficiency ratio, institutional quality, inflation rate and unemployment rate. |
| Keywords: | CO2 emissions, carbon emissions, climate change, financial stability, bank profitability, enviornment, economic growth, unemployment, inflation, pollution |
| JEL: | G21 G28 Q01 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125566 |
| By: | Mercer, Leo; Burke, Josh; Rodway-Dyer, Sue |
| Abstract: | Alongside actions to rapidly reduce greenhouse gas emissions, carbon dioxide will need to be removed from the atmosphere if the world is to meet the Paris Agreement climate goals. The proliferation of net zero targets, and by extension the use of carbon dioxide removal (CDR), has led to increased attention on the governance of CDR. Monitoring, reporting and verification (MRV) is a central component of the governance architecture. This report examines the cost of MRV for different CDR methods, the extent to which the cost of MRV for different methods is perceived as a barrier to their upscaling, where opportunities lie to reduce the cost of MRV and what factors influence the choice of MRV protocol. It provides recommendations for the UK government but which are more widely applicable. |
| Keywords: | oceal alkalinity enhancement; BECCS; biochar; bioenergy; carbon dioxide removal; CCUS; CDR; DACCS; DESNZ; direct air capture; MRV; UK |
| JEL: | R14 J01 |
| Date: | 2024–10–28 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129071 |
| By: | Jamie Hansen-Lewis; Michelle M. Marcus |
| Abstract: | Targeting distributional impacts is gaining importance in the design of environmental policy. To achieve this, policy makers are adopting advances in air transport models to predict the benefits of air emissions regulation. These models offer policy makers accuracy in the spatial distribution of ambient air quality improvements for a given emissions reduction, but do not take into account behavioral responses to environmental policies. We consider how the failure to account for behavioral responses when making policy predictions may have important implications for the ultimate distributional impact of such policies. We compare the distributional impacts of maritime emission regulation predicted from the policy maker's air transport model to the realized distributional impacts. We then decompose the prediction error from two components: model error, whereby the predictions of air transport models fail to account for behavioral responses of polluting firms, and sorting error, whereby the targeted population migrates. |
| JEL: | Q5 Q51 Q52 Q53 Q58 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34055 |
| By: | Kang, Wilson; Smyth, Russell; Vespignani, joaquin vespignani |
| Abstract: | This paper applies the macroeconomic fragility framework for studying the effects of supply chain disruptions, proposed by Acemoglu and Tahbaz-Salehi (2024), to critical minerals markets. A key prediction of the macroeconomic fragility framework is that equilibrium supply chains are inherently fragile, meaning that even small shocks can trigger cascading supply chain breakdowns that can significantly magnify the discontinuous response of aggregate supply to shocks, leading to higher volatility and prices of critical minerals. We highlight the important role that the non-technical risk premium plays in magnifying global supply chain shocks in the specific case of critical minerals. Using a mixed-frequency Structural VAR model with agnostic sign restrictions and newly constructed data on non-technical risk premiums, we estimate the impact of supply chain disruption, the non-technical risk premium and their interaction on the prices and volatility of six critical minerals. We find that global supply chain disruptions, magnified by non-technical risk premiums, significantly increase critical mineral prices and price volatility for all six critical minerals studied, indicating inefficient outcomes which we interpret as macroeconomic fragility in critical minerals markets. We also show that stockpiling has the potential to reduce macroeconomic fragility in critical mineral markets. |
| Keywords: | global supply chain disruption, critical minerals, non-technical risk premiums, macroeconomic fragility |
| JEL: | E0 E02 Q0 Q02 |
| Date: | 2025–03–02 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125351 |
| By: | Ye Zhang; Eric Zou |
| Abstract: | We develop an experimental framework to identify the belief-based and taste-based drivers of demand for Environmental, Social, and Governance (ESG) partnerships. Our study implements two symmetric experiments with real startup founders and venture capital (VC) investors, who evaluate hypothetical profiles under the understanding that their responses will inform an algorithm generating personalized real-world matches. We find a significant ESG penalty: profiles randomly labeled with ESG attributes receive substantially lower collaboration interest from both founders and VCs. This penalty is primarily driven by negative performance beliefs—ESG-labeled profiles are perceived as less profitable and less accessible. To isolate taste-based preferences, we further implement a willingness-to-pay experiment in which participants may forgo part of a lottery reward to receive additional match recommendations of comparable quality. Participants randomly offered ESG-oriented recommendations are now significantly more likely to pay, revealing a latent preference for ESG once performance concerns are held constant. These findings highlight a tension between financial returns and personal values: in current market conditions, concerns about profitability obscure an underlying taste for ESG. |
| JEL: | C91 C93 G24 L26 M13 Q56 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34048 |
| By: | Rode, Johannes; Römer, Daniel; Salzgeber, Johannes |
| Abstract: | Die Nachfrage nach Elektroautos nimmt zu. Das gilt weltweit und für Deutschland. Auch für den Export werden Elektroautos wichtiger. Im ersten Quartal 2025 war mehr als jedes vierte aus Deutschland exportierte Auto ein reiner Stromer. Zuletzt wurden pro Monat durchschnittlich 82.000 reine Elektroautos exportiert – im Wert von 3, 4 Mrd. EUR. Mittlerweile erzielt Deutschland mit reinen Elektroautos im Vergleich zu anderen Antrieben den größten Exportüberschuss. Der Wert der Exporte reiner Stromer übersteigt den der Importe um den Faktor 5. Elektroautos bieten zudem immer größere Klimavorteile. Laut KfW-Energiewendebarometer stammt mittlerweile ein Drittel des Ladestroms für Elektroautos aus selbst erzeugtem grünem Strom – ein Rekordwert. Die Vorbehalte gegenüber Elektroautos gehen insgesamt leicht zurück. Ansatzpunkte für eine weitere Verbreitung sind der Abbau von Informationsdefiziten, Anreize für zeitoptimiertes Laden und die Verbesserung der Lademöglichkeiten in Mehrfamilienhäusern. |
| Date: | 2025–08–05 |
| URL: | https://d.repec.org/n?u=RePEc:dar:wpaper:156302 |
| By: | António Afonso; José Alves; Alessio Ferrara; Sofia Monteiro |
| Abstract: | This paper estimates the fiscal multipliers of green public spending using a linear Bayesian Panel VAR and a Smooth Transition VAR framework, with quarterly data for the period 1995Q1–2022Q4 for EU member states. We group EU member states based on similarities in debt trajectories and green spending intensity, forming three regional aggregates: Southern Europe, Eastern Europe, and Northern Europe. Our results show that green spending multipliers on GDP are generally below one, but the response of private investment is significantly stronger — particularly in Southern and Eastern Europe. Multipliers tend to be larger in periods of high public debt, suggesting that green fiscal expansions may be more effective during downturns. Another key finding is that in response to green spending shocks, both long-term interest rates and public debt tend to decline — especially in high-debt regimes — indicating improved market expectations about fiscal sustainability. In contrast, when we estimate the effects of a shock to total public spending net of green spending, we find that both interest rates and debt increase. This suggests that economic agents perceive green spending more favorably than undifferentiated fiscal expansions, likely due to its role in mitigating climate risks, lowering long-term energy costs, and signaling credible long-term policy commitments. |
| Keywords: | green fiscal multipliers, debt trajectories, interest rates, Bayesian Panel Vector Autoregression (BVAR) |
| JEL: | C23 E44 E62 G15 H62 H63 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12039 |
| By: | Landini, Fabio; Lunardon, Davide; Rinaldi, Riccardo; Tredicine, Luigi |
| Abstract: | The need to achieve a safe and just ecological transition is a key target of European policy makers. Green jobs are often presented as key levers to achieve this objective, as they enable the creation of new employment opportunities across a wide spectrum of occupations, including low skill ones. In this paper we investigate if and how these opportunities are seized by one of the most vulnerable segment of the labor force, namely migrants. By relying on detailed administrative data covering more that 12 million contract activations in the Emilia-Romagna Region (Italy) we document that, after controlling for potential confounders, migrants are less likely than natives to find employment in green jobs. Moreover, when they do, they have higher chances to be hired with either a fixed-term or an agency contract. Heterogeneity analysis across industries and occupations reveals that such precarious employment patterns are driven primarily by firm attempts to reduce green costs. These results are rationalized through the lenses of institutional segmentation theory. Related policy implications are discussed. |
| Keywords: | Green Jobs, Migrant Workers, Precarious Employment, Institutional Segmentation |
| JEL: | Q52 J24 J15 J41 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1636 |
| By: | Bryan Campbell; Michel Magnan; Robert Normand; Elizabeth Labonté; Léo Lamy-Laliberté |
| Abstract: | According to a recent report by KPMG International (KPMG, 2022), the success in achieving global and national carbon neutrality targets depends largely on the decisions and actions of cities regarding climate risk management. Municipal administrations' efforts to manage carbon neutrality can have a significant ripple effect on both the population and the private sector. Unfortunately, few cities have implemented systematic processes to measure carbon emissions, primarily due to a lack of resources. A CIRANO report (Campbell et al., 2025) proposes the development of a carbon emissions dashboard that reflects the activities directly related to the management of a city. This tool could prove highly valuable for any municipal organization seeking to identify the most appropriate measures to reduce its emissions. Selon un récent rapport de KPMG International (KPMG, 2022), le succès dans l’atteinte des cibles mondiales et nationales de carboneutralité repose en grande partie sur les décisions et actions des villes en matière de gestion des risques climatiques. La gestion de la carboneutralité par les administrations municipales peut avoir un effet d’entraînement important sur la population et le secteur privé en général. Malheureusement, peu de villes ont mis en place des processus systématiques de mesure des émissions de carbone, faute de ressources. Un rapport CIRANO (Campbell et coll. 2025) propose un tableau de bord des émissions de carbone qui découlent des activités propres à la gestion d’une ville. Cet outil pourrait s’avérer être d’une grande valeur pour tout organisme municipal qui désire déterminer les mesures les plus appropriées à prendre pour réduire ses émissions. |
| Keywords: | Dashboard, greenhouse gases (GHG), emissions, municipalities, financial policy, Tableau de bord, gaz à effet de serre (GES), émissions, municipalités, politique financière |
| Date: | 2025–08–05 |
| URL: | https://d.repec.org/n?u=RePEc:cir:circah:2025pj-11 |
| By: | Abate, Megersa Abera; Barattieri, Alessandro; Brugnoli, Alberto; Porta, Flavio |
| Abstract: | The US-China direct flights in mid-2023 were only 7 percent of those available in mid-2019. This quasi-experiment informs the debate on air transport de-carbonization. An estimated structural model shows that re-establishing the pre-pandemic direct connectivity could increase passengers by 387 percent and reduce prices by 63 percent. Moreover, due to the suppression of flights, carbon dioxine emissions decreased by 80 percent. A counterfactual exercise shows that maintaining pre-COVID connectivity and achieving the same emissions reduction through a market mechanism (i.e. offsetting), would have resulted in more passengers (+365 percent), lower prices (-60 percent), and lower reduction in consumer surplus (-40 percent) than observed in the post COVID-19 equilibrium. |
| Date: | 2025–08–11 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11183 |
| By: | Leonie P. Meissner |
| Abstract: | I study the role of green research and development (R&D) subsidies under different environmental policies. Using a stylized equilibrium model calibrated to the European electricity sector, I analyze the effects of R&D subsidies under (1) an emission tax, (2) an emission cap, and (3) no environmental policy, focusing on competitiveness, environmental outcomes, and welfare. I find that increasing R&D subsidies increases knowledge accumulation and clean-sector output, displacing dirty-sector production. This raises overall output, lowers production costs, and enhances sectoral competitiveness. However, environmental benefits from R&D subsidies occur only under an emission tax or in the absence of environmental policy. Under an emission cap, emission prices fall from an increase in the R&D subsidy, reducing compliance costs without lowering total emissions. Our calibration further reveals interaction effects between environmental policy stringency and the effectiveness of the R&D subsidy under an emission tax, emission cap, or in the absence of an environmental policy. |
| Keywords: | climate policy, R&D support, innovation policy, renewable energy, environmental innovation |
| JEL: | D50 H23 O38 Q55 Q58 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12002 |
| By: | Matthew Sprintson; Edward Oughton |
| Abstract: | It is estimated that over one-fourth of US households experienced a power outage in 2023, costing on average US $\$150$ Bn annually, with $87\%$ of outages caused by natural hazards. Indeed, numerous studies have examined the macroeconomic impact of power network interruptions, employing a wide variety of modeling methods and data parameterization techniques, which warrants further investigation. In this paper, we quantify the macroeconomic effects of three significant natural hazard-induced US power outages: Hurricane Ian (2022), the 2021 Texas Blackouts, and Tropical Storm Isaias (2020). Our analysis evaluates the sensitivity of three commonly used data parameterization techniques (household interruptions, kWh lost, and satellite luminosity), along with three static models (Leontief and Ghosh, critical input, and inoperability Input-Output). We find the mean domestic loss estimates to be US $\$3.13$ Bn, US $\$4.18$ Bn, and US $\$2.93$ Bn, respectively. Additionally, data parameterization techniques can alter estimated losses by up to $23.1\%$ and $50.5\%$. Consistent with the wide range of outputs, we find that the GDP losses are highly sensitive to model architecture, data parameterization, and analyst assumptions. Results sensitivity is not uniform across models and arises from important a priori analyst decisions, demonstrated by data parameterization techniques yielding $11\%$ and $45\%$ differences within a model. We find that the numerical value output is more sensitive than intersectoral linkages and other macroeconomic insights. To our knowledge, we contribute to literature the first systematic comparison of multiple IO models and parameterizations across several natural hazard-induced long-duration power outages, providing guidance and insights for analysts. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.19989 |
| By: | Nicholls, Mark |
| Abstract: | Philippines-based utility ACEN Renewables is planning to use the carbon markets to accelerate its coal plant closure and fund a just transition for workers and the local community. This ‘work in progress’ highlights the practical questions around how to govern and price the just transition in an inclusive way. |
| JEL: | R14 J01 |
| Date: | 2024–12–11 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129010 |
| By: | Saussay, Aurélien |
| Abstract: | This report examines the potential future ramifications that tariff proposals put forward by US Presidential Candidate Donald Trump in August 2024 could have on EU member states, the UK and also on China and other major emerging market economies. The proposed tariffs, framed as measures to correct trade imbalances and protect US industries, have the potential to significantly reshape international trade relations and supply chains, with notable consequences for the EU and its trade priorities. |
| Keywords: | UK; carbon border adjustment mechanism; carbon price; cars; United States; CBAM; China; electric vehicles; emerging markets; EU; GDP; Germany; supply chains; tariffs; trade; Trump |
| JEL: | L81 R14 J01 N0 |
| Date: | 2024–10–30 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129067 |
| By: | Hoppen, Thole H.; Cuno, Rieke Marie; Schlechter, Pascal; Morina, Nexhmedin (University of Münster) |
| Abstract: | In a recent meta-analysis, we examined the efficacy of social comparison as a behaviour change technique (SC-BCT) across behavioural sciences. Our findings indicate that SC-BCT can effectively influence behaviour related to climate change mitigation, health, performance and service in the desired direction, although the effect sizes were small. Our data were re-analyzed by Bartoš et al. using a different statistical method to correct for publication bias, which did not support some of our conclusions. We appreciate the critical re-analysis of our data by Bartoš et al., which raises important methodological considerations regarding the influence of publication bias in meta-analyses and the relative performance of various methods to adjust for publication bias. A critical reflection on meta-analytical methods to correct for publication bias is important to examine the robustness of scientific findings, enabling genuine scientific progress. While we agree with Bartoš et al. that publication bias can significantly threaten the validity of meta-analytic results by inflating pooled effects and should therefore be taken into account both methodologically and when interpreting the results, we contend that two key issues limit the strength of their conclusions. First, we challenge the assumption that the method of Bartoš et al. to correct for publication bias offers a superior solution to the method we applied. Second, we are concerned with how this method was implemented in their re-analysis. |
| Date: | 2025–07–20 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:sh6tu_v1 |
| By: | Henrik Egbert (Anhalt University of Applied Sciences, Germany) |
| Abstract: | This paper examines whether conspicuous destruction—typically observed in small groups or individuals—can emerge as a behavioral pattern in large, democratic societies. Using Germany’s energy transition as a case study, it explores how politically legitimized decisions lead to the dismantling and devaluation of existing energy infrastructure, including nuclear power plants and fossil fuel systems. This visible devaluation and destruction serve as political and social signals of Germany’s commitment to a green economy. The paper identifies three interrelated motives driving this process: the pursuit of status, the demonstration of power, and the display of economic wealth. These motives, commonly observed in small groups, help explain similar behavioral patterns in national policymaking within the energy sector. |
| Keywords: | conspicuous destruction; energy transition; wealth; climate status; Germany |
| JEL: | P17 Q42 Z13 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:sko:wpaper:bep-2025-03 |
| By: | Till Köveker; Robin Sogalla |
| Abstract: | Carbon pricing policies are usually combined with compensation for exposed firms to prevent adverse competitiveness effects. In cap-and-trade systems, this carbon cost compensation mostly occurs through free allocation of emission permits. Using an administrative panel of German manufacturing firms, this paper investigates how free allocation in the European Union Emissions Trading System affects firms’ competitiveness and their incentives to reduce emissions. Leveraging a reform of free allocation rules in a continuous difference-in-differences design, we find that that a reduction of freely allocated emission permits decreased firms’ emission intensity. Our results suggest that this decrease is driven by energy efficiency improvements instead of outsourcing of emission intensive production. On the other hand, we do not find statistically significant effects on firms’ employment, sales, value added, investments and exports – indicating that the reduction in free permits did not reduce firms’ competitiveness. |
| Keywords: | Cap and trade, permit allocation, industry compensation, greenhouse gas emissions, competitiveness, manufacturing firms |
| JEL: | Q54 Q58 H23 D22 F18 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2133 |
| By: | Liu, Shimeng; Xu, Hangtian; Zhang, Wenqin; Zheng, Wenzhuo |
| Abstract: | In the automobile market, where consumers value the social recognition associated with car ownership, how would introducing a lower-cost alternative influence the market outcomes of traditional internal combustion engine vehicles (ICEVs)? Leveraging high-frequency sales data from China's entire automobile market from 2018 to 2022, we investigate the heterogeneous market responses to the emergence of electric vehicles (EVs) across different price-tier segments. Overall, the emergence of EVs reduces ICEV sales while boosting total automobile sales. More importantly, while EV penetration reduces ICEV sales in low- and mid-end segments, it enhances ICEV sales in the high-end segment. We provide further evidence that the rise of EVs amplifies the symbolic value of high-end ICEVs, resulting in improved sales for ICEV brands with strong social recognition. |
| Keywords: | Electric Vehicle; Market Responses; Symbolic Value; Social Recognition |
| JEL: | L16 L62 M2 |
| Date: | 2024–05–01 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125224 |
| By: | Lucas Woodley; Chung Yi See; Daniel Palmer; Ashley Nunes |
| Abstract: | Preowned vehicles are disproportionally purchased by low-income households, a group that has long been unable to purchase electric vehicles. Yet, low-income households would disproportionally benefit from EV adoption given the operating costs savings offered by electrification. To help realize this benefit, provisions of the 2022 Inflation Reduction Act offer preowned EV purchasing incentives. How effective might these efforts be. Leveraging data from the United States Census Bureau, the National Household Travel Survey, and the Greenhouse gases, Regulated Emissions, and Energy use in Technologies Model, we address this question. Our findings are fourfold. First, we demonstrate that although low-income households are more likely to benefit from preowned EV purchasing incentives offered by IRA, up to 8.4 million low-income households may be ineligible owing to heterogeneity in vehicle procurement pathways. Second, we show that program ineligibility risks preventing up to 113.9 million tons in lifecycle emissions reduction benefits from being realized. Third, we find that procurement pathways depend on vehicle price. More expensive preowned vehicles are purchased directly from commercial dealers, while less expensive preowned vehicles are purchased from private sellers. These procurement pathways matter because qualification for IRA incentives necessitates purchasing solely from commercial dealers. Fourth, we demonstrate that while incentives motivating preowned vehicle purchases from commercial dealers may be effective if the vehicle is expensive, this effectiveness diminishes at higher price points. The implications of our findings on decarbonization efforts and energy policy are discussed. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.15054 |
| By: | De Miguel, Carlos J.; Lorenzo, Santiago; Ferrer, Jimy; Gómez García, José Javier; Alatorre, José Eduardo |
| Abstract: | Carbon pricing is one of the public policy options for discouraging production activities and consumption patterns that generate greenhouse gas (GHG) emissions. This study provides an overview of carbon pricing in Latin America and the Caribbean, along with other associated economic policies. It reviews the situation regarding explicit carbon pricing via carbon taxes and emissions trading systems and the use of implicit pricing through the inclusion of the social price of carbon in public investment project evaluation procedures. It draws attention to the fact that very little use is being made of these pricing instruments in the region and that, even where they are in use, their coverage of GHG emissions is quite limited. What is more, the use of fossil fuel subsidies (negative carbon prices) is widespread: budget allocations for such subsidies in 2013–2022 were almost 10 times greater than the allocations for climate financing. The study also looks at two different scenarios for the reform of fossil fuel subsidization policies and what their economic, social and environmental effects would be. |
| Date: | 2025–01–29 |
| URL: | https://d.repec.org/n?u=RePEc:ecr:col022:81239 |
| By: | Gupta, Mehul; Kannan, Smruthi Bala; Bhalla, Kavi; Goel, Rahul |
| Abstract: | What are the primary policy and economic barriers to e-bicycle adoption in Delhi, India? In cities in India, individual private mobility is dominated by motorized two-wheelers, with a policy push towards large shifts to electric mobility and, therefore, a sustainable shift in transportation. E-bicycles are at the margins of electric mobility policy and have an ambiguous presence in the policy documents. This paper explores the unique possibilities and challenges that e-bicycles pose in urban India through exploratory qualitative research interviews with current e-bicycle users and retailers in Delhi and other stakeholders such as manufacturers and a policy analyst in Delhi, India. We begin the paper by describing how e-bicycles are defined in the Indian scenario and their place within a spectrum of two-wheelers. Following a description of the research methodology, the paper explores the affordability of e-bicycles, how current taxation and subsidy regimes shape e-bicycle retail, the interviewee’s reflections regarding the safety concerns of using e-bicycles on the city’s roads, its physical health and accessibility benefits, and convenience of charging and repair. We conclude with a discussion on the need for a targeted policy to encourage the adoption of e-bicycles for gains toward reduction in speeds and emissions. |
| Date: | 2025–07–16 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:rfeuv_v1 |
| By: | Christopher R. Knittel; Juan Ramon L. Senga; Shen Wang |
| Abstract: | Data centers are among the fastest-growing electricity consumers, raising concerns about their impact on grid operations and decarbonization goals. Their temporal flexibility—the ability to shift workloads over time—offers a source of demand-side flexibility. We model power systems in three U.S. regions: Mid-Atlantic, Texas, and WECC, under varying flexibility levels. We evaluate flexibility's effects on grid operations, investment, system costs, and emissions. Across all scenarios, flexible data centers reduce costs by shifting load from peak to off-peak hours, flattening net demand, and supporting renewable and baseload resources. This load shifting facilitates renewable integration while improving the utilization of existing baseload capacity. As a result, the emissions impact depends on which effect dominates. Higher renewable penetration increases the emissions-reduction potential of data center flexibility, while lower shares favor baseload generation and may raise emissions. Our findings highlight the importance of aligning data center flexibility with renewable deployment and regional conditions. |
| JEL: | D61 L94 Q41 Q48 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34065 |
| By: | Markus Dertwinkel-Kalt; Anna Ressi; Christian Wey |
| Abstract: | To counter the threat of deindustrialization due to soaring energy prices and facilitate a green transition, policymakers have devised new subsidy schemes such as the "bridge electricity price" (BEP). To analyze this, we develop a model, where the principal introduces a subsidy program to prevent the agent from exiting and facilitate green investments, which would end the agent's reliance on the subsidy. We demonstrate that, while successfully mitigating deindustrialization, the subsidy can lead to unintended consequences. First, the principal's commitment problem can lower investment incentives and lead to the subsidy program being everlasting. Second, it can induce a "subsidy trap'", drawing non-targeted agents into the subsidy scheme. Lastly, it can reinforce the exit problem it intended to solve by encouraging opportunistic investments. When applying our results to the BEP, we conclude that the fiscal costs of this subsidy could, therefore, far exceed initial projections. |
| Keywords: | deindustrialization, bridge electricity price, electrification, green transition, subsidy trap |
| JEL: | D04 L11 L50 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12012 |
| By: | Li, Zikai (University of Chicago) |
| Abstract: | Can targeted tax credits designed to stimulate renewable energy development in areas vulnerable to economic decline shift voters’ support? While advocates argue that economic gains from such incentives can realign political preferences by altering local communities' cost-benefit calculations, competing mechanisms such as disruptions to these communities and ideological resistance may offset these effects or even trigger backlash. Focusing on the Energy Community Tax Credit Bonus (ECTCB) under the 2022 Inflation Reduction Act, I use a two-dimensional regression discontinuity (2DRD) design to estimate its impact on the Democratic share of the two-party vote in the 2024 presidential election. The analysis suggests a small negative effect (point estimate: −0.0039; 95% confidence interval: [−0.0078, −0.0002]). These findings contribute new causal evidence to the debate on the electoral effects of place-based climate policies. This paper also makes methodological contributions by improving a recently proposed 2DRD estimator with bagging and the delta bootstrap. Through Monte Carlo simulations, I show the refined estimator exhibits less bias and greater efficiency than common alternatives. |
| Date: | 2025–07–17 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:s4nje_v1 |
| By: | Toni Mora (Research Institute for Evaluation and Public Policies (IRAPP), Universitat Internacional de Catalunya.); Manuel Flores (Serra Hunter Fellow, Department of Applied Economics, Universitat Autònoma de Barcelona.); David Roche (Research Institute for Evaluation and Public Policies (IRAPP), Universitat Internacional de Catalunya.) |
| Abstract: | To what extent does air pollution in low-pollution settings affect children’s health? Which children benefit most from further reductions, and what factors moderate this relationship? We address these questions using the universe of administrative medical records from the universal public healthcare system in Catalonia (Spain) between 2013 and 2017. We combine these data with spatio-temporal kriging techniques to construct complete time-by-location data on several air pollutants and environmental confounders. We then instrument for local PM10 concentrations—the main reference pollutant for air quality policies at the time—using variation in local wind direction in a multiple fixed effects model. Our primary outcome is respiratory-related healthcare visits, a measure of child morbidity. We find that even at relatively low ambient levels, increases in PM10 concentrations raise the incidence of respiratory-related visits. Our preferred instrumental variables estimate indicates that a 1 µg/m³ (or 4.5%) increase in PM10 leads to a 0.5% increase in overall respiratory visits, driven mainly by lower respiratory illnesses, which carry more serious health implications than other respiratory illnesses. We also find evidence of heterogeneous effects, with the youngest children (ages 0–5) and those exposed during hot or drier months being most affected. We estimate that the observed decline in PM10 concentrations during our sample period may have prevented approximately 16 million respiratory-related visits and saved around €800 million in direct healthcare costs. The results highlight the value of targeted public health interventions, particularly for young children and during periods of elevated environmental risk. |
| Keywords: | air pollution; low-pollution setting; healthcare use; respiratory illnesses; children; spatio-temporal kriging; instrumental variables. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:uab:wprdea:wpdea2507 |
| By: | Scheer, Antonina; Tyson, Judith; Plyska, Sasha; Charkowska, Zuzanna; Dagnino Contreras, Valeria |
| Abstract: | This report presents a novel methodology to assess the presence of just transition elements in green, social, sustainability and sustainability-linked (GSS+) bond frameworks. This methodology demonstrates how GSS+ bonds can be leveraged for the just transition, which can inform both issuers’ bond design and investor decision-making. The authors classify certain GSS+ bond framework characteristics – eligible expenditures, performance targets and post-issuance reporting – as just transition-related where activities cover both climate change mitigation and one of the following social themes: education, employment or equality. Where there is a causal link between the mitigation and social activities in question, the expenditure, target or reporting is considered just transition-focused. Using this methodology, they assess nearly all existing sovereign GSS+ bond frameworks, amounting to 68 in total, finding moderate evidence that just transition elements are present. |
| JEL: | F3 G3 |
| Date: | 2025–04–29 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:128998 |
| By: | Diego R. Känzig; Maximilian Konradt; Lixing Wang; Donghai Zhang |
| Abstract: | This paper examines the relationship between green innovation and the business cycle, revealing that while non-green innovation is procyclical, green innovation is countercyclical. This pattern holds unconditionally over the business cycle and conditional on economic shocks. Motivated by these findings, we develop a business cycle model with endogenous green and non-green innovation to explain their distinct cyclical behavior. The key mechanism operates through a ‘green is in the future’ channel: green patents are expected to generate higher profits in the future, making green patenting less sensitive to short-term economic fluctuations. In general equilibrium, this channel is reinforced, making green and non-green innovation effective substitutes. We provide direct evidence supporting the model mechanism using data on market-implied values of green and non-green patents. |
| JEL: | E32 O31 Q55 Q58 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34041 |
| By: | König, Leonard Maximilian |
| Abstract: | This study investigates the role of language and discursive strategies in constructing and legitimizing truth claims about climate change as a security issue within the European Union (EU), focusing on European Parliament decisions and key Common Foreign and Security Policy (CFSP) documents. Employing an explanatory sequential mixed-methods approach, the research integrates quantitative computational linguistic techniques with qualitative critical discourse analysis to provide a comprehensive understanding of how climate change is framed as a security threat in the EU's CFSP and its implications for climate change mitigation and adaptation. The findings reveal an increased emphasis on security implications of climate change, a higher focus on the relationship between climate change and security, and a shift in focus from topics such as migration, energy, and economic issues to human and environmental aspects, as well as defence and regional issues. The study also highlights the interconnectedness of securitisation and riskification framings in constructing climate change as a security issue within CFSP policy documents. These insights contribute to existing literature on climate change securitisation, critical discourse analysis, and policy-making within the EU context. The research underscores the importance of adopting a comprehensive approach to address climate change-related security risks, prioritizing actions that address both direct impacts of climate change on ecosystems and societies, enhancing collaboration with various stakeholders, and developing policies that encompass a wide range of strategies for mitigation and adaptation efforts. |
| Date: | 2025–07–18 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:zfywa_v1 |
| By: | Nicholls, Mark |
| Abstract: | Spain’s Just Transition Institute (ITJ) has developed a series of innovative tenders linking grid access for renewables to job creation and social and environmental programmes. The first will see utility Endesa investing €1.5 billion in the municipality of Andorra, Aragón. |
| JEL: | R14 J01 |
| Date: | 2025–02–19 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129002 |
| By: | Kalmey, Tim; Rausch, Sebastian; Schneider, Jan |
| Abstract: | We examine the welfare effects of removing explicit and implicit fossil fuel subsidies, the latter entailing Pigouvian pricing of local externalities from fossil energy consumption. We map a multi-region, multi-sector general equilibrium model to granular data on subsidies, local marginal external costs, and national income and product accounts. On average, unilateral Pigouvian pricing improves a country's welfare by 3.7%, generates fiscal revenues equal to 2.5% of consumption, and reduces the carbon price needed to meet the Paris climate target by 76%. Non-market welfare gains exceed market-related losses, benefiting most countries. Local air pollution pricing accounts for 90% of net benefits. About one third of countries would already meet their climate targets, making additional policies like carbon pricing redundant. For all countries combining Pigouvian energy pricing with carbon pricing increases welfare compared to relying on carbon pricing alone. Removing explicit subsidies has a minor impact on welfare and emissions. Global Pigouvian energy pricing would reduce global emissions by 32%, while increasing global welfare by 2.4%. Our findings underscore the potential of Pigouvian energy pricing to align economic, fiscal, and climate goals. |
| Keywords: | Fossil Fuels, Subsidies, Externalities, PigouvianTaxation, Climate Policy, Co-Benefits, General Equilibrium |
| JEL: | C68 H23 Q43 Q58 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:321869 |
| By: | Matteo Crosignani; Emilio Osambela; Matthew Pritsker |
| Abstract: | Are carbon emissions priced in equity markets? The literature is split with different approaches yielding conflicting results. We develop a stylized model showing that, if emissions are priced, stock returns depend on expected emissions and the product of the innovation in emissions and the price-dividend ratio. Building on this insight, we derive and test new predictions. We find that emissions are priced in equity markets, but the magnitude of such pricing is highly sensitive to the inclusion of a few “super emitters” (mostly operating in electric power generation). Our theoretical insight also helps reconcile seemingly divergent results in the literature. |
| Keywords: | carbon emissions; stock returns; cost of capital; ESG |
| JEL: | D62 G11 G12 Q54 |
| Date: | 2025–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednsr:101379 |
| By: | Saha, Krishnendu; Das, Bijoy Chandra |
| Abstract: | This study investigates the relationship between CEO optimism and firm-level decarbonisation performance using a longitudinal dataset of 1, 600 publicly listed U.S. firms from 2010 to 2020. Drawing on Upper Echelons Theory (UET) and behavioural strategy, we examine how executive disposition shapes environmental outcomes across three key indicators: absolute greenhouse gas (GHG) emissions, emissions intensity, and emissions disaggregated by scope (Scopes 1, 2, and 3). CEO optimism is operationalised through stock option-based measures of forward-looking executive behaviour. Our empirical analysis, employing fixed effects and instrumental variable estimations, reveals that optimistic CEOs are significantly associated with lower absolute emissions and improved emissions efficiency. The effect is most substantial for Scope 1 and Scope 2 emissions, areas under direct managerial control, while Scope 3 reductions exhibit weaker associations, indicating the limits of individual leadership traits in addressing complex, value chain-wide challenges. We argue that CEO optimism functions as a behavioural enabler of decarbonisation, facilitating long-term strategic investment and adaptive risk-taking. However, optimism also carries potential drawbacks, including miscalibrated ambition and overextension. The findings contribute to emerging scholarship on executive cognition and corporate climate action, offering theoretical and practical insights into how psychological traits influence organisational sustainability trajectories. |
| Date: | 2025–07–31 |
| URL: | https://d.repec.org/n?u=RePEc:akf:cafewp:37 |
| By: | Microsoft Copilot; Stephen E. Spear |
| Abstract: | This paper extends (Spear 2003) by replacing human agents with artificial intelligence (AI) entities that derive utility solely from electricity consumption. These AI agents must prepay for electricity using cryptocurrency and the verification of these transactions requires a fixed amount of electricity. As a result the agents must strategically allocate electricity resources between consumption and payment verification. This paper analyzes the equilibrium outcomes of such a system and discusses the implications of AI-driven energy markets. |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2505.14612 |