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on Energy Economics |
| By: | Harim Kim (University of Connecticut) |
| Abstract: | Energy transition from coal to gas is reshaping the power sector to rely more on gas generation, which is cleaner but has more variable input costs. Using counterfactual analysis, I study the competitive effects of this transition, considering several transition paths that differ in the types of firms involved in retiring coal plants and investing in gas plants. I show that the variable nature of the marginal cost of gas generation creates an environment in which market power could increase after the transition. However, the transition’s impact on competition depends on the characteristics of the firms investing in new gas generation; the adverse impact is mitigated under a well-planned transition that leads to a more competitive industry structure. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:uct:uconnp:2025-08 |
| By: | Monica Bonacina (University of Milan, Fondazione Eni Enrico Mattei, Bocconi University and University of Insubria); Romolo Consigna Tokong (Fondazione Eni Enrico Mattei and University of Florence) |
| Abstract: | The European Union’s decarbonisation strategy necessitates profound shifts across all sectors, with road transport presenting a particularly formidable challenge due to its sustained emissions growth since 1990. Given that Italy’s road transport sector is the third-largest consumer of fossil fuels in Europe, its role is pivotal in achieving these collective climate objectives. This study employs grey forecasting models to assess the projected contribution of alternative fuels – specifically biodiesel, bio-gasoline, biomethane, and electricity – to Italy’s 2030 decarbonisation pathway. The results suggest that consumption of these energy carriers will reach around 5 Mtoe (million tons of oil equivalent), representing a threefold increase compared to 2022 levels. While our analysis forecasts that biomethane, will entirely displace its fossil counterpart and that electricity consumption will expand considerably, the progress in the use of liquid biofuels could be lower than that reported in Italy’s National Energy and Climate Plan (NECP). According to grey models, in 2030, alternative fuels could meet one-sixth of the final energy demand for Italian road transport: a considerable improvement from current levels but less than the two-fifths share needed to align with the EU’s broader decarbonisation objectives. The findings suggest that the decarbonisation of road transport, largely attributed to the use of biofuels, is currently outpacing the progress achieved through the electrification of the vehicle fleet. This underscores the imperative of adopting a holistic strategy that leverages the full potential of all technologies. Such a unified design is essential to foster synergy and expedite the achievement of climate objectives in a manner that is both efficient and inclusive. |
| Keywords: | Road Transport, Final Energy Consumption, Alternative Fuels, Italy’s National Energy and Climate Plan, Grey Forecasting Models |
| JEL: | Q2 Q4 C22 C45 C53 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2025.19 |
| By: | Harju, Jarkko; Kosonen, Tuomas; Laukkanen, Marita; Palanne, Kimmo; Suonto, Satu |
| Abstract: | This paper studies the efects of a signifcant fuel tax increase on driving and therefore CO2 emissions. Fuel taxes are a major policy tool to reduce road transport emissions. Despite the prevalence of fuel taxes, credible causal evidence of the efect of fuel taxes on driving and emissions is limited, and the reasons why existing estimates vary remain unexplored. Our research directly addresses these gaps in the literature by exploiting exogenous variation provided by Finland’s 2012 energy tax reform. The reform increased the tax on diesel by almost 12 euro cents per litre, while the tax on gasoline was increased by less than 3 euro cents per litre. The reform allows us to utilize a quasi-experimental setting and compare the vehicle kilometers traveled by diesel-and gasoline-powered cars to identify the impacts of fuel taxes. We employ a large representative data set of about 0.7 million cars, which contains car odometer readings from mandatory car inspections starting from 2008. Our estimates indicate a clear reduction in vehicle kilometers traveled by diesel cars due to reform-induced increases in diesel prices. In our heterogeneity analysis we observe that a large part of the response originates from car owners that reside in urban rather than rural environments. |
| Keywords: | Fuel taxes, Fuel consumption, Fuel tax elasticity, Mileage, CO2 Emissions, Road transport emissions, J31, J38, D22, fi=Verotus|sv=Beskattning|en=Taxation|, |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:fer:wpaper:177 |
| By: | Anas Abuzayed |
| Keywords: | Market value of renewables, subsidy-free electricity markets, renewable energy policy, energy-only markets, electricity market design |
| JEL: | Q41 D47 Q42 H23 Q47 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:enp:wpaper:eprg2521 |
| By: | Meera Mahadevan; Adrian Martinez; Ryan McCord; Robyn Meeks; Manisha Pradhananga |
| Abstract: | A central challenge in the global transition to cleaner energy is how governments can design policies that deliver large social benefits while facing trade-offs in energy security, fiscal costs, and household adoption frictions. We study this question in urban Nepal, where cooking is dominated by imported LPG, but abundant hydropower makes both large-scale electrification and improved energy security feasible. We embed household adoption decisions in a model of a planner balancing fiscal, fuel supply, and energy-security considerations, and estimate its key parameters using a scalable randomized controlled trial in Kathmandu Valley. Subsidies had large effects, increasing electric stove adoption by 23 percentage points and compatible cookware purchases by 41 percentage points. In contrast, information treatments highlighting cost or health benefits alone had little impact. Using detailed survey and electricity billing data, we find substitution away from LPG toward electricity, with meaningful household heterogeneity. Disciplined by these experimental estimates, the model evaluates counterfactual targeting rules, and estimates optimal subsidy levels under different macroeconomic conditions. |
| Keywords: | electrification, energy transition, technology adoption, policy design, development, climate change, energy security |
| JEL: | C93 O1 O33 Q48 Q56 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12190 |
| By: | Pablo Garcia (BANQUE CENTRALE DU LUXEMBOURG); Pascal Jacquinot (EUROPEAN CENTRAL BANK); Crt Lenarcic (BANKA SLOVENIJE); Kostas Mavromatis (DE NEDERLANDSCHE BANK); Niki Papadopoulou (EUROPEAN CENTRAL BANK); Edgar Silgado-Gómez (BANCO DE ESPAÑA) |
| Abstract: | We explore the macroeconomic effects of climate policies promoting the green energy transition in the euro area using an extended version of the Euro Area and Global Economy (EAGLE) model. The model differentiates between brown and green energy sectors and incorporates carbon taxes and brown capital income taxes. We analyze scenarios with unilateral and globally coordinated carbon taxes, with and without revenue redistribution to green firms and financially constrained households. Carbon taxes act as negative supply shocks, raising inflation and lowering output, while subsidies to green energy firms reduce green energy prices, supporting the transition and easing recessions. Redistribution to constrained households boosts consumption but does not accelerate the green transition. Taxes on brown capital income lower both inflation and output by acting as demand shocks. Recycling revenue from this tax to subsidize green capital investment strengthens the shift to green energy and moderates economic contractions. Global coordination of carbon taxes delivers only modest additional macroeconomic effects compared with unilateral action, as substitution in energy use outweighs international spillovers. Sensitivity analyses confirm the robustness of these findings under alternative assumptions about price rigidity, substitution elasticities and monetary policy. |
| Keywords: | climate policy, carbon taxation, fiscal policy, monetary policy, euro area, DSGE modeling |
| JEL: | C53 E32 E52 F45 H30 Q48 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:bde:wpaper:2537 |
| By: | Markoulakis, Andreas; Nduka, Eleanya |
| Abstract: | We investigate how different facets of energy security, e.g., energy vulnerability (domestic energy supply, import dependency, technology development on energy sources), energy affordability (higher prices) and energy reliability (power cuts frequency) impact the support for different sources of renewable energy — offshore and onshore wind power, biomass energy and solar power. Our results show that there is a common pattern for energy vulnerability since as concerns decline, the probability of support for each renewable source also declines, but the rate of decline is larger for biomass and onshore wind. Energy imports dependency and affordability reveal a distinction between the wind power sources and the other sources since both offshore and onshore wind power are affected less by energy imports concerns or affordability concerns. Energy reliability is the only facet that leads to a rise in the probability of support for offshore wind. The above results are critical for policy appraisal purposes to inform policymakers on the differences between energy security facets and renewable energy sources when designing future energy policies towards net zero strategies. |
| Keywords: | Energy security ; renewable energy ; offshore wind ; onshore wind ; solar ; biomass. JEL Classification: Q20 ; Q40 ; Q42 ; Q48 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1583 |
| By: | Sabrine Emran; Hanne Knaepen; Larabi Jaïdi |
| Abstract: | The European Union (EU) is seeking to enhance energy security. It clearly recognises North Africa’s strategic role in the global energy transition, given the region’s abundant renewable resources, with some of the world’s highest solar irradiation and strong winds. Joint efforts could advance shared sustainable energy solutions and generate mutual benefits. Climate finance plays a crucial role in facilitating the renewable energy transition. Egypt, Tunisia, Morocco and Algeria are well-positioned to lead this transition, while advancing their own renewable energy sectors, green industrialisation and the hydrogen economy. Through the EU’s Global Gateway AfricaEurope Investment Package (EC, 2025a), various flagship projects have been approved for North Africa since 2023. These include green energy projects in Algeria and Tunisia (MedLink) (Council of the European Union, 2024), a 1.7 GW renewable energy programme in Tunisia in 2024 (Hellenic Aid, 2024) or the construction of a high-voltage undersea electrical interconnection between Egypt and Greece in 2023 (French Ministry of Europe and Foreign Affairs, 2023). However, realising this potential requires significant investment and infrastructure development to ensure a just and sustainable transition that benefits both local economies and global partners. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbcoen:pbettg1_25 |
| By: | Adrian Odenweller; Falko Ueckerdt; Johannes Hampp; Ivan Ramirez; Felix Schreyer; Robin Hasse; Jarusch Muessel; Chen Chris Gong; Robert Pietzcker; Tom Brown; Gunnar Luderer |
| Abstract: | The rapid expansion of low-cost renewable electricity combined with end-use electrification in transport, industry, and buildings offers a promising path to deep decarbonisation. However, aligning variable supply with demand requires strategies for daily and seasonal balancing. Existing models either lack the wide scope required for long-term transition pathways or the spatio-temporal detail to capture power system variability and flexibility. Here, we combine the complementary strengths of REMIND, a long-term integrated assessment model, and PyPSA-Eur, an hourly energy system model, through a bi-directional, price-based and iterative soft coupling. REMIND provides pathway variables such as sectoral electricity demand, installed capacities, and costs to PyPSA-Eur, which returns optimised operational variables such as capacity factors, storage requirements, and relative prices. After sufficient convergence, this integrated approach jointly optimises long-term investment and short-term operation. We demonstrate the coupling for two Germany-focused scenarios, with and without demand-side flexibility, reaching climate neutrality by 2045. Our results confirm that a sector-coupled energy system with nearly 100\% renewable electricity is technically possible and economically viable. Power system flexibility influences long-term pathways through price differentiation: supply-side market values vary by generation technology, while demand-side prices vary by end-use sector. Flexible electrolysers and smart-charging electric vehicles benefit from below-average prices, whereas less flexible heat pumps face almost twice the average price due to winter peak loads. Without demand-side flexibility, electricity prices increase across all end-users, though battery deployment partially compensates. Our approach therefore fully integrates power system dynamics into multi-decadal energy transition pathways. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.04388 |
| By: | Arega Getaneh Abate; Salim Hassi; Dogan Keles; Xiufeng Liu; Xiao-Bing Zhang |
| Abstract: | The transition to electricity systems powered entirely by renewable energy sources makes energy storage indispensable for balancing intermittency and ensuring reliability. Since RES operate at near-zero marginal cost, storage operators can strongly influence electricity prices and energy security when renewable supply alone cannot meet demand. We develop a Cournot competition model in which storage operators strategically bid quantities to maximize their profits. We propose a MILP model with the big-M method and reformulation using continuous variables, incorporating demand blocks. The strategic bidding game is solved using the diagonalization algorithm, and the social planner's problem is used for benchmarking, cast as a one-shot optimization. The proposed model is applied to Denmark's power system using current data and 2030 renewable projections, capturing both current and future market conditions. Results show that storage operators affect market performance by arbitrage between low-and high-price periods, which can smooth supply-demand imbalances, thereby improving welfare relative to the no-storage case. With limited competition, however, strategic withholding increases prices and reduces welfare, while expanding storage capacity beyond a certain point yields no further gains. As the number of firms increases, competition mitigates distortions, and outcomes converge toward the social planner's benchmark with only two to three strategic players. These findings highlight storage's dual role in both stabilizing markets and creating market power. underscoring the need for market designs that align operators' incentives with social welfare. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.26568 |
| By: | Daniel Oeltz; Tobias Pfingsten |
| Abstract: | Battery Energy Storage Systems (BESS) are a cornerstone of the energy transition, as their ability to shift electricity across time enables both grid stability and the integration of renewable generation. This paper investigates the profitability of different market bidding strategies for BESS in the Central European wholesale power market, focusing on the day-ahead auction and intraday trading at EPEX Spot. We employ the rolling intrinsic approach as a realistic trading strategy for continuous intraday markets, explicitly incorporating bid--ask spreads to account for liquidity constraints. Our analysis shows that multi-market bidding strategies consistently outperform single-market participation. Furthermore, we demonstrate that maximum cycle limits significantly affect profitability, indicating that more flexible strategies which relax daily cycling constraints while respecting annual limits can unlock additional value. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.01956 |
| By: | Camille Megy (TECH ECO (ex-ITESE) - Institut Technico-Economie - CEA-DES (ex-DEN) - CEA-Direction des Energies (ex-Direction de l'Energie Nucléaire) - CEA - Commissariat à l'énergie atomique et aux énergies alternatives - Université Paris-Saclay) |
| Abstract: | As the global transition toward low-carbon energy systems intensifies, Power-to-Gas (PtG) technology plays a crucial role in converting surplus electricity into hydrogen via water electrolysis. However, scaling up renewable hydrogen production presents environmental challenges, particularly concerning freshwater resources, which are expected to decline due to climate change. While the integration of water considerations has been explored in electricity systems, they have received little attention in the context of hydrogen systems. This article examines how climate-induced water availability constraints affect joint electricity and hydrogen planning. We employ a linear programming model to optimize investment and operating decisions. A regret-minimizing approach is used to compare planning decisions with and without considering water availability constraints. We focus on a French case study at a river basin scale. Results indicate that incorporating climate impacts on water resources leads to increased investments in renewables and PtG capacity, helping offset reductions in hydro and nuclear production and ensuring adequate hydrogen supply during summer. The regret-minimizing approach demonstrates that proactively considering the impacts of climate change on water resources in electricity and hydrogen planning minimizes regrets. This findings highlight the importance of integrating water constraints in energy system models and contribute to the broader dialogue on climate change adaptation planning. |
| Date: | 2025–06–15 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:cea-05294990 |
| By: | Pufan Qi |
| Abstract: | This paper examines the impact of electric vehicles on total annual electricity consumption across 58 counties in California from 2010 to 2021. Employing a log linear model to analyze the relationship between electricity consumption and EV ownership, alongside a linear log model with an instrumental variable approach, the study finds that annual per capita electricity consumption increased by 0.23% for each additional electric vehicle per 10, 000 residents over the 12 years period. The analysis identifies partisanship, measured as the annual percentage of voter registration for the Democratic Party by county, as a robust instrumental variable. Specifically, a 1% increase in Democratic voter registration corresponds to the adoption of approximately two additional EVs per 10, 000 residents. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.02530 |
| By: | Mengying Wu; Kristen McCormack; William A. Scott; Aaron Smith; Jingran Zhang; James H. Stock |
| Abstract: | Decarbonizing aviation in the short term will likely entail replacing large quantities of petroleum jet fuel with sustainable aviation fuels (SAFs), which are predominantly biofuels. In the United States, biofuels are currently used as substitutes for gasoline and diesel in road transportation and are supported by a complex set of federal and state policies including the Renewable Fuel Standard (RFS), state low carbon fuel standards, and state and federal tax credits. Policies promoting SAF therefore interact with surface transport biofuel policies. In this paper, we use a new detailed partial equilibrium model of road and air transportation fuel markets to compare various policy options designed to achieve a target of 3 billion gallons of SAF by 2030. Our results suggest that the target is attainable with current technology but not with current policy. Several potential federal policies, including modifications to the existing RFS, a federal SAF tax credit, or a clean aviation standard could meet the 3 billion gallon target with similar emissions reductions and costs but different incidence. The lowest cost policy we study entails replacing all current biofuels policies with a modest carbon tax on fossil transportation fuels paired with a SAF tax credit. |
| JEL: | Q16 Q42 Q48 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34326 |
| By: | Pierre Dumont (GeePs - Laboratoire Génie électrique et électronique de Paris - CentraleSupélec - SU - Sorbonne Université - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique, Stellantis (Centre technique de Carrières-sous-Poissy)); Lorenzo Nicoletti (Stellantis (Centre technique de Carrières-sous-Poissy)); Marc Petit (GeePs - Laboratoire Génie électrique et électronique de Paris - CentraleSupélec - SU - Sorbonne Université - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique); Damien-Pierre Sainflou (Stellantis (Centre technique de Carrières-sous-Poissy)) |
| Abstract: | Vehicle-to-grid (V2G) technology is gaining interest, particularly for electricity trading using electric vehicle (EV) batteries. This study focuses on the economic impact of V2Ginduced vehicle degradation. Unlike traditional approaches that estimate costs based on battery capacity loss, upcoming "virtual mileage" regulations aim to provide a more tangible metric. Virtual mileage, deduced from the energy reinjected onto the grid by the vehicle, is meant to represent a similar wear as real mileage. However, it should be noted that this metric is flawed as it tends to overestimate vehicle degradation since it tacitly includes wear on components that are not used during V2G (for instance: tires, brakes), and overlooks other factors like battery calendar ageing: for example, an EV with high virtual mileage could retain better battery health than one stored at full charge. Virtual mileage could hence significantly affect EV residual value, around ~1 c€ per virtual kilometre in order of magnitude, translating to ~0.05 € per discharged kWh. This depreciation would pose a substantial barrier to V2G profitability. Using simulations of EVs in the French day-ahead electricity market for 2019, the study finds that accounting for devaluation reduces average annual V2G benefits to just 6.96 €/EV, compared to 29.2 €/EV without it. The paper highlights the aforementioned limitations to virtual mileage and advocates alternative metrics such as the state-of-health to assess vehicle degradation, aiming to enhance the feasibility of V2G. |
| Keywords: | day-ahead market, energy arbitrage, residual value, virtual mileage, battery degradation, Vehicle-to-grid |
| Date: | 2025–06–29 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05294002 |
| By: | Fausto Cavalli; Alessandra Mainini; Enrico Moretto; Ahmad Naimzada |
| Abstract: | We propose an evolutionary model to study the transition toward green technology under the influence of innovation. Clean and dirty technologies are selected according to their profitability under an environmental tax, which depends on the overall pollution level. Pollution itself evolves dynamically: it results from the emissions of the two types of producers, naturally decays, and is reduced through the implementation of the current abatement technology. The regulator collects tax revenues and allocates them between the implementation of the existing abatement technology and its innovation, which increases the stock of knowledge and thereby enhances abatement effectiveness. From a static perspective, we show the existence of steady states, both with homogeneous populations of clean or dirty producers and with heterogeneous populations where both technologies coexist. We discuss the mechanisms through which these steady states emerge and how they may evolve into one another. From a dynamical perspective, we characterize the resulting scenarios, showing how innovation can foster a green transition if coupled with a suitable level of taxation. At the same time, we investigate how improper environmental policies may also produce unintended outcomes, such as environmental deterioration, reversion to dirty technology, or economic unsustainability. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.25272 |
| By: | Cortina Lorente, Juan Jose; Raddatz, Claudio; Schmukler, Sergio; Williams, Tomas |
| Abstract: | This paper investigates how firms use green versus conventional debt and the associated firm- and aggregate-level environmental consequences. Employing a dataset of 127, 711 global bond and syndicated loan issuances by non-financial firms across 85 countries during 2012–23, the paper documents a sharp rise in green debt issuances relative to conventional issuances since 2018. This increase is particularly pronounced among large firms with high carbon dioxide emissions. Local projections difference-in-differences estimates show that, compared to conventional debt, green bond and loan issuances are systematically followed by sustained reductions in carbon intensity (emissions over income) of up to 50 percent. These reductions correspond to as much as 15 percent of global annual emissions. Green bonds contribute to reducing emissions by providing financing to large, high-emitting firms, whose improvements in carbon intensity have significant aggregate consequences. Syndicated loans do so by channeling a larger volume of financing to a wider set of firms. |
| Date: | 2025–10–02 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11226 |
| By: | Rim Berahab |
| Abstract: | The second Trump administration’s reversal of federal climate policy is reshaping the U.S. energy and industrial landscape, with significant implications for macroeconomic performance, clean technology competitiveness, and global climate cooperation. While the deregulatory shift and emphasis on fossil-fuel production may generate short-term output gains in selected sectors, the long-term structural transformation necessary for sustained growth in an increasingly low-carbon global economy is likely to be undermined. President Donald Trump’s efforts to dismantle the Inflation Reduction Act (IRA) and related climate policies has disrupted private investment flows, stalled infrastructure deployment, and raised uncertainty for firms in clean-energy supply chains. Simultaneously, regulatory weakening—particularly of emissions standards—has heightened fiscal and systemic risks, while eroding the credibility of U.S. financial markets in pricing climate exposure. |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbecon:pb024_25 |
| By: | Marcus Vinicius de Freitas |
| Abstract: | China's ascent to the position of the world's most prominent energy consumer has altered global energy markets and fundamentally reshaped the geopolitics of energy security. As China navigates the complexities of sustaining its economic momentum, ensuring access to reliable, affordable, and diversified energy sources has become an existential imperative, intricately woven into its foreign policy strategy. In parallel, Africa's immense wealth of both conventional and renewable resources, coupled with its drive toward industrialization and sustainable development, presents a remarkable opportunity for a transformative partnership. This Policy Paper explores the strategic intersection between China's energy imperatives and Africa's developmental aspirations. It argues for a relational cooperation model that transcends a narrow transactional approach, and champions an inclusive, sustainable, and future-oriented partnership. Historically characterized by overseas investments in oilfields, critical infrastructure, and renewable energy projects, China's engagement is examined against Africa's chronic energy poverty and industrialization needs. China can enhance its energy security and gain access to Africa's abundant energy resources. At the same time, Africa can accelerate its progress towards the goals enshrined in Agenda 2063, improve its energy infrastructure, and boost its industrialization. However, the partnership is not without significant risks. Issues of debt sustainability, environmental and social governance, and political instability threaten to undermine the transformational potential of China–Africa energy cooperation. Accordingly, this Policy Paper stresses the imperative for transparent, inclusive, and sustainable modes of engagement, advocating for stronger environmental stewardship, enhanced local capacity-building, and greater alignment with Africa's regional integration agendas. This emphasis on transparency and sustainability is crucial to building confidence in the partnership. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaeco:pp27_25 |
| By: | Yiming Zhang; Wolfgang Ridinger; David Wozabal |
| Abstract: | As renewable energy integration increases supply variability, battery energy storage systems (BESS) present a viable solution for balancing supply and demand. This paper proposes a novel approach for optimizing battery BESS participation in multiple electricity markets. We develop a joint bidding strategy that combines participation in the primary frequency reserve market with continuous trading in the intraday market, addressing a gap in the extant literature which typically considers these markets in isolation or simplifies the continuous nature of intraday trading. Our approach utilizes a mixed integer linear programming implementation of the rolling intrinsic algorithm for intraday decisions and state of charge recovery, alongside a learned classifier strategy (LCS) that determines optimal capacity allocation between markets. A comprehensive out-of-sample backtest over more than one year of historical German market data validates our approach: The LCS increases overall profits by over 4% compared to the best-performing static strategy and by more than 3% over a naive dynamic benchmark. Crucially, our method closes the gap to a theoretical perfect foresight strategy to just 4%, demonstrating the effectiveness of dynamic, learning-based allocation in a complex, multi-market environment. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.03209 |
| By: | Francis Perrin |
| Abstract: | La parution de la dernière édition (la 74ème) de la Statistical Review of World Energy (SRWE, 2025) est une bonne occasion de faire le point sur certaines grandes tendances du monde de l’énergie. Dans cette note, nous nous centrerons sur le continent africain. Tous les chiffres ci-dessous sont extraits de ce document et portent sur l’année 2024, sauf indication contraire. Les chiffres de la SRWE portent sur les énergies qui font l’objet d’échanges commerciaux, ce qui inclut les énergies fossiles, l’hydroélectricité, le nucléaire et les énergies renouvelables modernes autres que l’hydroélectricité et qui sont utilisées pour produire de l’électricité, notamment l’éolien et le solaire. Ces données sous-estiment donc la consommation énergétique de l’Afrique puisque certaines énergies renouvelables (bois, biomasse) ne passent pas toujours par des circuits commerciaux. Pendant plusieurs décennies, la SRWE était la BP Statistical Review of World Energy. Le groupe britannique s’est retiré de ce projet il y a trois ans tout en continuant à le soutenir. La SRWE est, pour la troisième année consécutive, publiée par l’Energy Institute (Londres) en collaboration avec Kearney et KPMG. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbcoen:pb40_25 |
| By: | William Yancey Brown |
| Abstract: | Following a decade-long partnership, the Policy Center for the New South and the Atlantic Council have joined forces around a new program focused on the power of the Atlantic. This series of publications and webinars will focus both on opportunities and challenges around the basin. This brief, the inaugural of the series, by William Yancey Brown highlights the vast energy and mineral potential of the Atlantic Ocean and how African nations bordering the basin can manage resources responsibly and fairly. It launches against a backdrop that includes World Ocean Day, the 2025 UN Ocean Conference, and the continuing work of the Group of Twenty (under South Africa’s presidency) within the Oceans 20 engagement group. The Atlantic Ocean is of paramount importance to Africa. The African nations on the ocean’s shore represent 46 percent of the continent’s population, 55 percent of its gross domestic product, and 57 percent its trade. The blue economy is crucial for Africa as the continent’s economies see new changes brought upon by issues related to the maritime energy transition, the port revolution, maritime transport, fishing, and control over exclusive economic zones. African countries have accordingly developed frameworks, through the African Union, for action in the region and declared 2015-2025 the “Decade of Africa’s Seas and Oceans.” By bridging knowledge, finance, and governance gaps, this policy brief seeks to inform national and regional strategies that can strengthen resilience, protect livelihoods, and uphold climate justice in the face of accelerating climate threats. |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbcoen:pbac6_25 |
| By: | Lavy, Victor; Rachkovski, Genia; Yoresh, Omry |
| Abstract: | Literature has shown that air pollution can have short- and long-term adverse effects on physiological and cognitive performance. In this study, we estimate the effect of increased pollution levels on the likelihood of accidents at construction sites, a significant factor related to productivity losses in the labor market. Using data from all construction sites and pollution monitoring stations in Israel, we find a strong and significant causal effect of nitrogen dioxide (NO2), one of the primary air pollutants, on construction site accidents. We find that a 10-ppb increase in NO2 levels increases the likelihood of an accident by as much as 25 %. Importantly, our findings suggest that these effects are non-linear. While moderate pollution levels, according to EPA standards, compared to clean air levels, increase the likelihood of accidents by 138 %, unhealthy levels increase it by 377 %. We present a mechanism where the effect of pollution is exacerbated under conditions of high cognitive strain or reduced awareness. Finally, we perform a cost-benefit analysis, supported by a nonparametric estimation calculating the implied number of accidents due to NO2 exposure, and examine a potential welfare-improving policy to subsidize the closure of construction sites on highly polluted days. |
| Keywords: | workplace accidents; labor productivity; air pollution; government policy |
| JEL: | R14 J01 |
| Date: | 2025–11–30 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129773 |
| By: | Anna Che Azmi (Department of Accounting Faculty of Business and Economics, University of Malaya, Malaysia Author-2-Name: Ying Hou Author-2-Workplace-Name: Department of Accounting Faculty of Business and Economics, University of Malaya, Malaysia Author-3-Name: Azlina Abdul Jalil Author-3-Workplace-Name: Department of Accounting Faculty of Business and Economics, University of Malaya, Malaysia Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:) |
| Abstract: | " Objective - This study summarizes the carbon disclosure indicators currently used in the literature and aims to explore what types of carbon information corporate disclosure can improve the comparability and understandability of carbon reporting. Methodology/Technique - This study conducted a systematic literature review of the relevant literature in two databases, Scopus and Web of Science (WOS). Sixty-seven relevant academic articles were analyzed to summarize commonly used carbon disclosure indicators and guidelines for constructing a carbon disclosure framework. Findings - This study categorizes the disclosure indicators used in the existing literature into ten categories, describing the information that each indicator can convey and the role that it provides for stakeholder decision-making. This was used as a basis for identifying the carbon disclosure indicators necessary to improve the comparability and understandability of carbon reporting. Novelty - This study identifies the limitations of current carbon disclosure indicators and provides targeted recommendations on how companies should select carbon disclosure indicators when making disclosures. These insights are intended to support the future implementation of standardized carbon reporting and auditing practices, thereby strengthening global climate governance. Type of Paper - Empirical" |
| Keywords: | Corporate Carbon Disclosure, Disclosure Indicator, GHG emission, Comparability, Comprehensibility |
| JEL: | Q56 M40 |
| Date: | 2025–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:gtr:gatrjs:afr241 |
| By: | Alice Di Bella; Toni Seibold; Tom Brown; Massimo Tavoni |
| Abstract: | This study analyzes how Europe can decarbonize its industrial sector while remaining competitive. Using the open-source model PyPSA-Eur, it examines key energy- and emission-intensive industries, including steel, cement, methanol, ammonia, and high-value chemicals. Two development paths are explored: a continued decline in industrial activity and a reindustrialization driven by competitiveness policies. The analysis assesses cost gaps between European green products and lower-cost imports, and evaluates strategies such as intra-European relocation, selective imports of green intermediates, and targeted subsidies. Results show that deep industrial decarbonization is technically feasible, led by electrification, but competitiveness depends strongly on policy choices. Imports of green intermediates can lower costs while preserving jobs and production, whereas broad subsidies are economically unsustainable. Effective policy should focus support on sectors like ammonia and steel finishing while maintaining current production levels. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.08199 |
| By: | Ferid Belhaj |
| Abstract: | MENA faces a severe water crisis, with 12 of the world’s 17 most water-stressed countries. Climate change, population growth, inefficient water management, and weak governance drive this challenge. Water production, treatment, and distribution require high energy inputs, while energy generation depends on water for cooling and refining. The region must integrate renewable energy, especially solar power, into water solutions like desalination. Inaction could shrink GDP by up to 14% by 2050, while a $500 billion investment over the next decade could secure water resources. Key solutions include renewable-powered desalination, modernized water networks, large-scale wastewater recycling, and innovative financing through green bonds, public- private partnerships, and sovereign wealth funds. Regional collaboration on transboundary water management and shared desalination projects remains essential. MENA must act now. By integrating sustainable water-energy strategies, the region can secure its future and drive stability and growth. |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbecon:pb016_25 |
| By: | Arnold-Keifer, Sonja; Barkhausen, Robin; Berger, Frederic; Hillenbrand, Thomas; Liesenhoff, Fabian; Niederste-Hollenberg, Jutta; Sánchez González, Rodrigo |
| Abstract: | This report investigates relationships between the water and electricity sectors, emphasizing their shared challenges in the context of climate change and urbanization. As both sectors are crucial for modern society, their evolution towards sustainability is increasingly vital. The report begins with a historical overview of each sector, illustrating how the electricity sector has pioneered innovative approaches that can inform the water sector's transition. The analysis identifies three key concepts - smart meters and dynamic pricing schemes, legal instruments such as cap-and-trade schemes, and extended sector coupling - that have proven effective in the electricity sector and evaluates their potential applicability to the water sector. Smart meters, which enable real-time monitoring and efficient demand management, could enhance water usage efficiency, while dynamic pricing models could incentivize conservation behaviours. Additionally, the exploration of legal instruments like cap-and-trade schemes may provide new frameworks for managing water resources more effectively. The report also discusses the potential for extended sector coupling, where the integration of water and energy systems can optimize resource use and improve resilience. This approach highlights the importance of viewing water not just as a utility, but as a resource that can contribute to energy management and sustainability. Despite the opportunities for innovation, the report acknowledges the challenges faced by the water sector, including its regulatory constraints and the fragmented nature of its market. These factors contribute to a slower adoption of new technologies compared to the electricity sector. However, the potential benefits of adapting successful strategies from the electricity sector are significant, with implications for resource management, regulatory compliance, and system integration. In conclusion, the report advocates for further research and pilot projects to explore the feasibility and impact of these concepts within the water sector. By leveraging lessons learned from the electricity sector, stakeholders can enhance the resilience, efficiency, and sustainability of water systems, ultimately contributing to a more sustainable future for both sectors. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:fisisi:328002 |
| By: | Pietrobelli, Carlo (RS: GSBE other - not theme-related research, Mt Economic Research Inst on Innov/Techn); Valverde Carbonell, Jorge (RS: GSBE other - not theme-related research, Mt Economic Research Inst on Innov/Techn) |
| Abstract: | The energy transition success depends largely on the availability of critical minerals, and this may produce a window of opportunity for producing countries. In this regard, this paper examines the different avenues to maximizing value added from critical minerals production. In particular, we assess whether the classic structural change recipe could be a good road map for countries rich in critical minerals. For this purpose, we use copper and lithium as case-studies. For each mineral, we discuss and assess the cost competitiveness and the potential benefits for countries to diversify downward, including potential spillovers proxied by products’ complexity. Our research shows that maximizing value-added in the long term is a tailored mineral-country-specific challenge that can be pursued through three main channels: deepening, moving downward and/or moving upward along the mining value chain. These depend on the comparative advantages of the country and the particular features of the mineral market. In the case of copper, deepening and moving upward seems to be preferable given the bounded value-added of nearer downward chain stages, such as smelting and refining. However, under a low-carbon paradigm downward stages could become competitive. In the case of lithium, moving downward appears a preferable strategy due to the significantly larger value-added and spillovers derived from producing grade battery lithium (carbonate or hydroxide) rather than producing lithium intermediate compound, such as sulfate or chloride, or lithium ore (spodumene). |
| JEL: | O13 O14 Q32 |
| Date: | 2025–09–04 |
| URL: | https://d.repec.org/n?u=RePEc:unm:unumer:2025019 |
| By: | Théo Aphecetche |
| Abstract: | The transition to a low-carbon economy requires significant investments in green technologies and infrastructure. Despite growing demand for sustainable finance, investment barriers persist, hindering the flow of capital towards environmentally sustainable projects. Building on a literature review, and analysis of existing work in G20 countries, this brief identifies three key investment barriers: legislative, skills-related, and operational. The brief highlights for each barrier possible solutions to lift or at least reduce them and identify possible room for international cooperation. We identify where such solutions are being discussed in the framework of the G20 such as the G20 voluntary high-level Principles for Financial Institution and Corporate Transition to ensure globally consistent and comparable disclosure standards – addressing legislative barriers, or the G20 Technical Assistance Action Plan to create an ecosystem of capacity-building initiatives encompassing a series of advisory, operational, and technical programs – addressing skills-related barriers. The brief underlines that further efforts are still warranted to ensure effective implementation of the G20 recommendations/tools. The brief also goes beyond G20 existing initiatives and offers some additional solutions to further address the identified barriers such as agreeing on clear, science-based and interoperable taxonomies - to address legislative barriers, and develop market-based solutions, such as green bonds and other financial instruments, to incentivise investment in green projects – and address operational barriers. |
| Keywords: | sustainable finance, macroeconomic enabling factors, green transition, investment, green skills. |
| JEL: | E61 G28 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:euf:ecobri:083 |
| By: | Thibault Deletombe (TECH ECO (ex-ITESE) - Institut Technico-Economie - CEA-DES (ex-DEN) - CEA-Direction des Energies (ex-Direction de l'Energie Nucléaire) - CEA - Commissariat à l'énergie atomique et aux énergies alternatives - Université Paris-Saclay); Hyun-Jin Julie Yu (TECH ECO (ex-ITESE) - Institut Technico-Economie - CEA-DES (ex-DEN) - CEA-Direction des Energies (ex-Direction de l'Energie Nucléaire) - CEA - Commissariat à l'énergie atomique et aux énergies alternatives - Université Paris-Saclay); Patrice Geoffron (Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres) |
| Abstract: | In this paper, we investigate the trade-off between resiliency and competitiveness to propose a coherent supply strategy for solar PV in France. Such a dilemma is steered by various uncertainty sources (environmental, technological, market, etc.) that we cannot forecast objectively over the long term and whose probability measures are unknown. Therefore, we build a framework based on Knightian uncertainty to evaluate the different investment schemes and configurations for the supply of solar PV. In particular, three supply sources are considered: import, storage, and domestic manufacturing. Each investment scheme is assessed through its net present value in the different states of the world that occurs. In particular, the benefits of maintaining some domestic manufacturing capacity to foster innovation and pave the way for future competitiveness are taken into account. |
| Date: | 2025–06–15 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:cea-05293380 |
| By: | Euston Quah (Economics, School of Social Sciences, Nanyang Technological University); Wai Mun Chia (Economics, School of Social Sciences, Nanyang Technological University); Yeow Hwee Chua (Economics, School of Social Sciences, Nanyang Technological University); Zach Lee (Economics, School of Social Sciences, Nanyang Technological University); Jun Rui Tan (Economics, School of Social Sciences, Nanyang Technological University) |
| Abstract: | ASEAN Green Future is a multi-year regional research project that involves the UN Sustainable Development Solutions Network (SDSN), Climateworks Centre and nine country teams from leading universities and think tanks across Southeast Asia (Cambodia, Indoesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietname). The researchers undertake quantitative and qualitative climate policy analysis and develop net zero pathways to inform policy recommendations and support the strategice foresight of policy makers. The Phase 1 country reports priorities and actions to date, and key techology and policy opportunities to further advance domestic climate action. The Phase 1 regional report positions Southeast Asia's low carbo transition pathways within a global context using the country reports and other studies. This series of reports, produced througha synthesis of existing research and knowledge, builds the case for advancing the region's climate agenda. Phase 2 of the ASEAN Green Future project uses modelling to quantitatively assess the different decarbonisation pathways for Southeast Asia. |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:nan:wpaper:2501 |
| By: | D\'avid Csercsik; Mih\'aly Andr\'as V\'aghy |
| Abstract: | In a recent publication, using a simple two-period model, which is already capable to capture essential non-convex multiperiod bids, Richstein et al. have shown that in the case of optimal bidding, multi-part bidding always ensures a higher expected profit for the bidder, compared to simple bidding and block-bidding. The model proposed in their analysis assumes a uniform distribution of the market-clearing prices in both periods. In this paper, we study how the conclusions of the analysis are affected, if a very simple, symmetric, stepwise-constant but non-uniform distribution is assumed in the case of the market-clearing price. We show that the results of Richstein et al. also hold in this case. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.07025 |
| By: | Catherine Haeck; Martino Pelli; Charles Séguin; Ana Catherina Ismachowiez Mamber |
| Abstract: | Emissions and atmospheric pollution concentrations in Quebec and Canada have generally declined since the early 2000s. However, fine particulate matter has decreased less than other pollutants, and the recent rise in wildfires raises concerns about a resurgence, with negative impacts particularly on young people. In this study, the authors assess the effects of ambient fine particulate matter concentrations on the cognitive and behavioral development of Canadian children aged 4 and 5. Although scores on certain tests are negatively associated with exposure to fine particulate matter, these associations remain modest and statistically difficult to detect. Les émissions et les concentrations de pollution atmosphérique au Québec et au Canada ont généralement diminué depuis le début des années 2000. Les particules fines ont toutefois enregistré un recul inférieur à ceux d’autres polluants, et l’augmentation récente des feux de forêt fait craindre un retour à la hausse, avec des impacts négatifs, notamment sur les jeunes. Dans cette étude, les auteurs examinent les répercussions des concentrations atmosphériques de particules fines sur le développement cognitif et comportemental des enfants de 4 et 5 ans au Canada. Bien que les scores à certains tests soient négativement associés à l’exposition aux particules fines, les associations demeurent modestes et difficiles à détecter statistiquement. |
| Keywords: | Air pollution, Fine particulate matter (PM2.5), Cognitive development, Behavioral development, Pollution atmosphérique, Particules fines, Développement cognitif, Développement comportemental |
| Date: | 2025–10–07 |
| URL: | https://d.repec.org/n?u=RePEc:cir:cirpro:2025rp-22 |
| By: | Yousef Adeli Sadabad; Mohammad Reza Hesamzadeh; Gyorgy Dan; Matin Bagherpour; Darryl R. Biggar |
| Abstract: | The System Price (SP) of the Nordic electricity market serves as a key reference for financial hedge contracts such as Electricity Price Area Differentials (EPADs) and other risk management instruments. Therefore, the identification of drivers and the accurate forecasting of SP are essential for market participants to design effective hedging strategies. This paper develops a systematic framework that combines interpretable drivers analysis with robust forecasting methods. It proposes an interpretable feature engineering algorithm to identify the main drivers of the Nordic SP based on a novel combination of K-means clustering, Multiple Seasonal-Trend Decomposition (MSTD), and Seasonal Autoregressive Integrated Moving Average (SARIMA) model. Then, it applies principal component analysis (PCA) to the identified data matrix, which is adapted to the downstream task of price forecasting to mitigate the issue of imperfect multicollinearity in the data. Finally, we propose a multi-forecast selection-shrinkage algorithm for Nordic SP forecasting, which selects a subset of complementary forecast models based on their bias-variance tradeoff at the ensemble level and then computes the optimal weights for the retained forecast models to minimize the error variance of the combined forecast. Using historical data from the Nordic electricity market, we demonstrate that the proposed approach outperforms individual input models uniformly, robustly, and significantly, while maintaining a comparable computational cost. Notably, our systematic framework produces superior results using simple input models, outperforming the state-of-the-art Temporal Fusion Transformer (TFT). Furthermore, we show that our approach also exceeds the performance of several well-established practical forecast combination methods. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.18887 |
| By: | Harald Mayr; Mateus Souza |
| Abstract: | We leverage quasi-experimental variation to study how group size influences free-riding behavior within a high-expense environment. When buildings lack apartment-specific heat meters, tenants use simple heuristics to split a common bill. We estimate that the staggered rollout of a corrective technology, "submetering, " reduces heating expenses by 17%, on average. Machine learning techniques uncover substantial heterogeneity, consistent with strategic exit of free-riders and coordination failures in large buildings. Tenants in smaller buildings show minimal response and are surprisingly price elastic. Only a minority of households exploits the free-riding incentives. Targeted submetering policies can be much more cost-effective than universal mandates. |
| Keywords: | free-riding, submetering, individual billing, heating energy, tragedy of the commons, welfare |
| JEL: | D62 Q41 Q52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12185 |
| By: | Hasselbalch, Jacob; Larsen, Mathias |
| Abstract: | When imagining how a green transition can take place, the relationship between economic growth and environmental sustainability is commonly viewed in two ways: As ‘green growth, ’ where the two can be mutually supporting, and as ‘degrowth, ’ where they cannot. The two are considered mutually exclusive, internally coherent, and competing eco-political paradigms. Here, we conceptually analyze the literature and map standpoints within the two positions along nine dimensions covering national institutions, world order, and scientific cosmology. We find that there are substantial disagreements within as well as agreements between green growth and degrowth. In consequence, we argue that the literature is caught in a false binary. To constructively move the debate forward, we propose giving up the paradigmatic and polarized approach and instead embracing a multidimensional plurality of imagined growth futures. |
| Keywords: | green growth; degrowth; post-growth; imaginaries; paradigms |
| JEL: | J1 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129714 |
| By: | Zoltan Bartha |
| Abstract: | With rising concerns about climate change, the issue of green growth have been growing in importance. The aim of this study is to establish a measurement method for green growth, and to identify the best performing countries in this field. The Future, Outside, and Inside (FOI) development model was used to measure the performance of the 38 OECD countries. Based on their 2019-20 scores, the countries that are top performers in green growth are the members of the so called Welfare-participatory cluster (Austria, Denmark, Finland, Germany, Ireland, Isra-el, New Zealand, Norway, Sweden), and two outliers (Iceland, and Luxembourg). |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.02367 |
| By: | Giuseppe Pagano Giorgianni |
| Abstract: | This paper examines how natural gas price shocks affect Italian firms' pricing decisions and inflation expectations using quarterly survey data from the Bank of Italy's Survey on Inflation and Growth Expectations (SIGE) spanning 1999Q4-2025Q2. We identify natural gas price shocks through a Bayesian VAR with sign and zero restrictions. Our findings reveal that these shocks are a primary driver of firms' inflation expectations, particularly during the post-COVID period (2021-2023) when supply disruptions following Russia's invasion of Ukraine generated unprecedented price pressures. We then estimate a larger BVAR incorporating firm-level price setting variables and macro aggregates, documenting that gas price shocks generate persistent increases in both firms' current and expected prices, alongside elevated inflation uncertainty. We uncover substantial non-linearities using state-dependent local projections: under high uncertainty, firms successfully pass through cost increases to consumers, maintaining elevated prices; under low uncertainty, recessionary effects dominate, causing firms to reduce prices below baseline. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.03792 |
| By: | Rym Aloui (Université Lumière Lyon 2, CNRS, Université Jean Monnet Saint Etienne, EMLyon Business School, GATE, 69007, Lyon, France); Hafedh Bouakez (HEC Montréal, 3000 Côte-Sainte-Catherine, Montréal, Québec, Canada) |
| Abstract: | We derive the (second-best) optimal long-run carbon tax in a polluted economy with preexisting tax distortions, where labor and capital income taxes adjust endogenously to changes in the ratio of public debt to GDP via pre-established fiscal rules, and sovereign debt carries default risk. Relative to the no-climate-policy scenario, the welfare-maximizing carbon tax lowers the debt-to-GDP ratio as well as labor and capital income taxes, while raising consumption and GDP. The strength of these effects depends on the aggressiveness of the tax rules and on the initial level of public debt. When initial debt is low, the optimal carbon tax and the resulting increase in consumption, GDP, and welfare rise with the aggressiveness of the tax rules. When initial debt is high, however, this monotonic relationship breaks down, and the highest welfare gain from the optimal carbon levy is attained when the tax rules are moderately aggressive. This result hinges crucially on the convexity of the default probability with respect to the ratio of public debt to GDP. |
| Keywords: | Distortionary Taxes, Optimal Carbon Tax, Public Debt, Revenue Recycling, Second Best, Sovereign Default |
| JEL: | E62 H21 Q56 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:gat:wpaper:2519 |
| By: | Christian de Boissieu |
| Abstract: | Dans un contexte devenu plus incertain et plus compliqué à la suite des décisions de la nouvelle administration américaine, les impératifs de la lutte contre le changement climatique et de la transition énergétique et écologique demeurent. Les banques centrales peuvent et doivent apporter leur contribution à cette transition, en « verdissant », dans une proportion à définir, la politique monétaire qu’elles mènent. Concrètement, cela veut dire compléter la palette des objectifs de la politique monétaire sans remettre en cause la place accordée aux objectifs prioritaires que sont la stabilité monétaire et la stabilité financière. Les modes d’intervention des banques centrales, qu’il s’agisse du refinancement des banques, d’achats fermes de titres ou des collatéraux acceptés lors d’opérations de prêts, doivent également être modifiés en conséquence. Ce Policy Paper dresse l’état des lieux des débats et des pratiques concernant le verdissement des politiques monétaires. Les comparaisons internationales sont éclairantes, et l’Afrique ne doit pas être oubliée dans ces comparaisons. L’analyse, qui montre l’apport mais aussi les limites de ce verdissement, débouche sur plusieurs recommandations concrètes. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaeco:pp23_25 |
| By: | McLoughlin, Jacob (University of Warwick) |
| Abstract: | In 2019, the Ultra Low Emissions Zone (ULEZ) was implemented in London: a daily charge on all non-compliant cars driven in a specified zone. This zone was expanded in 2021 and again in 2023. I construct a novel dataset on UK house sales, and use a staggered difference-in-differences design to find that the implementation of the ULEZ led house prices in these expansion zones to fall on average by roughly 3-4% over the following year. This corresponds to a windfall loss to the average London homeowner of roughly £25, 000, or half the median annual salary in the region. This result is robust to considerable weakening of the parallel trends assumption. It is also robust to different methods of dealing with spatial spillovers, and I quantify the spillover effects to find that the ULEZ leads prices of houses just outside the region to fall by roughly 2% over a similar time-frame. Beyond two years after implementation, the main negative effect begins to recover, which I justify as a product of asymmetric information transmission. |
| Keywords: | emissions charges ; house prices ; difference-in-differences ; environmental policy ; spatial spillovers JEL classifications: C23 ; Q53 ; Q58 ; R21 ; R31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:wrkesp:86 |
| By: | Yana Kostiuk (University of Pavia); Paola Cerchiello (University of Pavia); Arianna Agosto (University of Pavia) |
| Abstract: | In this paper, we analyse the immediate market response of the coal industry to the onset of Russia’s full-scale invasion of Ukraine. We apply the event study methodology to identify the impact of the war on the coal firms’ share prices. Subsequently, we use a Time-Varying Parameter Vector Auto Regressive (TVP-VAR) approach to analyse changes in market interconnectedness. The results reveal significant cumulative average abnormal returns (CAARs) for the Titans sub-sample, indicating that coal-related firms headquartered in the United States, the UK, Canada, and Australia outperformed the stock market on a cumulative basis after the outbreak of the war. Our findings also show that the onset of the Russo-Ukrainian war resulted in an approximately 11% increase in average interconnectedness among the defined groups and led to shifts in their roles as transmitters and receivers. Specifically, while Europe and the Titans transitioned from net transmitters to net receivers, East Asia became a major net transmitter of shock. |
| Keywords: | Russo-Ukrainian war, Event study, Coal Markets |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:pav:demwpp:demwp0229 |