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on Energy Economics |
| By: | Melita Van Steenberghe; Marten Ovaere (-) |
| Abstract: | Inefficient market responses to renewable support schemes can increase costs and undermine decarbonization efforts. We study two-way Contracts for Difference (CfDs), which stabilize generator revenues but may distort generation incentives. Exploiting variation across support schemes and CfD design rules for offshore wind farms in Great Britain, we apply difference-in-differences to hourly unit-level data to provide the first ex-post evidence on CfDinduced inefficiencies in day-ahead and balancing markets. Market-based wind farms reduced output by 69-83% during negative-price hours; CfD-backed units showed a similar reduction when payments were suspended after six or more consecutive negative-price hours. CfDs also distort the balancing market: generators curtail output by 28% less when they receive payments that cover the negative imbalance price; when they must repay, they curtail 19% more when the imbalance price drops below the payment. From 2019–2024, day-ahead market distortions resulted in 2.9 TWh excess generation, costing £176 million in support. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:rug:rugwps:25/1124 |
| By: | Todd D. Gerarden; Bryan K. Bollinger; Kenneth Gillingham; Daniel Xu |
| Abstract: | This study examines the effects of tariffs imposed by the U.S. on imported solar panels. We first provide clear evidence that tariff-exposed firms shifted production to locations that did not face tariffs, and that domestic prices increased relative to other markets. We then develop a structural model to analyze welfare effects. We find that the tariffs generated modest gains for domestic manufacturers and for government revenues, but larger losses in domestic consumer surplus and environmental benefits, thereby reducing domestic welfare. Furthermore, the tariffs reduced domestic solar industry employment and wages. By contrast, subsidizing solar panel manufacturing could increase domestic production, employment, and welfare. |
| JEL: | F13 Q48 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34401 |
| By: | Oliver Ruhnau (Institute of Energy Economics at the University of Cologne (EWI)); Paul Lehmann (University of Leipzig, Faculty of Economics and Management Service) |
| Abstract: | Many administrations, including the EU and the US, have introduced substantial support policies for electrolytic hydrogen. However, interactions of such policies with existing climate policies remain poorly understood. Here, we combine an analytical and a numerical model to investigate the combination of emissions trading, renewable electricity subsidies, and electrolytic hydrogen support. We find that supporting hydrogen reduces renewable subsidies, while emissions prices increase unless the operation of hydrogen electrolysis flexibly responds to electricity prices. Even without explicit regulations on electricity sourcing, the increase in electricity demand for hydrogen production is almost entirely covered by additional renewable electricity generation. If subsidized hydrogen is explicitly required to be matched with additional renewable electricity (“green hydrogen”), the amounts of emissions and renewable electricity remain constant, but the prices of emissions and electricity decline, and support costs for renewable electricity and hydrogen increase. Overall, matching requirements inflate the hydrogen-policy-related system costs by 2–7%. We conclude that promoting the price-responsiveness of hydrogen electrolysis offers greater potential for synergies with emissions trading and renewable electricity subsidies than enforcing strict matching requirements. |
| Keywords: | Environmental policy; electrolytic hydrogen; emissions trading; renewable energy; energy markets; welfare and redistribution; demand-side flexibility |
| JEL: | C61 D47 Q21 Q28 Q41 Q48 |
| Date: | 2025–10–27 |
| URL: | https://d.repec.org/n?u=RePEc:ris:ewikln:021699 |
| By: | Ghosn, Fadi; Zreik, Mohamad; Awad, Ghina; Karouni, George |
| Abstract: | In the evolving landscape of global energy dynamics, Malaysia stands as a pivotal example of a nation actively transitioning towards renewable energy and sustainable development. This paper provides a comprehensive analysis of Malaysia's energy sector transformation, underpinned by the government's commitment to reducing carbon emissions and mitigating the impacts of climate change. The objective of this research is to delve into the intricacies, opportunities, and challenges of steering Malaysia towards a greener future, with a particular focus on the shift from reliance on fossil fuels to the adoption of renewable energy sources such as solar, wind, and biomass. Employing a mixed-method approach, this study synthesizes existing literature, policy documents, and case studies to examine the current state and historical context of energy use in Malaysia, analyze government initiatives and policy frameworks, explore technological advancements, and assess the environmental and socioeconomic impacts of the energy transition. Results indicate that despite facing challenges such as financial investment, technological advancement, and public acceptance, collaborative efforts between the government, private sector, and communities have led to significant progress in promoting renewable energy. The paper concludes that Malaysia's energy transition represents a critical step towards achieving a balance between economic growth and environmental preservation, setting a precedent for sustainable development in the Southeast Asian region. This transition is not only essential for climate change mitigation but also presents opportunities for economic diversification, energy security, and social inclusivity. The study ultimately calls for continued innovation, supportive policies, and international cooperation to overcome remaining barriers and fully realize the potential of renewable energy in Malaysia. |
| Keywords: | Malaysia, Renewable Energy, Sustainable Development, Energy Security, Climate Change Mitigation. |
| JEL: | O1 O13 |
| Date: | 2024–01–17 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126301 |
| By: | Toker Doganoglu (Department of Economics, University of Wuerzburg); Lukasz Grzybowski (Faculty of Economic Sciences, University of Warsaw); Frank Verboven (KU Leuven and CEPR (London), Naamsestraat 69, 3000 Leuven, Belgium) |
| Abstract: | This paper examines the impact of the 2021 revision of the EU energy labeling regulation on the energy efficiency of refrigerators sold in Belgium, France, Germany, and Poland between 2019 and 2022. We analyze detailed product-level sales data to assess whether the introduction of the new labeling system (the New EU Energy Label 2021) improved the energy performance of products available on the market. The results reveal substantial cross-country differences in sales-weighted energy consumption: Germany and Belgium exhibit significantly lower average energy use, reflecting differences in product portfolios and consumer preferences, while consumers in France and Poland tend to purchase less efficient models. After controlling for refrigerator characteristics, average energy consumption declined by 2.8% in France, 3.4% in Belgium, and 3.5% in both Germany and Poland between March 2021 and December 2022. We further estimate a nested logit demand model incorporating both energy labels and the discounted ten-year cost of electricity consumption. The results indicate that, except in Poland, consumers tend to undervalue future energy costs under both the old and new labeling regimes. The estimated willingness to pay (WTP) for labels varies across countries, with some evidence of overvaluation for specific efficiency classes. Using the model, we conduct counterfactual simulations to assess the effects of alternative policy scenarios. The simulations suggest that the 2021 reform led to measurable improvements in the average energy efficiency of refrigerators sold in the EU market. |
| Keywords: | Energy Efficiency, EU Energy Label, Nested Logit |
| JEL: | D12 L51 Q58 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:war:wpaper:2025-26 |
| By: | Ashutosh Yadav (Patna, India); Bright Akwasi Gyamfi (Udaipur, India); Simplice A. Asongu (Johannesburg, South Africa); Deepak Kumar Behera (Patna, India) |
| Abstract: | In the context of sustainable development, this study investigates the intricate dynamics among good governance, renewable energy investment, and green finance in BRICS nations. The aim of the study is to assess how green finance and governance effectiveness moderate the impact of renewable energy investment on CO2 emissions. Utilizing the Cross-Sectional Autoregressive Distributed Lag (CS-ARDL) model, a meticulous analysis spanning two decades was conducted to unravel the relationships among key variables and CO2 emissions. The findings underscore a nuanced interplay where renewable energy investments, synergized with robust governance and strategic green finance, significantly mitigate CO2 emissions, contributing to sustainable economic development. However, the study reveals non-linear relationships, highlighting the necessity for optimal allocation and strategic planning to maximize environmental benefits. In the short-run, a government effectiveness policy threshold that should be attained in order for renewable energy investment to reduce CO2 emissions is provided. In the long-run, the negative responsiveness of CO2 emissions to renewable energy investment is further consolidated by green finance. Moreover, enhancing renewable energy investment in the long run is positive for environmental sustainability. It follows that policy makers should tailor policies aimed at enhancing renewable energy investment in the long-run as well as complementing renewable energy investment with green finance in the long-run in order to ensure environmental sustainability by means of reducing CO2 emissions. Policymakers in BRICS nations are urged to strengthen governance structures, promote renewable energy investments, leverage green finance, foster public-private partnerships, adopt a holistic approach, and address non-linear effects to accelerate the transition to a low-carbon economy. |
| Keywords: | Sustainable Development, Governance, Renewable Energy Investment, BRICS and CS-ARDL |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:dbm:wpaper:24/014 |
| By: | CHENG, Haitao; YANASE, Akihiko |
| Abstract: | Article 6 of the Paris Agreement seeks to foster international cooperation between developed and developing countries in curbing global carbon emissions. Central to this provision is the facilitation of international transfers of green technology and carbon mitigation outcomes. Through this mechanism, developed countries transfer their green technology to developing countries to help them mitigate emissions. In return, developing countries transfer emission permits equivalent to the mitigated outcomes to developed countries to alleviate their abatement burden. This study employs an international oligopoly model to explore the implications of green technology transfer (GTT) and international transfer of mitigated outcomes (ITMO) on welfare, emission permit issuance and global emissions. We find that once successfully implemented, these transfers consistently improve global welfare. Moreover, when permits are determined non-cooperatively by the countries, the implementation of GTT and ITMO leads to a reduction in global emissions. |
| Keywords: | Green technology transfer, Internationally transferred mitigation outcomes, Permit markets, International coordination, Paris Agreement |
| JEL: | F12 F18 H23 Q54 |
| Date: | 2025–10–16 |
| URL: | https://d.repec.org/n?u=RePEc:hit:hiasdp:hias-e-154 |
| By: | Kenneth T. Gillingham; Matthew Kotchen; James A. Levinsohn; Barry J. Nalebuff |
| Abstract: | We study how Elon Musk's polarizing and partisan actions have impacted Tesla vehicle sales in the United States. Using county-level, monthly data on new vehicle registrations, we leverage how changes in vehicle sales over time diverge across counties with differing shares of Democratic and Republican voters. Without the Musk partisan effect, Tesla sales between October 2022 and April 2025 would have been 67-83% higher, equivalent to 1-1.26 million more vehicles. Musk’s partisan activities also increased the sales of other automakers' electric and hybrid vehicles 17-22% because of substitution, and undermined California’s progress in meeting its zero-emissions vehicle target. |
| JEL: | G3 Q48 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34413 |
| By: | Leonard Gregor; Justus Haucap |
| Abstract: | This paper evaluates the temporary reduction in energy taxes implemented by the German government between June and September 2022. We use pricing and quantity data from the wholesale market for crude oil, gasoline, and diesel and find an average pass through of 80% to 85% of the tax cut, which amounts to a 3.7 cents per liter increase in wholesale prices net of tax. We do, however, document significant treatment heterogeneity over time and across regions within Germany. When weighting price effects by quantities sold, the estimated pass-through of the tax cut decreases to about 70% for gasoline and 58% for diesel, suggesting that refinery margins increased significantly during times of higher demand. |
| Keywords: | pass-through, tax reduction, fuel prices, wholesale markets |
| JEL: | H22 L13 L71 Q48 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12214 |
| By: | Cheikh T. Ndour (Dakar, Senegal); Simplice A. Asongu (Johannesburg, South Africa) |
| Abstract: | Purpose – This study examines the relevance of information and communication technologies in the effect of gender economic inclusion on environmental sustainability. Design/methodology/approach – The focus is on a panel of 42 sub-Saharan African countries over the period 2005-2020. The empirical evidence is based on generalized method of moments. The environmental sustainability indicator used is CO2 emissions per capita. Two indicators of women's economic inclusion are considered: women's labour force participation and women's unemployment. The chosen ICT indicators are mobile phone penetration, internet penetration and fixed broadband subscriptions. Findings – The results show that: (i) fixed broadband subscriptions represent the most relevant ICT moderator of gender economic inclusion for an effect on CO2 emissions; (ii) negative net effects are apparent for the most part with fixed broadband subscriptions (iii) both positive ICT thresholds (i.e., critical levels for complementary policies) and negative ICT thresholds (i.e., minimum ICT levels for negative net effects) are provided; (iv) ICT synergy effects are apparent for female unemployment, but not for female employment. In general, the joint effect of ICTs or their synergies and economic inclusion should be a concern for policymakers in order to better ensure sustainable development. Moreover, the relevant ICT policy thresholds and mobile phone threshold for complementary policy are essential in promoting a green economy. Originality/value –The study complements the extant literature by assessing linkages between information technology, gender economic inclusion and environmental sustainability. |
| Keywords: | ICT, Gender inclusion; Environment sustainability; Sub-Saharan Africa |
| JEL: | C52 O38 O40 O55 P37 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:dbm:wpaper:24/003 |
| By: | Pierre Cotterlaz (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique); Christophe Gouel (UMR PSAE - Paris-Saclay Applied Economics - AgroParisTech - Université Paris-Saclay - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique) |
| Keywords: | Empreinte carbone, France |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05323366 |
| By: | Diana Barro (Ca’ Foscari University of Venice); Marco Corazza (Ca’ Foscari University of Venice); Gianni Filograsso (Ca’ Foscari University of Venice) |
| Abstract: | In this contribution, we discuss how to handle financial and sustainable investment goals, focusing on greenness and ESG features. Sustainable investing has attracted increasing interest with an associated growing commitment to take an active part in investment choices. Among thematic investments, green and energy-related ones have emerged, capturing investors' attention. Non-optimized strategies and traditional portfolio allocation models cannot guarantee the necessary flexibility. To answer this demand, ESG tailored-made allocations should be provided, with the aim of representing the preferences and commitments of investors adequately. This contribution introduces a novel ESG-focused tracking error model to optimize portfolio allocation. We consider two reference benchmarks, accounting for a financial target and an ESG one, respectively. The objective function results in a convex linear combination of the two goals where the parameter λ accounts for the investor's financial and ESG preferences. A symmetric tracking error measure is proposed to replicate the financial benchmark passively, while an asymmetric measure is used to track and possibly outperform the thematic ESG benchmark. Identifying the benchmarks for the two components represents a crucial step and, jointly with the choice of the parameter λ, accounts for the portfolio's overall risk-return and ESG profiles. In the model, the sustainability feature is handled not only with the presence of the ESG benchmark but also with the introduction of dedicated constraints. Namely, a desired minimum level of greenness and a maximum amount of carbon intensity can be accounted for. An application to the EUROSTOXX 600 equity market is presented and discussed for different choices of the parameter λ, representing different sustainability preferences and risk-return profiles. Furthermore, a discussion on the choice of the benchmarks is provided. |
| Keywords: | Tracking Error, Portfolio optimization, Green sustainability, ESG, GAN |
| JEL: | C53 C61 G11 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ven:wpaper:2025:21 |
| By: | Kirui, Oliver K.; Ahmed, Mosab; Raouf, Mariam; Abushama, Hala; Siddig, Khalid |
| Abstract: | This study investigates the determinants of access to safe water and reliable energy for households in Sudan using nationally representative data from a recent labor market survey. The results show that urbanization, education, and wealth significantly enhance the access households have to these essential services, while rural areas and less developed regions, particularly in the Darfur and Kordofan regions, face substantial challenges. Access to reliable energy correlates with better food security and health outcomes within households, and improved access to safe water significantly enhances the health of household members. Policy recommendations supported by these research results include targeted rural infrastructure investments, educational improvements, and regional interventions to address disparities in household access to safe water and reliable energy across Sudan. |
| Keywords: | Sudan; Africa; Northern Africa; capacity development; households; water; energy; food security; health; socioeconomic environment; rural urban relations |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:fpr:ssspwp:22 |
| By: | Catherine Leining (Motu Economic and Public Policy Research); Sasha Maher (Motu Economic and Public Policy Research); Hannah Kotula (Motu Economic and Public Policy Research) |
| Abstract: | Cooperation between countries is key to avoiding the most severe impacts of climate change. Under current policies, the world will face temperatures of 3ºC above pre-industrial levels by 2100. Developing countries hold three quarters of the cost-effective mitigation needed in 2030 under 1.5ºC pathways, but currently lack the capability to make it happen and historically have contributed least to the problem. If higher- and lower-income countries fail to work together to unlock that mitigation, the world will lock in dangerous climate change. Providing conventional climate finance to lower-income countries is crucial but is not the only option – nor has it been sufficient so far. |
| Keywords: | Climate change; emissions trading; carbon markets; Paris Agreement; New Zealand; Article 6; cooperation |
| JEL: | Q54 Q56 Q58 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:mtu:mnotes:note_54 |
| By: | Diana Barro (Ca’ Foscari University of Venice); Oleksandr Castello (Ca’ Foscari University of Venice); Marco Corazza (Ca’ Foscari University of Venice); Martina Nardon (Ca’ Foscari University of Venice) |
| Abstract: | The sustainable energy transition represents a transformative shift in how energy is produced, distributed, and consumed – moving away from fossil fuels toward renewable energy sources. This shift is essential for achieving global decarbonization goals but presents significant challenges for businesses. As firms are compelled to adapt to this evolving regulatory and economic landscape, they become increasingly exposed to transition-related financial risks and uncertainties. This exposure is particularly pronounced for small and medium-sized enterprises (SMEs), which often lack the financial and strategic capacity to manage such transformation effectively, placing their valuations and long-term competitiveness at risk. To facilitate SMEs' transition process, we propose a novel financial tool, termed Transition Risk Impact Swap (TRIS), that leverages the conceptual framework of equity swaps, the use of conventional and sustainability-linked indices as proxies for corporate greenness, and flexible customisation, to enable the hedging of climate transition costs and uncertainty based on SMEs' transition performance. Proposed under both floating-for-floating and fixed-for-floating structures, TRIS allows for positive upfront payments and mitigating basis risk through linkage to observable market indicators, while also offering the flexibility to achieve a zero initial value through appropriately defined spreads, enhancing its marketability. The economic viability and risk-mitigating potential of the TRIS are quantitatively assessed through Historical Bootstrap and Monte Carlo simulations using European market data from STOXX and MSCI index series. The proposed financial instrument offers a scalable mechanism to strategically support firms in initiating or accelerating their climate transition by enhancing financial flexibility, reducing reliance on traditional funding channels, and mitigating the risk of long-term marginalisation or market exclusion. |
| Keywords: | Energy transition risk, Risk mitigation, European listed SMEs, Equity swaps, STOXX Europe 600 and MSCI Europe indices, Historical Bootstrap and Monte Carlo simulations |
| JEL: | G13 G23 C63 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ven:wpaper:2025:23 |
| By: | Kazeem B. Ajide (Lagos, Nigeria); Olorunfemi Y. Alimi (Lagos, Nigeria); Simplice A. Asongu (Johannesburg, South Africa) |
| Abstract: | The research investigates the relationship between intelligence quotient (IQ) and environmental degradation, aiming to understand how cognitive abilities influence environmental outcomes across different nations and time periods. The objective is to examine the impact of intelligence quotient (IQ) on environmental indicators such as carbon emissions, ecological demand, and the Environmental Kuznets Curve (EKC), seeking insights to inform environmental policy and stewardship. The study utilizes statistical techniques including Ordinary Least Squares (OLS), Two Stage Least Squares (2SLS), and Iteratively Weighted Least Squares (IWLS) to analyze data from 147 nations over the years 2000 to 2017. These methods are applied to explore the relationship between IQ and environmental metrics while considering other relevant variables. The findings reveal unexpected positive associations between human intelligence quotient and carbon emissions, as well as ecological demand, challenging conventional notions of "delay discounting." Additionally, variations in the Environmental Kuznets Curve (EKC) hypothesis are identified across different pollutants, highlighting the roles of governance and international commitments in mitigating emissions. The study concludes by advocating for the adoption of a "delay discounting culture" to address environmental challenges effectively. It underscores the complex interactions between intelligence, governance, and population dynamics in shaping environmental outcomes, emphasizing the need for targeted policies to achieve sustainability objectives. |
| Keywords: | Human capital; intelligence quotient; population; output; carbon emission; EKC, World |
| JEL: | C52 O38 O40 Q50 I20 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:dbm:wpaper:24/004 |
| By: | C. LABROUSSE (INSEE); Y. PERDEREAU (PSE) |
| Abstract: | Les effets distributifs de la taxation carbone sont cruciaux pour son acceptabilité politique et dépendent à la fois des inégalités de revenus et de facteurs géographiques. En utilisant des données d’enquêtes et administratives françaises, nous montrons que les ménages ruraux consacrent une part de leur consommation 2, 8 fois plus élevée aux combustibles fossiles que les ménages urbains, et travaillent dans des entreprises qui émettent 2, 7 fois plus de gaz à effet de serre. Nous intégrons ces éléments dans un modèle spatial à agents hétérogènes avec choix endogènes de migration et d’accumulation de richesse. Après une augmentation des taxes carbone, nous estimons que les ménages ruraux subissent des pertes de bien-être 20 % plus élevées que les ménages urbains. Ces pertes sont amplifiées à court terme par une baisse des salaires, mais partiellement compensées à long terme par la migration et la baisse des prix de l'immobilier. Par rapport à des transferts uniformes, cibler à la fois le revenu et la localisation géographique augmente les gains de bien-être médians d’un tiers de plus que ceux obtenus par le seul ciblage du revenu. Nous concluons que les mécanismes de taxation du carbone doivent tenir compte des disparités spatiales afin d’améliorer leur acceptabilité politique. |
| Keywords: | Taxe carbone, énergie, politique fiscale, inégalités, géographie, dynamiques spatiales, migration |
| JEL: | C61 E62 H23 Q43 Q58 R13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:nse:doctra:2025-21 |
| By: | Christopher Hoy (Melbourne Institute of Applied Economic and Social Research); Yeon Soo Kim; Saad Imtiaz; Ana Maria Rojas Mendez; Moritz Meyer; Gustavo Javier Canavire Bacarreza; Lydia Kim; William Hutchins Seitz; Imane Helmy; Ikuko Uochi; Sering Touray; Juni Singh; Bambang Suharnoko Sjahrir; Utz Pape; Alan Fuchs; Trang Van Nguyen; Defne Gencer; Min A Lee; Akiko Sagesaka; Ivette Contreras |
| Abstract: | Public opposition is a major barrier to economic reforms, such as subsidy removal.Using multilayered, randomized survey experiments with 10, 000 respondents across ten surveys in five countries, this paper shows that opposition to energy price reforms is shaped more by design and communication than by cost. Around 70 percent of respondents strongly opposed a 100 percent immediate price increase, but resistance was nearly halved when reforms were phased in, targeted at high-energy consumers, or paired with compensation. Informational messages also reduced opposition by as much as halving the price increase. An expert prediction survey revealed systematic misunderstandings: specialists underestimated the influence of design features and greatly misperceived coping strategies and compensation preferences. These findings demonstrate that behavioral biases—such as present bias, loss aversion, and fairness heuristics—are as influential as economic costs in shaping people’s opposition to economic reforms, underscoring the importance of careful design and communication of politically sensitive reforms. |
| Keywords: | Political Economy, Public Finance, Subsidies, Climate Change, Energy Policy |
| JEL: | D04 D80 D90 H20 H30 H50 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iae:iaewps:wp2025n14 |
| By: | Ana Fontoura Gouveia; João Carvalho |
| Abstract: | Several countries established ambitious climate goals to tackle the climate emergency. To fulfill these goals, bold climate policies are needed, upholding the political commitments and effectively addressing climate change. Given that social resistance is seen as a deterrent for action, this research provides a contribution to policy makers wanting to boost support for climate policies. Relying on randomized control trials over different design options within the same climate instrument – including green taxes, subsidies and regulations –, we show the importance of design features, namely relating to funding options and the overall tax burden. We also show that individual perceptions on climate change and climate policies are significantly associated with support, providing scope for government action also in this front. Taken together, these factors can be enough to sustain a supporting majority for all policies considered. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ptu:wpaper:w202513 |
| By: | Svenja Flechtner (Siegen University); Martin Middelanis (Freie Universitat Berlin) |
| Abstract: | The relationship between income inequality and carbon emissions remains ambiguous in both theory and evidence. A declining–marginal–propensity-to-emit (MPE) framework predicts a short-term trade-off between reducing inequality and limiting emissions, whereas political-economy perspectives suggest that higher structural inequality increases carbon output. Empirical studies often report negative associations, but these frequently conflate within-country dynamics with cross-country differences. We argue that distinguishing these levels can reconcile the evidence: the MPE mechanism primarily operates within countries over time, while political-economy channels shape structural, cross-country variation. Using data from the World Inequality Database, we conduct two complementary analyses. First, simulations on a global sample of 162 countries from 2019 test whether shifts in national income distributions alter carbon emissions at constant GDP, isolating the within-country MPE effect. Second, cross-sectional panel analyses examine whether households at equivalent income levels generate more emissions in more unequal societies. Our results show a modest within-country trade-off â۠most pronounced in low- and middle-income countries and when the income share of the middle class rises â۠alongside a cross-country pattern in which higher inequality is systematically associated with higher emissions across the income distribution. These findings highlight the coexistence of opposing dynamics and underscore that climate policy should balance short-term trade-offs against the structural benefits of reducing inequality. |
| Keywords: | Inequality, Carbon emissions, Climate change, Marginal propensity to emit, Redistribution |
| JEL: | D31 Q53 Q54 Q56 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:inq:inqwps:ecineq2025-687 |
| By: | Bright A. Gyamfi (Udaipur, India); Divine Q. Agozie (Accra, Ghana); Ernest B. Ali (Accra, Ghana); Festus V. Bekun (Istanbul, Turkey); Simplice A. Asongu (Johannesburg, South Africa) |
| Abstract: | As the environmental sustainability effectiveness of various political systems is taken into consideration, it is doubtful as to whether the presumption of the overall efficiency of democracy can be sustained in global governance architecture. The effectiveness of autocracies and democracies (i.e., governance indicators are compared in the present study) with reference to strengths and weaknesses in environmental objectives. This analysis explores the effect of autocracy, democracy, as well as the trend of globalization on CO2 emissions for open and closed economies from 1990 to 2020. Crucial indicators such as economic growth, renewable energy and non-renewable energy are controlled for while examining the roles of economic expansion on the disaggregated energy consumption portfolios for both open and closed economies. The empirical analysis revealed some insightful results. First, for the open economies, with the expectation of non-renewable energy which show a positive significant impact on emissions, all variables show a negative effect on emissions. Furthermore, the closed economies result indicate that, apart from renewable energy which has a negative relationship with emissions, all the variables including the interaction terms have a positive relation with emissions. However, an inverted U-shaped environmental Kuznets curve (EKC) hypothesis was validated for both economies. |
| Keywords: | Open economies, closed economies, democracy, autocracy, Environmental Kuznets Curve, globalization index, environmental sustainability. |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:dbm:wpaper:24/018 |
| By: | Ayoki, Milton |
| Abstract: | The diffusion of general-purpose artificial intelligence (AI) systems is collapsing the marginal cost of cognition, coordination, and capital formation. This abundance of intelligence is simultaneously re-pricing the three residual scarcities that still constrain human welfare: atmospheric carbon space, human labor hours, and irreversible time. Using a unified production–climate–welfare model, we show that (i) AI accelerates decarbonization by driving the cost curve of clean technologies below that of fossil fuels; (ii) labor markets bifurcate into a vanishing low-skill wage sector and an expanding high-skill rent sector, generating a transfer problem that can only be solved by AI dividends; and (iii) the option value of future consumption rises as AI compresses the calendar time needed to unlock large-scale decarbonization, longevity, and existential-risk mitigation. The conjunction of these effects drives the Ramsey rule for optimal climate policy to its mathematical limit: the social discount rate (SDR) must converge to zero. We provide empirical calibration using the latest IPCC scenarios, large-language-model energy-intensity data, and labor-share forecasts through 2100. A zero SDR reconciles inter-generational equity with intra-generational efficiency and unlocks a portfolio of “long-horizon public goods” (LHPGs)—from atmospheric restoration to asteroid defense—that markets at positive discount rates chronically under-supply. |
| Keywords: | Artificial intelligence, abundance; scarcity; social discount rate; zero discounting; inter-generational equity; labor-market bifurcation; AI dividend; long-horizon public goods; existential risk, decarbonization; marginal cost of cognition; Ramsey rule; option value of time. |
| JEL: | D63 E24 H23 O33 Q54 Q55 |
| Date: | 2025–09–03 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126550 |
| By: | Galle, Johannes (Potsdam Institute for Climate Impact Research); Oliveira, Rodrigo (UNU-WIDER); Overbeck, Daniel (National University of Singapore); Riedel, Nadine (University of Münster); Severnini, Edson (Boston College) |
| Abstract: | This paper provides the first comprehensive evidence on how firms in emerging economies respond to carbon taxation. Using detailed administrative data, we study the announcement and implementation of South Africa’s 2019 carbon tax—a potential trailblazer for other developing countries with limited state capacity amid the global expansion of carbon pricing. Contrary to concerns that carbon taxes might hinder growth or employment, we find no negative effects on firm performance or jobs. Firms facing higher effective tax rates increased activity following the tax’s announcement, four years before implementation, likely reflecting the resolution of regulatory uncertainty and efforts to mitigate stranded asset costs. While we find no measurable reduction in emissions—likely due to this anticipatory behavior—our results suggest that carbon taxation can be implemented without harming economic outcomes, even in the short term and in low- and middle-income settings. |
| Keywords: | firm performance, carbon tax, carbon pricing, employment outcomes |
| JEL: | H23 Q52 Q58 O13 O55 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18212 |
| By: | Jan-Tjibbe Steeman (Directorate-General for Research and Innovation, European Commission); Alexandr Hobza (Directorate-General for Research and Innovation, European Commission); Erik Canton (Directorate-General for Research and Innovation, European Commission); Valentina Di Girolamo (Directorate-General for Research and Innovation, European Commission); Alessio Mitra (Directorate-General for Research and Innovation, European Commission); Océane Peiffer-Smadja (Directorate-General for Research and Innovation, European Commission); Julien Ravet (Directorate-General for Research and Innovation, European Commission) |
| Abstract: | This paper provides a rationale on why investing in research and innovation (R&I) matters for Europe. It describes the potential of R&I to strengthen EU's competitiveness, support a green and sustainable future, and build a fair European society. EU's R&I performance is presented, including R&I investments compared to global peers, EU's main strengths and weaknesses, and EU’s added value. The paper also highlights the importance of well-designed R&I policies, integral to the overall policy design, and provides pathways to strengthen current public and private efforts to reap the full potential of R&I. |
| Keywords: | Research and innovation, competitiveness, green economy, fair society, EU policy, public investment, private investment |
| JEL: | O32 O33 Q55 Q56 I28 |
| Date: | 2024–03 |
| URL: | https://d.repec.org/n?u=RePEc:eug:wpaper:ki-bd-24-002-en-n |
| By: | Dotti, Nicola Francesco (Directorate-General for Research and Innovation, European Commission); Canton, Erik (Directorate-General for Research and Innovation, European Commission); Benoit, Florence (Directorate-General for Research and Innovation, European Commission); Cavicchi, Bianca (Directorate-General for Research and Innovation, European Commission); Di Girolamo, Valentina (Directorate-General for Research and Innovation, European Commission); Ravet, Julien (Directorate-General for Research and Innovation, European Commission); Steeman, Jan-Tjibbe (Directorate-General for Research and Innovation, European Commission) |
| Abstract: | This literature review provides short summaries of recent scientific articles discussing the challenges of 'greening research'. While science has played a fundamental role in understanding climate change, today's most pressing societal challenge, research organisations and activities are also called to 'greening' themselves, reducing their environmental footprint and promoting more sustainable practices. This multifaceted challenge is addressed by an emerging literature identifying the carbon footprint of university campuses and research infrastructure, discussing the main challenges such as research-related travelling. This review aims to discuss the emerging practices contributing to promoting environmental sustainability for research activities. |
| Keywords: | Greening research, decarbonisation, sustainability, climate change, research organisations |
| JEL: | Q56 Q58 O32 O38 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:eug:wpaper:ki-01-25-022-en-n |
| By: | Soriano, Carles |
| Abstract: | Market and planned economies are considered antagonistic types of material production systems in modern society. Since they are thermodynamic systems, the entropy and energy requirements of each system can be estimated based on its specific characteristics and dynamics. The results show that the entropy and energy requirements of a market economy are much higher than those of a planned economy. This is due to competition for profit, the driving mechanism of market dynamics and self-organization, which is absent in a planned economy. Thus, the entropy and energy needs of a planned economy approach the minimum magnitudes required of a modern economic system that is irreversibly driven to equilibrium with an external reservoir supplying low-entropy energy. Dissipative systems on Earth absorb low-entropy energy from an external source, using it to gain internal order and stability while emitting high-entropy energy. Conversely, a market economy increases its internal entropy during energy exchange with an external reservoir. Large internal entropy in a market economy does not result from summing the entropy of individual capitals. Rather, it results from self-similar dynamics driven by competition for profit, which manifests as larger system property magnitudes. |
| Keywords: | capital, competition, entropy, probabilistics, profit, self-similarity |
| JEL: | P51 |
| Date: | 2025–10–11 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126451 |
| By: | Elvis K. Ofori (Taiyuan, China); Festus V. Bekun (Istanbul, Turkey); Bright A. Gyamfi (Istanbul, Turkey); Ali E. Baba (Yekaterinburg, Russia); Stephen T. Onifade (Konya, Turkey); Simplice A. Asongu (Johannesburg, South Africa) |
| Abstract: | The current study thus explored the impact of technological innovation and trade openness on clean energy while accounting for economic growth, access to electricity, pollution, industrial restructuring, and urbanization using data from 1990 to 2020 for both the MINT and BRICS economies. A series of test were performed for a robust analysis using second generation econometrics approaches before proceeding to investigate the long-run linkages between renewable energy and the duo of innovation and trade using the Prais-Winsten regression model with panel-corrected standard errors (PCSE) while the Driscoll-Kraay standard errors test was applied for robustness checks. The results, firstly confirm the presence of heterogeneity, cross-sectional dependence, and cointegration among the selected variables. Secondly, technological innovation as a renewable energy determinant demonstrated negative elasticities in both BRICS countries and the full sample, but a positive elasticity in the MINT countries. Thirdly, concerning trade liberalisation, negative elasticities were obtained for the full sample and MINT countries, while the elasticities were positive for the BRICS bloc. Fourthly, the roles of economic growth and environmental pollution reveal a negative impact on renewable energy consumption for all samples while urbanisation and industrial restructuring promote renewable energy developments only in the BRICS bloc. Policy implications are discussed. |
| Keywords: | Renewable energy, trade liberalization, technological innovation, Prais-Winsten regression |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:dbm:wpaper:24/007 |
| By: | Kaldorf, Matthias |
| Abstract: | We propose a quantitative DSGE model with environmental and financial frictions to asses how high emission taxes affect optimal central bank collateral policy. Central banks specify which assets banks can pledge as collateral to obtain short-term central bank funding. This is referred to as central bank collateral policy and involves a trade-off between supplying sufficient liquidity to banks and exposing itself to losses from accepting risky assets as collat- eral. Emission taxes affect this trade-off by reducing productivity in the non-financial sector, such that the corporate default rate increases and the quality of collateral deteriorates. High emission taxes also reduce investment, debt issuance and, hence, the amount of collateral available to banks. This decline in the quantity of collateral is more pronounced if emission tax shocks are very persistent or permanent. It is therefore optimal to relax collateral policy in the longer run, where the collateral quantity channel dominates, and to tighten collateral policy after a transitory emission tax shock, in order to offset the short run reduction in collateral quality. |
| Keywords: | Central Bank Collateral Policy, Climate Policy, Collateral Premia, Corporate Default Risk |
| JEL: | E44 E58 E63 Q58 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bubdps:330307 |
| By: | Sikwebu, Dinga; Aroun, Woodrajh |
| Abstract: | The just transition (JT) concept is in vogue. Presently, an array of forces has adopted the JT concept, either as a goal or policy. Since its emergence within the trade union movement in the 1990s as a response to global warming, multilateral bodies, civil society organisations, and corporations, have endorsed just transition with intentions to use it as a guide in their actions and interventions to mitigate climate change. To comply with international treaties, national and subnational governments are also introducing hard and soft laws to facilitate what they regard as just transitions. In addition to above uses, the JT concept has moved into the academe and is utilised in diverse economic sectors such as energy, food and agriculture, healthcare, finance and tourism. After years of climate denialism, corporations and business associations have achieved what has been their goal since the signing of the Paris Agreement in 2015, recognition as a key non-state actor in climate negotiations (Mousu, 2020). Viewed positively, the popularity of the JT concept reflects a "growing awareness of and concern about deepening inequalities between the world's rich and poor, and how the climate and environmental crises, and efforts to address them, are accentuating them" (Stevis, Morena and Krause, 2020, 4). Considering its spread, attempts are underway to operationalise the concept. To enhance its utility and simplify the expansive use of JT concept, Harrington (2022) makes a distinction between climate and non-climate transitions. Climate-related transitions require shifts away from large-scale greenhouse gas emissions and adaptation by sectors that are potential carbon sinks. Non-climate transitions involve changes required in sectors such healthcare, agriculture and food production. (...) |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:gluwps:330336 |
| By: | Simplice A. Asongu (Yaoundé, Cameroon); Amarachi O. Ogbonna (Yaoundé, Cameroon); Mariette C. N. Mete (Yaoundé, Cameroon) |
| Abstract: | The present research extends the extant literature by investigating the hypothesis on whether marriage can be a substitute for financial inclusion in energy poverty reduction in Ghana. Pooled data and two stage least squares techniques are used in the estimation process and the validity of the tested hypothesis (i.e., that marriage is a substitute for financial inclusion in energy poverty mitigation) is based on two main criteria: (i) a positive interactive effect relative to the negative unconditional effect of marriage; (ii) a marriage net effect lower in magnitude compared to the unconditional effect of marriage and (iii) an insignificant interactive effect when both unconditional effects are negative. The investigated hypothesis is not valid in the full sample, urban sub-sample and female sub-sample while it is valid in the rural and male sub-samples. Policy implications are discussed. |
| Keywords: | Energy poverty; financial inclusion; consumption poverty; education; household income |
| JEL: | D03 D12 D14 I32 Q41 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:dbm:wpaper:24/006 |
| By: | Dünhaupt, Petra; Gibson, Safiya; Herr, Hansjörg; Warwick, Ozzi; Xhafa, Edlira |
| Abstract: | Trinidad and Tobago (T&T) stands at a critical juncture as it faces a set of interrelated socio-ecological crises: extreme vulnerability to climate crisis, rising levels of violent crime, and deeply rooted social inequality and exclusion fuelled by inequalities and injustices in the world of work and a patchy social protection and welfare. The root causes of this multiple crisis lie in a model of economic growth highly dependent on fossil fuels, particularly oil and natural gas, prioritizing short-term stability over longterm transformation. (...) |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:gluwps:330337 |
| By: | Simplice A. Asongu (Oxford, UK); Sara Le Roux (Oxford, UK) |
| Abstract: | The study investigates the role of governance (i.e., ‘voice & accountability’, political stability/no violence, regulatory quality, government effectiveness, corruption-control and the rule of law) in the incidence of short-term debt services on infrastructure development in the perspective of telecommunication infrastructure and access to electricity. The focus of the study is on 52 African countries for the period 2002-2021. The generalized method of moments is employed as estimation strategy and the following findings are established. Debt service has a negative unconditional effect on access to electricity and telecommunication infrastructure. Governance dynamics moderate the negative effect of debt service on infrastructure dynamics. Effective moderation is from regulatory quality and corruption-control for access to electricity and from government effectiveness, regulatory quality, corruption-control and rule of law, for telecommunication infrastructure. Policy implications are discussed. |
| Keywords: | Debt service, governance; information technology; access to electricity; Africa |
| JEL: | F34 H63 O10 O40 O55 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:dbm:wpaper:24/027 |
| By: | Arega Getaneh Abate; Xiufeng Liu; Ruyu Liu; Xiaobing Zhang |
| Abstract: | Photovoltaic (PV) operators face substantial uncertainty in generation and short-term electricity prices. Continuous intraday markets enable producers to adjust their positions in real time, potentially improving revenues and reducing imbalance costs. We propose a feature-driven reinforcement learning (RL) approach for PV intraday trading that integrates data-driven features into the state and learns bidding policies in a sequential decision framework. The problem is cast as a Markov Decision Process with a reward that balances trading profit and imbalance penalties and is solved with Proximal Policy Optimization (PPO) using a predominantly linear, interpretable policy. Trained on historical market data and evaluated out-of-sample, the strategy consistently outperforms benchmark baselines across diverse scenarios. Extensive validation shows rapid convergence, real-time inference, and transparent decision rules. Learned weights highlight the central role of market microstructure and historical features. Taken together, these results indicate that feature-driven RL offers a practical, data-efficient, and operationally deployable pathway for active intraday participation by PV producers. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.16021 |
| By: | Kampmann, David |
| Abstract: | How We Sold Our Future: The Failure to Fight climate Change by J. Beckert, Polity Press, 2025. Overshoot: How the World surrendered to Climate Breakdown by A. Malm and W. Carton, Verso, 2024 |
| JEL: | N0 |
| Date: | 2025–10–21 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129931 |
| By: | Tiago Cavalcanti; Kamiar Mohaddes; Hongyu Nian; Haitao Yin |
| Abstract: | This paper investigates the pass-through of environmental compliance costs along supply chains. We compile a firm-level dataset linking regulated firms in pollution-intensive industries with their top five clients and suppliers. We find that clients of regulated firms invest less in R&D, employ fewer skilled R&D staff, and produce fewer innovations than clients of less regulated firms, while no comparable effects are observed for suppliers. The pass-through is stronger with larger trade volumes, higher input prices faced by clients, and in markets where regulated firms hold greater market power or clients face intense competition. Policy simulations suggest that green technology incentives for regulated firms and R&D subsidies for their clients can mitigate these adverse effects and raise social welfare by enhancing both innovation and environmental quality. |
| Keywords: | environmental compliance, supply chain, pass-through, R&D, innovation |
| JEL: | O30 Q01 Q55 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2025-55 |
| By: | Fitzgerald, Frances; Spiller, Beia (Resources for the Future) |
| Abstract: | Even as the United States rolls back renewable-energy tax incentives, global investments in clean technologies are rising (IEA 2025). This financial and industrial infusion has the potential to profoundly affect local economies. In rural southern Arkansas, for example, companies are poised to spend billions to extract the region’s lithium, filling the landscape with pipelines and wells while also injecting significant cash into the local economy. At the national level, the implications may be even more consequential; today, US supply chains for batteries—used to power everything from consumer electronics to military systems—depend almost entirely on lithium imports. In many ways, the technology the Arkansas projects plan to use, direct lithium extraction (DLE), represents the promise of a new green industrial economy that could deliver high-tech growth, economic revitalization, and climate benefits all at once.Realizing these benefits will be easier said than done. The lithium market has whipsawed over the past five years, and for every analysis predicting that DLE will reshape global markets (Patel 2023), another warns that its commercial viability is still far from certain (Pedersen and Iqbal 2024). Drawing on conversations with industry experts, company feasibility studies, and project finance modeling, this report provides novel insights into the specific technological, market, and policy conditions that DLE would require to succeed in the United States. We take an in-depth look at three projects in the Smackover region of Arkansas—ExxonMobil’s Saltwerx, Standard Lithium’s Lanxess project, and the Reynolds Unit developed by Southwest Arkansas (SWA), a joint venture between Standard Lithium and Norway’s Equinor—as well as Anson Resources’ Paradox Project in Utah. SWA Reynolds offers particularly strong public data and is thus the focus of much of this analysis.Resources for the Future (RFF) has identified three core challenges to market viability for DLE: price volatility of lithium, technological uncertainty, and macroeconomic factors. Regarding price, we find that lithium prices must rise well above summer 2025 levels, which were around $10, 000 per tonne of lithium carbonate equivalent (LCE), See https://tradingeconomics.com/commodity/lithium to make the US projects profitable. Prices are currently in a multiyear trough, having fallen 80 percent since 2023 because of a surge in production in China (Scheyder 2025). However, this is not expected to last: Industry forecasts suggest that prices will rebound to their previous yearly average highs (~$40, 000 per tonne) over the next five years, driven primarily by rising global electric vehicle (EV) demand and the corresponding increased need for batteries (IEA 2024). SC-Insights (SCI) projects an average lithium price of around $21, 000 per tonne over the next two decades, well above the average of $16, 000 per tonne that our modeling suggests most US projects will require to break even.The second challenge DLE must overcome is technological uncertainty. Commercial viability of DLE depends on whether the technology can scale beyond the pilot stage. Although many developers report lithium recovery rates from brine of around 90 percent—a substantial improvement over the 40 to 60 percent from traditional evaporative ponds (Nicolaci et al. 2024) —these figures are based on controlled demonstrations and remain unproven in full-scale operations. More broadly, untested technology increases the risks of capital expenditure and operational expenditure overruns, and our modeling shows that cost overruns can quickly erode the financial viability of these projects, particularly if lithium prices do not fully recover. Finally, macroeconomic factors, such as inflation, high interest rates, or shifts in investors’ risk appetite, pose a risk for project economics. The 8 percent discount rate assumed by most US DLE companies appears reasonable under current conditions, but DLE’s early-stage status may make it particularly sensitive to increases in the cost of capital.If US DLE projects succeed, they could create a new domestic supply chain, generate durable revenue for local governments, and bolster US competitiveness in the global battery economy. If they falter, they may serve as a cautionary tale about the risks of betting on unproven technologies in a rapidly shifting industrial landscape. This report provides novel insights into the specific price points, technological performance levels, and policy ecosystems that DLE will require to compete, and it concludes with a discussion of the broader implications of DLE for the United States and the world. |
| Date: | 2025–10–27 |
| URL: | https://d.repec.org/n?u=RePEc:rff:report:rp-25-16 |
| By: | Frank, Luis |
| Abstract: | The article proposes a nowcasting model to estimate Argentina's seasonally adjusted Monthly Estimator of Economic Activity (EMAE) using a reduced set of high-frequency economic variables (tax revenue, Portland cement dispatches, automobile sales, and electricity demand), available with a 5–7-day lag, covering data from January 2015 to June 2025. A traditional error correction model (ECM) is compared with a flexible version (FECM) that incorporates time-varying coefficients. The FECM, with $\lambda=1$, outperforms the ECM in accuracy (MAPE of 0.35 versus 1.04). Electricity demand and cement production are the most relevant indicators, while tax revenue has a lower impact. However, it is recommended to retain all variables, as their contribution depends on their joint inclusion. Additionally, a hybrid model that recursively updates parameters is proposed, offering an efficient alternative for real-time economic monitoring. |
| Keywords: | nowcasting, flexible ECM, Argentina, GDP |
| JEL: | C13 C53 |
| Date: | 2025–10–20 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126543 |
| By: | Ranger, Nicola A.; Adam, Christopher; Arndt, Channing; Martín, Roberto Spacey |
| Abstract: | Climate change is driving three transformations in the landscape of global finance, with implications for central banks in Sub-Saharan Africa (SSA). First, pressures on financial institutions related to climate-related physical risks are mounting, with potential to threaten price and financial stability. Second, global and domestic responses to climate change are creating risks and opportunities for SSA economies. Third, the ongoing shift in the global financial architecture toward sustainability could either crowd-out or crowd-in international investment flows to SSA. Uncertainties in each increase the challenges for central banks and supervisors. We find that, without action, the risks outweigh the opportunities. To fulfil their mandates, SSA's central banks are obliged to react; however, the paucity of peer-reviewed evidence hinders the development and execution of appropriate responses. Preparedness is crucial if actions by SSA central banks are to play their part in shifting the balance towards managing risks and grasping opportunities. |
| Keywords: | climate change; central banking; Sub-Saharan Africa; financial markets; financial risk |
| JEL: | E58 O13 Q54 |
| Date: | 2025–10–06 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129898 |
| By: | Bassirou Gueye |
| Abstract: | The Environmental and Clean Technology (ECT) sector in Canada plays a significant role in the nation's economy and efforts to combat climate change. Statistics Canada defines the ECT sector as encompassing activities related to environmental protection, resource optimization, and the use of energy-efficient goods. In 2021, the sector contributed 2.9% to Canada's GDP and employed 314, 257 individuals, representing 1.6% of the national workforce. This study uses data from the Environmental and Clean Technology Products Economic Account to provide a comprehensive analysis of the sector's workforce diversity. This paper focuses on the representation of women in the ECT sector, highlighting their underrepresentation and examining their compensation relative to men across various demographics, including age, education, and occupation. Women comprised 28.6% of the ECT workforce in 2021, with a higher presence in service-related jobs compared to goods production. They were more likely to have postsecondary education but face a gender pay gap, earning on average 16.3% less than their men counterparts. The paper further explores the intersectionality of gender with Indigenous, racialized, and immigrant identities, highlighting the additional challenges these groups could face. For instance, among immigrants, Indigenous peoples, and the racialized population, women were underrepresented in the ECT sector and faced a compensation gap compared to their men counterparts. |
| Keywords: | Environmental and clean technology, gender representation, compensation gap, Indigenous women, racialized women, immigrant women, Canada, economic growth, workforce diversity |
| JEL: | J23 M21 |
| Date: | 2024–07–24 |
| URL: | https://d.repec.org/n?u=RePEc:stc:stcp8e:202400700003e |
| By: | St\'ephane Cr\'epey (LPSM); Samuel Drapeau (LPSM); Mekonnen Tadese (LPSM) |
| Abstract: | Carbon pricing has become a central pillar of modern climate policy, with carbon taxes and emissions trading systems (ETS) serving as the two dominant approaches. Although economic theory suggests these instruments are equivalent under idealized assumptions, their performance diverges in practice due to real-world market imperfections. A particularly less explored dimension of this divergence concerns the role of financial intermediaries in emissions trading markets. This paper develops a unified framework to compare the economic and environmental performance of tax- and market-based schemes, explicitly incorporating the involvement of financial intermediaries. By calibrating both instruments to deliver identical aggregate emission reduction targets, we assess their economic performance across alternative market structures. Our results suggest that although the two schemes are equivalent under perfect competition, the presence of intermediaries in ETS reduces both regulatory wealth and the aggregate wealth of economic agents relative to carbon taxation. These effects stem from intermediaries' influence on price formation and their appropriation of part of the revenue stream. The findings underscore the importance of accounting for intermediaries' behavior in the design of carbon markets and highlight the need for further empirical research on the evolving institutional structure of emissions trading systems. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2510.15941 |
| By: | Vina Dooshima Kiishi (Graduate School of Management, Management & Science University Malaysia Author-2-Name: Ibiwani Alisa Binti Hussain Author-2-Workplace-Name: Graduate School of Management, Management & Science University Malaysia Author-3-Name: Author-3-Workplace-Name: 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 explores the role of women's participation in advancing sustainable development in Nigeria's oil and gas sector, a field traditionally dominated by men. It examines how gender inclusion may influence policy innovation, economic growth, and workplace equity within this critical industry. Methodology/Technique - The research adopts a cross-sectional quantitative design. Data were collected through structured surveys from 358 female professionals across Nigeria's six geopolitical zones. Analytical methods included descriptive statistics, Pearson correlation, and multiple regression analysis, all of which were performed using SPSS software. Finding - The analysis revealed a weak but statistically significant relationship between women's inclusion and sustainable development indicators. Notably, a stronger association was found between women's influence on decent work conditions and their contributions to policy and innovation. The regression model showed modest explanatory power, suggesting other factors may also contribute to sustainability outcomes. Novelty - This study contributes to the limited body of empirical research on gender inclusion in the extractive industries of Sub-Saharan Africa. By conceptualising inclusion as a driver of innovation and sustainable growth, it highlights the strategic value of women's participation in advancing SDG 5 (Gender Equality) and SDG 8 (Decent Work and Economic Growth) in Nigeria's oil and gas sector. Type of Paper - Empirical" |
| Keywords: | Economic growth; innovation capacity; leadership opportunities; Nigeria energy industry; policy development; workplace diversity; and women empowerment. |
| JEL: | J16 Q56 O15 L72 |
| Date: | 2025–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:gtr:gatrjs:gjbssr666 |
| By: | Jose Eduardo Alatorre; Gabriel Porcile; Julia Juarez; Juan Carlos Moreno-Brid |
| Abstract: | The paper presents a Kaleckian extended model exploring sustainable development, defined as growth that is economically stable, socially inclusive, and environmentally respectful. The model links CO2 emission trends with public investments in green capabilities, represented by the share of renewables in total energy supply. It incorporates three key actors: green capitalists (G), brown capitalists (B), and workers (R), whose alliances influence taxes, social expenditure, and green capabilities investments. Three political coalitions are formed: green-red (GR), green-brown (GB), and red-brown (RB). The GR coalition promotes sustainable and inclusive growth but may face trade imbalances depending on public investment's ability to boost non-price competitiveness. The GB alliance yields sustainable but non-inclusive growth with a high long-term deficit. The RB coalition results in environmentally unsustainable outcomes but may produce stable growth with income redistribution during high commodity export demand. Applying the model to Mexico highlights fiscal space challenges for public investment and income redistribution amidst emissions reduction targets. |
| Keywords: | Climate |
| JEL: | B50 Q43 Q56 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:lev:wrkpap:wp_1074 |
| By: | Simplice A. Asongu (Johannesburg, South Africa); Samba Diop (Bambey, Senegal); Ekene ThankGod Emeka (Nsukka, Nigeria); Amarachi O. Ogbonna (Bengaluru, India) |
| Abstract: | This study investigates how governance and infrastructure moderate the effect of natural resource rents on economic growth using a sample of 110 countries, including 47 African countries from 2000 to 2018. The empirical evidence is based on Panel Smooth Transition Regressions (PSTR). The following findings are established. First, the nexus between economic growth and natural resources is not linear and the underlying non-linearity is contingent on existing infrastructural and governance levels. Second, evidence of a “natural resource curse†is apparent in countries with extremely low levels of governance and infrastructural development. Third, the favorable effect of natural resources on economic growth requires a governance threshold of -1.210 and an infrastructure threshold of 2.583, indicating that countries with governance and infrastructure levels higher than these values tend to benefit much more from the wealth of natural resources. With high levels of the transition variables (governance and infrastructure), the established thresholds are low and situated between the 5thand the 10th percentiles. Countries identified below the established thresholds are mainly from Africa. Policy implications are discussed with specific emphasis on African countries. |
| Keywords: | Natural Resources; Economic Growth; Governance; Infrastructure; Threshold; Panel Smooth Transition Regressions; Generalised Method of Moments; Panel |
| JEL: | H10 Q20 Q30 O11 O55 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:dbm:wpaper:24/013 |
| By: | Toyo A. M. Dossou (Cotonou, Benin); Dossou K. Pascal (Cotonou, Benin); Emmanuelle N. Kambaye (Chengdu, China); Simplice A. Asongu (Johannesburg, South Africa); Alastaire S. Alinsato (Cotonou, Benin) |
| Abstract: | Although the impact of financial development on renewable energy consumption has been extensively examined in recent years, the study regarding the moderation of governance quality on the financial development on renewable energy consumption nexus is sparse. By filling the gap in the energy economics literature, this study investigates the moderating effect of governance quality on the relationship between financial development on renewable energy consumption for a panel of 33 African countries over the period 2000-2020. The fully modified ordinary least square (FMOLS) estimation techniques has been used to account for the cointegration and cross-sectional dependence, respectively. The results unveil that the impact of governance quality and financial development on renewable energy consumption is negative and statistically significant. Moreover, the results reveal that the FD-governance quality interactions are significant and negative. Governance quality thresholds at which the negative incidence of financial development on renewable energy consumption is completely nullified are 0.825; 2.15; 2.86; 3.52;3.36; and 0, 1, respectively |
| Keywords: | Financial development, renewable energy consumption, governance quality, Africa |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:dbm:wpaper:24/011 |
| By: | Asim, Meerab |
| Abstract: | We examine market reactions to climate events using event study methodology on a final sample of 250 high-severity events (2000–2025) across US, EU, and Asian markets, which were filtered from a raw dataset of over 1.5 million events. Broad US indices (SPY, QQQ) show no significant event- day AR, while the US energy sector (XLE) exhibits a negative reaction (−6 bps, p |
| Keywords: | Climate Events; Market Efficiency; Event Study; Financial Markets, Information Processing; Climate Finance; ESG Investing; Climate Risk Pricing; Event Study Methodology |
| JEL: | C12 G10 Q4 Q41 Q51 |
| Date: | 2025–10–13 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126500 |
| By: | Chepeliev, Maksym; Maryla Maliszewska; Amit Kanudia; Wen Jin Yuan; Channing Arndt; Dominique van der Mensbrugghe |
| Abstract: | This paper uses a combination of the global energy system model KINESYS and global computable general equilibrium (CGE) model ENVISAGE to analyze the impact of future climate mitigation policies. Results are subsequently linked to an atmospheric source-receptor model. Principal findings are as follows: (i) Holding global temperatures below 2oC requires significant policy effort. A uniformly applied tax of nearly $400 (2014 USD) per tonne of CO2eq is required. (ii) Ignoring benefits and co-benefits of mitigation policy, the cost to the global economy is relatively small. Holding global temperature rise below 2oC implies a loss of about 1.1% of global GDP. Using the revenue from carbon taxation to offset distorting taxes, as opposed to transferring carbon revenues in a lump sum manner to households, further reduces or reverses economic losses. (iii) However, benefits and co-benefits are significant. Benefits relate to reduced climate-related damages, such as lower frequency/intensity of extreme weather events. The co-benefit in focus relates to reduced air pollution. The monetized co-benefits of reduced air pollution substantially exceed the costs of mitigation alone by 2050 in most scenarios. Low-income countries experience a higher benefit-to-cost ratio compared to high-income economies. (iv) As mitigation effort increases, global trade-to-GDP ratios decline. Mitigation substitutes strongly traded fossil fuels for mostly domestically generated electricity. This downdraft on trade volume is a major and robust result. (v) The composition of trade shifts in logical ways, with production/trade in energy-intensive products tending to decline more and production/trade in less energy-intensive products tending to decline less. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:gta:workpp:7609 |