|
on Energy Economics |
| By: | Alexander Reentovich (Bank of Russia, Russian Federation) |
| Abstract: | The phenomenon of the ‘Green Paradox’ has been widely discussed in the climate economics literature for the last 15 years. The term refers to a situation in which a well-intended climate policy leads to adverse results, such as a rise in greenhouse gas emissions. The emergence of the paradox is usually attributed to the exhaustibility of fossil fuels: firms extracting these resources seek to equalise the present value of resource rents in each time period, so, anticipating future tax increases, they increase current production. On the other hand, if the productivity growth in the green sectors is driven by learning-by-doing, the Green Paradox does not emerge. In this paper, I show that the Green Paradox may arise as a consequence of an ex ante optimal policy in the absence of exhaustible resources if technological change in the clean sector is subject to uncertainty. That is, if the true speed of technological progress is an unknown parameter, economic agents have to form their expectations regarding future technological development with the help of Bayes’ rule and make their decisions accordingly. If the market expects (a priori) the demand for dirty capital to shrink more rapidly due to technological progress than policymakers do, the latter must cut carbon taxes or even subsidize investment in dirty capital to avoid underinvestment in this type of capital and, consequently, the underproduction of energy in the present. If the flow of subsidies is persistent enough, CO2 emissions may rise. |
| Keywords: | Climate change, Bayesian learning, Green Paradox, Learning-by-doing, heterogeneous beliefs |
| JEL: | D81 D83 D84 Q54 Q55 Q58 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:bkr:wpaper:wps133 |
| By: | Brian P. Hanley (Butterfly Sciences); Pieter Tans (Institute of Arctic and Alpine Research University of Colorado Boulder); Edward A. G. Schuur (Center for Ecosystem Science and Society Northern Arizona University); Geoffrey Gardiner (London Institute of Banking and Finance); Adam Smith (Climate Central) |
| Abstract: | Despite well-meaning scenarios that propose global CO2 emissions will decline presented in every IPCC report since 1988, the trend of global CO2 increase continues without significant change. Even if any individual nation manages to flatten its emissions, what matters is the trajectory of the globe. Together the gulf between climate science and climate economics, plus the urgent need for alternative methods of estimation, provided the incentives for development of our Ocean-Heat-Content (OHC) Physics and Time Macro Economic Model (OPTiMEM) system. To link NOAA damages to climate required creating a carbon consumption model to drive a physics model of climate. How fast could carbon be burned and how much coal, oil and natural gas was reasonably available? A carbon model driving climate meant burning the carbon, and modelling how the earth heated up. We developed this using the most recent best greenhouse gas equations and production models for CO2, CH4, N2O, and halogenated gases. This developed an ocean heat content model for the globe. Each step is validated against Known carbon consumption, CO2, temperature, and ocean heat content. This allows a physics founded model of climate costs to be projected. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2601.06085 |
| By: | Thomas Stoerk (National Bank of Belgium, Research Department) |
| Abstract: | The Paris Agreement is designed to increase climate ambition gradually through a process of ratcheting up. What is the plausible endpoint of this process? We develop a tractable integrated assessment model in which countries interact through a decentralized general equilibrium and negotiate unanimously over a global carbon budget, with all mitigation implemented via a global carbon price. We prove existence and uniqueness of a unanimous international agreement on global emissions, in which carbon pricing revenues are redistributed across countries in proportion to marginal climate damages. In a quantitative application for 154 countries, the resulting equilibrium limits global mean surface temperature change to 1.51C, at a carbon price of 320 USD/tCO2. The associated international transfers of carbon pricing revenue are progressive toward lower-income countries and amount to about 0.8% of global GDP annually - an order of magnitude larger than the Paris Agreement’s climate finance target. |
| Keywords: | Paris Agreement, climate policy, international environmental agreement, climate economics. |
| JEL: | F35 F53 Q54 Q56 Q58 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbb:reswpp:202601-486 |
| By: | Rim Berahab |
| Abstract: | This policy brief examines what the 2025–2026 period reveals about the future of global energy risk and the energy transition. After the shocks of 2021–2023, 2025 brought broad price easing: oil and coal prices declined as supply growth outpaced demand, and the World Bank projects further declines in the global energy price index in 2026, offering short-term relief for energy-importing economies. The brief argues, however, that the macroeconomic relevance of energy entering 2026 is no longer defined primarily by commodity price levels, but by the distribution of risks and by the capacity of energy systems—grids, flexibility resources, supply chains, and investment frameworks—to absorb shocks and deliver reliable power. It identifies four structural forces shaping 2026 and beyond: artificial intelligence-related demand growth, grid congestion and resilience constraints, critical mineral concentration, and a capital-rich but execution-constrained investment environment. Taken together, these dynamics suggest that energy risk is increasingly shifting toward infrastructure and supply-chain bottlenecks, with widening asymmetries across regions, particularly for emerging and developing economies. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbcoen:pb02_26 |
| By: | Thibault Deletombe |
| Abstract: | The Net Zero Industry Act (NZIA) promotes non-price criteria in renewable auctions. It aims to unlock green willingness-to-pay and scale up manufacturing capacity for net-zero technologies in the European Union (EU). This paper builds a partial equilibrium model of the European solar module sector and investigates how renewable auction design impacts solar photo- voltaic (PV) manufacturing. First, a formal analysis evaluates the complementarities between the different non-price criteria. Most notably, we find that if local manufacturing development is aligned with climate goals, then non-price criteria in solar auctions do not necessarily increase costs to consumers. Then, a numerical simulation estimates solar module production in 2030 based on NZIA targets, considering various degrees of market integration within the EU. The results show that market fragmentation can inhibit economies of scale and thus increase solar PV manufacturing costs by €2 billion per year. The development of a common framework for the implementation of non-price criteria at the country level is a no-regret solution. Leveraging the common European market with an integrated policy approach represents the first-best strategy. Forming coalitions of willing Member States is a second-best strategy that can significantly reduce fragmentation costs. |
| Keywords: | renewable auction, non-price criteria, market integration, photovoltaics, solar modules |
| JEL: | L51 L52 L60 Q27 Q40 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2153 |
| By: | Mele, Marco; Costantiello, Alberto; Anobile, Fabio; Leogrande, Angelo |
| Abstract: | This paper evaluates the structural, environmental, and climatic factors influencing carbon dioxide emissions from the building sector (CBE) in 27 European Union member states from 2005 to 2023. This analysis uses panel data from the World Bank and four econometric models—Random Effects, Fixed Effects, Dynamic Panel GMM, and Weighted Least Squares—coupled with machine learning and clustering to provide a robust analysis of emissions. The econometric models show that all models support a negative relationship between agriculture, forestry, and fishing value added (AFFV) and forest area (FRST), suggesting that a robust rural economy and substantial natural carbon sinks are accompanied by lower emissions in the building sector. On the other hand, water stress (WSTR), PM2.5 pollution, heating and cooling degree days, and nitrous oxide emissions (N2OP) are found to significantly, yet positively, affect CBE. Tests of diagnostic analyses support Fixed Effects and Weighted Least Squares models, whereas results from GMM models are limited by instrument validity violations. In machine learning analysis, K-Nearest Neighbors (KNN) models are found to be most diagnostic, with all performance metrics being improved, establishing a prominent role for coal electricity, water stress, agricultural intensities, and climatic factors. Subsequently, a solution with 10 clusters, selected using Bayesian Information Criteria and silhouettes, identified a set of environmental and economic characteristics based on differences between low- and high-emission groups. High-emitting groups result from agricultural intensification, pollution, and low energy efficiency, while low-emitting groups are associated with renewable energy, low pollution, and a favorable climate. This analysis, hence, presents a multifaceted assessment of building sector emissions, with climatic, structural, and energy transition patterns as driving factors for meeting decarbonization targets for the European Union. |
| Keywords: | Building-sector carbon emissions; Panel data econometrics; Machine learning prediction; Environmental and climatic drivers; Cluster analysis |
| JEL: | C3 C33 C38 Q41 Q54 Q56 |
| Date: | 2025–12–12 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127321 |
| By: | Rim Berahab |
| Abstract: | Artificial intelligence (AI) is rapidly emerging as both an energy optimizer and a structural source of energy demand. While AI promises efficiency gains in forecasting, grid management, and emissions reduction, its expansion is already reshaping electricity systems: data center consumption could more than double by 2030. Beyond this techno-economic duality lies a deeper challenge: the sovereignty of digital and energy systems. AI rests on highly concentrated supply chains of chips, compute infrastructure, and critical minerals, as well as on access to abundant, low-carbon electricity. This concentration creates new dependencies and asymmetries, reinforcing the strategic control of a handful of actors. For Africa, the stakes are particularly high. The continent holds significant reserves of cobalt, manganese, rare earths, and other inputs indispensable to batteries and semiconductors, yet faces chronic electricity deficits, fragile grids, and limited compute capacity. Without deliberate investment in infrastructure, regional integration, and industrial upgrading, Africa risks remaining confined to raw-material supply while depending on foreign actors for digital infrastructure and cloud services. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpcoen:pp_37-25 |
| By: | Hansjoerg Albrecher; Nora Muler |
| Abstract: | Achieving net-zero carbon emissions requires a transformation of energy systems, industrial processes, and consumption patterns. In particular, a transition towards that goal involves a gradual reduction of excess carbon emissions that are not essential for the well-functioning of society. In this paper we study this problem from a stochastic control perspective to identify the optimal gradual reduction of the emission rate, when an allocated excess carbon budget is used up over time. Assuming that updates of the available carbon budget follow a diffusion process, we identify the emission strategy that maximizes expected discounted emissions under the constraint of a non-increasing emission rate, with an additional term rewarding the amount of time for which the budget is not yet depleted. We establish a link of this topic to optimal dividend problems in insurance risk theory under ratcheting constraints and show that the value function is the unique viscosity solution of the associated Hamilton-Jacobi-Bellman equation. We provide numerical illustrations of the resulting optimal abatement schedule of emissions and a quantitative evaluation of the effect of the non-increasing rate constraint on the value function. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2601.11348 |
| By: | Binh T. Bui |
| Abstract: | The shale revolution, driven by advances in horizontal drilling, multi-stage hydraulic fracturing, and cyclic gas injection, has reshaped the oil and gas industry over the past two decades. In the United States, these technologies transformed ultra-low permeability shale formations into commercially viable resources, increasing crude oil production from 5 million bpd in 2008 to more than 12 million by 2019. Horizontal drilling became the standard after 2010, with nearly 200, 000 horizontal wells completed by the end of 2023, accounting for more than 80% of all new wells in the US. This success is now being replicated in Argentina making the country a leading unconventional producer. The common driver in both cases is the mass manufacturing approach, which industrializes oil production through standardized well designs, repeatable workflows, multi-well pad drilling, and continuous process optimization. Supported by a competitive oilfield service market and a skilled technical workforce, this model has reduced drilling times from months to weeks and cut well costs by half over the past decade. New technologies such as precision geosteering, advanced completion designs, real-time drilling analytics, and cyclic gas injection continue to improve efficiency and productivity. Applying these methods and technologies to conventional reservoirs could significantly expand global production capacity and place sustained downward pressure on crude oil prices. This paper argues that in a period of slowing economic growth and potential financial deleveraging, abundant supply from both unconventional and conventional developments could extend a prolonged phase of relatively low oil prices. Such a scenario would have far-reaching implications for energy policy, investment strategies, and the competitive position of oil-producing nations. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2601.14281 |
| By: | Antoine Dechezleprêtre (CERNA i3 - Centre d'économie industrielle i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique); Adrien Fabre (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique, ETH Zürich - Eidgenössische Technische Hochschule - Swiss Federal Institute of Technology [Zürich]); Tobias Kruse (OCDE / OECD - Organisation de Coopération et de Développement Economiques = Organisation for Economic Co-operation and Development); Bluebery Planterose (EU Tax - EU Tax Observatory); Ana Sanchez Chico (OCDE / OECD - Organisation de Coopération et de Développement Economiques = Organisation for Economic Co-operation and Development); Stefanie Stantcheva (Department of Economics, Harvard University - Harvard University, NBER - National Bureau of Economic Research [New York] - NBER - The National Bureau of Economic Research, CEPR - Center for Economic Policy Research) |
| Abstract: | This paper explores global perceptions and understanding of climate change and policies, examining factors that influence support for climate action and the impact of different types of information. We conduct large-scale surveys with 40, 000 respondents from 20 countries, providing new international data on attitudes toward climate change and respondents' socioeconomic backgrounds and lifestyles. We identify three key perceptions affecting policy support: perceived effectiveness of policies in reducing emissions, their impact on low-income households, and their effect on respondents' households (self-interest). Educational videos clarifying policy mechanisms increase support for climate policies; those merely highlighting climate change's impacts do not. (JEL C83, D83, D91, Q54, Q58) |
| Keywords: | experiment, green energy, carbon tax, climate policies, Climate change |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05459604 |
| By: | Martin Richardson (Research School of Economics, The Australian National University, Canberra); Frank Stahler (School of Business and Economics, University of Tubingen, Tubingen, Germany); Halis Murat Yildiz (Department of Economics, Toronto Metropolitan University, Toronto, Canada); |
| Abstract: | We identify a condition in a general equilibrium model of trade with tariff bindings under which a customs union (CU) can design a carbon border adjustment mechanism (CBAM) that induces other countries to adopt the CU's carbon tax. Trade liberalization makes this easier and so would help the CU `export' its climate policies. We then show that, in an inter-industry, perfectly competitive framework with competing exporters, the optimal carbon tax is lower when the CU maximizes CU welfare than if it were to maximize global welfare. Furthermore, the CU optimally raises its tariff threat via CBAM by less than the difference in member and non-member environmental taxes. By contrast, in an intra-industry oligopoly model of trade with profit shifting incentives, we find the opposite result, with a "penalty" tariff threat that exceeds the difference in carbon taxes. |
| Keywords: | Tariff Binding, Carbon Leakage, Climate Change, Carbon Border Adjustment Mechanism, European Union |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:rye:wpaper:wp098 |
| By: | Fabien Giauque; Mehdi Farsi |
| Abstract: | Dynamic social norms have been recognized as a promising approach to promote energy sufficiency. By highlighting trends and future shifts rather than current states, dynamic norms allow for a better focus on emerging norms that are not widely adopted. While existing studies predominantly examine behavioral outcomes, the underlying processes and trade-offs remain to be explored. This paper uses a discrete choice experiment (DCE) combined with a randomized controlled trial to study electricity saving preferences under various dynamic norms. An emphasis is placed on the rationale for the norm changes. The results show that dynamic norms framed in terms of growing concerns about energy supply security positively affect electricity saving goal, whereas those framed around climate change do not. The heterogeneity analyses suggest that dynamic norms shape behavior through two complementary mechanisms: they generate new preferences while simultaneously reinforcing existing ones. The concluding analysis identifies four distinct groups that vary systematically in their preferences for electricity sufficiency. |
| Keywords: | Electricity saving; Dynamic Norms; Energy supply security; Climate change; Discrete choice experiment; Latent Class Model; Mixed Logit Model; Value-Belief-Norm Theory |
| JEL: | D12 D91 Q48 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:irn:wpaper:25-09 |
| By: | Hadda, kilani; Mohamed, Ben AMAR |
| Abstract: | This study investigates the dynamic relationships between agricultural productivity, green energy adoption, governance quality, and environmental degradation in BRICS economies over the period 2002–2023. Using a Pooled Mean Group Autoregressive Distributed Lag (PMG-ARDL) approach, complemented by FMOLS and CCR robustness estimators, the results show that agricultural productivity significantly increases long-run environmental pollution, reflecting the environmental cost of agricultural intensification. In contrast, green energy adoption and governance quality exert strong and consistent pollution-mitigating effects, underscoring their central role in promoting environmental sustainability. Overall, the findings emphasize that long-run structural factors dominate environmental outcomes in emerging agricultural economies. The study provides policy-relevant insights for advancing low-carbon and sustainable agricultural development in BRICS countries. |
| Keywords: | Environmental pollution- Agricultural productivity- - Green innovation- PMG -BRICS |
| JEL: | Q18 Q28 Q47 |
| Date: | 2025–10–14 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127353 |
| 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:rpcoen:pp_27-25 |
| By: | Wang, Yitian; Vespignani, Joaquin; Smyth, Russell |
| Abstract: | Accelerating transport electrification is vital for net-zero goals, yet remains hindered by slow, uncertain development of battery minerals. We show how non-technical risk, such as policy, regulatory, social, and geopolitical risk, inflate capital costs, delay greenfield supply, and heighten price volatility for lithium, cobalt, nickel, manganese, graphite, and copper. Combining Fraser Institute investment scores with reserve shares of these critical minerals, we construct dynamic, mineral-specific risk premiums, derive an optimal stockpiling rule balancing risk and storage costs and introduce a distance-to-iso-cost map comparing recycling and stockpiling strategies. Our framework suggests that in 2040 recycling-led stabilization will be the optimal strategy for mitigating non-technical risk for Japan and Korea, strategic stockpiling will be the optimal strategy for China and the United States, and mixed outcomes for Europe. The method that we propose provides a tractable and updateable toolkit for deciding optimal stockpiles and prioritising recycling where it is most cost-effective. |
| Keywords: | Critical Mineral, EV Battery, Stockpiling, Recycling |
| JEL: | O13 Q34 Q38 Q41 |
| Date: | 2025–12–04 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127186 |
| By: | Thais Diniz Oliveira (Food Systems and Global Change, College of Agriculture and Life Science, Cornell University, Ithaca, NY, USA); Paula Pereda (Dept. of Economics, University of São Paulo, São Paulo, Brazil); Ademir Rocha (Dept. of Economics, Federal University of Amazonas, Manaus, Brazil); Samuel Bicego (Dept. of Economics, University of São Paulo, São Paulo, Brazil); Ana Clara Duran (NEPA, University of Campinas (UNICAMP), Campinas, Brazil) |
| Abstract: | Carbon footprints have emerged as a key measure of anthropogenic pressure on the environment and are crucial for designing mitigation policies. However, obtaining an accurate assessment of these footprints requires accounting for the full range of emission sources and the regional variability embedded in production and consumption chains. To address these important issues, we quantify the carbon footprints of Brazilian households by combining multiple datasets and methodologies. We account for all major emission sources in Brazil (land-use change, agriculture and livestock, energy, industry, and waste) using a state-level multi-regional input–output (MRIO) framework integrated with household consumption microdata. Our analysis reveals that food, housing, and transport are the dominant drivers of per capita emissions among Brazilian households, with beef and dairy products emerging as key contributors within food consumption. Emissions increase sharply with income, shifting from food-related emissions in lower-income households to transport, housing, and services in wealthier ones. These results highlight the need for integrated climate policies that account for the full spectrum of emission sources while addressing regional disparities and income-related heterogeneity in emissions patterns. |
| Keywords: | Carbon footprints; Brazil; Region-specific; Emissions sources; Sustainability; Multi-regional input-output (MRIO) |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ris:nereus:022143 |
| By: | Hardman, Scott PhD; Karanam, Vaishnavi PhD |
| Abstract: | California has set an ambitious target to transition 100% of off-road vehicles and equipment to zero-emission (ZE) alternatives by 2035 “where feasible, ” as outlined in Executive Order N-79-20. Interviews were conducted with 16 stakeholders—contractors, manufacturers, rental firms, researchers, nonprofits, and public agencies. Intervieweesacknowledged positive attributes of ZE equipment, but barriers were more numerous and included inadequate charging infrastructure, limited grid access at job sites, high upfront equipment costs, limited ZE model availability, and complications with rental-based procurement models. Social and organizational barriers such as operator resistance, climate skepticism, and inequities faced by smaller firms were also noted. Most interviewees expressed skepticism that the 2035 ZE off-road goal is realistically achievable without significant policy and infrastructure support. Commonly recommended interventions included strengthening site-level grid capacity, expanding financial incentives and public investment, aligning regulations with market realities, and improving policymakers’ understanding of construction practices. |
| Keywords: | Engineering, Zero emission vehicles, All terrain vehicles, Technology adoption, Electric vehicle charging, Interviews, Policy analysis |
| Date: | 2026–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsdav:qt4qk0182c |
| By: | Kraynak, Daniel |
| Abstract: | This paper estimates the welfare costs of declining coal demand from the power sector on coal mining regions of the US. Using an instrumental variable derived from a stylized model of the electricity sector, I estimate that coal producers shed jobs and wages primarily in coal mining and adjacent industries. In-migration, home values, and public education expenditures also decline. Applied in a spatial equilibrium framework, my estimates imply about $0.85 billion in costs to coal country residents resulting from a net decline of $8.03 billion in thermal coal production value from 2007-2017. |
| Keywords: | Environmental Economics and Policy, Labor and Human Capital |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:nceewp:388972 |
| By: | Uwineza, Yvette |
| Keywords: | Community/Rural/Urban Development |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ags:aaea25:361132 |
| By: | Bergman, Aaron (Resources for the Future); Krupnick, Alan (Resources for the Future); Nehrkorn, Katarina (Resources for the Future); Zhu, Yuqi |
| Abstract: | Hydrogen has the potential to serve as a zero-carbon energy carrier as an element of a zero-carbon economy. But the high cost of clean hydrogen and infrastructure needs for scaling, plus the dismantling of policies to promote its production and use, have hampered its spread. Focusing on the heavy-duty trucking and ports sectors, we review the policy landscape here and abroad and the obstacles faced by clean hydrogen in these sectors. We present potential policies for overcoming the demand-side obstacles in these two sectors, with some focus on the nascent Biden administration’s Joint Offtake Producer Auction and its contrast with other policy ideas, such as contracts for differences. The discussion is organized around the obstacles of high cost, uptake of fuel cell vehicles and the construction of a refueling network for heavy-duty trucking. Among several suggestions, we find that hydrogen use in heavy-duty trucking requires more coordinated investment due to the need for extensive refueling infrastructure along transportation corridors. |
| Date: | 2026–01–23 |
| URL: | https://d.repec.org/n?u=RePEc:rff:dpaper:dp-26-03 |
| By: | Minhaj Mahmud (Asian Development Bank); Yujie Zhang (University of Pennsylvania) |
| Abstract: | This study examines the interplay between extreme temperatures and air pollution risks, the geographic and temporal distribution, as well as the population burden of climate shocks in Bangladesh, Indonesia, Pakistan, Thailand, and Viet Nam—countries severely impacted by climate change. Using ERA5-HEAT temperature data and PM2.5 pollution data, we first identify “hotspots” within and across the countries by analyzing district level trends in heat stress and pollution exposure. We further explore the correlation between temperature and pollution shocks. Finally, jointly considering the spatial distribution of populations and key climate and pollution hazards, we highlight the most vulnerable groups with population weighted exposure measures. Our findings reveal distinct country-specific patterns in both the correlation between heat stress and air pollution risk, and the population exposure to the hazards across demographic profiles. These results emphasize targeted policies to mitigate the compounded effects of climate and air pollution hazards on vulnerable populations across Asia. |
| Keywords: | heat;air pollution;climate change;Asia;population exposure |
| JEL: | J10 Q53 Q54 Q56 |
| Date: | 2026–01–27 |
| URL: | https://d.repec.org/n?u=RePEc:ris:adbewp:022144 |
| By: | Halkos, George (University of Thessaly); Zisiadou, Argyro |
| Abstract: | The Environmental Performance Index (EPI) is a widely recognized tool developed by Yale University and Columbia University, in partnership with the World Economic Forum, to assess countries' environmental performance using 58 performance indicators across 11 issue categories. The EPI provides a comprehensive benchmark for evaluating environmental health, ecosystem vitality and climate change. Greece, as a member of the European Union (EU), operates within a complex regulatory framework aimed at promoting sustainable development. Greece's performance in the EPI reflects both its environmental policy efforts and its exposure to regional challenges such as air pollution, biodiversity loss, and climate-related risks. In recent years, Greece has demonstrated progress in areas such as renewable energy development and climate change mitigation, although issues like waste management and air quality continue to require focused policy intervention. Analyzing Greece’s EPI score offers valuable insights into its environmental priorities and the effectiveness of national strategies aimed at promoting sustainability and resilience. |
| Date: | 2026–01–15 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:egchs_v1 |
| By: | Emma Hubert; Dimitrios Lolas; Ronnie Sircar |
| Abstract: | We study the problem of forecasting and optimally trading day-ahead versus real-time (DART) price spreads in U.S. wholesale electricity markets. Building on the framework of Galarneau-Vincent et al., we extend spike prediction from a single zone to a multi-zone setting and treat both positive and negative DART spikes within a unified statistical model. To translate directional signals into economically meaningful positions, we develop a structural and market-consistent price impact model based on day-ahead bid stacks. This yields closed-form expressions for the optimal vector of zonal INC/DEC quantities, capturing asymmetric buy/sell impacts and cross-zone congestion effects. When applied to NYISO, the resulting impact-aware strategy significantly improves the risk-return profile relative to unit-size trading and highlights substantial heterogeneity across markets and seasons. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2601.05085 |
| By: | Radek Stefanski; Lassi Ahlvik; Jørgen Juel Andersen; Torfinn Harding; Alex Trew |
| Abstract: | How large are the productivity differences arising from micro-level distortions, and how much of that is due to tax policy? Using over a century of field-level data (1900-2023), this paper examines the role of field-level revenue taxes in explaining misallocation in the oil and gas industry, a single large sector that produces a homogeneous, globally-traded good. A key advantage is our ability to link model-implied distortions directly to these observed tax rates. We show that misallocation is significant in the oil industry, and that over half of this misallocation can be accounted for by the dispersion in revenue tax rates across fields, exceeding the 2-25% explanatory power typical in studies of misallocation sources. We show that nearly all of the impact of this tax dispersion operates through the intensive margin (the inputs allocated at a field) rather than the extensive margin (the choice to enter a field). These findings have direct implications for tax policy |
| Keywords: | Misallocation; productivity; distortions; tax policy |
| JEL: | O47 O11 D24 Q32 |
| Date: | 2025–05 |
| URL: | https://d.repec.org/n?u=RePEc:gla:glaewp:2025_10 |
| By: | Tal, Gil PhD; Ramadoss, Trisha |
| Abstract: | The secondary market for zero-emission vehicles (ZEVs) will play a critical role in decarbonizing transportation and in bringing ZEVs to lower income populations. Yet research into this market remains limited. Thus, in this study, the characteristics of the used ZEV market, its buyers, and the sources and destinations of used ZEVs were explored. The flows of secondhand, pre-owned, or “used” ZEVs in California were quantified by analyzing vehicle registration and transfer information from the Department of Motor Vehicles from 2016 to 2020. Descriptive statistics were used to examine this market, and the sources and destinations of used ZEVs were modeled using linear regression. Several key trends became evident. First, plug-in hybrids appear to be entering the used market at higher rates than battery electric vehicles. Second, there was a net gain of used ZEVs into disadvantaged communities over the study period. Finally, the number of households in the highest income brackets and land use types play a significant role in which census tracts are sources and destinations for used ZEVs. While the highest income bracket does not seem to play a substantive role in either side of the market, the next three income brackets serve to both generate and procure used ZEVs. |
| Keywords: | Engineering, Zero emission vehicles, electric vehicles, used cars, used vehicle industry, demographics, linear regression analysis |
| Date: | 2026–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsdav:qt0p9928s8 |
| By: | Fredy Pokou (MRE, CRIStAL); Jules Sadefo Kamdem (MRE); Kpante Emmanuel Gnandi (ENAC-LAB) |
| Abstract: | This paper investigates whether structural econometric models can rival machine learning in forecasting energy--macro dynamics while retaining causal interpretability. Using monthly data from 1999 to 2025, we develop a unified framework that integrates Time-Varying Parameter Structural VARs (TVP-SVAR) with advanced dependence structures, including DCC-GARCH, t-copulas, and mixed Clayton--Frank--Gumbel copulas. These models are empirically evaluated against leading machine learning techniques Gaussian Process Regression (GPR), Artificial Neural Networks, Random Forests, and Support Vector Regression across seven macro-financial and energy variables, with Brent crude oil as the central asset. The findings reveal three major insights. First, TVP-SVAR consistently outperforms standard VAR models, confirming structural instability in energy transmission channels. Second, copula-based extensions capture non-linear and tail dependence more effectively than symmetric DCC models, particularly during periods of macroeconomic stress. Third, despite their methodological differences, copula-enhanced econometric models and GPR achieve statistically equivalent predictive accuracy (t-test p = 0.8444). However, only the econometric approach provides interpretable impulse responses, regime shifts, and tail-risk diagnostics. We conclude that machine learning can replicate predictive performance but cannot substitute the explanatory power of structural econometrics. This synthesis offers a pathway where AI accuracy and economic interpretability jointly inform energy policy and risk management. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2601.19321 |
| By: | Hafez Ghanem |
| Abstract: | Africa today has only one real climate priority: adaptation. Africa should still push the rich countries of the Global North to cut emissions. But Africa should not have any illusions. Past mitigation efforts have had some positive effects but have not been sufficient to stay on track with the targets of the Paris Agreement. There is no reason to believe that future efforts will fare any better. Political developments in the United States and Europe do not augur well for global mitigation efforts. Emissions will most likely remain stable or even increase a little, which means that temperatures will probably continue to rise to nearly 3 degrees Celsius above preindustrial levels by the end of the century. Africa must be prepared for this eventuality. It would be irresponsible not to start preparing now for the worst-case climate scenario. This does not mean that Africa should accept the failure of rich countries to mitigate climate change. It must continue to point out their role in creating the climate crisis and to demand justice. Countries of the North have a moral duty to support adaptation efforts in Africa. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbcoen:pb60_25 |
| By: | Janda, Karel; Rozsahegyi, Marketa; Quang Van Tran; Zhang, Binyi |
| Abstract: | This paper investigates the role of investor sentiment in the pricing and volatility dynamics of green bond exchange-traded funds (ETFs). For a construction of green sentiment one original and two already existing natural language processing models are used and evaluated. The VAR model found no significant impact of green sentiment on ETF returns. The GARCH (1, 1) estimation strongly supported the presence of volatility clustering and time-varying volatility in green bond ETF returns, validating the use of conditional heteroskedasticity models. Regressing the conditional volatility on sentiment scores revealed a significant negative relationship – higher sentiment is associated with lower volatility. This finding implies that positive green sentiment contributes to market stability and may reduce perceived risk, reinforcing the importance of investor psychology in green financial markets. |
| Keywords: | Machine learning, NLP model, ESG, Exchange Traded Funds |
| JEL: | C45 C55 G11 G17 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:335550 |
| By: | Marco Bornstein; Amrit Singh Bedi |
| Abstract: | The race for artificial intelligence (AI) dominance often prioritizes scale over efficiency. Hyper-scaling is the common industry approach: larger models, more data, and as many computational resources as possible. Using more resources is a simpler path to improved AI performance. Thus, efficiency has been de-emphasized. Consequently, the need for costly computational resources has marginalized academics and smaller companies. Simultaneously, increased energy expenditure, due to growing AI use, has led to mounting environmental costs. In response to accessibility and sustainability concerns, we argue for research into, and implementation of, market-based methods that incentivize AI efficiency. We believe that incentivizing efficient operations and approaches will reduce emissions while opening new opportunities for academics and smaller companies. As a call to action, we propose a cap-and-trade system for AI. Our system provably reduces computations for AI deployment, thereby lowering emissions and monetizing efficiency to the benefit of of academics and smaller companies. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2601.19886 |
| By: | Das Banerjee, Anannya; Ramji, Aditya; Hazelton, Rex; Morrison, Geoff |
| Keywords: | Engineering, Social and Behavioral Sciences |
| Date: | 2026–01–26 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsdav:qt39g8d51x |
| 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:rpcoen:pp_23-25 |
| By: | Ficura, Milan; Ibragimov, Rustam; Janda, Karel |
| Abstract: | This working paper investigates the application of modern artificial intelligence techniques to financial time-series forecasting, with a specific focus on crude oil futures markets. Building on advances in deep learning and natural language processing, the study evaluates the predictive performance and economic relevance of several neural network architectures, including univariate and multivariate LSTM, CNN, and N-HiTS models. In addition to statistical accuracy, the models are assessed through trading-based performance metrics and factor regressions to examine the presence of economically and statistically significant returns. The paper contributes to the growing literature on AI-driven asset price forecasting by demonstrating that multivariate deep learning models incorporating additional market information and sentiment measures can improve both forecast precision and trading performance in commodity markets. |
| Keywords: | Artificial intelligence, Deep learning, Oil futures, Time-series forecasting |
| JEL: | C45 Q47 G13 G17 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:335571 |
| By: | Nwaobi, Godwin |
| Abstract: | After decade of aspiring to fulfill sustainability ambitions, we are still facing a polycrisis of complex and intertwined global economic, social and environmental challenges. Specifically, climate – related challenges (stemming from both acute and chronic risks) are responsible for a series of macroeconomic shocks which (by inducing economic disruptions and fiscal pressures) directly affect a country’s fiscal space and debt sustainability. Consequently, Global Vulnerable Countries (GVCs) will have to face higher borrowing needs and costs which can result in heightened refinancing risks and fiscal space reduction. Regrettably, this will result in fewer resources being available to fund adaptation and mitigation policies to reduce potential climate vulnerabilities. In fact, this also increases the probability of default of the GVCs and can feed into the climate Crisis – Sovereign Debt Doom Cycle. Therefore, this paper argued that Debt for – Climate – Swaps (DFCS) could unlock direct funding for climate – related spending to break the negative cycle. Fundamentally, DFCS can free up fiscal space beyond the direct savings generated by the debt swap by enhancing governments’ repayment capacity is well as lowering borrowing costs often linked to debt distress situation. However, policy action at both global and national levels is needed to foster a more favorable external environment as well as enhancing macroeconomic stability with reduced structural constraints to accelerate long term growth and development of those vulnerable countries. In other words, for these actions, global coordination and cooperation will be critical and useful. |
| Keywords: | Debt, Sustainability, Climate Change, Climate finance, Vulnerability, Green Swaps, Debt Swaps, Poverty, Polycrisis, environment, development. |
| JEL: | F30 F31 F32 F33 F34 F35 G0 G15 Q0 Q5 Q50 Q54 Q56 |
| Date: | 2025–11–19 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126894 |
| By: | Miersch, Klaas; Lamb, William; Creutzig, Felix; Garschagen, Matthias; Haines, Andy; Hansen, Gerrit; Harper, Sherilee; Khanna, Tarun M (Mercator Research Institute for Global Commons and Climate Change); Konnyu, Kristin; Mastrandrea, Michael D. |
| Abstract: | The rigorous treatment of uncertainties in global environmental assessments is essential to characterise the scientific state of the art and to inform policy. Recognizing this, the Intergovernmental Panel on Climate Change (IPCC) has adopted a standardized assessment framework to promote transparency and consistency in reporting the level of confidence in its key findings — most prominently those featured in the Summary for Policymakers. However, applying this framework is challenging and often leads to confidence statements based on expert judgment rather than a transparent and replicable process. Here we recommend an updated framework for assessing uncertainties that is suitable for lines of quantitative ex-post policy evaluation evidence that inform Working Group II and III reports. The framework uses evidence synthesized from systematic reviews to support robust and transparent confidence statements and to provide a clear and traceable rationale for conclusions. Where such synthesized evidence is lacking, we offer practical guidance and outline intermediary steps for improving confidence assessments. Our approach provides a concrete and replicable pathway to enhance the level of transparency and the reliability of scientific assessments that inform climate policy. |
| Date: | 2026–01–21 |
| URL: | https://d.repec.org/n?u=RePEc:osf:metaar:fqtdr_v1 |
| By: | Hirschbuehl Dominik (European Commission - JRC); Ceglar Andrej; Cojoianu Theodor; Emambakhsh Tina; Qi Yifan; Rho Caterina (European Commission - JRC); Hu Elsie; Petracco Marco (European Commission - JRC); Biganzoli Fabrizio; De Jager Alfred (European Commission - JRC); Garcia Herrero Laura (European Commission - JRC); Mandrici Andrea; Pasqua Carlo |
| Abstract: | This study examines how euro area banks factor pollution-induced biodiversity risks into lending decisions, using data from 832 banks and 5, 000 major polluters. Our results show that banks are increasingly pricing these risks by adjusting loan-to-value ratios and interest rates. Banks adjust lending conditions in line with EU pollution and biodiversity protection legislation, particularly for companies with large pollution footprints near biodiversity-protected areas or those contributing to Environmental Quality Standards failures of downstream surface waters. The former is driven primarily by banks' adoption of biodiversity policies and public commitments to the Equator Principles, while the latter is a result of regulatory risks. Our findings inform financial supervisors on how banks manage risks associated with the EU's zero pollution ambition, shed light on the interplay between biodiversity protection legislation and banks' lending decisions, and offer actionable guidance on leveraging existing regulatory frameworks to address the climate-biodiversity-pollution nexus. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:jrs:wpaper:202510 |
| By: | Yan, Wenshou; Wang, Ruoxuan; Huang, Kaixing |
| Abstract: | Large-scale hydropower dams are among the most costly and controversial infrastructure projects, yet credible evidence on their regional economic impacts is scarce. This paper provides the first quasi-experimental estimate of the impact of the Three Gorges Project—the world’s largest dam—on regional economic growth. Using a difference-in-differences design with county level data, we find that the project raised GDP per capita in directly affected counties (which account for 11.6% of China’s GDP) by 9.1%. These gains were driven by improved navigation and trade, industrial land creation, and a moderated local climate—not merely by increased electricity supply. The project has also significantly accelerated the economic shift from agriculture to industry and services. However, the benefits were starkly unequal: downstream counties saw a 13.8% increase, while upstream counties experienced negligible gains, a divergence explained by asymmetric changes in land avail able for development. A cost-benefit analysis shows that considering only direct power revenues yields a negative return (-65.5%), but incorporating regional growth spillovers reveals a strongly positive return of 322.3%. Our findings demonstrate that the economic justification for mega-dams hinges on their indirect growth effects, which are large but spatially concentrated. |
| Keywords: | Mega-dams, Regional economic growth, Spatial heterogeneity, Cost-benefit analysis |
| JEL: | O13 O18 O53 Q25 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127196 |