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on Energy Economics |
| By: | Marc A.C. Hafstead; Roberton C. Williams III |
| Abstract: | The energy transition away from fossil fuels toward alternative energy sources will, like every significant economic transition, disrupt existing economic relationships and markets. Disruption in the labor market is of particular concern due to the distributional and political importance of energy jobs and the potential concentration of risks on workers in carbon-intensive sectors and regions that are particularly reliant on fossil-fuel industries. We look at modeling the labor implications of the energy transition. We outline a conceptual framework for analyzing the labor-market risks, focusing on obstacles to labor-market adjustments during the transition. We then review empirical research on such barriers to labor-market adjustments, with a focus on evidence that can inform modeling efforts. We also survey the literature on ex-ante modeling of the effects of the energy transition on labor markets, identifying both the challenges and opportunities for new research in this field. |
| JEL: | C68 D58 E24 J63 J64 Q40 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34723 |
| By: | Chakraborty, Debapriya PhD; Konstantinou, Theodora PhD; Gutierrez Lopez, Julia Beatriz PhD; Tal, Gil PhD |
| Abstract: | New car sales is the primary metric for measuring electric vehicle (EV) adoption, however, monitoring transition to EVs overall will require knowing more about what is going on in the used car market. While there is limited research on used EV buyers, examining the characteristics and vehicle costs of individuals who currently purchase used vehicles could provide some helpful insights. Our research team explored the financial impact of a household that typically purchases a used car, choosing a used EV instead. To do this, we analyzed consumer survey data that tracks households’ expenditure on vehicle purchasing and operations on a national scale to identify why households opt for new versus used vehicles and the consequent cost of vehicle ownership. |
| Keywords: | Social and Behavioral Sciences |
| Date: | 2026–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsdav:qt98n5h7sg |
| By: | Dolphin, Geoffroy; Ferrucci, Gianluigi |
| Abstract: | The EU Carbon Border Adjustment Mechanism (CBAM) came into force on 1 October 2023, introducing reporting requirements for importers of covered products and, from 2026, an obligation to pay a fee on the carbon content of imported goods. This paper uses indices of ad valorem tariffs to assess the incidence of the EU CBAM on both EU member states and the EU’s trading partners. Overall, the direct impact on EU countries’ trade is estimated to be small, adding 0.1 percent to the value of EU imports when averaged across all imports, and 0.04 percent to the average cost of non-EU countries’ exports to the EU—with a maximum of 1.2 percent. However, effects could be sizeable for specific products such as iron, steel and aluminium, which can help explain CBAM’s political salience. Moreover, an expanded CBAM featuring full coverage of ETS sectors, and a significantly higher carbon price could entail larger costs in the more distant future. JEL Classification: F13, F64, Q54, Q56 |
| Keywords: | carbon leakage, carbon taxation, emissions trading, trade policy |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20263177 |
| By: | Abbasi, Umar; Ali, Amjad; Audi, Marc |
| Abstract: | This study examines sustainability reporting practices among firms listed on the Pakistan Stock Exchange, focusing on sectoral differences, reporting patterns, and the interconnection between economic, social, and environmental dimensions. The research analyzes standalone sustainability reports from sixty-two organizations across fifteen sectors between 2016 and 2020, using content analysis aligned with the global reporting initiative standards. The findings indicate that although sustainability reporting has increased in Pakistan, it remains uneven and largely motivated by compliance. Disclosures heavily emphasize economic indicators such as financial performance, with leading firms disclosing at a rate of 94.4 percent, while lagging firms report significantly less on environmental issues such as emissions and energy consumption, and social concerns including labor rights and child labor, ranging between eleven and twenty-three percent. Sectoral analysis reveals that banking, oil and gas, and cement sectors report more frequently, largely due to regulatory obligations and stakeholder scrutiny, while retail and engineering sectors lag behind. The presence of integrated reporting positively correlates with comprehensive performance across the three sustainability dimensions i.e., economic, environmental, and social, but remains limited due to the voluntary nature of frameworks, inadequate resources, and weak enforcement mechanisms. The study highlights the need for mandatory reporting, capacity development programs, and strategic alignment with global frameworks such as the global reporting initiative and the United Nations Sustainable Development Goals. Policy reforms, tailored sector-specific guidelines, and active stakeholder engagement are essential to bridge the divide between symbolic gestures and meaningful sustainability disclosures. This research contributes to the discourse on environmental, social, and governance reporting in emerging markets, offering insights for policymakers, corporate executives, and investors aiming to advance sustainable development in Pakistan. |
| Keywords: | Sustainability Reporting, GRI Standards, ESG Disclosures, Corporate Governance |
| JEL: | M14 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127311 |
| By: | Mohammad Al-Hashel (Qatar University); Atef Alrashidi (Saudi Central Bank); Youssef Saidi (Gulf Monetary Council) |
| Abstract: | This paper investigates the role of oil supply and demand shocks in monetary policy stance among the Gulf Cooperation Council (GCC) countries using a panel vector autoregressive (PVAR) framework and annual panel data over the period 1980-2019. The impulse response functions show that under the symmetric definition of oil shocks (‘all’ shocks), the inflation shock leads to a contractionary monetary policy in GCC countries. Nevertheless, based on asymmetric supply-driven and demand-driven specifications, we find clear evidence of a differentiated reaction of monetary policy to asymmetric oil-induced inflation shocks. Following an oil demand-induced inflation shock, the monetary policy stance remains neutral or becomes accommodative (Dovish). On the other side, the real interest rate in GCC countries increases in response to the anticipated oil supply-induced inflation shock, suggesting that monetary policy stance may become contractionary (Hawkish). With regard to policy implications, as previously experienced, the monetary policy stance in GCC countries must be sensitive to the source of the oil-induced inflation shocks. |
| Date: | 2024–09–20 |
| URL: | https://d.repec.org/n?u=RePEc:erg:wpaper:1735 |
| By: | Hubbell, Bryan (Resources for the Future); Krupnick, Alan (Resources for the Future) |
| Abstract: | The Trump administration’s US Environmental Protect Agency (EPA) has decided to stop quantifying and monetizing human health benefits when analyzing the impacts of federal regulations, overturning decades of established and peer-reviewed conventions. Instead, only the costs incurred by companies for complying with a regulation will be quantified when implementing regulatory decisions, leading to an unbalanced assessment of impacts. The EPA’s arguments for not quantifying and monetizing benefits are unsupported and out of step with the best available science and established practice. We provide a point-by-point rebuttal to these arguments and conclude that by failing to include quantified and monetized benefits in economic impact analysis, EPA has chosen to abandon adherence to economic principles, decades of guidance from experts, its own economic analysis guidelines, and guidance from the Office of Management and Budget. |
| Date: | 2026–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:rff:report:rp-26-04 |
| By: | Marie Alder (European University Institute); Eva Franzmeyer (European University Institute); Benjamin Hattemer (University of Helsinki & FIT) |
| Abstract: | This study provides new causal evidence on the firm-level effects of reducing free emission permits in emission trading systems. Using a difference-in-differences design, we exploit a reform that altered an eligibility threshold for free permit allocation. Receiving fewer free permits reduced emissions by more than 14 percent relative to firms that retained them. This reduction was accompanied by similar declines in revenue, employment, and assets. We develop a multi-product general equilibrium model that explains these patterns through a novel mechanism linking permit allocation to firms’ decisions. Firms that receive fewer free emission permits terminate their least productive product lines, increasing the market share of the remaining ones. Higher expected profits then encourage earlier adoption of an efficiency-improving technology. |
| Keywords: | Emissions, Emission permits, Emission trading |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:fit:wpaper:42 |
| By: | Serpil Kahraman (Yasar University, Izmir, Turkiye); Merve Keser (Yasar University, Izmir, Turkiye) |
| Abstract: | Central Banks have traditionally managed and conducted monetary policy tools to achieve macroeconomic policy goals. Green Central Banking is a subset of central banking that acknowledges the profound impact of climate change on the economy. The measures undertaken by central banks to address these environmental issues are referred to as “green central banking.†Since the European Central Bank (ECB) introduced this concept in July 2021, central banks have begun to integrate this tool into monetary policy. This study provides a comprehensive overview of central banks' roles and actions in the context of environmental issues through a systematic literature review using WoS and Scopus databases. The results indicate that two main research questions are extensively examined by a large body of literature: (1) whether green monetary policies have an impact on climate change, and (2) whether climate change has an impact on green central banking as a converse causality. The existing literature tends to support the view that there is a bidirectional interaction between green central banking and climate change. It can also be said that the nascent body of literature lacks complementary research questions on how the greening of central banks, considering the costs and benefits of the policies. Thus, the literature focuses on three key rationales: the role of climate policy on green central banking and its monetary policies, the converse interaction from green central banking to climate policy, and the bidirectional interaction between the two. |
| Keywords: | monetary policy, central banking, green central banking |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:smo:raiswp:0584 |
| By: | Batool, Aleeza; Ali, Amjad; Audi, Marc |
| Abstract: | Climate change has become a central concern in global policy discourse over the past two decades, motivating nations to adopt a wide range of sustainability initiatives. Analyzing the specific measures implemented and their effectiveness in promoting environmental sustainability is therefore critical. This study aims to evaluate the contribution of various sustainability actions to environmental preservation by focusing on Sweden and Finland, recognized for their leadership in sustainable development. Employing panel least squares and generalized method of moments methodologies using 2010-2020 data, the research rigorously assesses the impact of sustainability initiatives on environmental performance, with a particular focus on greenhouse gas emissions as the primary indicator. The empirical findings reveal that the expansion of renewable energy sources delivers the most prompt and significant reductions in greenhouse gas emissions among the interventions examined. Additionally, investments in green technologies and the issuance of green bonds are shown to enhance environmental quality, with their benefits projected to increase over time. These results highlight the necessity of prioritizing renewable energy development in national climate strategies. Building on these insights, the study presents targeted policy recommendations for Sweden and Finland. It advocates for a strategic shift from compliance-oriented environmental reporting towards the adoption of actionable policies that produce measurable emission reductions. Recommended policy measures include the promotion of sector-specific emission abatement, accelerated development of renewable energy infrastructure, and the encouragement of clean technology innovation through public investment and fiscal incentives. By comparing two Nordic sustainability leaders, Sweden and Finland, this study clarifies which targeted environmental measures are most effective within advanced institutional contexts. |
| Keywords: | Sustainability Initiatives, Greenhouse Gas Emissions, Renewable Energy, Environmental Performance |
| JEL: | Q5 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127481 |
| By: | Burtraw, Dallas (Resources for the Future); Hafstead, Marc (Resources for the Future); Rennert, Kevin (Resources for the Future) |
| Abstract: | Eliminating greenhouse gas emissions throughout the global economy will entail comprehensive actions to reshape society’s approach to producing and using energy. Shifting to complete reliance on low- and zero-emissions sources of energy will require substantial investments in technology and infrastructure. Such investments could simultaneously drive economic growth and deliver environmental benefits in disproportionately impacted communities. Accomplishing a rapid energy transition—and doing so in a way that seizes the economic opportunity of that transition—will require a supportive policy framework. |
| Date: | 2026–01–28 |
| URL: | https://d.repec.org/n?u=RePEc:rff:report:rp-26-03 |
| By: | Hala Abou-Ali (Cairo UniversityAuthor-Name: Mona Amer; Cairo University) |
| Abstract: | The global shift toward green economies underscores the need to better understand and measure the labor market changes driven by the low-carbon transition. This paper explores the characteristics of Egypt's labor market in light of the escalating importance of sustainable development, focusing on the composition and differentiation of green jobs compared to nongreen jobs. It addresses the scarcity of studies on green jobs in Egypt by leveraging Egyptian Labor Market Panel Survey (ELMPS) data and applying the International Labour Organization’s(ILO) definition to identify and categorize these jobs. Using newly incorporated ELMPS 2023 questions on job characteristics tied to environmentally friendly practices, this analysis differentiates jobs based on their degree of greenness, i.e., whether they focus on ecofriendly processes, both processes and output, or output alone. It also assesses the extent of greenness by examining the number of environmental aspects associated with each job. The paper further explores the distribution of green jobs across economic activity, occupation, employment status, gender, education, and age groups while comparing the attractiveness of green and non-green jobs in terms of wages, social benefits, and job stability. Finally, it analyzes the potential for expanding green jobs by examining skill requirements and educational trends.Length: 48 |
| Date: | 2024–12–20 |
| URL: | https://d.repec.org/n?u=RePEc:erg:wpaper:1761 |
| By: | B. Kelsey Jack; Nicholas Ryan |
| Abstract: | Economic development relies on and transforms the environment. The transformation is evident in the poor environmental quality in many developing countries. For example, air quality in Southeast Asia is three times worse than in the United States, in sub-Saharan Africa four times worse and in South Asia more than six times worse. We model how environmental quality affects health, productivity and well-being and how individuals privately adapt to environmental hazards. We also model how collective action and formal regulation contribute to environmental quality. We draw three main findings from a review of empirical research on these mechanisms. First, individual adaptation to environmental hazards is both inadequate as a remedy and inefficiently low. Second, collective action, without the state, to manage resources or address externalities has been outstripped by the scale of environmental problems. Third, state action through formal regulation works better than it looks. Many formal regulations are coarse, poorly targeted and inefficient, but nonetheless yield benefits in excess of their costs. |
| JEL: | O10 Q0 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34735 |
| By: | Marijana Cvetanoska (Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, North Macedonia); Biljana Tashevska (Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, North Macedonia); Predrag Trpeski (Faculty of Economics-Skopje, Ss. Cyril and Methodius University in Skopje, North Macedonia) |
| Abstract: | Purpose The foundations of sustainable development theory promote economic growth within the limits of preserving the environmental conditions of countries (Lazăr et al., 2019; Jones., 2022; Hatmanu and Cautisanu, 2023). This paper conducts a preliminary examination of the Environmental Kuznets Curve (EKC) by testing its hypothesized inverted U-shaped trajectory (Kisswani et al., 2019; Ansari, 2022; Magazzino et al., 2023). Specifically, the Kuznets hypothesis suggests that, in the short term, increased economic development leads to higher levels of environmental pollution (Mazur et al., 2015; Shahbaz and Sinha, 2019; Simionescu, 2021). However, over the long run, improvements in environmental standards, the implementation of regulatory measures, and the adoption of cleaner technological and production processes contribute to a reduction in environmental degradation (Zhang et al., 2017; Shuai et al., 2017; Kuznets, 2019; Jóźwik et al., 2021). This analysis includes five Western Balkan countries that have achieved candidate status for European Union membership in the post-2000 period. Empirical tests for co-integration among the variables confirmed the existence of a long-run relationship between economic growth and environmental quality. In a study conducted by Armeanu et al. (2018), the relationship between variables measuring environmental pollution and the economic growth rates of the EU-27 countries from 1995 to 2014 was empirically tested. The results of the research confirm the Environmental Kuznets Curve (EKC) hypothesis, indicating the existence of a long-term effect in the case of sulphur dioxide (SO2) emissions and non-methane volatile organic compounds (NMVOCs). Another significant research in the European context was conducted by Vasylieva et al. (2019), examining the relationship between economic growth rate, renewable resource allocation, and greenhouse gas (GHG) emissions during the period 2000-2016. Using FMOLS and DOLS panel estimation techniques, the study confirms the Environmental Kuznets Curve (EKC) hypothesis. Additionally, Dogan and Inglesi-Lotz (2020), conducted a study covering the period from 1980 to 2014, analysing the impact of industrial activity and energy consumption on the increase in carbon dioxide (CO2) emissions in the EU-27 countries. The findings of this research indicate a long-term decline in (CO2) emissions as a result of more efficient energy use and the adoption of cleaner technologies. The purpose of this paper is to conduct an empirical analysis of the short- and long-term effects of economic growth in Western Balkan countries on the quality of their natural environment. Based on the available data, the study separately examines the impact of economic growth on carbon dioxide (CO2) emission levels, in contrast to the effect of economic growth on the increase in total greenhouse gas (GHG) emissions. The Environmental Kuznets Curve hypothesis is tested using data from five Western Balkan countries. To examine the effect of economic growth on environmental quality and the use of renewable energy in five Western Balkan countries, the following three hypotheses will be tested: H1: Increases in economic growth rates and per capita energy consumption have a short-term effect on CO2 and GHG emission levels, as indicators of environmental quality in Western Balkan countries. H2: Growth in economic activity and total per capita energy consumption exerts a long-term influence on changes in CO2 and GHG emissions in Western Balkan countries. H3: Rising economic growth rates and per capita energy consumption lead to a short-term decline in environmental quality, whereas, in the long term, they contribute to improvements in environmental quality. Design/methodology/approach The methodological section of this research focuses on examining the existence of both short- and long-run effects of economic growth and per capita energy consumption on the variation in carbon dioxide (CO2) and greenhouse gas (GHG) emissions. The research covers the period from 2000 to 2023 and includes a sample of five Western Balkan countries-candidates for accession to the European Union (EU-27). The analysis explores links between economic growth, energy use, and environmental degradation using panel data methods. To implement the methodological part and ensure the robustness of the empirical results, the stationarity of the time series is tested using unit root tests. Specifically, the Augmented Dickey-Fuller (ADF) test and the Phillips-Perron (PP). The Johansen co-integration test and Vector Error Correction model are applied to determine the order of co-integration of the variables. Prior to conducting the co-integration tests, the optimal lag length is selected based on the various selection criteria: Akaike Information Criterion (AIC), the Schwarz Information Criterion (SIC), and the Hannan-Quinn Information Criterion (HQIC). The study employs the VAR Lag Order Selection Criteria, and based on the obtained results, the existence of a co-integration relationship among the time series is subsequently assessed. Findings The research findings confirm the hypothesis regarding the impact of economic growth and per capita energy consumption on carbon dioxide (CO2) emissions and greenhouse gas (GHG) levels over the long term. The results suggest the existence of a long-run relationship between the examined variables across all five Western Balkan countries, including North Macedonia, where a statistically significant effect of the economic growth rate and per capita energy consumption on (GHG) emissions was confirmed. On the other hand, the hypothesis concerning the short-run relationship among the included variables was validated in three Western Balkan countries - Serbia, North Macedonia, and Bosnia and Herzegovina. Finally, the third hypothesis, which pertains to the Environmental Kuznets Curve (EKC) and its inverted Ushape, was empirically supported in the case of Serbia. Originality/value Sustainable economic development is a central topic in current economic research and a core part of the European Union's development strategies: Europe 2020, European Green Deal (Fetting, 2020; Wolf et al., 2021), Agenda for Sustainable Development (Lee et al., 2016; Delbeke et al., 2019; Kryk and Guzowska, 2021; Burgin, 2023). The originality of this paper lies in assessing the significance of the impact of economic growth on environmental conditions through the application of econometric methods, specifically the Vector Error Correction Model. The value of this research stems from analysing the impact of greenhouse gas emissions on economic growth rates – a dimension that previous studies have primarily examined through the impact of carbon dioxide emissions alone. A key limitation of the study concerns the scope of the dataset, particularly the omission of the pre-2000 period. As a recommendation for future research, a comparative analysis between Balkan countries and a group of EU-27 members is suggested to evaluate differences and similarities in the progress of sustainable development policies across different regions of Europe. |
| Keywords: | ARDL bounds testing approach, Income inequality, Life expectancy, North Macedonia |
| JEL: | C32 I14 I15 O52 |
| Date: | 2025–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:aoh:conpro:2025:i:6:p:288-292 |
| By: | Sofia Aleshina; Richard S.J. Tol (Department of Economics, University of Sussex, BN1 9SL Falmer, United Kingdom); Valeriya Ignatovskaya |
| Abstract: | This work presents a modified version of the integrated economic-climate model RICECH4. The aim of the work was to expand the basic RICE model by explicitly accounting for methane (CH4) emissions along with traditional carbon dioxide (CO2) emissions, as well as the subsequent analysis of the economic and climatic effects of implementing various emissions control strategies. The development was based on the open implementation of RICE in Python using the Pyomo library and the IPOPT solver. The model was modified as follows: a separate methane cycle block was implemented, including both industrial and natural CH4 emissions; the radiative forcing function was adapted taking into account the contribution of methane; a new control variable was built in to reduce CH4 emissions; the logic of two climate policy scenarios, cooperative and non-cooperative, was implemented. In addition, parameterization and aggregation of input data for 12 regions were conducted based on open sources. The model covers key blocks of integrated assessment: the dynamics of capital, investment, savings, production, consumption, and emissions, as well as climate indicators—greenhouse gas concentrations, atmospheric and ocean temperatures, radiative forcing, and climate change damage. Simulations were conducted for the 2025–2115 horizon, and the objective function indicators were calculated. The resulting RICE-CH4 model can be used as a tool for quantitative analysis of climate policy, assessing the social cost of emissions, and sustainable development strategies in a regional representation of global data. A flexible implementation structure provides the potential for future expansion of the model: adding new types of emissions, complicating the country interaction block, and integrating it with external risk and resilience assessment modules. |
| Keywords: | climate change, global warming, methane emissions, RICE model, cooperation |
| JEL: | Q54 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:sus:susewp:0226 |
| By: | Schneider, Eric B. |
| Abstract: | There is strong evidence that exposure to atmospheric pollution is detrimental to health. However, most current and historical research has focussed on the shortrun consequences of exposure to pollution on health, and historical researchers have not been able to assess the effects of pollution on a wide range of health indicators. This paper uses fog events at a daily level as a proxy for acute extreme pollution events in historical London (1892-1919). It tests whether exposure to fog at birth and at the time of sickness influenced a wide range of indicators of child health in the short and long term, including birth outcomes (birth weight, length, stillbirth, premature birth and neonatal death), mortality risk (mortality before age 15), growth outcomes (heights and weights in infancy, childhood and adolescence), and morbidity outcomes (incidence, prevalence and sickness duration from respiratory diseases and measles). Being born on a fog day did not have strong effects on birth or growth outcomes or on morbidity outcomes for upper respiratory diseases. However, being born on a fog day increased mortality risk from respiratory diseases and increased incidence, prevalence and sickness duration from measles, influenza and other lower respiratory diseases. I also find short-run effects of fog on sickness duration from influenza and measles. Overall, the mixed results suggest that atmospheric pollution caused significant ill health in historical London but only for limited dimensions of health. |
| Keywords: | ambient air pollution; morbidity; child growth; respiratory disease; health transition |
| JEL: | N33 I12 Q53 |
| Date: | 2025–06–26 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:wpaper:128850 |
| By: | Sweder van Wijnbergen (University of Amsterdam and Tinbergen Institute) |
| Abstract: | Climate change and its two-way relation with economic activity is stochastic and so is therefore the optimal tax internalizing the climate externality. But with capital irreversibility a stochastic time path for carbon prices slows down the reallocation from brown to green sectors because waiting then acquires an option value. We show that it is optimal to pre-announce a time path for future carbon taxes, eliminating the option value of waiting at the cost of suboptimality of the pre-announced taxes at the time they apply. We analyse for how long carbon taxes should be pre-announced and which factors influence that timespan. |
| Keywords: | Carbon taxes, Social Cost of Carbon, Irreversible Capital, Real Options |
| Date: | 2025–07–25 |
| URL: | https://d.repec.org/n?u=RePEc:tin:wpaper:20250043 |
| By: | Adhikari, Geeta Devi |
| Abstract: | The risks associated with climate change are disproportionately high to the small states due to elevated vulnerability and limited adaptive capacity. The current literature has mainly focused on small island developing countries, leaving the relatively unexplored small land-locked countries in the climate governance literature. This study uses a qualitative case-study approach and thematic analysis of national climate plans and policy documents and international agreements to study Bhutan as an example of climate governance, and examines how its national climate policies are aligned with international climate processes. The article will assess the policies of Bhutan in conserving forests, renewable energy, climate change and sustainable development under the Gross National Happiness plan. It has been found that the strong credibility of the domestic environment in Bhutan gives it the normative and moral power in the international climate governance despite its minor material power. This article can be added to the discussion of climate governance by predetermining the role of land-locked developing countries in influencing the global climate action. Keywords: Climate governance, Bhutan, small states, land-locked state, sustainability, climate policy. |
| Date: | 2026–02–07 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:5ktw8_v1 |
| By: | Yasmine Kamal (Cairo UniversityAuthor-Name: Mahmoud Mohieldin; Cairo University); Myriam Ramzy (Cairo University) |
| Abstract: | Egyptian firms are a vital case for examining the impact of the EU Carbon Border Adjustment Mechanism (CBAM) in its current transitional phase. CO2 emissions tariffs on imports implemented under the CBAM could threaten export competitiveness of developing countriesincluding Egypt- in the EU market. Thus, this study examines Egyptian firms’ performance in greening their production process and the determinants of their environmental measures using data from the World Bank Enterprise Survey. Our findings indicate that green management practices matter for Egyptian firms’ probability of adoption of green measures as well as the number of measures they adopt. In contrast, financial constraints negatively impact the probability of undertaking capital-intensive green investments such as machinery and vehicle upgrades. Also, specific targets for carbon emissions and energy consumption exert greater positive effect on the extensive and intensive margins of a firm’s environmental performance than any other green management action. Qualitative analysis supports the quantitative findings on the importance of both managerial and financial factors in determining environmental performance. Egyptian firms in steel, fertilizers, and cement sectors that export to the EU have technically complied with CBAM requirements with the help of government bodies and through hiring consultants and training their employees. In interviews, they emphasized their need to establish reliable monitoring, reporting, and verification systems for their carbon emissions and to secure concessional long-term finance to undertake their decarbonization plans. They are also willing to engage in the trading of carbon certificates in the Egyptian exchange on the newly developed voluntary carbon market. Even as they are actively responding to CBAM, firms acknowledged their need to diversify their export destination markets so as not to depend primarily on the EU. |
| Date: | 2024–12–20 |
| URL: | https://d.repec.org/n?u=RePEc:erg:wpaper:1771 |
| By: | Lipman, Timothy E. PhD; Collins, Stephanie; Horvath, Arpad PhD |
| Abstract: | California has ambitious goals to introduce zero-emission technologies across various transportation sectors. Significant progress has been made over the past decades in deploying battery electric light-duty trucks, but heavy-duty diesel trucks are harder to “decarbonize” due to their operational demands and duty cycles, even though the benefits of replacing heavily polluting diesel trucks are significant. Front line communities where diesel vehicles operate the most, especially those near seaports and warehouses, bear the brunt of the pollution from these vehicles and stand to benefit the most from their electrification. Hydrogen fuel cell technology represents a promising approach for transitioning these trucks to zero-emission but the costs and benefits over time must be carefully considered. |
| Keywords: | Engineering |
| Date: | 2026–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsrrp:qt37f0x741 |
| By: | Matthew K. Agrawala; Richard S. J. Tol |
| Abstract: | We estimate the national social cost of carbon using a recent meta-analysis of the total impact of climate change and a standard integrated assessment model. The average social cost of carbon closely follows per capita income, the national social cost of carbon the size of the population. The national social cost of carbon measures self-harm. Net liability is defined as the harm done by a country's emissions on other countries minus the harm done to a country by other countries' emissions. Net liability is positive in middle-income, carbon-intensive countries. Poor and rich countries would be compensated because their current emissions are relatively low, poor countries additionally because they are vulnerable. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2601.13834 |
| By: | Gu, Grace (University of California, Santa Cruz); Mulalic, Ismir (Department of Economics, Copenhagen Business School); Pozzoli, Dario (Department of Economics, Copenhagen Business School); Wu, Jinhong (The Technical University of Denmark) |
| Abstract: | Climate-related risks have increased significantly over the past two decades, including both physical risks (such as extreme weather events) and transition risks (arising from climate change mitigation policies). This paper examines how these risks relate to firms’ innovation outcomes, including those related to green technologies. We first develop a model in which firms choose how many workers to employ for R&D and production activities in response to rising climate risks. The model predicts an increase in green innovation and overall innovation under certain conditions. Empirical evidence from Danish administrative data generally supports these predictions, showing that firms exposed to climate risks exhibit higher innovation activity, especially in green technologies. |
| Keywords: | Climate change; Physical risks; Transition risks; Firms’ innovation |
| JEL: | Q54 Q55 Q56 |
| Date: | 2026–01–23 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:cbsnow:2026_003 |
| By: | Barro, Tjantana; Marencak, Michal; Nghiem, Giang |
| Abstract: | We provide causal evidence that the economic framing of a structural policy changes households' macroeconomic expectations. In a randomized survey experiment in the Bundesbank Online Panel of Households, all participants first read an identical neutral primer about climate policy measures and are then randomly assigned to receive no further text or an additional narrative interpreting the policy primarily as a negative demand or supply shock. Both narratives reduce expected growth. However, only the supply-shock framing raises inflation expectations, while the demand-shock framing does not reduce them-contrary to a simple demand-channel benchmark. These findings suggest that communication that makes different macro channels salient can materially shape expectations, with implications for economic policy communication during structural transitions. |
| Keywords: | climate change, expectations, survey experiments, RCT. |
| JEL: | C33 D84 E31 E52 Q4 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:han:dpaper:dp-743 |
| By: | Mahmoud Arbouch |
| Abstract: | This paper assesses the economic and environmental implications of Morocco’s strategic transition from internal combustion engine vehicle (ICEV) manufacturing to electric vehicle (EV) production, with a particular focus on the regional impacts of localizing high-value battery manufacturing. Using an interregional input-output model, extended with environmental satellite accounts, the study simulates a structural shock related to the wholesale substitution of ICEV-specific inputs with EV-specific components. The results highlight substantial macroeconomic gains, including a 1.9% increase in national GDP and positive employment growth, particularly in Tanger-Tétouan-Al Hoceima, Rabat-Salé-Kénitra, and Casablanca-Settat. However, these benefits are regionally concentrated, exposing the risk of deepening spatial inequalities. Additionally, while the transition enhances Morocco’s position in global green value chains, it also induces a measurable rise in carbon dioxide emissions, especially in industrial and phosphate-rich regions. The prospect of economic advancement accompanied by environmental degradation raises critical concerns about policy alignment between industrial growth and energy decarbonization. |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpaeco:rp17_25 |
| By: | Clement, Jessica; Doranova, Asel (Tilburg University, School of Economics and Management); Hodzic, Sabina; Pachova, Nevelina |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:tiu:tiutis:d4dd3a06-64d4-4384-a18e-0992fe6f7e6b |
| By: | Leonzio Rizzo; Riccardo Secomandi; Luisa Loiacono; Enrico Rubolino |
| Abstract: | In extraordinary times, policy makers need to find new ways to finance public expenditures and restore public budgets. Taxing who benefit from the extraordinary time would be the easy way, but the threat of negative trickle-down responses often make policy makers reluctant to go along this road. This paper studies how big corporations respond to tax hikes in extraordinary times. We leverage variations from the “Robin Hood†tax: a large surcharge applying to Italian firms operating in the energy sector with revenues above a discrete threshold. After showing that firms did not game the law by manipulating their revenues, our regression discontinuity estimates provide compelling evidence that the tax did not hurt in vestments nor profits, and that the tax burden is not shifted to workers. Moreover, our results are confirmed by the additional analysis we run using a difference in difference approach. |
| Keywords: | corporate taxation; big corporation; regression discontinuity design |
| JEL: | H22 H25 G38 L25 |
| Date: | 2025–11–03 |
| URL: | https://d.repec.org/n?u=RePEc:udf:wpaper:20250214 |
| By: | Ñancupil, Ignacio; Gil, Marina |
| Abstract: | La Comisión Económica para América Latina y el Caribe (CEPAL) ha establecido cinco ejes prioritarios para una transición energética justa e inclusiva en América Latina y el Caribe: acceso universal y equitativo a la energía; una matriz sostenible; mayor eficiencia; infraestructura resiliente, e integración energética regional. Una mejor conectividad energética y una red resiliente e integrada permiten a los países aumentar su seguridad energética, aprovechar economías de escala en proyectos de infraestructura verde con menores costos, y facilitar la complementariedad y la mayor integración de energías renovables en un sistema interconectado más inclusivo, flexible, confiable y descarbonizado. Este estudio aporta información, sobre la base del análisis de los datos de Costa Rica, sobre las oportunidades que ofrece la integración energética para mejorar la seguridad y resiliencia de los sistemas energéticos, y constituye un insumo técnico para apoyar la formulación de políticas públicas orientadas a una transición energética sostenible e inclusiva, que contribuya al bienestar de las personas y al cumplimiento de los compromisos regionales y mundiales en materia de desarrollo sostenible. |
| Date: | 2025–11–19 |
| URL: | https://d.repec.org/n?u=RePEc:ecr:col022:83822 |
| By: | Joshua McNamara (University of Waikato) |
| Abstract: | This paper examines whether retail fuel prices in New Zealand adjust asymmetrically to cost shocks, using the introduction and repeal of the Auckland Regional Fuel Tax (ARFT) as a natural experiment. The ARFT imposed a 10 cents-per-litre levy on fuel sold in Auckland from July 2018 to June 2024, while neighbouring regions remained untaxed. Exploiting these sharp and opposite policy changes, the analysis employs a difference-in-differences framework using daily, station-level fuel price data from Auckland, Northland, and Waikato. At the aggregate level, fuel prices increased by 10.8 cents per litre following the tax introduction and fell by 11.6 cents per litre after its repeal, indicating near-complete and symmetric pass-through on average. However, substantial spatial heterogeneity emerges when local competitive conditions are considered. Among stations located close to competitors operating under a different tax regime, prices rose almost fully after the tax was introduced but fell by only around three-quarters as much following its removal. Distance-based interaction estimates confirm that pass-through varies systematically with proximity to oppositely treated competitors, consistent with localised asymmetric price transmission driven by spatial competition. These findings show that while fuel prices may adjust symmetrically on average, asymmetric adjustment can persist in local markets, with important implications for the incidence of regional fuel taxes and their repeal. |
| Keywords: | asymmetric price transmission; price transmission; fuel tax; spatial competition; difference-indifferences; retail fuel prices |
| JEL: | L11 H22 Q41 R12 |
| Date: | 2026–02–02 |
| URL: | https://d.repec.org/n?u=RePEc:wai:econwp:26/01 |
| By: | Derek Lemoine |
| Abstract: | I study asymmetric information about the social cost of an externality, as opposed to asymmetric information about private costs of abatement. I show that quantity regulation with bankable permits has an informational advantage because the permit market aggregates dispersed information about social costs. It has the disadvantage of making private costs more uncertain ex ante. I analytically derive the expression for the (dis)advantage of prices over quantities in this setting. I show that a quantity policy can dominate a price policy for any slope of marginal private costs and always dominates when marginal private costs are sufficiently flat. |
| JEL: | D62 D82 G14 H23 Q54 Q58 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34738 |
| By: | Beyene, Winta; Falagiarda, Matteo; Ongena, Steven; Scopelliti, Alessandro |
| Abstract: | Transitioning to a sustainable economy and reducing air pollution hinge on appropriate economic incentives and financing conditions. The auto loan market offers a prime setting, as lenders' credit terms can either discourage or incentivize the purchase of high-pollution vehicles. Using loan-level data, we examine how captive and independent banks adjust lending conditions in response to information and regulatory shocks affecting diesel vehicles. Exploiting the 2015 diesel emissions scandal and the introduction of local circulation restrictions, we show that lending responses differ systematically across lender types, with captive banks tending to weaken, rather than reinforce, the effectiveness of environmental regulation for air pollution. |
| Keywords: | Car Loans, Captive Banks, Independent Banks, Diesel Emissions Scandal, Car Circulation Restrictions |
| JEL: | G21 G51 Q53 Q58 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:safewp:335886 |
| By: | Katrin Gasior; Gemma Wright; H. Xavier Jara; Daniele Malerba |
| Abstract: | Carbon pricing is widely recognized as a key tool for reducing greenhouse gas emissions. However, if implemented without compensatory measures, it can increase poverty and inequality. The aim of this paper is to examine the role of carbon pricing in generating fiscal space for expanding social protection systems in low- and middle-income countries (LMICs). |
| Keywords: | Climate change mitigation, Social protection, Microsimulation, SDGs |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2026-4 |
| By: | Ñancupil, Ignacio; Gil, Marina |
| Abstract: | La Comisión Económica para América Latina y el Caribe (CEPAL) ha establecido cinco ejes prioritarios para una transición energética justa e inclusiva en América Latina y el Caribe: acceso universal y equitativo a la energía; una matriz sostenible; mayor eficiencia; infraestructura resiliente, e integración energética regional. Una mejor conectividad energética y una red resiliente e integrada permiten a los países aumentar su seguridad energética, aprovechar economías de escala en proyectos de infraestructura verde con menores costos, y facilitar la complementariedad y la mayor integración de energías renovables en un sistema interconectado más inclusivo, flexible, confiable y descarbonizado. Este estudio aporta información, sobre la base del análisis de los datos de Panamá, sobre las oportunidades que ofrece la integración energética para mejorar la seguridad y resiliencia de los sistemas energéticos, y constituye un insumo técnico para apoyar la formulación de políticas públicas orientadas a una transición energética sostenible e inclusiva, que contribuya al bienestar de las personas y al cumplimiento de los compromisos regionales y mundiales en materia de desarrollo sostenible. |
| Date: | 2025–11–19 |
| URL: | https://d.repec.org/n?u=RePEc:ecr:col022:83830 |
| By: | Sylvain Chareyron; Laetitia Tuffery |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:tep:teppwp:wp26-04 |
| 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:pbecon:pb02_26 |
| By: | Berger, Frederic; Suerkemper, Felix; Kaselofsky, Jan; Vondung, Florin; Swagemakers, Julia; Reinfandt, Niklas; Eichhammer, Wolfgang; Wagner, Fabian; Kokkinos, Christos-Iason; Andreou, Andreas; Eidelloth, Stefan; Ellmauer, Christian; Lorenz, Tobias |
| Abstract: | The MICATool is a comprehensive framework designed to assess the Multiple Impacts of energy efficiency and renewable energy measures. Its methodology allows the incorporation of a variety of social, economic and environmental indicators reflecting the wider impacts of assessed measures. The framework provides the necessary inputs and gathers indicators' results, in both physical and, where applicable, monetised terms. Furthermore, the results can be assessed in a cost-benefit analysis module. As a result, the MICATool supports the assessment and comparison of different measures pertaining to energy efficiency and renewable energy. The framework allows for the embedding of multiple impact indicators for quantification and monetisation. These assessments allow for better informed energy policy decisions |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:fisisi:335891 |
| By: | Chauvet, Pablo; Pizzi, Tatiana; Olave, Nicolás; Godoy, Ignacio |
| Abstract: | Este documento tiene por objetivo describir de manera sintética la industria del hidrógeno y el papel que puede cumplir el llamado hidrógeno de bajas emisiones para descarbonizar sectores o industrias difíciles de electrificar o desfosilizar. Con este propósito, se abordan las propiedades de este vector energético, sus variados tipos (o colores), sus procesos de producción (o vías tecnológicas) y sus principales aplicaciones en la actualidad y aquellas que se prevén a futuro. Posteriormente, se explora el panorama del mercado del hidrógeno a nivel mundial, presentando datos de consumo, producción y comercio, y se examinan la cartera de proyectos anunciados y las proyecciones de demanda. Además, se analiza el costo del hidrógeno de bajas emisiones según las vías tecnológicas empleadas. También se presentan y evalúan algunas de las principales ventajas de los países de América Latina y el Caribe para producir hidrógeno de bajas emisiones, lo que se complementa con un examen de los esfuerzos de los Gobiernos en materia de planificación estratégica, normativa y regulación para impulsar esta industria. En las conclusiones se ofrecen reflexiones y recomendaciones para contribuir a una agenda de desarrollo productivo que tenga a la industria del hidrógeno bajo en emisiones como impulsora. |
| Date: | 2025–12–17 |
| URL: | https://d.repec.org/n?u=RePEc:ecr:col022:84466 |
| By: | Sérgio Cruz |
| Abstract: | This paper analyzes electricity consumption dynamics in Portugal between 2012 8 and 2024, a period marked by unprecedented energy transition, the COVID-19 pan- 9 demic, and the 20212022 energy crisis. Using three complementary Vector Autore- 10 gressive approaches, the analysis compares forecast performance and identies the 11 main drivers of electricity consumption amid the rapid expansion of renewable capa- 12 city. All models achieve good forecasting accuracy, and impulse response functions 13 indicate that GDP shocks have signicant and persistent eects on electricity con- 14 sumption, with long-run cumulative eects ranging from 0.27 to 0.49. At the same 15 time, renewable capacity penetration shows ambiguous short-run eects, and con- 16 sumption remains highly price-inelastic. The results suggest that economic forecasts 17 will remain central to electricity system planning. However, declining elasticities 18 suggest a gradual decoupling between consumption and economic growth, driven by 19 energy transition factors such as energy eciency and self-consumption. |
| Keywords: | electricity consumption, income, renewable capacity, forecasting, VAR. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ise:remwps:wp04062026 |
| By: | Serpil Kahraman (Yasar University, Izmir, Turkiye) |
| Abstract: | As an economic model, the green economy aims to reduce environmental risks while promoting sustainable development. Ecopreneurs are entrepreneurs whose business efforts are not only driven by profit maximization, but also by a concern for environmental sustainability. The aim of the ecoentrepreneur is to establish a successful business that fulfills market needs and secures financial stability by considering sustainability concepts. In this framework, the green economy and ecopreneurship are closely interrelated, as both aim to create environmentally friendly ecosystems. As part of the Ecopreneurs Project*, this study aims to provide an ecopreneur profile structure, and related competence areas by considering sustainability priorities. In this research, workshop, desk research, focus group, and survey methodologies are performed by the project partnering countries, which are the Netherlands, Spain, Greece, Turkiye, Romania, and Sweden. The results show five ecopreneur profiles based on industry focus: eco-venturing/manufacturing, agro-tourism, ecohospitality, eco-transportation, and eco-construction. While environmental issues are determined to be relatively the highest priority, it can be said that other sustainability issues—economic, social, shortterm, medium-term and long-term—have almost the same level of priority, i.e., medium and high priority. Additionally, the results of the competence matrix show that among the given competences, working in a team and effective problem solving are relatively more important than other competences. |
| Keywords: | ecopreneur, green economy, sustainability |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:smo:raiswp:0582 |
| By: | Frondel, Manuel |
| Abstract: | Aktuell fordern Wirtschaftsverbände, das Zieljahr Deutschlands für das Erreichen der Klimaneutralität von 2045 auf 2050 zu verschieben und damit das nationale Ziel dem Klimaneutralitäts-Ziel der Europäischen Union anzugleichen. Für diese Forderung gibt es gute Gründe, wie in diesem Beitrag erläutert wird, allen voran immense Kosteneinsparungen für die deutsche Volkswirtschaft. Eine Verschiebung wäre aber auch deshalb geboten, weil eine effektive Klimapolitik, die etwas im globalen Maßstab bewirkt, nur in internationaler Kooperation möglich ist, nicht aber im nationalen Alleingang (Ockenfels, Schmidt 2019). Angesichts der mit einer zeitlich überambitionierten Klimapolitik einhergehenden Herausforderungen stellt sich die Frage, warum Deutschland die damit verbundenen Risiken und Kosten eingehen sollte, wenn die daraus resultierenden Treibhausgaseinsparungen im globalen Maßstab betrachtet allenfalls symbolischer Natur sein können. Diese Frage stellt sich umso mehr, als die Vorreiterrolle gravierende kontraproduktive Rückwirkungen für Deutschland haben kann, allen voran den möglichen Verlust an gesellschaftlicher Akzeptanz für die Klimapolitik. |
| Abstract: | Business associations are currently calling for Germany's target year for achieving climate neutrality to be postponed from 2045 to 2050, thereby aligning the national target with the European Union's climate neutrality target. There are good reasons for this demand, as explained in this article, foremost among them the immense cost savings for the German economy. However, a postponement would also be advisable because effective climate policy that has an impact on a global scale is only possible through international cooperation, not through unilateral national action (Ockenfels, Schmidt 2019). In view of the challenges associated with an overly ambitious climate policy, the question arises as to why Germany should take on the associated risks and costs when the resulting greenhouse gas savings can only be symbolic on a global scale. This question is all the more pertinent given that playing a pioneering role could have serious counterproductive repercussions for Germany, above all the possible loss of social acceptance for climate policy. |
| Keywords: | Emissionshandel, konditionierte Klimaziele, Reziprozität |
| JEL: | Q21 I38 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwimat:335879 |
| 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:26-01 |
| By: | Đorđe Kotarac (Faculty of Agriculture, University of Belgrade, Serbia) |
| Abstract: | Purpose The foundations of sustainable development theory promote economic growth within the limits of preserving the environmental conditions of countries (Lazăr et al., 2019; Jones., 2022; Hatmanu and Cautisanu, 2023). This paper conducts a preliminary examination of the Environmental Kuznets Curve (EKC) by testing its hypothesized inverted U-shaped trajectory (Kisswani et al., 2019; Ansari, 2022; Magazzino et al., 2023). Specifically, the Kuznets hypothesis suggests that, in the short term, increased economic development leads to higher levels of environmental pollution (Mazur et al., 2015; Shahbaz and Sinha, 2019; Simionescu, 2021). However, over the long run, improvements in environmental standards, the implementation of regulatory measures, and the adoption of cleaner technological and production processes contribute to a reduction in environmental degradation (Zhang et al., 2017; Shuai et al., 2017; Kuznets, 2019; Jóźwik et al., 2021). This analysis includes five Western Balkan countries that have achieved candidate status for European Union membership in the post-2000 period. Empirical tests for co-integration among the variables confirmed the existence of a long-run relationship between economic growth and environmental quality. In a study conducted by Armeanu et al. (2018), the relationship between variables measuring environmental pollution and the economic growth rates of the EU-27 countries from 1995 to 2014 was empirically tested. The results of the research confirm the Environmental Kuznets Curve (EKC) hypothesis, indicating the existence of a long-term effect in the case of sulphur dioxide (SO2) emissions and non-methane volatile organic compounds (NMVOCs). Another significant research in the European context was conducted by Vasylieva et al. (2019), examining the relationship between economic growth rate, renewable resource allocation, and greenhouse gas (GHG) emissions during the period 2000-2016. Using FMOLS and DOLS panel estimation techniques, the study confirms the Environmental Kuznets Curve (EKC) hypothesis. Additionally, Dogan and Inglesi-Lotz (2020), conducted a study covering the period from 1980 to 2014, analysing the impact of industrial activity and energy consumption on the increase in carbon dioxide (CO2) emissions in the EU-27 countries. The findings of this research indicate a long-term decline in (CO2) emissions as a result of more efficient energy use and the adoption of cleaner technologies. The purpose of this paper is to conduct an empirical analysis of the short- and long-term effects of economic growth in Western Balkan countries on the quality of their natural environment. Based on the available data, the study separately examines the impact of economic growth on carbon dioxide (CO2) emission levels, in contrast to the effect of economic growth on the increase in total greenhouse gas (GHG) emissions. The Environmental Kuznets Curve hypothesis is tested using data from five Western Balkan countries. To examine the effect of economic growth on environmental quality and the use of renewable energy in five Western Balkan countries, the following three hypotheses will be tested: H1: Increases in economic growth rates and per capita energy consumption have a short-term effect on CO2 and GHG emission levels, as indicators of environmental quality in Western Balkan countries. H2: Growth in economic activity and total per capita energy consumption exerts a long-term influence on changes in CO2 and GHG emissions in Western Balkan countries. H3: Rising economic growth rates and per capita energy consumption lead to a short-term decline in environmental quality, whereas, in the long term, they contribute to improvements in environmental quality. Design/methodology/approach The methodological section of this research focuses on examining the existence of both short- and long-run effects of economic growth and per capita energy consumption on the variation in carbon dioxide (CO2) and greenhouse gas (GHG) emissions. The research covers the period from 2000 to 2023 and includes a sample of five Western Balkan countries-candidates for accession to the European Union (EU-27). The analysis explores links between economic growth, energy use, and environmental degradation using panel data methods. To implement the methodological part and ensure the robustness of the empirical results, the stationarity of the time series is tested using unit root tests. Specifically, the Augmented Dickey-Fuller (ADF) test and the Phillips-Perron (PP). The Johansen co-integration test and Vector Error Correction model are applied to determine the order of co-integration of the variables. Prior to conducting the co-integration tests, the optimal lag length is selected based on the various selection criteria: Akaike Information Criterion (AIC), the Schwarz Information Criterion (SIC), and the Hannan-Quinn Information Criterion (HQIC). The study employs the VAR Lag Order Selection Criteria, and based on the obtained results, the existence of a co-integration relationship among the time series is subsequently assessed. Findings The research findings confirm the hypothesis regarding the impact of economic growth and per capita energy consumption on carbon dioxide (CO2) emissions and greenhouse gas (GHG) levels over the long term. The results suggest the existence of a long-run relationship between the examined variables across all five Western Balkan countries, including North Macedonia, where a statistically significant effect of the economic growth rate and per capita energy consumption on (GHG) emissions was confirmed. On the other hand, the hypothesis concerning the short-run relationship among the included variables was validated in three Western Balkan countries - Serbia, North Macedonia, and Bosnia and Herzegovina. Finally, the third hypothesis, which pertains to the Environmental Kuznets Curve (EKC) and its inverted Ushape, was empirically supported in the case of Serbia. Originality/value Sustainable economic development is a central topic in current economic research and a core part of the European Union's development strategies: Europe 2020, European Green Deal (Fetting, 2020; Wolf et al., 2021), Agenda for Sustainable Development (Lee et al., 2016; Delbeke et al., 2019; Kryk and Guzowska, 2021; Burgin, 2023). The originality of this paper lies in assessing the significance of the impact of economic growth on environmental conditions through the application of econometric methods, specifically the Vector Error Correction Model. The value of this research stems from analysing the impact of greenhouse gas emissions on economic growth rates – a dimension that previous studies have primarily examined through the impact of carbon dioxide emissions alone. A key limitation of the study concerns the scope of the dataset, particularly the omission of the pre-2000 period. As a recommendation for future research, a comparative analysis between Balkan countries and a group of EU-27 members is suggested to evaluate differences and similarities in the progress of sustainable development policies across different regions of Europe. |
| Keywords: | Sustainable development, Kuznets (EKC) hypothesis, CO2/GHG emissions, Panel data methods, Western Balkan countries |
| JEL: | Q01 O44 C50 |
| Date: | 2025–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:aoh:conpro:2025:i:6:p:283-287 |