|
on Energy Economics |
| By: | Comisión Nacional de los Mercados y la Competencia (CNMC) (Comisión Nacional de los Mercados y la Competencia (CNMC)) |
| Abstract: | Photovoltaic self-consumption installations (PVSC) have grown exponentially in the Spanish electricity system since 2021. These installations, along the storage systems coupled to them, have also benefited from significant public aid during the same period. Such aid may have affected both the development of the sector and the competitive dynamics in the energy field and in other markets. The study analyses the various public support schemes offered at the national, regional and local levels in the form of grants, tax reductions and tax deductions. It assesses their impact on the penetration of the PVSC and, from there, evaluates their effect on competition. To strengthen the effectiveness and pro-competitive effects of these support measures, as well as to minimise possible competitive distortions, the CNMC recommends, first, reinforcing the institutional framework and coordination among administrations. This includes ensuring that the combined aid intensity does not exceed a certain threshold, implementing one-stop-shop solutions, and grouping incentives. Second, it proposes defining aid in terms of fixed unit amounts and regularly reassessing priority areas eligible for public support. Third, it suggests speeding up access to aid by streamlining administrative procedures and granting aid automatically where possible, expanding advance payment systems for subsidies, concentrating tax reduction in the first year, and considering the use of financial instruments. |
| Keywords: | Regulation, Competition, Public aid, Electricity generation, Photovoltaic self-consumption |
| JEL: | H23 K23 L52 L9 Q42 Q48 |
| Date: | 2025–10–21 |
| URL: | https://d.repec.org/n?u=RePEc:awo:epaper:ei/02/2023_eng |
| By: | Comisión Nacional de los Mercados y la Competencia (CNMC) (Comisión Nacional de los Mercados y la Competencia (CNMC)) |
| Abstract: | Las instalaciones de autoconsumo fotovoltaico (ACFV) han aumentado de forma exponencial en el sistema eléctrico español desde 2021. Estas instalaciones y los sistemas de almacenamiento acoplados a ellas se han beneficiado también de importantes ayudas públicas durante el mismo periodo, las cuales han podido afectar tanto al desarrollo del sector como a la dinámica competitiva en el ámbito energético y en otros mercados. El estudio analiza las diversas ayudas públicas ofrecidas a nivel estatal, autonómico y local en forma de subvenciones, deducciones y bonificaciones. Se evalúa su impacto sobre la penetración del ACFV y, a partir de ahí, se valora su efecto sobre la competencia. Para reforzar la eficacia y los efectos procompetitivos de estas ayudas, así como para minimizar posibles distorsiones competitivas, la CNMC recomienda, primero, reforzar el marco institucional y la coordinación entre administraciones, asegurando que la intensidad de las ayudas combinadas no exceda un determinado umbral, instaurando soluciones de ventanilla única y agrupando incentivos. Segundo, se propone definir las ayudas en términos de cuantías fijas unitarias, así como reevaluar regularmente las áreas prioritarias susceptibles de apoyo público. Tercero, se plantea acelerar el acceso a las ayudas, agilizando su tramitación y la concesión de oficio, ampliando los sistemas de anticipos de subvenciones, concentrando las bonificaciones en el primer año y valorando el uso de instrumentos financieros. |
| Keywords: | Regulación, Competencia, Ayudas públicas, Generación de energía eléctrica, Autoconsumo fotovoltaico |
| JEL: | H23 K23 L52 L9 Q42 Q48 |
| Date: | 2025–10–21 |
| URL: | https://d.repec.org/n?u=RePEc:awo:epaper:ei/02/2023 |
| By: | Leocata, Marta; Livieri, Giulia; Morlacchi, Silvia; Corvino, Fausto; Flandoli, Franco; Pirni, Alberto Eugenio Ermenegildo |
| Abstract: | Household adoption of rooftop photovoltaic (PV) systems is central to the green energy transition, yet diffusion depends on social influence and behavioral biases, as well as payback economics. This study develops a parsimonious Markovian model in which households move sequentially from being unengaged (“Carbon”) to informed, to planning, and finally to adoption (“Green”). Transition rates are micro-founded by two mechanisms: (i) social contagion/communication, proxied by the current share of adopters, and (ii) economic profitability, proxied by payback time computed from a Net Present Value framework. Novel to this diffusion setting, bounded rationality is introduced via hyperbolic discounting, creating a procrastination loop that delays adoption even when PV is economically attractive in a long-run perspective. Calibrated on the Italian residential PV diffusion path (2006–2020) and assessed in national and regional applications, the model reproduces observed trajectories and enables forward-looking scenario analysis (2020–2026). Results show that policies yielding similar payback improvements can produce different outcomes once present bias is accounted for and that behaviorally informed intervention are stronger. The findings contribute a micro-to-macro bridge between behavioral economics and technology diffusion modeling and imply that effective policy portfolios (and PV business models) should complement incentives with commitment devices and social-norm peer strategies to accelerate PV uptake and its spillover emissions benefits. |
| Keywords: | green energy transition; solar photovoltaic; individual based modeling; ethics and mathematics; procrastination; Markovian model |
| JEL: | Q42 Q55 D91 C61 |
| Date: | 2026–04–30 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:136956 |
| By: | Sven Heim; Mario Liebensteiner; Félix Michelet |
| Abstract: | Wind turbines offer significant environmental benefits but also create negative local externalities, such as noise and visual pollution, which can lead to local tensions and community resistance against the energy transition. This paper examines negative and positive externalities associated with wind turbine siting in Germany. Utilizing an instrumental variables approach, we find that wind turbine siting decreases house purchase prices by 1.9% in affected municipalities, with this adverse effect being most pronounced for the first turbines installed. Additionally, the siting of wind turbines reduces local tourism, apartment rents, and leads to fewer building permits being issued for apartments and houses, exacerbating existing housing shortages. On the positive side, each installed wind turbine increases a municipality's local tax capacity by 1.8\% through higher commercial tax revenues. Our findings suggest that the negative externalities can be mitigated by investing the increased tax revenue into local amenities and public services, thereby compensating for the adverse effects of wind turbines. |
| Keywords: | wind power, externalities, hedonic pricing, NIMBY, local disamenities |
| JEL: | H2 Q4 Q5 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12478 |
| By: | Rachel Bonnifield (Center for Global Development); Caroline Mallory (Center for Global Development) |
| Abstract: | Access to electricity is a cornerstone of sustainable development, and a basic prerequisite for modern agriculture and industry. Despite significant recent progress, 677 million people still lacked access to electricity in 2023, of which an estimated 87 percent live in sub-Saharan Africa, and most live in low-density rural, remote, or conflict-affected areas without functional electrical grids. In these contexts, rapid electrification—a political and development imperative, and current focus of the World Bank-led Mission 300 initiative—relies heavily on off-grid solar systems, which are favored for their quick and flexible deployment, zero recurrent costs, and low-carbon footprint. Most off-grid solar systems in sub-Saharan Africa use lead-acid batteries for energy storage, which can create severe risks of environmental lead pollution and human lead exposure in the absence of safe disposal and recycling. Unsafe used lead-acid battery (ULAB) recycling is thought to be one of several important sources driving high rates of lead poisoning in sub-Saharan Africa. This paper investigates the role of lead in off-grid electrification across sub-Saharan Africa, including trends in off-grid technologies; the health and safety risks associated with ULAB recycling within sub-Saharan Africa; and a deep-dive market analysis of the off-grid solar sector. While there is high uncertainty, we estimate that the off-grid solar sector generates between 250, 000 and 1.5 million tonnes of ULAB waste per year, accounting for 13 to 47 percent of total ULAB waste volumes in the region. We conclude with a discussion of findings and actionable recommendations to improve collection and recycling practices within sub-Saharan Africa. |
| Date: | 2026–02–24 |
| URL: | https://d.repec.org/n?u=RePEc:cgd:ppaper:383 |
| By: | Federico M. Accursi; Raul Bajo-Buenestado |
| Abstract: | Mini-grids are emerging as a key solution to electrify access-deficit communities, yet their effectiveness in improving energy access and household welfare remains underexplored. This paper provides novel evidence from Tanzania, where a policy reform doubled the number of mini-grids since 2008. Exploiting spatial and temporal variation created by the distance to the households in proximity to mini-grids and the timing of their deployment, and using data from two different nationally representative surveys, we find that mini-grids increase local electrification rates by 10-23 percentage points — a result corroborated by a surge in nighttime light intensity near newly deployed projects. We also show that mini-grids reduce reliance on polluting fuel-based lighting and drive the uptake of electric-powered devices. Back-of-the-envelope calculations suggest the surplus generated by renewable-based mini-grids nearly offsets their costs. |
| Keywords: | energy access, mini-grids, nighttime light, energy poverty, Sub-Saharan Africa, sustainable development |
| JEL: | L94 O13 Q48 Q56 Q58 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12453 |
| By: | Francesco Decarolis |
| Abstract: | The energy crisis of 2022–2023 marked a turning point for European electricity markets. It exposed how tightly power prices remain linked to gas, how market volatility can destabilize investment, and how fragmented national responses can undermine the integrity of the internal energy market. In the wake of that shock, the European Union has placed electricitymarket reform at the center of its Clean Industrial Deal, coupling decarbonization with competitiveness and energy security. The 2024 Electricity Market Design (EMD) reform and forthcoming guidance on Contracts for Difference (CfDs) and Power Purchase Agreements (PPAs) aim to ensure that long-term investment signals coexist with short-run market efficiency. Yet implementation will determine success: translating legislative intent into market outcomes requires sound economic design and clear institutional coordination. This report was prepared to support that process. It analyzes how PPAs and CfDs can jointly mobilize private and public capital while preserving efficient dispatch and price discovery. Drawing on academic research, EU policy documents, and empirical evidence from different countries, the study provides a structured framework for reform. It links economic theory on incomplete markets and risk allocation to the operational experience of regulators, utilities, and corporate buyers. The analysis proceeds from the recognition that volatility in high renewable systems is not an anomaly but a structural feature, one that must be managed. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:baf:cbafwp:cbafwp26264 |
| By: | Piersilvio De Bortoli; Davide Ferrari; Francesco Ravazzolo; Luca Rossini |
| Abstract: | This paper studies the Model Selection Confidence Set (MSCS) methodology for univariate time series models involving autoregressive and moving average components, and applies it to study model selection uncertainty in the Italian electricity load data. Rather than relying on a single model selected by an arbitrary criterion, the MSCS identifies a set of models that are statistically indistinguishable from the true data-generating process at a given confidence level. The size and composition of this set reveal crucial information about model selection uncertainty: noisy data scenarios produce larger sets with many candidate models, while more informative cases narrow the set considerably. To study the importance of each model term, we consider numerical statistics measuring the frequency with which each term is included in both the entire MSCS and in Lower Boundary Models (LBM), its most parsimonious specifications. Applied to Italian hourly electricity load data, the MSCS methodology reveals marked intraday variation in model selection uncertainty and isolates a collection of model specifications that deliver competitive short-term forecasts while highlighting key drivers of electricity load like intraday hourly lags, temperature, calendar effects and solar energy generation. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.16527 |
| By: | Keith Head; Thierry Mayer; Marc Melitz; Chenying Yang |
| Abstract: | We model a multi-stage supply chain for EVs from battery production to vehicle distribution. Given industrial policies, firms select where to open facilities at each stage. This is a difficult combinatorial choice problem that we solve with a fast mixed integer linear programming formulation. We estimate the variable and fixed costs parameters using SMM. Counterfactual simulations reveal a tension between boosting EV adoption and promoting domestic supply chains. Due to increasing returns, even unconditional subsidies raise the number of factories in the subsidizing region—by about 16% for EVs and 7% for cells in North America, and even more in Europe. Theoretically, local assembly requirements can push down delivered marginal costs relative to unconditional subsidies. Empirically, local content requirements quadruple the expansion of cell factories in America, but they drive up costs and reduce subsidy uptake, undoing more than half of the EV adoption stimulus coming from pure buyer subsidies. |
| JEL: | C63 F14 F23 L50 L62 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34884 |
| By: | Garcia Calvo, Angela (University of Reading) |
| Abstract: | This paper explores how Europe may achieve this goal through an analysis of the automotive sector as it transitions from internal combustion engines to battery electric, software-defined vehicles |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:bda:wpsmep:wp2025/47 |
| By: | Fulton, Lewis PhD; Lamichhaine, Madhu; Lipman, Timothy PhD; Coffee, Daniel PhD; Kong, David PhD |
| Abstract: | This report develops a transportation hydrogen roadmap for California projected to 2045, building on previous UC ITS work, in part for the ARCHES hydrogen hub for trucks and ports. This study adds modes such as airports, aircraft, rail systems, and fuel-cell light-duty vehicles. Based on a scenario of high adoption of hydrogen-fueled transport, these modes and sectors would use 1000 tonnes/day of hydrogen by 2035 and 5000 tonnes/day by 2045. To 2035, about 40% of the expected growth occurs in heavy-duty trucking. Another 20% is used by other truck types, about 20% by light-duty vehicles, and 20% by other modes, notably shipping and aviation. These shares remain similar to 2045. Trucking remains the dominant driver of demand. Shipping, aviation, and rail are not anticipated to account for an increasing share of demand in the scenarios in this study. This hydrogen fuel system would support around 6, 000 jobs per year. Hydrogen vehicle adoption will depend on strong policy support, coordination of planning and investments, and rapid scale up to reach a hydrogen system that can be self-sustaining, on the order of hundreds of tonnes per day by 2040. |
| Keywords: | Engineering, Hydrogen fuels, Hydrogen refueling, Fuel consumption, Greenhouse gases, Technology adoption, Trucking, Ports |
| Date: | 2026–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsdav:qt5fh1v02k |
| By: | Hardman, Scott PhD; Senthil, Sonali; Li, Jiewei Grant; Jenn, Alan PhD |
| Abstract: | Public direct current fast charging (DCFC) infrastructure is in an early stage of development, depends on public funding, may not be profitable, and its locations may not provide the amenities that consumers want to use while charging. This report explores topics related to these issues: what activities battery electric vehicle (BEV) drivers participate in, BEV drivers’ spending on charging and other items while at a DCFC, drivers’ self-reported preferences for amenities at DCFC, and drivers’ reported experiences using DCFC. The results reveal most drivers do something other than using DCFC while charging their BEV; close to half of respondents purchase something other than electricity for their BEV, and this expenditure is higher than the average cost of a charging session. The results highlight the potential for charging providers to explore new ways of generating revenue directly by developing stations with revenue-generating amenities attached, or through symbiotic relationships between charging providers and businesses such as stores, restaurants, and coffee shops. |
| Keywords: | Engineering, Electric vehicle charging, Electric vehicles, Service stations, Consumer behavior, Surveys |
| Date: | 2026–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsdav:qt0jm16498 |
| By: | Jingni Zhang; David Popp |
| Abstract: | Electric vehicles (EVs) are crucial for cutting transportation emissions, yet the policy drivers of EV innovation remain underexplored. This study analyzes firm-level panel data on EV and battery patents, covering more than 4, 000 firms across 19 countries from 2010 to 2021, to assess how these policy tools and their interactions in different time horizons influence innovative activity. We test the effects of individual policy instruments that either raise demand for EVs or support the development of EV technologies. Stringent fuel-economy standards, financial incentives, adoption targets, and public R&D investments each significantly increase patenting in EV and battery technologies. Moreover, long-term EV targets amplify the innovative impact of public R&D and standards while diminishing the marginal effect of short-term price signals. The results suggest that governments can accelerate clean automotive innovation by combining long-term adoption commitments with sustained R&D investment or strong performance standards, and by managing these instruments as a coordinated policy portfolio rather than as separate tools. The study contributes cross-country, firm-level evidence that links policy design to the direction of clean technology innovation. |
| Keywords: | electric vehicle, technological innovation, policy horizons |
| JEL: | O31 Q55 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12421 |
| By: | Tal, Gil PhD; Kurani, Kenneth PhD |
| Abstract: | Since most Californians don’t buy new cars, the used car market plays a vital role in broadening access to zero-emission vehicles (ZEVs), particularly among lower-income populations who may find new ZEVs financially out of reach. However, little is known about the used ZEV market. To address this gap, our research team analyzed used ZEV market characteristics, buyer demographics, and the patterns of vehicle transfers within the state. The aim of our research is to help policymakers understand how the used ZEV market contributes to California’s broader goals of reducing emissions and ensuring equitably access to clean transportation technologies. |
| Keywords: | Engineering |
| Date: | 2026–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsdav:qt9fz4b7dv |
| By: | Christian Montet (UPF - Université de la Polynésie Française); Véronique Sélinsky (Barreau de Montpellier); Florent Venayre (UPF - Université de la Polynésie Française) |
| Abstract: | The article assesses whether competition authorities in New Caledonia and French Polynesia are the appropriate bodies to regulate network industries such as energy and telecommunications. Noting the longstanding shortcomings of regulation by local executive branches, it examines proposals to broaden the mandates of the Polynesian and Caledonian competition authorities. Drawing on economic theory and international experience, the study shows that combining regulatory and competition functions weakens the agencies' independence, clarity of remit, and overall effectiveness. It argues that, in small island economies, any potential cost savings are minimal compared with the governance risks involved. The authors ultimately advocate for strengthened cooperation with France's national energy and telecommunications regulators rather than pursuing local institutional integration. |
| Abstract: | L'article évalue si les autorités de concurrence de Nouvelle-Calédonie et de Polynésie française constituent des instances appropriées pour réguler les industries de réseau telles que l'énergie et les télécommunications. Constatant les insuffisances persistantes de la régulation par les exécutifs locaux, il examine les propositions visant à élargir les mandats des autorités de concurrence polynésienne et calédonienne. S'appuyant sur la théorie économique et l'expérience internationale, l'étude montre que la combinaison des fonctions de régulation et de concurrence affaiblit l'indépendance, la clarté du mandat et l'efficacité globale de ces agences. Elle soutient que, dans les petites économies insulaires, les économies potentielles sont minimes au regard des risques de gouvernance qu'elles impliquent. Les auteurs plaident finalement pour un renforcement de la coopération avec les régulateurs nationaux français de l'énergie et des télécommunications plutôt que pour une intégration institutionnelle locale. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05508291 |
| By: | Collins, Stephanie; Lipman, Timoth PhD; Horvath, Arpad PhD |
| Abstract: | The CA-LCA-H2 tool performs a cost and greenhouse gas and criteria air pollutant emissions assessment for a hydrogen project in California by selecting the operating region and mode of production and distribution of the hydrogen through to a fuel cell trucking use case. The cost of clean hydrogen production can change significantly from the choice of production method due to the respective energy and capital costs, and in the case of electrolysis, the electricity source. The regional variations in the electricity mix can significantly affect the carbon intensity of the hydrogen produced. These components then contribute to the potential effectiveness of hydrogen as a low-carbon fuel for the use case assessment. |
| Keywords: | Engineering, Life cycle analysis, Hydrogen fuels, Hydrogen production, Trucks, Fuel cell vehicles, Greenhouse gases, Emissions |
| Date: | 2026–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsrrp:qt7k9796xb |
| By: | Mario Montalvan (mario.montalvanalvarado@uts.edu.au); Kaveh Khalilpour (Kaveh.Khalilpour@uts.edu.au); Reinhard Madlener (RMadlener@eonerc.rwth-aachen.de) |
| Abstract: | This study presents a comprehensive framework for establishing a hydrogen supply chain network in Central America, encompassing Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama, in alignment with global decarbonization efforts. Utilizing Mixed Integer Linear Programming, the research assesses the techno-economic feasibility of hydrogen integration, focusing on its role in freight transportation and regional electricity supply. The findings highlight alkaline electrolysis as the preferred production method, with liquefied hydrogen and ammonia identified as optimal carriers. Costa Rica and Nicaragua emerge as key production hubs, supplying hydrogen to neighboring countries via sea transport. The estimated levelized cost of hydrogen is 10.84 USD/kg, largely driven by electricity prices, with projections indicating a reduction to 5.16 USD/kg by 2050. A comparative analysis suggests that under specific conditions, hydrogen could achieve cost parity with diesel by 2050. While acknowledging data limitations and socio-economic uncertainties, this study provides critical insights into hydrogen’s potential role in Central America's energy transition, serving as a foundation for future research and policy development. |
| Keywords: | hydrogen economy; liquefied hydrogen; ammonia; supply chain; electrolyzer; Central America |
| JEL: | C61 Q41 L91 |
| Date: | 2025–04–01 |
| URL: | https://d.repec.org/n?u=RePEc:ris:fcnwpa:022307 |
| By: | Adrien Concordel; Phuong Ho; Christopher R. Knittel |
| Abstract: | This paper compares the impacts of critical mineral price and oil price on an economy in a unified neoclassical growth model. Unlike oil price shocks, which affect the cost of utilizing existing capital (e.g., cars), critical mineral price shocks influence the cost of creating new capital (e.g., electric vehicles) without altering the cost of existing capital. We find that both types of shocks ultimately reduce output and welfare. However, oil-price increases are systematically more contractionary for the economy. Mineral-price increases generate comparatively larger adjustments in investment, capital, and external borrowing but smaller and more gradual losses in output and welfare, and in capital-rich economies can slightly raise long-run employment. These results imply that oil-price shocks remain the more serious threat to aggregate activity and welfare, whereas mineral-price shocks call for policies that smooth investment and external-balance-sheet adjustment (e.g., macroprudential tools and precautionary reserves or fiscal buffers). |
| JEL: | E22 E32 F41 Q41 Q43 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34847 |
| By: | Dugoua, Eugenie; Noailly, Joëlle |
| Abstract: | Reaching net zero emissions by 2050, a goal now endorsed by many countries, requires the rapid and massive deployment of clean energy systems. However, this transition hinges on a new form of dependence. The technologies required to decarbonise depend on a small set of critical minerals like lithium, cobalt and rare earth elements that have highly concentrated supply chains marked by heavy environmental footprints and challenges regarding labour and community rights. This paper presents a simple framework to explore how innovation can strengthen critical mineral supply chains. It examines technological, digital and organisational solutions across the full lifecycle — from mining exploration and processing, to manufacturing, reuse and recycling. The authors examine what drives or hinders innovation, including price volatility, industrial policy, environmental regulation, firm strategies (such as vertical integration), market size and rising demand from competing sectors like AI and defence. They highlight that a portfolio of innovations is essential for reconciling the growing demand for critical minerals with climate, economic and geopolitical priorities. Innovation can reduce the costs of reform, allowing governments to pursue security and sustainability simultaneously. The challenge is not simply to secure more materials but to build a system that is resilient, circular and adaptive. |
| Keywords: | critical minerals; innovation; clean energy transition; supply chain; mining; rare earth elements; batteries; industrial policy; circular economy |
| JEL: | O31 Q55 L72 |
| Date: | 2024–12–04 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137103 |
| By: | Shagor Chowdhury (UMET - Unité Matériaux et Transformations - UMR 8207 - Centrale Lille - INC-CNRS - Institut de Chimie - CNRS Chimie - Université de Lille - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Maya Marinova (IMEC - Institut Michel Eugène Chevreul - FR 2638 - UA - Université d'Artois - Centrale Lille - INC-CNRS - Institut de Chimie - CNRS Chimie - Université de Lille - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Alexandre Fadel (IMEC - Institut Michel Eugène Chevreul - FR 2638 - UA - Université d'Artois - Centrale Lille - INC-CNRS - Institut de Chimie - CNRS Chimie - Université de Lille - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Fadi Soubhie (UMET - Unité Matériaux et Transformations - UMR 8207 - Centrale Lille - INC-CNRS - Institut de Chimie - CNRS Chimie - Université de Lille - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Severine Bellayer (UMET - Unité Matériaux et Transformations - UMR 8207 - Centrale Lille - INC-CNRS - Institut de Chimie - CNRS Chimie - Université de Lille - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Clement Vandingenen; Philippe Supiot (UMET - Unité Matériaux et Transformations - UMR 8207 - Centrale Lille - INC-CNRS - Institut de Chimie - CNRS Chimie - Université de Lille - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Ulrich Maschke (UMET - Unité Matériaux et Transformations - UMR 8207 - Centrale Lille - INC-CNRS - Institut de Chimie - CNRS Chimie - Université de Lille - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Keywords: | Lithium, energy, Battery |
| Date: | 2025–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05494640 |
| By: | Chanda, Arka; Tyson, Judith |
| Abstract: | This report develops a framework to map the scale and scope of the just transition for private equity and credit funds that have specialist expertise in sustainable and socially responsible investing. It provides evidence to inform the case for continued action on a just transition, examples of emerging practice for investors, and recommendations for policymakers. As private capital assumes a growing share of financing for energy infrastructure – a sector with clear implications for community development, employment and land use – understanding how these investors approach the just transition becomes critical. The report examines how 23 specialist private equity and credit funds embed just transition principles into their energy infrastructure investments, drawing on policy document analysis and semi-structured interviews with fund representatives. |
| Keywords: | development finance; institutional investors; energy; global; financial instruments and strategies |
| JEL: | R14 J01 F3 G3 |
| Date: | 2025–01–05 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137113 |
| By: | Guerini, Mattia; Marin, Giovanni; Vona, Francesco |
| Abstract: | This paper studies how monetary policy can shape firm-level carbon emissions and energy efficiency. It also looks at the heterogeneity of these effects by firm size, the underlying transmission channels and interaction with climate policies. The authors draw on administrative and survey data on French manufacturing firms for the period 2000–2019, including emissions, energy use, financial conditions, environmental protection investments and productivity. They examine the effect of credit easing following a variation to interest rate policy made by the European Central Bank in July 2012. They find that financially constrained firms cut emissions by about 9.4% more than unconstrained ones. This effect primarily stems from improvements in energy efficiency, reduced carbon intensity of energy, and general productivity improvements associated with capital deepening that outweighed modest scale effects. The results are driven by small and medium-sized firms. Large firms including those regulated by the EU emissions trading system (ETS) showed no significant response. On average, emissions fell by 3.3% per year, summing up to 5.3 million tonnes of CO2 saved (comparable to the savings from the EU ETS), highlighting the untargeted nature of the policy. |
| Keywords: | carbon intensity; credit; EU ETS; European Central Bank; firms; France; interest rates; manufacturing; SMEs |
| JEL: | Q48 Q52 |
| Date: | 2025–12–16 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137115 |
| By: | Perkins, Richard; Taeger, Matthias |
| Abstract: | Green finance has demonstrated remarkable resilience despite ongoing challenges. We address this puzzle by arguing that this resilience rests on a promissory legitimacy – credibility derived from future-oriented promises rather than present achievements. To advance this argument, we develop the concept of a promissory machine which produces green finance through the ordering logics of promises, themselves primarily directed at financial audiences. The machine further works to uphold the credibility of these promises through cycles of credibility work. A corollary is that green finance is constantly evolving, diversifying, and growing in complexity in ways that ultimately obscure the veracity of promissory claims. We contribute to debates on future temporalities by suggesting that the promises of green finance extend the present rather than creating possibilities for transforming it. |
| Keywords: | green finance; promissory legitimacy; machine; temporalities; greenwashing |
| JEL: | F3 G3 R14 J01 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137061 |
| By: | Michelle Hanlon; Saumitra Jha; Namrata Kala; Nemit Shroff; Chagai M. Weiss |
| Abstract: | Despite the large common net benefits of climate mitigation, broad-based political consensus for large-scale policy action remains elusive. We hypothesize that financial exposure to energy stocks central to the green transition can induce learning and greater support for climate mitigation policies. We conduct a RCT which randomizes both the presence of financial market exposure to the energy sector, as well as which type of portfolio—fossil-fuel (brown) or renewable energy (green)—is given to an individual. Treatment increases support for mitigation action and intent to undertake adaptation, with positive support caused by ownership of both green and brown assets. The effects are particularly pronounced among individuals who are initially more climate-skeptic, and persist eight months after treatment. We present evidence consistent with learning as the primary mechanism: treated respondents are more likely to consume financial news and become more financially knowledgeable, less likely to obtain news from polarized sources, and better able to accurately predict the environmental impacts of green and brown firms. |
| JEL: | G11 O13 O16 P18 Q49 Q50 Q52 Q53 Q54 Q56 Q58 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34828 |
| By: | Kuosmanen, Natalia; Kuosmanen, Timo |
| Abstract: | Abstract This brief examines how R&D spillovers are associated with firm-level greenhouse gas emissions in Finnish energy-intensive manufacturing. The results show that R&D spillovers from other firms within the same industry are more strongly associated with lower emissions than the firm’s own R&D activity. This result highlights the role of innovation spillovers and knowledge diffusion in emissions abatement. However, the direction and magnitude of R&D spillovers differ across industries depending on their R&D intensity. In the chemical industry that has high R&D intensity, inter-industry R&D spillovers are associated with lower emissions, whereas in the pulp and paper and basic metals industries, inter-industry R&D spillovers are associated with higher emissions. These results demonstrate that technology spillovers do not automatically lower emissions, but can also contribute to higher emissions. Our findings reveal an important channel of inter-industry R&D spillovers through material flows, highlighting the pivotal role of the chemical industry for the GHG abatement in the pulp and paper production and non-metallic minerals industry. |
| Keywords: | Carbon dioxide emissions, Environmental performance, Green productivity, Sustainability, Technology spillovers |
| JEL: | D24 O33 Q52 Q55 Q56 |
| Date: | 2026–02–23 |
| URL: | https://d.repec.org/n?u=RePEc:rif:briefs:175 |
| By: | Kuosmanen, Natalia; Kuosmanen, Timo; Zhou, Xun |
| Abstract: | Abstract A structural shift from fossil fuel-based energy systems to renewable, sustainable energy sources critically depends on research and development (R&D) activities at the firm-level. This study examines the contribution of R&D spillovers from other firms to greenhouse gas (GHG) emissions in Finnish energy-intensive manufacturing industries. We link firm-level GHG emissions to financial and innovation data for 230 firms in the pulp and paper, chemicals, non-metallic minerals, and basic metals industries over 2000–2019. We derive emissions-generating functions based on a directional distance function framework, and estimate them using shape-constrained semiparametric regression. Our key result is that R&D spillovers have a strong statistically significant association with the firm-level GHG emissions. However, the signs and magnitudes of the spillovers differ across industries. In the chemical industry, intra-industry R&D spillover is associated with lower emissions, whereas in the pulp and paper and the basic metals industries, intra-industry R&D spillover is associated with higher emissions. These results demonstrate that R&D spillovers do not self-evidently lower emissions, but can also contribute to higher emissions. Our findings also reveal an important channel of inter-industry R&D spillovers through material flows, highlighting the pivotal role of the chemical industry for the GHG abatement in the pulp and paper production and non-metallic minerals industry. |
| Keywords: | Carbon dioxide emissions, Environmental performance, Green productivity, Sustainability, Technology spillovers |
| JEL: | D24 O33 Q52 Q55 Q56 |
| Date: | 2026–02–23 |
| URL: | https://d.repec.org/n?u=RePEc:rif:wpaper:136 |
| By: | Selvaraju, Sangeeth; Pratiwi, Anisa; Sabogal Reyes, Laura; Ahlgren, Victor |
| Abstract: | Just Energy Transition Partnerships (JETPs) are political agreements between a group of donor countries and an emerging economy partner country to mobilise and coordinate public and private finance to support a just energy transition. When they were initially launched in 2021 they represented a turning point in international climate finance towards a more comprehensive, country-led approach linking emissions mitigation with social equity in coal-dependent economies. However, their disproportionate reliance on loans has been suggested to have put the ‘just’ component of the transition at risk, particularly in countries already grappling with mounting debt and fiscal constraints. Country platforms build on the ambitions of JETPs in mobilising and coordinating public and private finance to support a just energy transition while placing greater emphasis on country ownership, coherence, and integration into long-term development and climate objectives. This report analyses the grant distribution of JETPs in Indonesia and South Africa to support future country platform design. |
| Keywords: | development finance; energy; industry; global; financial instruments and strategies; policy |
| JEL: | N0 F3 G3 R14 J01 |
| Date: | 2025–11–24 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137110 |
| By: | Niakh, Fallou; Bassière, Alicia; Denuit, Michel (Université catholique de Louvain, LIDAM/ISBA, Belgium); Robert, Christian |
| Abstract: | This work presents a framework for peer-to-peer (P2P) basis risk management applied to solar electricity generation. The approach leverages physically based simulation models to estimate the day-ahead production forecasts and the actual realized production at the solar farm level. We quantify the financial loss from mismatches between forecasted and actual production using the outputs of these simulations. The framework then implements a parametric insurance mechanism to mitigate these financial losses and combines it with a P2P market structure to enhance participant risk sharing. By integrating day-ahead forecasts and actual production data with physical modeling, this method provides a comprehensive solution to manage production variability, offering practical insights for improving financial resilience in renewable energy systems. The results highlight the potential of combining parametric insurance with P2P mechanisms to foster reliability and collaboration in renewable energy markets. |
| Keywords: | Parametric insurance ; Basis risk ; P2P insurance ; Renewable production insurance |
| Date: | 2025–04–15 |
| URL: | https://d.repec.org/n?u=RePEc:aiz:louvad:2025007 |
| By: | Michele Fioretti; Alessandro Iaria; Aljoscha Janssen; Clement Mazet-Sonilhac; Robert K. Perrons |
| Abstract: | Contractual relationships between the state and private firms involving large irreversible investments are vulnerable to sovereign hold-up risk: anticipating that the state can unilaterally revise terms once capital is sunk, firms may underinvest. Causal evidence on this mechanism is scarce because sovereign commitment is typically bundled with broader institutional quality. We overcome this identification challenge by exploiting a natural experiment in the North Sea oil and gas industry. In 1985, a Norwegian Supreme Court ruling declared retroactive changes to petroleum licenses unconstitutional, while the UK retained the discretion to revise contracts. Using granular data on the universe of fields and firms from 1975 to 1995, we estimate the impact of this strengthening of sovereign commitment on the adoption of Enhanced Oil Recovery (EOR), a major extraction technology requiring large irreversible investments. Firms exposed to the ruling sharply increased EOR adoption and productivity, gaining market share through aggressive portfolio expansion. We find that private firms with preexisting EOR expertise – rather than state-owned enterprises – drove this transformation, leveraging this expertise to diversify into riskier geologies and adopt complementary technologies. These findings establish sovereign commitment as a primary determinant of investment and technology adoption. By tying the state's hands, the ruling transformed promises into credible commitments, effectively functioning as an industrial policy that unlocked a trajectory of technological deepening. While such constitutional protections are critical for investment, a global survey of constitutions reveals that only 30.6% of countries prohibit retroactive legislation beyond criminal law. |
| Date: | 2026–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:bri:uobdis:26/824 |
| By: | Kine Josefine Aurland-Bredesen; Tor Håkon Jackson Inderberg; Snorre Kverndokk |
| Abstract: | Public acceptance has influenced the evolution of carbon capture and storage (CCS) in Europe. To study the mechanisms behind this, we use evolutionary game theory where the governmental policy towards CCS, such as subsidies to the industry, is dependent on public acceptance. Public acceptance further depends on the perceived benefits and costs for individuals of CCS. We show that in this model, multiple equilibria may exist, and the starting point as well as the heterogeneity of firms will determine the equilibrium that will be reached over time. While the subsidy is tied to public acceptance, the government can affect development by correcting other imperfections in the market. Using such policy instruments, a new equilibrium may develop with a higher share of investments in CCS. The model also suggests an explanation of the different situations in many countries today with respect to CCS investments and investment plans. |
| Keywords: | carbon capture and storage, evolutionary games, public acceptance, climate change |
| JEL: | C73 H23 Q35 Q38 Q54 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12412 |
| By: | Stylianos Asimakopoulos; George Kapetanios; Vasilis Sarafidis; Alexia Ventouri |
| Abstract: | We study spillover effects in corporate toxic emissions using a heterogeneous panel network of U.S. industrial facilities from 2000-2023. Rather than imposing a network structure a priori, we uncover an unobserved web of influence directly from the data using recent advances in high-dimensional network econometrics. Indirect effects transmitted through the estimated network account for about 28% of the total impact of key firm balance-sheet characteristics. By contrast, distance-based networks generate no statistically discernible spillovers, while a priori firm- or industry-based networks substantially overstate within-group spillins relative to the data-driven network. These findings show that who is linked to whom, and with what strength, matters critically for assessing systemic environmental risk and for designing targeted regulation. Methodologically, the paper provides a flexible framework for quantifying facility-level emissions spillovers and their consequences in financial and policy settings. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.21434 |
| By: | Djedjiga Kachenoura (AFD - Agence française de développement); David Chetboun (AFD - Agence française de développement); Marine Lagarde (AFD - Agence française de développement); Laurent Mélère (AFD - Agence française de développement); Damien Serra (AFD - Agence française de développement) |
| Abstract: | En 2015, à l'approche de la COP21 à Paris, le discours de Mark Carney, alors gouverneur de la Banque d'Angleterre et mandaté par le Conseil de stabilité financière du G20, a fait date. Il alertait sur l'importance des risques financiers climatiques pour la stabilité des institutions financières et du système financier dans son ensemble. La charge politique de la transition était laissée aux États, à condition qu'elle soit ordonnée, tandis que la responsabilité de la stabilité incombait aux régulateurs et aux banques centrales. La « finance », informée par des régimes de divulgation d'informations extra-financières, allait orienter la demande en tant que pourvoyeur de capital. Ces régimes de divulgation devaient être initiés par les acteurs privés et soutenus par les régulateurs. M. Carney craignait cependant qu'ils manquent de cohérence, de comparabilité et de clarté. Depuis, ces régimes ont proliféré couvrant à la fois les risques et l'alignement des flux financiers sur l'Accord de Paris. Néanmoins, cette « théorie du changement » et la répartition des responsabilités des acteurs demeurent floues et ambiguës. Les régulateurs financiers doivent collaborer pour rendre ces différents régimes inter-opérants et expliciter leurs objectifs. De plus, les coûts de mise en conformité et la déconnexion de certains cadres des réalités nationales freinent la mobilisation des financements et peuvent mener à l'exclusion des entités les plus vulnérables, un sujet peu abordé. |
| Keywords: | Réglementation financière, Accord de Paris, Politiques financières, Risques climatiques, Banques centrales, Taxonomie verte, Finance climat |
| Date: | 2024–12–03 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05421553 |
| By: | forbes, Kristin; Ha, JONGRIM; Kose, M. Ayhan |
| Abstract: | Business cycles are increasingly driven by global shocks, rather than the domestic demand shocks prominent in earlier decades, posing challenges for central banks seeking to meet domestic mandates and communicate their policy decisions. This paper analyzes the evolving influence and characteristics of global and domestic shocks in advanced economies from 1970-2024 using a new FAVAR model that decomposes movements in interest rates, inflation, and output growth into four global shocks (demand, supply, oil, and monetary policy) and three domestic shocks (demand, supply, and monetary policy). We find that the role of global shocks has increased sharply over time and that their characteristics differ from those of domestic shocks across multiple dimensions. Compared to domestic shocks, global shocks have a larger supply component, higher variance, more persistent effects on inflation, and are more asymmetric (contributing more to tightening than to easing phases of monetary policy). As global supply shocks have become more prominent, central banks have also been less willing to “look through” their effects on inflation than for comparable domestic shocks. The distinct characteristics and rising influence of global shocks—particularly global supply shocks—have significant implications for modeling monetary policy and designing central bank frameworks. |
| Keywords: | Demand shocks; supply shocks; geopolitical risk; oil prices; supply-chain disruptions; global uncertainty, central banks, Federal Reserve; European Central Bank |
| JEL: | E31 E32 E52 Q43 |
| Date: | 2026–01–31 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127928 |
| By: | Rosello, Giulia; Reatini, Maria Antonietta; Pinto, Gabriele; Cattani, Giorgio |
| Abstract: | Air pollution is a major externality whose consequences extend beyond health and productivity. This paper shows that short-run pollution shocks also reduce democratic participation. We combine official, municipality-level election results from 32 national, European, regional, and municipal elections in Italy (2013-2022) with newly assembled daily measures of PM2.5, PM10, and NO2 for all Italian municipalities. Our identification strategy exploits quasi-random election-day deviations in local pollution relative to recent conditions, and we corroborate the results using wind speed as an instrument for particulate matter. Higher pollution on election day substantially depresses turnout: a 10 μg/m3 increase in PM2.5 (roughly doubling typical exposure) lowers participation by 2-3 percentage points, corresponding to about one million fewer votes. The estimates are similar for PM10 and NO2, and when pollution exceeds WHO guideline thresholds. Using post-election survey data from the 2013, 2018, and 2022 national elections coupled with survey-date exposure, we find consistent individual-level declines in reported voting intentions, with larger effects among citizens who report higher political interest. These findings identify the political-economy cost of air pollution, which not only reduces turnout but distorts the democratic representation by altering who turns out, not just how many. Our results suggest that environmental regulation can strengthen the democratic process by improving political participation and representation, in addition to its health and welfare benefits. |
| Keywords: | Air Pollution, Turnout, Environmental Effects, Political Participation |
| JEL: | Q51 Q53 D72 D91 O44 |
| Date: | 2026–02–24 |
| URL: | https://d.repec.org/n?u=RePEc:unm:unumer:2026004 |
| By: | Gabriel Felbermayr; Mahdi Ghodsi (The Vienna Institute for International Economic Studies, wiiw); Heider Kariem; Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw); Yoto V. Yotov |
| Abstract: | How would fundamental political change in Iran, leading to a democratic system with a free and rules-based economic order, affect Germany and the EU economically? In the event of change, sanctions could be scaled back, allowing Iran to rejoin the global economy. This study quantifies the economic effects of such a transformation. It neither advocates for nor legitimises the lifting or easing of sanctions under the current regime or without far-reaching and credible reforms that fully address the concerns underlying the sanctions currently in place. Using the newest available data and quantitative methods, the results indicate that lifting EU sanctions alone could raise Iran’s real GDP by more than 80% in the long run while generating moderate but economically meaningful gains for Germany and the EU of around 0.3-0.4% of GDP. These gains are driven by expanded trade, lower energy and input prices, and improved allocative efficiency. When sanctions removal is combined with plausible scenarios of productivity catch-up with Turkey or South Korea, Iran’s GDP would increase by 240-388% and the gains for Europe would increase further, underscoring the strong complementarity between trade integration and productivity growth. Moreover, Iran’s reintegration would reduce energy price volatility, improve the security of maritime trade routes, and lower migration pressures. Overall, the findings suggest that a negotiated transition and rules-based reintegration of Iran would generate substantial mutual economic benefits while contributing to regional and global stability. |
| Keywords: | Iran; economic sanctions; regime transition; trade integration; energy markets; oil and gas prices; foreign direct investment; European Union; inflation; political economy |
| JEL: | F13 F15 F51 Q41 Q48 O53 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:wii:rpaper:rr:481 |
| By: | Giulia Martinelli (Gran Sasso Science Institute); Andrea Ascani (Gran Sasso Science Institute); Stefano Basilico (Gran Sasso Science Institute); Alberto Marzucchi (Gran Sasso Science Institute) |
| Abstract: | By integrating the literature on the twin transition with an international business perspective, this paper assesses whether the regional endowment of green, digital and twin occupations in the EU can act as a pull factor for inward foreign direct investment (FDI). We explore green, digital and twin skills per se as well as the role of their respective enabling (complementary) skills. We find a positive link of enabling skills on inward FDI, while focused digital and twin skills are generally not related to a higher level of FDI attractiveness. A high regional endowment of green skills may even have detrimental effects under specific circumstances. Our evidence paves the way for policies reinforcing locations with occupational complementarities between green, digital and twin competences in order to foster regional participation in global dynamics and favouring the twin transition. |
| Keywords: | green skills, digital skills, twin skills, FDI, EU regions |
| JEL: | F23 O33 O32 R11 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ahy:wpaper:wp79 |
| By: | Carsten Fink; Maria de las Mercedes Menéndez; Julio Raffo |
| Abstract: | Technology diffusion is central to economic development. This paper examines diffusion patterns for 31 technologies for 139 countries over two centuries, extending existing databases to include recent digital technologies and renewable energy technologies. Using cross-country panel regressions, we find that while adoption lags have declined from 50 years (pre-1950) to 15 years (post-2000), adoption intensity in developing economies remains at 53% of advanced economy levels. We document diverging intensity for older technologies but emerging convergence for post-2000 technologies, suggesting digital innovations may reduce the technology gap. These findings inform policies aimed at accelerating technology diffusion to developing economies. |
| Keywords: | Technology diffusion, Digital technologies, Adoption lag, Intensity of use |
| JEL: | O33 O47 O57 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:wip:wpaper:91 |
| By: | Serigne Moussa Dia (UADB - Université Alioune Diop de Bambey) |
| Abstract: | Abstract This article examines the transmission of climate policies to bank credit allocation in the WAEMU region between 2015 and 2024. The methodology employs a bank-country-quarter fixed effects panel model applied to a sample of 40 banks (n = 1, 560 observations), adapting the approach of Covi et al. (2025). The empirical results reveal an almost non-existent transmission channel: the coefficient associated with the CCPI index is weak and statistically insignificant (β = 0.04; p > 0.10) for green exposures (TAC), as well as for carbon-intensive sectors (β = −0.02; p > 0.10). In contrast, inflation emerges as the main determinant: a one-point increase in the inflation rate leads to an estimated +3.5% reallocation toward more resilient sectors (β = 0.0014; p < 0.05), indicating macroeconomic dominance over climate signals. The findings highlight a substantial gap in the integration of climate risk within WAEMU banking practices. The average share of "green" loans remains below 2% of total portfolios, while exposure to vulnerable sectors still exceeds 28%. The study calls for strengthening the BCEAO's prudential framework: mandatory climate stress tests, standardized disclosure requirements, and targeted regulatory incentives. Keywords: Climate policies; Bank allocation; WAEMU; Transition risk; Green finance; Macroeconomic dominance. JEL Classification: G21, Q54, E58, O55 Paper type: Empirical research article |
| Abstract: | Résumé Cet article analyse la transmission des politiques climatiques à l'allocation du crédit bancaire dans la zone UEMOA entre 2015 et 2024. La méthodologie repose sur un modèle de panel à effets fixes banque-pays-trimestre appliqué à un échantillon de 40 banques (n = 1 560 observations), en adaptant l'approche de Covi et al. (2025). Les résultats révèlent une transmission quasi inexistante des politiques climatiques : le coefficient associé à l'indice CCPI est faible et non significatif (β = 0, 04 ; p > 0, 10) pour les expositions vertes (TAC), de même que pour les secteurs carbonés (β = −0, 02 ; p > 0, 10). En revanche, l'inflation constitue le principal déterminant de l'allocation : une hausse de 1 point du taux d'inflation entraîne un rééquilibrage d'environ +3, 5 % vers les secteurs résilients (β = 0, 0014 ; p < 0, 05), traduisant une dominance des facteurs macroéconomiques sur les signaux climatiques. Ces résultats soulignent un déficit majeur d'intégration du risque climatique dans les comportements bancaires de l'UEMOA. Le ratio moyen de prêts « verts » reste inférieur à 2 % du portefeuille total, et l'exposition aux secteurs vulnérables représente encore plus de 28 % des encours. L'étude appelle à un renforcement du cadre prudentiel de la BCEAO : stress tests climatiques obligatoires, divulgation standardisée et incitations réglementaires ciblées. Mots-clés : Politiques climatiques ; Allocation bancaire ; UEMOA ; Risque de transition ; Finance verte ; Dominance macroéconomique. Classification JEL : G21, Q54, E58, O55 Type de papier : Article de recherche empirique Abstract This article examines the transmission of climate policies to bank credit allocation in the WAEMU region between 2015 and 2024. The methodology employs a bank-country-quarter fixed effects panel model applied to a sample of 40 banks (n = 1, 560 observations), adapting the approach of Covi et al. (2025). The empirical results reveal an almost non-existent transmission channel: the coefficient associated with the CCPI index is weak and statistically insignificant (β = 0.04; p > 0.10) for green exposures (TAC), as well as for carbon-intensive sectors (β = −0.02; p > 0.10). In contrast, inflation emerges as the main determinant: a one-point increase in the inflation rate leads to an estimated +3.5% reallocation toward more resilient sectors (β = 0.0014; p < 0.05), indicating macroeconomic dominance over climate signals. The findings highlight a substantial gap in the integration of climate risk within WAEMU banking practices. The average share of "green" loans remains below 2% of total portfolios, while exposure to vulnerable sectors still exceeds 28%. The study calls for strengthening the BCEAO's prudential framework: mandatory climate stress tests, standardized disclosure requirements, and targeted regulatory incentives. Keywords: Climate policies; Bank allocation; WAEMU; Transition risk; Green finance; Macroeconomic dominance. JEL Classification: G21, Q54, E58, O55 Paper type: Empirical research article |
| Keywords: | Bank allocation, Macroeconomic dominance. JEL Classification: G21, Green finance, Transition risk, WAEMU, Politiques climatiques Allocation bancaire UEMOA Risque de transition Finance verte Dominance macroéconomique. Classification JEL : G21, O55 Climate policies, Dominance macroéconomique. Classification JEL : G21, Finance verte, Risque de transition, UEMOA, Allocation bancaire, Politiques climatiques, O55 Paper type: Empirical research, O55 Climate policies Bank allocation WAEMU Transition risk Green finance Macroeconomic dominance. JEL Classification: G21, E58, Q54 |
| Date: | 2025–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05420001 |
| By: | Nauro Campos; Flavia Ginefra; Angelo Martelli; Alessio Terzi; Nauro F. Campos |
| Abstract: | This paper reviews research across economics, political economy, political science, and public policy to investigate how institutions shape the adoption, implementation, and durability of climate policies. We examine how formal institutions (i) coordinate implementation capacity, (ii) anchor long-term commitments, and (iii) mediate distributional conflict. We also discuss how informal institutions, such as social norms and trust, further condition whether formal mechanisms translate into durable action. We distinguish quasi-experimental evidence from correlational and case-based findings, identifying where economic methods could further sharpen evidence, and conclude with a research agenda focused on institutional interdependencies and the conditions under which institutions can facilitate the adoption of effective and irreversible climate policies. |
| Keywords: | climate change, institutions, political economy, climate governance |
| JEL: | D72 H11 P48 O43 O44 Q54 Q58 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12490 |
| By: | Klaus Andresen; Ursula Müller; Hans-Jörg Schmerer |
| Abstract: | This study evaluates the causal impact of Indonesia’s Power Transmission Development Project on regional economic development. Employing the Generalized Synthetic Control Method on district-level satellite data, we find a statistically significant increase in economic activity (p |
| Keywords: | electricity infrastructure, economic development, nighttime lights, generalized synthetic control |
| JEL: | C23 H54 O11 O18 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12502 |
| By: | Christoph Böhringer; Knut Einar Rosendahl |
| Abstract: | Carbon leakage is a major concern in the design of unilateral climate policies aimed at reducing global emissions in a cost-effective manner. In order to assess the cost-effectiveness of anti-leakage measures, it is crucial to understand the fundamental mechanisms that contribute to leakage. We provide theoretical analysis of the two main channels of leakage: the fossil fuel market channel and the competitiveness channel. We show that the two channels reinforce each other. Furthermore, we find that whereas leakage via the fossil fuel market channel decreases with the fuel supply elasticity and increases with the fuel demand elasticity, the opposite is the case for the competitiveness channel. We show that the effectiveness of output-based allocation and border carbon adjustments to combat carbon leakage increases with the fuel supply elasticity and decreases with the fuel demand elasticity. We supplement the simplified theoretical analysis with numerical simulations using a more complex multi-sector, multi-region computable general equilibrium model of the global economy to quantify the implications of unilateral climate policy designs for the European Union. We find that leakage via the fossil fuel channel dominates leakage via the competitiveness channel unless fuel supply elasticities are quite high and fuel demand elasticities are quite low. Furthermore, we find that the lower the fossil fuel demand elasticity, the greater the gains in cost-effectiveness from implementing anti-leakage measures. |
| Keywords: | carbon leakage, fossil fuel elasticities, output-based allocation, border carbon adjustments |
| JEL: | D58 F18 H23 Q54 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12437 |
| By: | Panle Jia Barwick; Shanjun Li; Tianli Xia |
| Abstract: | Range anxiety, the fear of depleting battery before reaching a charging station, is often cited as a major barrier to electric vehicle (EV) adoption, yet there has been limited formal economic analysis to quantify its magnitude and examine the policy implications. We develop a continuous-time dynamic model of EV usage and charging decisions to micro-found range anxiety as the utility loss from feasible yet unrealized trips due to perceived range constraints. Using high-frequency data of 188, 000 EV trips and 26, 000 charging events among 8, 000 EVs in Shanghai, we recover model parameters governing consumer driving and charging decisions. The estimates imply that, across EV models with varying driving ranges, average range anxiety was about $1, 900 in 2021 but declined to $1, 200 in 2024, driven by improvements in charging infrastructure and, especially, increases in driving range. Policy simulations underscore the importance of coordinating investments in driving range and charging infrastructure to address range anxiety. Relative to socially optimal levels, Shanghai’s EV market has under-invested in driving range but over-invested in charging infrastructure. |
| JEL: | L91 R13 R21 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34871 |
| By: | Eugenie Dugoua; Joelle Noailly |
| Abstract: | This paper examines the patterns and mechanisms of global clean technology diffusion over the last two decades. We document four stylized facts: uneven sectoral progress favoring power and light transport; China’s dominance in innovation and manufacturing; the role of modularity in driving cost declines; and limited adoption in developing economies. Through case studies of solar, electric vehicles, and hydrogen, we analyze how policy and infrastructure enable scale. Finally, we assess emerging challenges for the next phase of diffusion, including critical mineral constraints, artificial intelligence, and geopolitical fragmentation. |
| Keywords: | Clean technology diffusion, Climate change mitigation, Renewable energy, Industrial policy, Solar photovoltaics, Electric vehicles, Hydrogen |
| JEL: | O33 Q55 O25 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:wip:wpaper:95 |
| By: | Tom Youngman; Tim Lennox; M. Lopes Alves; Pirta Palola; Brendon Tankwa; Emma Bailey; Emilien Ravigne; Thijs Ter Horst; Benjamin Wagenvoort; Harry Lightfoot Brown; Jose Moran; Doyne Farmer |
| Abstract: | In June 2026, the UK government will set its carbon budget for the period 2038 to 2042, the seventh such carbon budget (CB7) since the Climate Change Act became law in 2008. For the first time, this carbon budget will be accompanied by a macroeconomic assessment of its impact on growth, employment, inflation and inequality. Researchers from the Institute of New Economic Thinking (INET) Oxford are working in partnership with the Department for Energy Security and Net Zero to deliver this assessment using our data-driven macroeconomic agent-based model (ABM). This extended abstract presents the work in progress towards this pioneering policymaking using our data-driven macroeconomic ABM. We are conducting our work in three work packages. By the time of the workshop, we hope to be able to present preliminary findings from the first two work packages. In WP1, we adapt an existing macro-ABM prototype and build a UK macroeconomic baseline. The main task for this is initialising the model with suitable UK household microdata. We present the options considered and the approach settled upon. In WP2, we conduct preliminary modelling that represents UK decarbonisation as an external shock to financial flows and technical coefficients. In order to present results in time to influence the June 2026 policy decision, this second work package exogenously forces the ABM to follow the CB7 green investment and associated technological change projections provided by the Climate Change Committee. Finally, we will implement more sophisticated social and technological learning packages in WP3, building our own projections of likely decarbonisation pathways that may diverge from UK government plans. For the workshop, we will present the progress of WP1 and WP2. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.15607 |
| By: | David Popp; Myriam Gregoire-Zawilski; Lizhen Liang; Daniel Acuna |
| Abstract: | Does government funding influence the choice of research topics? Novel grant-making modalities such as the Advanced Research Projects Agency-Energy (ARPA-E) program aim to encourage scientists to take on difficult-to-solve, wicked societal problems such as clean energy. Yet little causal evidence exists linking funding and research direction, with most existing studies focusing on health sciences. We provide new evidence on the effect of funding on clean energy research, addressing two questions: (1) Do scientists change the focus of their research in response to targeted government funding opportunities? (2) If so, what types of calls for funding best attract new researchers? Using data on grants from the Department of Energy and National Science Foundation, we combine text and regression analyses to compare the publication trajectories of funded scientists to a set of matched controls. After funding, the research of funded scientists becomes more similar to the grant topic than that of the matched controls. The effect is largest for ARPA-E, which explicitly aims to attract new scientists to clean energy research, suggesting that agency efforts to attract new researchers to a topic area can succeed. General calls for funding such as offered by traditional NSF directorates generate less movement. |
| JEL: | O38 Q48 Q55 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34856 |
| By: | Benjamin Krebs; Matthew J. Neidell |
| Abstract: | We study how private information affects household responses to environmental risk. Using data from residential air quality monitors, we exploit the timing of monitor installation and high-frequency fine particulate matter (PM2.5) readings to identify responses to new information about indoor pollution risk. We find that indoor PM2.5 concentrations decline by 2.5 ug/m3 over the 12 weeks following installation, conditional on contemporaneous outdoor pollution, with effects significantly larger among households with high initial indoor pollution. The indoor–outdoor pollution gradient declines over time, indicating that households become increasingly effective at mitigating exposure when marginal health damages are highest. Using machine learning techniques to infer cooking activity and air purifier adoption, we show that households respond primarily through durable defensive investments rather than reductions in pollution-generating behavior, with back-of-the-envelope calculations implying positive net benefits. Our results suggest that personalized risk information increases the salience of indoor pollution as a controllable risk for households, in contrast to spatially coarse public information that frames pollution primarily as an outdoor threat requiring avoidance. |
| JEL: | D81 D83 Q53 Q55 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34875 |
| By: | Katia Gallegos Torres; Jakob Lehr |
| Abstract: | This paper studies the impact of the 2022 energy price shock on German manufacturing using newly available administrative data. We construct a Bartik-type exposure measure based on pre-shock energy use and relate it to sector-, establishment-, and region-level outcomes. While highly exposed sectors experienced sizable declines in production, we find no evidence of adverse effects on employment. Instead, we consistently document negative effects on wages. Our baseline estimates suggest that moving from the 25th to the 75th percentile of the exposure distribution at the four-digit sector level is associated with an average annual wage loss of about 2.5% over 2022–2023, corresponding to roughly €1, 250 per worker. These average effects mask substantial heterogeneity, with considerably larger wage declines for new hires. At the local labor market level, we find evidence of spillovers from manufacturing to other sectors. |
| Keywords: | Energy Crisis, Manufacturing, Labor Markets, Ex-Post Analysis |
| JEL: | Q40 Q41 O12 L60 J31 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_730 |
| By: | Runyao Yu; Derek W. Bunn; Julia Lin; Jochen Stiasny; Fabian Leimgruber; Tara Esterl; Yuchen Tao; Lianlian Qi; Yujie Chen; Wentao Wang; Jochen L. Cremer |
| Abstract: | Electricity price forecasting (EPF) plays a critical role in power system operation and market decision making. While existing review studies have provided valuable insights into forecasting horizons, market mechanisms, and evaluation practices, the rapid adoption of deep learning has introduced increasingly diverse model architectures, output structures, and training objectives that remain insufficiently analyzed in depth. This paper presents a structured review of deep learning methods for EPF in day-ahead, intraday, and balancing markets. Specifically, We introduce a unified taxonomy that decomposes deep learning models into backbone, head, and loss components, providing a consistent evaluation perspective across studies. Using this framework, we analyze recent trends in deep learning components across markets. Our study highlights the shift toward probabilistic, microstructure-centric, and market-aware designs. We further identify key gaps in the literature, including limited attention to intraday and balancing markets and the need for market-specific modeling strategies, thereby helping to consolidate and advance existing review studies. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.10071 |
| By: | Constanze Liepold (constanze.liepold@eonerc.rwth-aachen.de); Reinhard Madlener (RMadlener@eonerc.rwth-aachen.de) |
| Abstract: | The rapid electrification of private heating and mobility increases residential electricity demand and requires new mechanisms to stabilize power grids. Direct load control (DLC) offers a technically effective way to manage demand-side flexibility, yet its acceptance by private households remains uncertain. This study investigates willingness-to-accept (WTA) and preference structures for DLC programs in the German-speaking D-A-CH region (Germany, Austria, Switzerland), using a large-scale survey (N = 10, 346) and a choice-based conjoint experiment. Five core tariff attributes (financial compensation, intervention frequency, intervention duration, controllable technology, and Control Options) were evaluated across socio-economic groups using a hierarchical Bayes model. Financial compensation is found to be the most influential factor, followed by duration and frequency of interventions. Control Options are strongly preferred and associated with negative WTA values, indicating that autonomy substantially increases acceptance. Technology-related differences are found to be small: wallboxes require the highest compensation, while heat pumps and battery storage are generally well accepted. Cross-country differences in WTA are found to be statistically significant but modest, with Germany showing the highest compensation requirements. Socio-economic effects are minor. Overall, households accept DLC when interventions are short, predictable, and transparent, and when users retain basic control. These results suggest that effective DLC programs must combine fair compensation with autonomy safeguards and clear communication to ensure social acceptability. |
| Keywords: | Direct load control; Demand-side flexibility; Socio-Economic Status; D-AC-H Region; Discrete Choice Experiment |
| JEL: | D12 C25 Q41 |
| Date: | 2025–10–01 |
| URL: | https://d.repec.org/n?u=RePEc:ris:fcnwpa:022308 |
| By: | Kirschenmann, Karolin; Koch, Felicitas; von Schickfus, Marie-Theres; Hainz, Christa |
| Abstract: | We study how mandatory climate-related disclosure affects bank lending using the phased introduction of the EU Taxonomy Regulation. Exploiting the staggered development and implementation of the regulation, we distinguish banks' responses to anticipated disclosure requirements from their responses to realized firm-level sustainability information. Using syndicated loan data from 2016 to 2025 and a loan-level difference-in-differences design, we show that banks adjust lending to regulated firms with greater Taxonomy-eligible exposure following the 2019 announcement, reallocating credit toward similarly exposed non-regulated firms. Once firms report alignment, higher alignment is associated with larger loan volumes. We further show that banks adjust contractual terms to manage transition risk. |
| Keywords: | Green Finance, Climate Regulation, Sustainability Disclosure, Bank Lending |
| JEL: | G18 G21 G32 E43 Q51 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:336770 |
| By: | Yosr Ammar (UJML - Université Jean Moulin - Lyon 3 - Université de Lyon, MAGELLAN - Laboratoire de Recherche Magellan - UJML - Université Jean Moulin - Lyon 3 - Université de Lyon - Institut d'Administration des Entreprises (IAE) - Lyon, IFGE - Institut Français de Gouvernement des Entreprises - EM - EMLyon Business School); Julien Cloarec (MAGELLAN - Laboratoire de Recherche Magellan - UJML - Université Jean Moulin - Lyon 3 - Université de Lyon - Institut d'Administration des Entreprises (IAE) - Lyon, UJML - Université Jean Moulin - Lyon 3 - Université de Lyon, Iaelyon - Iaelyon School of Management - UJML - Université Jean Moulin - Lyon 3 - Université de Lyon); Bertrand Valiorgue (CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA [2017-2020] - Université Clermont Auvergne [2017-2020], EM - EMLyon Business School) |
| Abstract: | As technological advancements, artificial intelligence (AI), and climate change become increasingly intertwined, energy efficiency has emerged as a crucial issue for organizations and public authorities. This research examines how firms can align financial and environmental goals to attract diverse investor groups, focusing on AI-driven energy efficiency strategies. To do so, we use the Economies of Worth framework and explore how investors respond to energy strategies framed by financial or environmental motivations (i.e., market or green worlds), depending on the type of AI adopted and the nature of compliance. Across four experimental studies with 1, 500 investors, we find that environmental motivations can reduce investor willingness to invest, mediated by perceived energy efficiency. However, AI implementation and certification mechanisms act as critical boundary conditions that can legitimize environmental strategies and enable compromise between market and green logics. Specifically, coupling environmental motivations with AI for energy efficiency and third-party certification leads to higher investor willingness to invest. This study contributes to sustainable investment research by highlighting the critical role of AI and compliance in building hybrid justifications that can facilitate alignment between environmental and financial priorities in investor decision-making. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05470461 |
| By: | Ahmed Iqbal (Consultant); Helen Dempster (Center for Global Development) |
| Abstract: | This policy paper examines the scale and composition of donor investment in technical and vocational education and training (TVET), with a particular focus on green skills, using OECD Creditor Reporting System data from 2013–2022. By applying a broader methodology that captures TVET across 14 training-related purpose codes and identifying projects through keyword searches, the analysis provides a more comprehensive estimate of official development assistance to the sector. It finds that donors disbursed approximately US$7.5 billion to TVET over the decade, with funding highly concentrated among a small group of donors—led by Germany, the United States, Canada, Australia, and the World Bank—and directed primarily toward large emerging economies and selected low-income countries. Despite this, TVET accounts for less than 2 percent of total aid. Green TVET represents a small but growing share of this portfolio, rising from a very low base to around 2–2.5 percent in recent years, with most projects focused on renewable energy—especially solar photovoltaics. The paper highlights significant measurement challenges arising from the absence of a harmonised definition of TVET and fragmented reporting practices, which obscure the true scale of investment and limit impact assessment. It argues that agreeing a common definition and improving donor reporting systems would strengthen comparability, support evidence generation, and help unlock greater and more effective investment in skills for the green transition. |
| Date: | 2026–02–24 |
| URL: | https://d.repec.org/n?u=RePEc:cgd:ppaper:381 |
| By: | Yamaguchi, Rintaro; Agarwala, Matthew; Atkinson, Giles |
| Abstract: | Fossil fuels represent a significant portion of the wealth of resource-rich nations – up to 35% (on average) of total national wealth across the Middle East and North Africa, according to the World Bank (2021). But combusting these resources releases greenhouse gases into the atmosphere, driving costly climate change, ultimately reducing natural capital, productive capacity, and the inclusive wealth of nations. Yet, in most wealth accounting studies, fossil fuel assets are valued in isolation from their broader social costs. This study incorporates the social cost of carbon (SCC) — the present value of the future damage costs resulting from a marginal increase in emissions — into mainstream approaches to valuing fossil fuel stocks. We find that the value of fossil fuel reserves is sensitive to the carbon price, the extraction and decarbonisation pathway, and the discount rate. The results have implications for how fossil fuels should be valued in wealth accounts, how they should be reflected in national statistics, and the future of wealth in fossil-fuel rich economies. |
| Keywords: | genuine savings; natural capital; fossil fuel; inclusive wealth accounting; social cost of carbon; sustainable development |
| JEL: | C43 D63 O47 Q01 Q54 |
| Date: | 2025–11–28 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137102 |
| By: | Selvaraju, Sangeeth |
| Abstract: | Decarbonising industry is a major 21st century challenge that requires international partnership, cooperation and corporate strategy. Historically ‘hard-to-abate’ sectors like steel are now central to this policy debate. Large emerging market and developing economies (EMDEs) like India, Indonesia, and Vietnam are rapidly industrialising and driving new steel demand. But while steelmakers in the EU are investing in decarbonisation, this is proving more challenging for EMDEs. A major obstacle is the high associated cost and techno-economic limitations of implementing new methods, such as hydrogen-based iron reduction. This report seeks to understand the use of direct state subsidies as a critical enabling factor in EMDEs’ transition to decarbonising steel. The core contribution is a novel dataset on state subsidies for low-carbon steel projects worldwide. This dataset provides a foundation for future research on resource allocation and green industrial policy, enabling deeper analysis of how public finance shapes technology adoption and competitiveness in the steel sector and what the optimal policy package could be, given natural resource endowments, fiscal space and other existing climate policies that can be used together in the context of state capital expenditure (CapEx) and operational expenditure (OpEx) subsidies. |
| Keywords: | development finance; industry; global; India; policy |
| JEL: | R14 J01 |
| Date: | 2025–12–11 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137112 |
| By: | Felix Meier; Martin Quaas; Wilfried Rickels; Christian P. Traeger; Christian Träger |
| Abstract: | Carbon dioxide removal (CDR) is considered essential for climate change mitigation, yet its optimal role in climate policy remains unclear in the presence of non-permanent storage, energy constraints, and fossil fuel scarcity. We integrate CDR into an analytic integrated assessment model to derive general conditions for socially optimal CDR deployment. Within a linear carbon cycle model, we consider different CDR pathways, including direct air carbon capture, ocean alkalinity enhancement, and ocean iron fertilization. Introducing CDR does not significantly alter the optimal carbon price and the incentive to reduce emissions. The impact of CDR on gross emissions mainly stems from the energy required to operate it. This impact, as well as the optimal deployment of CDR, depends on fossil fuel scarcity and the pace of renewable energy deployment. In high-damage scenarios, the optimal deployment of CDR occurs before and around the year 2100, consistent with temperature overshoot pathways. |
| Keywords: | carbon dioxide removal, climate change, integrated assessment, social cost of carbon, optimal carbon tax |
| JEL: | Q54 Q52 C61 D61 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12501 |
| By: | Cheng Guo; Lauren Henderson; Ryan Cory-Wright; Boshi Yang |
| Abstract: | Nonconvexities in markets with discrete decisions and nonlinear constraints make efficient pricing challenging, often necessitating subsidies. A prime example is the unit commitment (UC) problem in electricity markets, where costly subsidies are commonly required. We propose a new pricing scheme for nonconvex markets with both discreteness and nonlinearity, by convexifying nonconvex structures through a semidefinite programming (SDP) relaxation and deriving prices from the relaxation's dual variables. When the choice set is bounded, we establish strong duality for the SDP, which allows us to extend the envelope theorem to the value function of the relaxation. This extension yields a marginal price signal for demand, which we use as our pricing mechanism. We demonstrate that under certain conditions-for instance, when the relaxation's right hand sides are linear in demand-the resulting lost opportunity cost is bounded by the relaxation's optimality gap. This result highlights the importance of achieving tight relaxations. The proposed framework applies to nonconvex electricity market problems, including for both direct current and alternating current UC. Our numerical experiments indicate that the SDP relaxations are often tight, reinforcing the effectiveness of the proposed pricing scheme. Across a suite of IEEE benchmark instances, the lost opportunity cost under our pricing scheme is, on average, 46% lower than that of the commonly used fixed-binary pricing scheme. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.15722 |
| By: | Galanis, Giorgos; Ricchiuti, Giorgio; Tippet, Ben |
| Abstract: | Responses to climate change differ between countries yet the impact of these differences on the evolution of global climate action has not been analysed to date. This paper addresses two related questions: (i) what is the role of the variation of preferences in the global political economy of climate action; and (ii) what are the necessary conditions for sustained high levels of global action? The authors develop a model to assess countries’ choices at different times to either take action to reduce emissions or not. They find that countries’ choices are influenced by their current level of emissions, total participation in climate action, and other idiosyncratic factors. The heterogeneity between countries is caused by income inequality, differing vulnerability to climate damage, and other political economy factors. The model’s key result is that sustained high levels of global action are achieved only if there is a low degree of heterogeneity in countries’ preferences for action and a strong peer pressure effect to act. |
| Keywords: | climate action; heterogeneous agents; evolutionary dynamics; integrated assessment; global action; political economy |
| JEL: | C62 F50 Q54 Q58 |
| Date: | 2025–12–11 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137104 |
| By: | Moreaux, Michel; Amigues, Jean-Pierre; Nguyen, Manh-Hung |
| Abstract: | Optimal energy transitions are characterized in an economy where fossil energy requires dedicated conversion capital that is costly to reverse and where cumulative emissions are capped by an exogenous carbon budget. Short-run complementarity between fossil inputs and sector-specific capital interacts with intertemporal scarcity of the remaining budget. The optimal path typically selects an expansion regime, a production plateau, a decline regime, and a post-fossil steady state. The plateau is pinned down by the need to operate in order to amortize sunk conversion capital while the shadow value of remaining emissions rises over time. These forces generate non-monotone useful-energy prices and deliver sharp conditions under which dedicated fossil capital becomes stranded. |
| Keywords: | Carbon constraint; Nonrenewable resources; Renewable resources; Energy transition; Hotelling rule |
| JEL: | E22 Q00 Q32 Q43 Q54 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:tse:wpaper:131485 |
| By: | Ottmar Edenhofer; Max Franks |
| Abstract: | We develop a unified cost-benefit framework that allows for a better understanding of nature conservation and climate policies under risk and uncertainty. We derive modified Hotelling rules from a social planner’s welfare optimization. They reveal four forces that jointly determine market design for climate and nature conservation: First, discounted marginal climate damages enter the social cost of carbon (SCC) and marginal ecosystem services the social value of nature (SVN). Second, climate and nature are coupled, which raises both prices: degradation of ecosystems increases the SCC, while climate damages raise the SVN. Third, a climate-nature beta quantifies additional hedging components of policies against fat tails, when we consider a stochastic setting with exogenous random shocks. The climate-nature beta summarizes the option values for abatement, adaptation, ecosystem restoration and carbon dioxide removal. Fourth, Markov markups quantify tipping risks, which we capture by extending the model to a constrained Markov decision process with state-contingent transition probabilities. Thereby, we endogenize tipping points: the likelihood of moving into a high-damage regime becomes a function of the atmospheric carbon stock and natural capital, which depend on policy choices. Thus, hazard risks are a policy-sensitive component of the system’s dynamics. The model yields state-contingent asset-pricing formulas for carbon prices, restoration subsidies, land charges, and capacity payments. We propose institutions at the level of the European Union that could implement Pigouvian taxes and subsides as well as new types of SCC- and SVN-indexed bonds to share non-diversifiable risks arising from Earth's changing climate and the degradation of its biosphere. |
| Keywords: | CDR, natural capital, biodiversity, sustainability, asset pricing, welfare economics, tipping points, option values |
| JEL: | Q51 Q54 Q57 D81 G12 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12426 |
| By: | Matthew T. Cole; James Lake; Benjamin Zissimos |
| Abstract: | International environmental agreements (IEAs) often condition entry into force on ratification by a minimum number of countries, yet deep environmental commitments frequently face strong domestic political resistance. We study how IEA breadth, through minimum ratification thresholds (MRTs), and depth are jointly determined when domestic ratification incentives are endogenous. In our model, lobbying competition between pro- and anti-environmental interest groups shape domestic ratification outcomes, and lobbying incentives depend on expectations about ratification in other countries. MRTs affect domestic political incentives by altering the pivotality of a country’s ratification for entry into force and the extent to which global emissions externalities are internalized. As a result, deeper agreements optimally feature lower MRTs: governments relax breadth requirements to offset endogenous domestic political resistance to more ambitious environmental commitments. Our analysis provides a political-economy foundation for the breadth–depth trade-off and offers a novel perspective on free riding that operates through domestic political effort rather than participation or enforcement mechanisms. |
| Keywords: | international environmental agreements, minimum ratification threshold, contest, ratification, lobbying, domestic political economy, breadth–depth trade-off, free riding |
| JEL: | Q54 H41 D72 F53 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12489 |
| By: | Jamotton, Charlotte (Université catholique de Louvain, LIDAM/ISBA, Belgium); Hainaut, Donatien (Université catholique de Louvain, LIDAM/ISBA, Belgium) |
| Abstract: | Fairness in insurance has received increasing attention, particularly in light of regulations calling for non-discriminatory premium estimation, such as the EU Gender Directive (2012). This research explores group fairness mechanisms designed to mitigate group-level disparities. We propose a method based on the energy distance, a multivariate metric that enables fairness adjustments across multiple sensitive attributes simultaneously, even where they are non-binary. To maintain overall prediction balance, our approach integrates an autocalibration step to correct for biases in the total predicted number of claims. Moreover, our method supports fairness adjustments for new policyholders without requiring retraining of the fairness model. We evaluate the proposed methodology in the context of car insurance pricing, where demographic factors such as age and gender are commonly used for risk assessment and premium determination. Results show that our method effectively reduces group-level disparities while preserving the predictive accuracy. |
| Keywords: | Fairness ; demographic parity ; autocalibration ; actuarial pricing ; energy distance |
| Date: | 2025–04–22 |
| URL: | https://d.repec.org/n?u=RePEc:aiz:louvad:2025009 |
| By: | Alan Finkelstein Shapiro; Olli-Pekka Kuusela |
| Abstract: | Zambia, an economy heavily reliant on hydropower for electricity, has faced sustained disruptions to electricity generation amid increasingly frequent and severe droughts. These drought-related disruptions have caused large GDP losses in recent years and have tilted electricity generation towards polluting sources, putting the green transition at risk. Current policy proposals aim to dramatically expand the share of electricity from solar. |
| Keywords: | Low income countries, Sub-Saharan Africa, Informal work, Green energy transition, Fiscal policy, Zambia |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:unu:wpaper:wp-2026-16 |
| By: | Lucas Bretschger |
| Abstract: | The study examines economic growth and climate change when system competition between countries causes drastic changes in their climate policies. The world is divided into two groups of countries: one that implements strict climate policies and another that refrains from doing so due to concerns about the negative economic impacts. A policy tipping point occurs once the economic performance of the proactive group surpasses that of the laggards, prompting the latter to implement comparable climate measures. I find that the impact of policy tipping is significant on emissions but moderate on economic growth. The occurrence of the policy shift depends on policy design and technological progress. In a divided world, subsidies for clean energy research prove more effective than carbon pricing in accelerating global decarbonization because they induce earlier tipping. Achieving the internationally agreed climate targets requires that proactive countries combine ambitious emissions reductions with sustained economic prosperity, an outcome attainable through an efficient mix of taxes and subsidies. |
| Keywords: | carbon policy, divided world, economic growth, global carbon emissions, policy tipping |
| JEL: | Q43 O47 Q56 O41 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12438 |
| By: | Marcel Ricou (IREX); John Mountford (Consultant); Helen Dempster (Center for Global Development); Shona Warren (Center for Global Development) |
| Abstract: | The global transition to a low-carbon economy demands the increased delivery of green skills, yet technical and vocational education and training (TVET) systems in Africa struggle to meet this need. This landscape analysis, by the Center for Global Development and IREX, aims to identify “investment-ready” TVET providers in Côte d’Ivoire, Ghana, Kenya, and Morocco that are capable of scaling green skills training for local and international markets. Drawing on a literature review, field visits, and stakeholder interviews, the landscape analysis identifies nine high-performing providers – mainly public-private partnerships and utility-based Centres of Excellence – delivering industry-aligned, employment-driven training. To accelerate green skills development, support international labour mobility, and advance equitable participation in the green transition, donors and national governments should invest in these providers and help scale their models. This agenda is particularly urgent when considering the challenges facing Africa: a demographic youth bulge, increasing unemployment rates, and a scarcity of workers to support Africa’s green transition. The paper concludes with actionable opportunities for international donors and national governments to invest in scalable, sustainable green-skilled migration partnerships. |
| Date: | 2026–02–24 |
| URL: | https://d.repec.org/n?u=RePEc:cgd:ppaper:382 |
| By: | Fabiano Compagnucci (Gran Sasso Science Institute); Daria Denti (Gran Sasso Science Institute); Alessandra Faggian (Gran Sasso Science Institute); Arsène Perrot (Gran Sasso Science Institute) |
| Abstract: | The green transition unfolds against a backdrop of widening territorial inequalities driven by the spatial concentration of the knowledge economy. While knowledge-intensive regions with educated, affluent populations might be expected to champion environmental causes, this paper reveals a counter-intuitive pattern. Using novel measures of pro- and anti-environmental activism across Italian provinces (2012-2022) and a Bartik-like instrumental variable, we find that knowledge economy concentration reduces pro-environmental activism nearly twice as much as anti-environmental activism. This asymmetry creates a compositional shift where knowledge-intensive areas exhibit relatively more anti-environmental sentiment in their remaining activism. The findings challenge simplified assumptions about education, affluence, and environmental support, revealing that territorial economic structures fundamentally alter engagement patterns. Green transition policies must account for how different economic contexts generate distinct mobilization patterns, addressing both the reduced collective action in knowledge hubs and resistance in vulnerable territories. |
| Keywords: | green transition, climate crisis, local resentment, knowledge economy, activism, polarisation, local vulnerability |
| JEL: | R11 R12 Q54 Q58 D74 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ahy:wpaper:wp75 |