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on Energy Economics |
| By: | Nicholas Z. Muller |
| Abstract: | This paper quantifies the environmental externalities associated with electricity consumption by data centers in the United States, focusing on damages from local air pollution and greenhouse gas (GHG) emissions. Using facility-level data for approximately 2, 800 operational data centers in 2025, combined with electricity grid characteristics and emissions data, the analysis estimates pollution impacts through the AP4 integrated assessment model and applies the social cost of carbon for GHG valuation. Results indicate that data centers consume roughly 250 TWh of electricity—about 5–6% of U.S. generation—and generate approximately $25 billion in gross external damages (GED), with a range of $10–$33 billion. These damages are highly geographically concentrated, with Texas and Virginia accounting for 30% of the national total. While GED comprises about 5% of industry GDP, this ratio varies widely across states, exceeding GDP in some regions. Planned data center expansion could increase electricity demand and associated damages by up to 85% in the near term. Despite these environmental costs, preliminary comparisons suggest that the damages attributable to AI-related energy use are small relative to potential productivity gains. |
| JEL: | Q41 Q51 Q53 Q54 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35100 |
| By: | Francesco Zanetti; Guillermo Verduzco-Bustos |
| Abstract: | We develop a novel instrumental variable to identify geopolitical oil price shocks arising around significant geopolitical tensions and examine their transmission to the global oil market, key U.S. macroeconomic aggregates, and cross-border spillover effects on other commodity markets, output, and inflation. Geopolitical oil price shocks resemble severe oil supply shocks, leading to production declines and a much sharper increase in oil prices than conventional shocks. They are coupled with heightened uncertainty and induce a distinct inventory response: an initial shortterm decline followed by long-term accumulation, reflecting market participants concerns about future economic and oil market conditions. The cross-border spillover effects are significant for oil-intensive commodities, and are stronger for output and inflation in oil-importing economies and for countries with low energy inventories and high energy dependency on foreign supply. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:cnn:wpaper:26-005e |
| By: | Pakrooh, Parisa; Manera, Matteo |
| Abstract: | Despite the strong commitment of European countries to achieve net-zero emissions by 2050, the extent to which key policies and drivers jointly shape emissions dynamics remains insufficiently investigated. To fill this gap, the study investigates the combined effects of the circular economy, energy transition, emissions trading systems, carbon tax, and digitalization on carbon reduction in the EU member states. Using annual data from 2000 to 2023, the analysis integrates causal discovery, time-varying dependence modeling, and machine learning methods to unravel system-level causal structure, dynamic connectedness, and future emission trajectories. The Directed Acyclic Graph method, especially the Fast Adjacency Skewness algorithm, identifies both contemporaneous and lagged causal relationships, in which resource productivity acts as a transmission channel within the system. Lagged disequilibrium shocks propagate from upstream circular economy factor (material footprint) and digitalization to midstream efficiency (resource productivity), and ultimately are transmitted to emissions. Time-varying copula models confirm significant heterogeneity and evolving dependence among key factors, highlighting the nature of the dynamic relationships. Forecasting results, based on a Support Vector Regression model under the European Union’s 2030 climate policy target, indicate a persistently declining emission trajectory, however at an insufficient speed to meet the EU’s 2030 target. Sensitivity analysis indicates that this gap does not reflect a policy failure but the need for accelerated policy adjustments. |
| Keywords: | Climate Change, Resource/Energy Economics and Policy |
| Date: | 2026–04–14 |
| URL: | https://d.repec.org/n?u=RePEc:ags:feemwp:396442 |
| By: | Gillani, Syed Irfan Haider; Ali, Amjad; Audi, Marc |
| Abstract: | Sustainable development is the most challenging issue facing the whole world. It includes multiple dimensions like economic, social, and environmental. The current study explores the determinants of sustainability in developing countries by incorporating the role of environmental taxes, economic growth, renewable energy, and political stability. The study used 21 developing countries from 1994 to 2023 to find the impact of these macroeconomic variables on greenhouse gas emissions. The generalized method of moments and penal least squares with fixed effects model have been used to find robust empirical evidence. The empirical findings indicate that environmental taxes have a significant positive impact on environmental sustainability, while renewable energy, political stability, and economic growth have a significant negative impact on environmental sustainability. The study also demonstrates the moderating role of environmental taxes on renewable energy and political stability. It indicates that environmental taxes have no statistical support to build a statement about the moderating role. The study suggests that policy makers to take immediate action to revise taxation policies by incorporating the current challenges faced by the environment. Renewable energy sources should be promoted to make them accessible. If possible, taxes on accessories of renewable energy setups should immediately be removed. |
| Keywords: | Environment Taxes, Renewable Energy, Sustainable Growth, Greenhouse Gas Emissions, Developing Countries, Political Stability |
| JEL: | H23 Q3 Q4 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128671 |
| By: | Julian Keutz (Institute of Energy Economics at the University of Cologne gGmbH) |
| Abstract: | Price premia between day-ahead and intraday electricity markets are well documented and often attributed to factors such as forecast errors or market frictions. However, existing explanations provide limited insight into why these price premia can exhibit a systematic diurnal structure, as observed in the German market. This paper provides a structural explanation by linking price premia to the bidding behavior of renewable producers. I develop a stylized two-stage model in which renewable producers determine their day-ahead bids under different bidding rationales, including expected-production bidding, risk-neutral bidding, and risk-averse bidding that accounts for tail risk. Closed-form solutions for day-ahead bids and the resulting price premia are derived and evaluated using a calibration to German market data. The results show how bidding behavior interacts with supply curve convexity and forecast uncertainty to translate risk preferences of renewable producers into systematic price premia. In particular, heterogeneous bidding behavior across renewable technologies replicates the diurnal pattern of price premia observed in the German market: negative premia around midday and positive premia during morning and evening hours arise when PV producers bid expected production while wind producers follow a risk-averse strategy. The findings suggest that observed price premia reflect both risk preferences and institutional features of renewable energy marketing, which may warrant reconsideration. |
| Keywords: | Sequential Markets;Renewable Energy Bidding; Price Premia; Risk Preferences |
| JEL: | Q41 Q42 L94 D81 |
| Date: | 2026–04–14 |
| URL: | https://d.repec.org/n?u=RePEc:ris:ewikln:022437 |
| By: | Ayse Tugba Atasoy (Chair of Energy Economics and Management, Institute for Future Energy Consumer Needs and Behavior (FCN), E.ON Energy Research Center / School of Business and Economics, RWTH Aachen University, Aachen, Germany); Reinhard Madlener (Chair of Energy Economics and Management, Institute for Future Energy Consumer Needs and Behavior (FCN), E.ON Energy Research Center / School of Business and Economics, RWTH Aachen University, Aachen, Germany) |
| Abstract: | Residential solar photovoltaic systems play a key role in decentralized energy transitions. Despite declining technology costs and growing policy support, household adoption remains uneven and below technical potential. This paper investigates whether PV adoption is pri- marily driven by preferences and motivations or constrained by structural and economic feasibility. Using a representative survey of Austrian households, we compare adopters and non-adopters by examining structural housing conditions, socio-economic characteristics and environmental attitudes, as well as the co-adoption of complementary technologies, comple- mented by evidence on perceived motivations and barriers. The results show that adoption is strongly associated with structural feasibility and technology co-adoption. Higher income, single-family housing, and ownership of heat pumps and electric vehicles significantly increase adoption likelihood, while the effect of homeownership becomes statistically insignificant once income and other socio-economic factors are controlled for. Environmental awareness does not significantly predict adoption once structural factors are taken into account. Reported barriers among non-adopters closely mirror these patterns: financial constraints, building limitations, and administrative hurdles dominate. Overall, the findings suggest that structural and financial constraints play a more prominent role than preference-based factors in shaping residential PV adoption, highlighting the importance of addressing feasibility barriers in policy design. Policies should therefore prioritize reducing structural and financial constraints, particularly for households in multi-family housing. |
| Keywords: | Residential Solar Photovoltaics; Energy Policy; Household Adoption; Structural Barriers; Financial Constraints; Energy Transition; Austria |
| JEL: | Q42 Q48 D12 R20 |
| Date: | 2026–03–01 |
| URL: | https://d.repec.org/n?u=RePEc:ris:fcnwpa:022448 |
| By: | Maier Sofia (European Commission - JRC); De Poli Silvia; Klenert David (European Commission - JRC); Amores Antonio F (European Commission - JRC); Dreoni Ilda (European Commission - JRC) |
| Abstract: | This article introduces Green EUROMOD, the environmental extension of the EU’s tax-benefit microsimulation model EUROMOD. It provides a novel framework for evaluating the distributional, environmental, and fiscal impacts of green policy reforms across the 27 EU Member States. The model captures both direct greenhouse gas (GHG) emissions - such as those arising from household fuel combustion for heating and private transport - as well as indirect emissions occurring along value chains. Indirect emissions are further disaggregated into those embodied in domestically produced goods and services, and those embodied in imports from other EU Member States and the rest of the world. This granularity, combined with the capacity to simulate environmental and tax-benefit policies jointly and consistently across countries, makes Green EUROMOD a unique tool for the design and assessment of environmental policy reforms, with a particular focus on their distributional effects. The article outlines the model’s components and methodological framework, followed by a demonstration of its capabilities through two applications. First, we present the estimated household carbon footprints from consumption across the income and GHGemissions distribution, for the 27 EU countries. Second, we assess the extent to which GHG emissions are already implicitly priced by existing value-added and excise taxes. This provides new policy insights regarding the current baseline which future carbon pricing policies need to consider, as well as the relative performance of Member States in balancing green and fair objectives with their current consumption tax structures. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:taxref:202604 |
| By: | Robert Botha |
| Abstract: | Examines the regulatory and institutional barriers preventing South African municipalities from procuring electricity from independent power producers despite reforms intended to enable municipal electricity procurement. |
| Keywords: | electricity, municipalities, independent power producers, South Africa, regulation |
| JEL: | L94 Q48 H77 |
| Date: | 2025–10–12 |
| URL: | https://d.repec.org/n?u=RePEc:cxs:wpaper:202507 |
| By: | Lipman, Timothy |
| Abstract: | Heavy-duty transportation modes including trucks, buses, and seaport and airport equipment are relatively hard to decarbonize because of their demanding performance requirements and other factors. The California Scoping Plan for Achieving Carbon Neutrality calls for carbon-neutral transportation across all modes by 2045, with different sectors reaching 100% zero-emission vehicle (ZEV) sales by earlier dates, depending on the type of vehicle (see EO N-79-20). For public transit buses, the state’s Innovative Clean Transit rule requires both large and small transit agencies to cease purchasing combustion engine buses in 2029 in favor of zero-emission (ZE) technologies, with a phased approach that has already commenced. However, for trucks, achieving the transition to ZEVs is more problematic as the state’s Advanced Clean Fleets rule is only applicable to government fleets at present, and the Clean Truck Partnership memorandum of understanding with truck manufacturers is effectively on hold pending legal actions. |
| Keywords: | Engineering |
| Date: | 2026–04–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsrrp:qt20m3j8w1 |
| By: | Wildmer Daniel Gregori; Daniel Abreu; Laura Bartolomeu; Fotios Kalantzis |
| Abstract: | This study examines whether banks incorporate climate transition risks into loan pricing for non-financial firms in Portugal, using loan-level data from 2018 to 2023. The results show that banks do price climate transition risks, with firms exhibiting greater emission intensity facing higher interest rates and smaller loan amounts, indicating both a pricing and credit rationing response to environmental risk. Public support measures influence how climate risk is transmitted, highlighting the potential relevance of policies with explicit environmental criteria. When accounting for the emission reduction efforts that firms are required to undertake under the current policies scenario, banks become more sensitive to firms’ emission levels when pricing interest rates. This suggests that banks incorporate, to some extent, expected future adjustment costs into their lending decisions. Coordinated government and prudential policies may help channel credit to low-emission and transformative projects, fostering the green transition while safeguarding financial stability. |
| JEL: | G21 Q52 Q53 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ptu:wpaper:w202603 |
| By: | Subash Bhandari; Hyeongwoo Kim |
| Abstract: | This paper investigates the transmission of structural global oil market shocks to U.S. inflation using an IV-SVAR approach applied to highly disaggregated CPI components. We specifically utilize oil supply news shocks-market expectations of future OPEC production changes-and find that a news-driven 10% oil price increase triggers a significant 5% surge in headline inflation. Analyzing over 55 sectoral indexes reveals that these effects are heavily concentrated in energy-related goods, while other components remain muted or respond negatively. We identify consumer budget reallocation as a primary mitigating mechanism: households facing rising energy costs shift demand toward more affordable alternatives, such as used vehicles and food at home. By employing weak-instrument robust inference, this study demonstrates that headline inflation dynamics are driven by specific energy sub-components and adaptive consumer behavior rather than broad-based sectoral increases. |
| Keywords: | OPEC News Shock; Oil Supply Shock; Disaggregated CPI Components; Instrumental Variable Structural Vector Autoregression |
| JEL: | E3 F4 Q4 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:abn:wpaper:auwp2026-06 |
| By: | Shahir Adnan; Ferrari Emanuele (European Commission - JRC) |
| Abstract: | This study evaluates the macroeconomic, environmental, and distributional effects of introducing a US$20 per tome 〖CO〗_2 tax on fossil fuels in Ethiopia. We employ a top-down macro–micro framework that links the DEMETRA computable general equilibrium model with the ETMOD tax–benefit microsimulation system to evaluate alternative revenue-recycling strategies, income-tax reductions, sales-tax cuts, and lump-sum transfers to households. The carbon tax reduces fossil-fuel emissions by 5.89% while causing a modest GDP decline of 0.17%, with carbon-intensive sectors, particularly transport and water, experiencing the largest contractions. Revenue recycling strongly influences outcomes: sales-tax reductions minimize GDP losses and are the only strategy that lowers poverty. The carbon tax would be regressive, but recycling its revenues makes it progressive, with sales-tax reductions yielding the greatest equity gains. The findings indicate that a carefully designed carbon tax, accompanied by an effective revenue-recycling strategy, can facilitate Ethiopia’s low-carbon transition, promote equitable outcomes, and safeguard vulnerable households. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:eapoaf:202603 |
| By: | Ibadoghlu, Gubad |
| Abstract: | Azerbaijan's substantial hydrocarbon endowment-particularly in crude oil and natural gas-plays a central role in shaping both its economic structure and governance model. The hydrocarbon sector constitutes the backbone of the national economy, accounting for a dominant share of fiscal revenues, export earnings, and macroeconomic stability. However, consistent with the literature on rentier state dynamics and resource dependence, the concentration of hydrocarbon rents has contributed to the consolidation of a highly centralized political system. Control over these revenues has enabled ruling elites to accumulate and sustain economic and political power, thereby limiting political pluralism and reinforcing the persistence of dominant leadership. This article examines how hydrocarbon wealth functions not only as an economic asset but also as an instrument of political control. Drawing on fiscal and sectoral data for the period 2007-2025, it shows how oil and gas revenues are accumulated in the State Oil Fund of Azerbaijan (SOFAZ), transferred to the state budget, and disproportionately allocated to defense, law enforcement, and judicial institutions, thereby expanding the state's coercive capacity. The analysis also highlights a structural shift from oil to gas production and Azerbaijan's growing role as a gas supplier to Europe. At the same time, it identifies a parallel increase in political repression, reflected in a sharp rise in the number of political prisoners since 2022. The findings suggest that Azerbaijan's increasing geopolitical and energy importance has reduced external pressure for democratic reforms. Overall, the article argues that hydrocarbon revenues play a central role in sustaining authoritarian governance by reinforcing coercive institutions and limiting accountability. |
| Keywords: | Azerbaijan, Oil and Gas Production, Hydrocarbons revenues, Energy, SOFAZ, SOCAR, Budget expenditures, Defense and security budget, Judiciary, law enforcement and prosecution budget, Gas Exports to Europe, Political Repression, Political Prisoners, EU |
| JEL: | P16 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:340056 |
| By: | Nelson, David (The Institute for New Economic Thinking at the Oxford Martin School, University of Oxford); Villanueva, Carlos Perez; Bohra, Moiz (Willis Towers Watson (WTF)) |
| Abstract: | Six key findings from the analysis: (1) Demand for oil is almost certain to decline significantly. The extent of the decline will be determined by the pace of technology development and by policy. (2) The combination of transition uncertainties and the threat of geopolitical shocks could cause oil producers to alter their production portfolios significantly. (3) Over the next 10-15 years, enough of a transition is locked-in to decrease expected price volatility and sensitivity to potential geopolitical shocks, despite transition uncertainty and changing production portfolios. An accelerated transition would decrease volatility and sensitivity further. (4) Future oil prices will be highly dependent on the outcomes of technology development, policy, and geopolitical shocks, with a wide range of price levels possible. (5) Median prices are heavily influenced by the speed of the transition, with faster transitions leading to lower prices, although producer responses set an effective floor to prices. (6) Simulation modelling of global oil markets could facilitate developing tools to manage uncertainty and risk. This analysis is part of a wider body of work exploring the financial risk for countries, companies and investors of changes to the global economy associated with mitigating climate change. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:amz:wpaper:2026-10-a |
| By: | Simon Hirsch; Florian Ziel |
| Abstract: | Electricity price forecasting supports decision-making in energy markets and asset operation. Probabilistic forecasts are increasingly adopted to explicitly quantify uncertainty, typically issued as quantile predictions or ensembles of the full predictive distribution. However, how improvements in statistical forecast quality translate into economic value remains unclear. Battery storage arbitrage in day-ahead markets is a popular application-based benchmark for this purpose. We analyze quantile-based trading strategies (QBTS) and identify two critical flaws: they do not incentivize honest probabilistic forecasting and they ignore the intertemporal dependence structure of electricity prices. We therefore frame battery optimization as a stochastic program based on fully probabilistic forecasts and examine decision quality measurement for risk-neutral and risk-averse settings under different uncertainty models. Our discussion touches both sides of the coin: How reliable is the economic evaluation of forecasting models though (simplified) application studies - and how do improvements in statistical forecast quality for stochastic programs relate to the decision-quality and economic performance? We provide theoretical justification and empirical evidence from a case study on the German electricity market. Our results highlight the pitfalls of ranking forecasting models through battery trading strategies. We conclude with implications for evaluation practice and directions for future research in application-based forecast assessment. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2604.19580 |
| By: | Margherita Gerolimetto (Ca’ Foscari University of Venice); Stefano Magrini (Ca’ Foscari University of Venice); Alessandro Spiganti (University of Genoa) |
| Abstract: | We study the causal effect of the local supply of sector-specific innovators on patenting activity across US metropolitan areas, distinguishing between innovators active in carbon-intensive ("brown") and environmentally sustainable ("green") technological fields. Using USPTO patent data from 1990 to 2016, we document a marked shift in the geography of green innovation: while brown patenting has long been concentrated in established hubs, green patents — initially more dispersed — have increasingly converged toward the same locations. We build a theoretical framework in which local patenting activity is driven by the supply of green and brown innovators, investigating how their interaction shapes the innovation process. Empirically, we address endogeneity using a shift-share instrument that combines predetermined local technological specialization with exogenous shocks to foreign innovation across CPC sections. We find that a one-unit increase in the local supply of brown innovators raises patenting activity by approximately 0.8%, an effect that is robust across specifications. Together, these findings suggest that green innovation is becoming increasingly embedded in existing agglomeration ecosystems, with important implications for place-based climate policy. |
| Keywords: | agglomeration, climate change, innovation, spatial distribution, patents |
| JEL: | O31 O33 O44 O47 R11 R12 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ven:wpaper:2026:14 |
| By: | Keramidas Kimon (European Commission - JRC); Fosse Florian; Aycart Javier (European Commission - JRC); Dowling Paul (European Commission - JRC); Garaffa Rafael (European Commission - JRC); Giurgiu Fuchs Eva; Ordonez Jose; Petrovic Stefan; Russ Peter (European Commission - JRC); Schade Burkhard (European Commission - JRC); Schmitz Andreas (European Commission - JRC); Soria Ramirez Antonio (European Commission - JRC); Van Der Vorst Camille (European Commission - JRC); Weitzel Matthias (European Commission - JRC) |
| Abstract: | Enhancing competitiveness became a key priority for policymakers in 2025. Decarbonisation efforts hinge on the relative competitiveness of clean energy technologies compared to high-emitting counterparts. GECO 2025 assesses the competitiveness of a range of key clean energy technologies globally, within the context of meeting global temperature targets. The report finds that a few technologies are already able to compete with their high-emitting counterparts, a few others are close to be able to do so, but many important clean energy technologies are far from maturity and require more support to reach the deployment levels required in the 1.5°C scenario. In a world where tariffs and trade barriers are increasingly on the rise, GECO 2025 also investigates the impact of global trade patterns on economic growth and decarbonisation, finding minimal interaction between climate and trade policy at global GDP level. International trade fragmentation may cause a limited reduction in GHG emissions but also hampers deep decarbonisation. Against this framework of structural change, climate mitigation reshapes international trade flows, where the scale of energy carrier transactions is set by the ambition of climate policies, and the volume of manufacturing commerce is driven by trade policy. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc145985 |
| By: | Fiona Burlig; James B. Bushnell; David S. Rapson |
| Abstract: | Despite the importance of program participation for policy, treatment effects are often measured on self-selected samples. We study electric vehicle (EV) managed charging, intended to reduce electric grid strain by optimally allocating charging across EVs. Prior work finds large impacts of managed charging among households who volunteer for an RCT. In contrast, we test managed charging with an experiment including all EVs within a California utility. Enrollment is low even with high incentives, and we can reject even modest intent-to-treat effects on electricity consumption. Managed charging is less effective than previously thought, underscoring the value of population-wide experiments. |
| JEL: | C90 Q40 R40 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35086 |
| By: | Nicolay, Katharina; Spix, Julia; Steinbrenner, Daniela |
| Abstract: | We conduct a data-based policy evaluation of the first large-scale, EU-wide excess profit tax, implemented during the 2022 European energy crisis to tax the windfall profits of inframarginal electricity producers. In particular, we evaluate the inherent trade-off of excess profit taxation: the benefits from generating additional tax revenues for crisis mitigation versus the costs of potential distortions to production and investment decisions. On tax revenues, our analysis indicates that the inframarginal revenue cap could cover almost one quarter of the crisis-related government support, although the distribution of tax revenues and thereby the cost coverage is highly uneven across EU Member States. On distortions, we distinguish between impact on long-run investment and short-run production decisions. While we find only a limited negative impact on profitability, which could discourage investment in the long run, we find, using a difference-in-differences design, that electricity producers slightly adapt their short-run production decisions to improve their profitability. Our conclusions help to guide policymakers in future supply shocks. Excess profit taxes only provide a beneficial cost-benefit perspective under specific conditions. Policymakers must carefully time the implementation and accurately identify excess profits. Even with a generous definition of profits, excess profit taxes can be distortionary and, hence, fail to be pure windfall taxes. While retroactive implementation could be an avenue to enhance the cost-benefit profile of excess profit taxes as a crisis measure, it may undermine the credibility and predictability of the tax framework. |
| Keywords: | Excess profit taxes, windfall profit taxes, inframarginal revenue cap, European electricity crisis, non-distortionary taxation, real effects of taxation |
| JEL: | H21 H23 H32 H12 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:340104 |
| By: | Shahriar, Muhammad Shajid; Luengjitvatana, Panapan; Baig, Mirza Samad Ali; Albreiki, Saeed; Luther, Aashish |
| Abstract: | In a world where people are increasingly shifting from internal combustion engine (ICE) vehicles to electric vehicles, revenue from state fuel taxes has continued to decline. This has prompted policymakers to consider alternative mechanisms to fund transportation infrastructure, including the introduction of a Vehicle Miles Travelled (VMT) fee. However, these changes may have distributional consequences. This study examines the geographical equity impacts of a VMT fee on residents of five cities in the San Francisco Bay Area and compares the financial burdens of a VMT fee and the existing fuel tax for households living in urban and rural settings. Household-level travel, income, and residential location data were obtained from the 2017 National Household Travel Survey. Four scenarios were evaluated: the current fuel tax, a static VMT fee, a dynamic VMT fee with modified elasticities, and a dynamic VMT fee using raw elasticities. Equity was assessed using the Gini Index. Results show that rural households face consistently higher burdens across all scenarios. The static VMT fee produces small changes relative to the fuel tax, while the dynamic scenarios increase financial burdens; especially for lower-income households due to behavioral adjustments. Overall, a VMT fee can serve as an alternative to the fuel tax, but behavioral responses and distributional differences remain important policy considerations. |
| Keywords: | Engineering, VMT Fee Impact, Transportation Equity, Tax Burden, Gini Index |
| Date: | 2026–03–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsrrp:qt6j93d459 |
| By: | OECD |
| Abstract: | Critical minerals such as lithium, cobalt, nickel, copper, graphite and rare earth elements are poised to play an increasingly important role in environmental sustainability, emerging technology and defense applications. Innovation can play a vital role in reducing primary demand for them while reducing associated supply chain risks and providing benefits for the environment and human health. This paper examines the intersection of technological innovation, critical raw materials and economic policy. It draws on a review of academic and non-academic literature to analyse the key drivers of innovation in the critical raw material supply chain, as well as how innovation might help drive the reforms needed to establish more secure supply networks and sustainable business practices. It then develops a conceptual framework for categorising innovation across the value chain and types of innovations before assessing emerging policy challenges and opportunities for governments. |
| Keywords: | Batteries, Critical materials, Critical mineral, Critical raw material, Innovation, Materials security, Mining, Rare earth elements, Resource scarcity, Supply chain |
| JEL: | O30 Q55 Q58 O38 |
| Date: | 2026–04–27 |
| URL: | https://d.repec.org/n?u=RePEc:oec:envaaa:273-en |
| By: | Yilin Cai; Meng Feng; Yueming (Lucy) Qiu; Yi David Wang |
| Abstract: | This paper uses a multi-time period difference-in-differences model to evaluate the effect of green bond issuance on the profitability of heavy-polluting enterprises listed on China's A-share market. Results reveal that the average treatment effect of green bond issuance on heavy-polluting firms’ ROE is significantly negative. Therefore, it suggests that green bond issuance requires issuing firms to give up a large amount of their profitability to develop green project and achieve green transformation. Heterogeneity analyses demonstrate that such issuance has a negative effect on firms’ profitability, which varies across different ownership, regions, and industries. Overall, these results are consistent with the concept that green bond issuance binds heavy-polluting companies to be more mindful of their polluting activities. |
| Keywords: | Green Bond Issuance; Profitability; Heavy-polluting Firms; Heterogeneity |
| Date: | 2026–04–10 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/082 |
| By: | Raimi, Daniel (Resources for the Future); Cilento, Christina (Resources for the Future) |
| Abstract: | In 2021, the US federal government provided billions of dollars to decommission orphaned oil and gas well sites. This program was touted by federal policymakers from both major political parties as a “win-win” for the environmental and economic benefits it would provide. In this analysis, we examine the costs and benefits of that program using data from roughly 2, 150 well sites across six states. We estimate the effects of this spending on employment, methane abatement, and property values. On average, decommissioning costs were roughly $67, 000 per well site, but with wide variation. Nine sites exceeded $1 million, while five sites reported the lowest costs of just $1, 000. Total costs were roughly $145 million, and we estimate benefits on the order of $30 to $40 million, mostly from higher property values. For the small number of wells where methane was measured, decommissioning costs exceeded the social benefits of methane abatement in 75 to 80 percent of cases. Our results should be interpreted with caution because of extensive data limitations and the sensitivity of results to key methodological assumptions. Prioritizing decommissioning for wells with the highest environmental impacts, such as high rates of methane emissions, would easily pass cost–benefit tests in most cases. |
| Date: | 2026–04–15 |
| URL: | https://d.repec.org/n?u=RePEc:rff:dpaper:dp-26-07 |
| By: | Hilde C. Bjørnland; Nicolás Hardy; Dimitris Korobilis |
| Abstract: | We develop a Quantile Bayesian Vector Autoregression (QBVAR) to forecast real oil prices across different quantiles of the conditional distribution. The model allows predictor effects to vary across quantiles, capturing asymmetries that standard mean-focused approaches miss. Using monthly data from 1975 to 2025, we document three findings. First, the QBVAR improves median forecasts by 2-5% relative to Bayesian VARs, demonstrating that quantile-specific dynamics matter even for point prediction. Second, uncertainty and financial condition variables strongly predict downside risk, with left-tail forecast improvements of 10-25% that intensify during crisis episodes. Third, right-tail forecasting remains difficult; stochastic volatility models dominate for upside risk, though forecast combinations that include the QBVAR recover these losses. The results show that modeling the conditional distribution yields substantial gains for tail risk assessment, particularly during major oil market disruptions. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:bny:wpaper:0148 |
| By: | Diaz Rincon Andrea (European Commission - JRC); Genty Aurelien (European Commission - JRC); Ruiz Garcia Juan (European Commission - JRC); Vergote Wouter (European Commission - JRC) |
| Abstract: | The European Union (EU) automotive industry is facing challenges as Chinese electric vehicles (EVs) are increasingly gaining market share due to lower prices and perceived higher quality. In the last decade, the industry's reliance on foreign components has increased slightly (from 8% to 11%), but this modest increase masks the heterogeneity of EV and internal combustion engine (ICE) manufacturing. The distinction between EVs and ICEs is particularly important for inputs where the EU lacks a comparative advantage, such as batteries. Using a new methodology developed under the SMILE EU project, we disaggregate the automotive sector to separately assess technological differences and foreign dependencies for ICEs, EVs, and vehicle parts. Our analysis reveals that EVs have a significantly higher reliance on foreign components than ICEs (29% vs 13%, respectively). We find that this disparity is largely attributed to global value chain (GVC) strategies, rather than a domestic technological shortfall. These findings underscore the need for policy initiatives at an EU-wide level aimed at reducing outsourcing through GVCs and boosting European competitiveness in EV manufacturing. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc145139 |
| By: | Allegra Pietsch; Dilyara Salakhova |
| Abstract: | In 2020 retail investors’ demand for green bonds surged leading to a jump in greenium – a price premium for green bonds. This trend did not last. Sensitivity of retail investors’ financial conditions to the macroeconomic situation may explain the later decline in investors’ appetite for green bonds and thus the later reduction in the greenium. <p> En 2020, la demande d’obligations vertes provenant des investisseurs particuliers a fortement augmenté, entraînant un bond du greenium – la prime de prix associée aux obligations vertes. Cette tendance n’a pas duré. La sensibilité des conditions financières des investisseurs particuliers à la situation macroéconomique pourrait expliquer la baisse de l’appétence des investisseurs pour les obligations vertes et par conséquent la réduction du greenium observée par la suite. |
| Date: | 2026–04–15 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:econot:445 |
| By: | Irene Aldridge; Gavhar Annaeva; Leyla Beriker; Zhiheng Cai; Samyak Choudhary; Camila Godoy; Kaicheng Gong; Zitao Huang; Jonah Ji; Hetvi Kharvasiya; Heng Li; Yuxuan Li; Tianchi Ma; Qingcheng Meng; Ruiyang Shi; Ananya Shrivastava; Jiaqi Wang; Yifan Wang; Zihua Wu; Jiayang Xu; Yuheng Yan; Zijun Zeng; Bowen Zhang; Francesco Zhang |
| Abstract: | Blockchain technology is widely expected to reduce transaction costs by automating contract enforcement and eliminating intermediaries; yet, the execution costs imposed by network congestion have received little attention in the operations management literature. We study on-chain peak shaving, the systematic scheduling of Ethereum transactions toward low-congestion windows to reduce gas fee exposure. We use transaction-level data from seven firms across seven industries (N = 62, 142 transactions, January-March 2026). Gas fees vary significantly throughout the day: the peak-hour premium at 10 AM Eastern Time reaches USD 0.220 per transaction above the overnight baseline, driven primarily by speculative-arbitrage demand rather than operational activity. Firm-level scheduling responses are heterogeneous and not uniformly disciplined. Only three of seven firms transact disproportionately during off-peak hours; four transact counter-cyclically, concentrated in peak windows due to external deadlines or governance cycles. This heterogeneity is explained by two moderators: transaction deferrability and gas intensity. We formalize these into an On-Chain Scheduling Matrix that maps firms to four regimes: 1) full peak shaving, 2) selective peak shaving, 3) cost provisioning, and 4) accept-market-rate, with regime membership predicting both fee savings and residual cost floors (40-92 percent of actual expenditure). Theoretically, we extend Transaction Cost Economics to account for time-varying execution costs imposed by congestion externalities. In addition to extending Williamson's original cost taxonomy, we introduce a dual classification of gas fees as execution costs in timing but maladaptation costs in origin. The findings reposition on-chain gas-fee management alongside energy procurement and foreign exchange hedging as a domain requiring systematic operational planning. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2604.19956 |
| By: | Ewa Weychert (University of Warsaw, Faculty of Economic Sciences; University of Florence, Department of Statistics, Computer Science, Applications “G. Parenti” (DiSIA)); Daniele Vignoli (University of Florence, Department of Statistics, Computer Science, Applications “G. Parenti” (DiSIA)); Anna Matysiak (University of Warsaw, Faculty of Economic Sciences); Dorota Celińska-Kopczyńska (University of Warsaw, Faculty of Mathematics, Informatics, and Mechanics) |
| Abstract: | This study investigates how climate news exposure relates to first-birth outcomes in the United Kingdom. Drawing on theories of imagined futures, individualized political engagement, and eco-anxiety, we examine whether and how exposure to climate-related media coverage is related to fertility behavior. We construct a novel index of climate news coverage using text mining and link it to individual-level longitudinal data from the UK Understanding Society survey. Results show that high exposure to climate news is associated with a lower probability of first birth, but only among individuals who express strong pro-environmental attitudes. In contrast, political identity and perceived long-term climate risk do not significantly moderate this relationship. These findings suggest that climate news coverage, which we use as a proxy for climate change narratives, is associated with fertility in a non-uniform way, shaped by moral and emotional mechanisms linked to current environmental concern. This study highlights the role of media-driven imaginaries in shaping life course decisions and contributes new evidence on the demographic implications of climate change discourse. |
| Keywords: | climate change, fertility outcomes, text mining |
| JEL: | J13 Q54 D83 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:war:wpaper:2026-11 |
| By: | Ahsan ul Haq (Pakistan Institute of Development Economics); Shahzada M. Naeem Nawaz (Pakistan Institute of Development Economics) |
| Abstract: | This paper investigates how a disturbance in the Strait of Hormuz could impact Pakistan through fuel prices, inflation, and external-sector pressure. Using a nonlinear scenario framework, it models three cases (mild, stress, and severe) by including war-risk premium, exchange-rate effects, separate shocks to motor spirit (petrol) and high-speed diesel, threshold-based indirect CPI impacts, and staggered monthly pass-through. The results indicate that even a mild shock can disrupt Pakistan’s recent disinflation trend. The stress and severe scenarios lead to substantially higher inflation because diesel-driven transportation and food-distribution costs amplify second-round effects. The findings also show that the shock affects more than just pump prices; it raises the petroleum import bill, weakens the current account, and limits policy options. The paper concludes that an effective response involves a coordinated approach (based on transparent pass-through, targeted support for critical logistics, and active external-sector management) rather than broad price controls. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pid:wpaper:2026:2 |
| By: | Mr. Christian Bogmans; Francis Cuadros-Bloch; Jean-Marc Natal; Andrea Paloschi |
| Abstract: | Recent supply shortages have intensified concerns about supply chain bottlenecks, prompting policymakers to adopt industrial policies to promote reshoring and friendshoring. Nowhere are these concerns more evident than in rare earth element (REE) markets, where supply chains are highly concentrated across stages, particularly refining. This paper quantifies the costs of reducing supply chain concentration using a dynamic global trade model calibrated with detailed market, industry and geological data. In the model, upstream (mining) and downstream (refining) production is slow-moving and determined by investment in capacity (CAPEX). We evaluate how different policies can raise U.S. downstream REE self-sufficiency from 10 to 25% by 2035, comparing CAPEX subsidies and price floors under unilateral and coordination action among importers. The fiscal cost of downstream unilateral CAPEX subsidies reaches 141% of the annual U.S. REE market (about $1.2 billion) by 2035, and falls to 96% under coordinated action. Downstream price floor policies are equally effective, but more fiscally inefficient. Despite their size relative to the market, absolute fiscal costs are contained, suggesting that de-risking REE supply chains is fiscally feasible. |
| Keywords: | Industrial Policy; Trade Restrictions; Rare Earths; Global Supply Chains |
| Date: | 2026–04–14 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/072 |
| By: | Leogrande, Angelo; Magaletti, Nicola; Zini, Ettore; di Molfetta, Mauro; Trotta, Maria Giovanna; Notarnicola, Valeria |
| Abstract: | The article introduces the concept of Smart Infrastructure Metaverse (SIM) and considers it from the perspective of Distributed Adaptive Systems (DAS). The approach combines technologies such as IoT, Digital Twins, AI, and XR to form an infrastructure intended to provide continuous real-time monitoring of objects, along with their prediction. The key idea behind SIM is that the infrastructure is viewed as an entity that changes continuously through data synchronization. The REMM (Real Estate Metaverse Manager) tool is provided as one way to apply the principle of distributed intelligence alongside edge and cloud computing to manage infrastructure. The experimental results demonstrate improvements in energy optimization, predictive maintenance, and situational awareness. |
| Date: | 2026–04–16 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:8aqfd_v1 |
| By: | Napiontek, Jakob (Potsdam Institute for Climate Impact Research (PIK)); Pichler, Peter-Paul |
| Abstract: | Household microdata combining socio-demographic, housing, income and expenditure attributes are a core resource for many studies in quantitative social science, such as modelling the household-level impacts of the energy transition. Yet no such data are openly available for Germany's full population. SynPop-DE provides a synthetic population of 40, 235, 916 households and their 82, 039, 613 members in all 400 German districts, calibrated to the 2022 census, with 34 attributes per household. Synthetic households are generated by estimating the joint attribute distribution of the German Household Budget Survey through a two-stage machine learning architecture. While an autoencoder first compresses high-dimensional categorical data into a continuous latent space, a generative adversarial network subsequently learns to sample new records from this representation. These records are then aligned with census marginals for all German districts using iterative proportional updating to ensure spatial representativeness. Validation along three dimensions confirms that the model learns attribute relationships and generates synthetic households that reproduce the statistical properties of the survey data (fidelity), supports downstream analyses with accuracy comparable to the original survey (utility), and prevents disclosure of individual respondents (privacy). The dataset is openly available at https://synpop.de. |
| Date: | 2026–04–12 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:zha8v_v1 |
| By: | Etienne Fakaba Sissoko (CRAPES MALI - Centre de Recherche et d'Analyses Politiques, Economiques et Sociales du Mali, Faculté des Sciences économiques et de Gestion - USSGB - Université des sciences sociales et de gestion de Bamako, USSGB - Université des sciences sociales et de gestion de Bamako) |
| Abstract: | This article analyses the economic strangulation strategy implemented by JNIM in Mali between July and November 2025. By blocking fuel flows and disrupting key road corridors, the jihadist group transformed the country's energy dependence into an instrument of political domination. Based on an integrated qualitative methodology, the analysis shows that the blockade is not a rupture but a revelation: it highlights the coercive delegation of sovereign functions to armed actors capable of controlling vital resources. The state remains visible but is functionally disabled, while society adapts under constraint and the economy fragments into survival circuits. The findings emphasize that economic sovereignty has become a scarce resource, administered through fear, dependency, and the control of flows. The study calls for a rethinking of security in the Sahel through the concept of circulatory security, centered on regional governance of vital flows. |
| Abstract: | Cet article examine la stratégie d'asphyxie économique déployée par le JNIM au Mali entre juillet et novembre 2025. En bloquant les flux pétroliers et en perturbant les principaux corridors routiers, le groupe jihadiste a transformé la dépendance énergétique nationale en instrument de domination politique. Fondée sur une méthodologie qualitative intégrée, l'analyse montre que le blocus ne représente pas une rupture mais un révélateur : il met en évidence la délégation coercitive de fonctions souveraines à des acteurs armés capables de contrôler les ressources vitales. L'État reste visible mais désactivé, tandis que la société s'adapte sous contrainte et que l'économie se fragmente en circuits de survie. Les résultats soulignent que la souveraineté économique est désormais un bien rare, administré par la peur, la dépendance et la maîtrise des flux. L'étude invite à repenser la sécurité au Sahel à partir d'une sécurité circulatoire, centrée sur la gouvernance régionale des flux vitaux. |
| Keywords: | Djihad économique, H56, Silent collapse Economic jihad AES Scarcity Sahel. JEL Codes: F52 O55 H56 P16 O17 Q34, Silent collapse Economic jihad AES Scarcity Sahel. JEL Codes: F52 O55 H56 P16 O17 Q34 Effondrement silencieux Djihad économique Rareté AES : Sahel. JEL Codes -F52 O55 H56 P16 O17 Q34, Silent collapse, Economic jihad, AES, Scarcity, Sahel. JEL Codes: F52, O55, P16, O17, Q34 Effondrement silencieux, Rareté, AES : Sahel. JEL Codes -F52, Q34 |
| Date: | 2025–12–04 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05562279 |
| By: | Mr. Christian Bogmans; Maximiliano Jerez-Osses; Jorge Miranda-Pinto; Jean-Marc Natal |
| Abstract: | Rare earth elements (REEs) are critical inputs in high‑tech manufacturing. Following China’s 2025 export licensing requirements on REEs and permanent magnets, concerns have risen about the macroeconomic consequences of supply disruptions in import‑dependent economies. Standard assessments based on “value added at risk” (VAAR) ignore production network linkages and input reallocation. We develop a small open economy model with imported REEs and production networks, calibrated using an REE‑augmented input–output table from USGS data. Applying the model to the United States, Germany, France, the United Kingdom, Japan, and India, we find substantial cross‑country heterogeneity in response to an 80% reduction in REEs supply. The most exposed economies are Japan, U.S. and Germany. Under low substitution elasticities (horizons under one year), these economies experience a GDP loss of 1.8, 1.5, and 1.2 percent, respectively. These differences reflect heterogeneity in sectoral composition, factor shares, and the strength of forward linkages of REE-intensive sectors. Under higher elasticities (longer horizons), aggregate losses become negligible. |
| Keywords: | Production Networks; Commodity Prices; Network-Adjusted Value- Added Share; Advanced Economies and Emerging Markets |
| Date: | 2026–04–14 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/073 |
| By: | Mircea Mureșan (Member of the Academy of Scientists, Romania) |
| Abstract: | The ongoing military conflict in the Middle East represents one of the most significant turning points for the contemporary architecture of international security. The escalation of the confrontations between Hamas and Israel, which began in October 2023, has generated a complex geopolitical dynamic that goes beyond the regional framework and produces structural effects on global security. In a context characterized by strategic rivalries, proxy conflicts and competition for influence in the international system, the war in the Middle East is becoming a catalytic factor of current geopolitical transformations. The paper analyzes how the conflict influences regional stability and contributes to the reconfiguration of the global balance of power. The study examines the interaction between state and non-state actors involved in the conflict, including the role played by Iran and regional armed organizations such as Hezbollah, as well as the impact of the positioning of great powers, especially the United States, Russia and China. The research also explores three main dimensions of the transformation of global security: the risk of regional conflict expansion, the implications for international energy and trade security, and the impact on the emerging geopolitical architecture characterized by multipolar tendencies. The research results suggest that the war in the Middle East is not just a regional confrontation, but an accelerating factor in the transformation of the international security system, amplifying rivalries between great powers, energy vulnerabilities, and risks of instability in different regions of the world. In this context, the conflict becomes a defining element of the new global geopolitical configuration. |
| Keywords: | Middle East, War, Global Security, Geopolitics, Multipolarity, Regional Conflict, Energy And Energy Security, International Stability |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:smo:raiswp:0638 |