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on Energy Economics |
| By: | Sheybanivaziri, Samaneh (Dept. of Business and Management Science, Norwegian School of Economics); Kyritsis, Evangelos (Dept. of Business and Management Science, Norwegian School of Economics) |
| Abstract: | Europe’s move toward renewable energy has sped up as the need to cut emissions has become closely linked with the need to secure energy supply. The EU’s Fit for 55 package proposed a 40% renewable energy target for 2030 [16]. The REPowerEU plan later raised the ambition to 45% in May 2022 in response to the need to reduce dependence on Russian fossil fuels [17]. Besides the significant contribution of renewable energies to the generation mix, they have created a dichotomy in electricity prices. An abundance of renewables can create extremely low prices and high volatility. On the other hand, their absence or insufficiency turns the gas-fired units or some fossil fuels on, which can create extremely high power prices. This phenomenon, in combination with geopolitical factors, has generated a binary fat-tailed distribution in electricity prices, which motivated us to study it more closely. Therefore, in this paper, we analyse the determinants of extreme electricity prices by modelling the conditional tail index. Additionally, we extend the analysis by [18] to a more recent sample period. We show that observable market conditions, such as TTF prices, load, and renewable generation in Germany and Italy from 2018 to 2023, affect the heaviness of the price distribution tail, a dimension of risk that is not captured by standard approaches such as quantile regression. |
| Keywords: | Extreme electricity prices; conditional tail-index estimator |
| JEL: | C14 C22 Q41 Q42 |
| Date: | 2026–09–21 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhhfms:2026_011 |
| By: | Farid Muradzada (Central Bank of Azerbaijan Republic); Khazan Bakhshaliyev (Central Bank of Azerbaijan Republic) |
| Abstract: | This study develops a forecasting framework for Brent crude oil prices based on the fundamental drivers of the global oil market, namely demand, supply, and market expectations. The estimation is conducted using quarterly time-series data covering the period 1994–2025 and employs a Vector Autoregressive (VAR) model. The results indicate that the proposed model demonstrates strong forecast performance under conditions of high oil price volatility. The forecasting error of the model is lower than that of benchmark models. Furthermore, the findings confirm that geopolitical tensions, regional conflicts, and uncertainty in global energy markets have a significant impact on oil price dynamics through oil futures prices. |
| Keywords: | Brent crude oil price, oil price forecasting, VAR model |
| JEL: | C53 Q43 Q47 |
| Date: | 2025–08–05 |
| URL: | https://d.repec.org/n?u=RePEc:aze:wpaper:2503 |
| By: | Simshauser, P. |
| Abstract: | This article examines whether zonal average-price wind swaps, more accurately defined as Asian wind swaps, are a 'bankable' instrument. Specifically, can a derivative that references the wind fleet's average price underwrite a bespoke project financed new entrant wind farm in Australia’s National Electricity Market? Prima facie, long -dated Asian swaps referencing the wind fleet’s dispatch-weighted average price present as a material departure from convention, viz. site-specific fixed price (run-of-plant) Power Purchase Agreements. Using South Australia as a deliberately demanding test case, ten years of chronologically matched 30-minute spot-price and wind-production data are block-bootstrapped into 10, 000 synthetic years of market data. This data is the n utilised within a hedge optimisation and stochastic project finance models across heterogeneous wind farms with explicit strike -price calibration and debt-sizing to stress-test the 'bankability' of Asian wind swaps. Results confirm when hedge quantities are optimised, and strike prices calibrated to entry costs, Asian wind swaps reduce revenue volatility and support project finance, with debt sizing at broadly equivalent levels to a conventional PPA. Findings suggest an Asian wind swap can plausibly replace bespoke government-originated CfDs, which in turn raises the prospect of seamless divisible re-trading and the creation of liquid secondary markets – a necessary precondition for a healthy retail supplier market. |
| Keywords: | Renewables, Energy-Only Markets, Project Finance, Asian Wind Derivatives, Asian Swaps |
| JEL: | D52 D53 G12 L94 Q40 |
| Date: | 2026–09–23 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2676 |
| By: | Anna Alberini; Levan Bezhanishvili; Milan Ščasný; Roberton C. Williams III |
| Abstract: | We examine the response of residential customers to an extreme price change – namely that imposed by the government in the Republic of Georgia during the pandemic lockdown in the winter of 2020 and early 2021. As of November 2020, the government paid the gas bill directly to the utility, effectively making gas free, as long as consumption was below or exactly 200 m3/month. The policy was lifted at the end of February 2021. We use quasi-experimental causal methods based on a control group comprised of permanent residents of an area along the North-South pipeline, who receive gas for free (up to the generous allowance of 700 m3/month) every winter, while the treatment group is comprised of households living in areas with similar climates and similar population density who received gas for free only during the pandemic free gas months. Controlling for the weather, the ATT of the policy is a 2-7% increase in gas consumption (in the treatment group compared to the control group). Back-of-the-envelope calculations suggest a price elasticity of demand of -6.5% to -11%. |
| JEL: | H23 L95 Q41 Q48 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35759 |
| By: | Francesco Corsello (Bank of Italy); Andrea Foschi (Bank of Italy); Marco Fruzzetti (Bank of Italy); Marianna Riggi (Bank of Italy) |
| Abstract: | We study how the composition of household consumption shapes the transmission of macroeconomic shocks in Italy. Over the last two decades, household expenditure has shifted from goods towards services. We show that the transmission of shocks is better understood by combining the goods-services distinction with the distinction between essential and discretionary spending. The response of household consumption is almost entirely concentrated in discretionary items, but the timing of adjustments differs markedly across components. Following a monetary policy shock, discretionary goods respond relatively quickly, whereas discretionary services adjust with a substantially longer lag and greater persistence. By contrast, energy shocks lead to a much faster adjustment in discretionary consumption, in line with their more immediate impact on consumer prices and households' purchasing power. These findings suggest that monitoring discretionary goods and services separately is crucial for assessing the intensity and timing of shock transmission in the economy. |
| Keywords: | consumption, monetary policy shocks, energy supply shocks |
| JEL: | E21 E32 E52 Q43 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:bdi:opques:qef_1044_26 |
| By: | João Tovar Jalles (University of Lisbon-Lisbon School of Economics and Management (ISEG)); John Beirne (Asian Development Bank); Donghyun Park (The South East Asian Central Banks (SEACEN) Research and Training Centre) |
| Abstract: | We quantify “green fiscal multipliers†by constructing country-specific, residual-based shocks to environmental protection outlays (COFOG) and tracing their effects on macroeconomic and environmental outcomes in a multi-country panel. Reduced-form estimates imply that an unexpected 1-pp-of-GDP increase in environmental spending lowers contemporaneous real GDP per-capita growth by about 2.6 pp globally; IV estimates are larger in magnitude (≈–4 pp globally; ≈–7 pp in EMDEs). Local projections show a small short-run dip that troughs around year 2 at –0.05% and fades thereafter, with mild medium-run rebound. Heterogeneity is pronounced: EMDEs drive the near-term contraction; effects are more negative at high public debt and in surplus/open economies and are mitigated where adaptive capacity (ND-GAIN readiness) is high. The findings imply that green fiscal policy should be carefully sequenced and tailored to country conditions to manage short-term costs while maximising long-term benefits. For central banks, green fiscal expansions should be incorporated into the assessment of the effectiveness and transmission of monetary policy. Accounting for their scale, timing, and country-specific conditions can help to minimise the risk of policy miscalibration and support price and financial stability during the transition to a low-carbon economy. |
| Keywords: | Environmental protection spending; green fiscal multipliers; residual-based shocks; local projections; state dependence; EMDE vs AE |
| JEL: | E62 Q58 C23 E32 O44 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:sea:wpaper:wp64 |
| By: | Sumit Agarwal; Yi Fan; Qiuxia Gao |
| Abstract: | To achieve carbon neutrality, electrifying vehicles in a cleaner electricity grid has become a key pathway for global cities. While extensive research has examined the environmental benefits of electric vehicles (EVs), their financial impacts remain underexplored. Using Singapore-a smart city-state - as a social laboratory, we combine high-resolution data on the geographic distribution of EV chargers with nearly 1 million individual-level monthly expenditure records from a major commercial bank and about 65, 000 housing transaction records, spanning January 2019 to March 2021. Our results show that proximity to charging stations during the initial phase of EV infrastructure rollout significantly increases household consumption by 1-3%. This effect is driven primarily by public housing residents, who are generally more financially constrained than their private housing counterparts. We identify three channels underlying this increase in consumption: appreciation in housing wealth, catalysts for commercial activity and discretionary spending around EV infrastructure, and budget reallocation from fuel expenses to other consumption categories. Notably, hybrid car owners exhibit the strongest trade-offs-reducing fuel spending while increasing expenditure on entertainment or necessity goods among public housing residents. Overall, our findings demonstrate that green infrastructure can shape economic behavior and enhance consumer welfare, extending its impact beyond environmental objectives. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.19034 |
| By: | Kyung-In Hwang (Korea Institute for Industrial Economics and Trade) |
| Abstract: | Talk of a crisis in Korea’s battery industry has not subsided. Slowing demand for electric vehicles, China’s expanding market share, and mounting policy uncertainty in major economies have arrived together, and the earnings of Korean firms have suffered as a result. What deserves attention, however, is that this recent weakness does not stem from any stagnation in the global battery industry. World battery demand continues to rise in existing markets, on the intensive margin, and demand in new applications, on the extensive margin, has lately been expanding quickly.<p> This paper shows that the root cause of the crisis in Korea’s battery industry lies not in the electric vehicle chasm itself but in an erosion of competitiveness in the country’s core market and core product. It further argues that the industry’s center of growth is shifting structurally from electric vehicles to energy storage systems (ESS), and it focuses on the US ESS market, which is growing on the strength of expanding renewable generation and the spread of AI data centers. The United States is combining tariff policy with the supply chain restrictions attached to the advanced manufacturing production credit (AMPC) to reduce its reliance on Chinese ESS and build a supply chain centered on itself. These policy changes are expected to open new growth opportunities for Korean battery firms that have established production bases on US soil.<p> ESS is critical infrastructure underpinning the global energy transition and the spread of the AI industry. Building ESS into a new engine of growth for Korea’s battery industry will require using US supply chain policy strategically, and it will also require expanded policy support to strengthen the domestic battery materials industry, to upgrade the systems through which Korea responds to industrial and trade policy in major economies, and to build capability in next-generation ESS technology and system integration (SI). |
| Keywords: | ESS; AI data centers; AIDC; secondary batteries; power grids; tariffs; domestic production tax credit |
| Date: | 2026–08–31 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kietrp:023647 |
| By: | Kenney, Martin |
| Abstract: | Abstract The global transition toward electric vehicles and renewable energy represents a fundamental shift in the world’s techno-economic paradigm. Drawing on discussions during my June 2026 visit to ETLA in Helsinki, this brief argues that the true engine of this transformation is the battery, the foundational technology uniting production and consumption in the emerging electric age. This memorandum is published alongside a companion brief by Petri Rouvinen (2026) examining the EU’s response to this shift, the proposed Industrial Accelerator Act (IAA). Through decades of deliberate industrial policy, China has secured command over the entire clean technology triad of solar power, batteries, and electric vehicles. Meanwhile, Western automakers, particularly in the United States, risk being stranded on a shrinking island of internal combustion engine technology amid political whiplash. In this brief, I synthesize the mechanisms driving China’s rise, examine the strategic implications of the electric technology stack, and offer insights for decision-makers seeking to build a competitive and resilient industrial future. |
| Keywords: | Electric vehicles, Battery supply chain, Geopolitics, Industrial policy, Energy transition |
| JEL: | F13 L52 L62 O38 Q42 |
| Date: | 2026–09–25 |
| URL: | https://d.repec.org/n?u=RePEc:rif:briefs:188 |
| By: | Elise Viadere |
| Abstract: | Prices coordinate economic activity by translating costs into incentives. When they accurately reflect the social costs of individual choices, private decisions can support socially efficient outcomes. The more consequential cases arise when this alignment breaks down. Prices may fail to capture costs that vary across time, location, or consumers. Consumers may be unable to adjust even when prices are informative, and the firms that set prices may have objectives that differ from social efficiency. Therefore, what a price signal achieves depends on its accuracy, but also on the response it induces, on how those responses interact in aggregate, and on the incentives of the intermediary that designs it. This dissertation studies these questions in retail electricity, a market that displays all three problems in an especially clean form.Unlike most goods, electricity must be produced and consumed at the same instant, and its marginal cost changes sharply from one hour and one location to the next. The residential electricity consumer, meanwhile, typically pays a price that does not change within the day at all. This gap has always been a distortion, but for a long time it carried little cost: generation was stable and largely dispatchable, so the cost of averaging over the day was low, and residential demand was inelastic. That condition no longer holds. Intermittent renewables widen the changes in the underlying marginal cost of electricity, and the electrification of transport and heating creates new uses of electricity whose timing can be shifted through the day. The flat electricity price used to be a relatively minor distortion. Today, however, it affects many of the outcomes that matter for the energy transition: what it costs to run the system, how heavily the network is used, and who gains from decarbonisation and who pays for it.This makes the timing of electricity demand increasingly important. If consumers can shift some consumption away from costly or congested periods, they can help the system adapt to these new conditions. This responsiveness to price, called \textit{flexibility} or demand response, has become valuable to the electricity system, and unlocking it has become a central aim of energy policy.The price paid by an electricity consumer is made of several components. The energy component pays for the electricity supplied and is set by the retailer, which buys electricity on the wholesale market and resells it to consumers. Network tariffs pay for the transmission and distribution infrastructure and are set within a regulatory framework. Taxes and levies add a further component determined by public authorities. The price signal faced by the consumer reflects a combination of market and regulatory choices. These different components can all be used to incentivise flexibility. Three questions stand out. Can consumers respond to the signal at all? How accurate does the signal need to be? And can the retailer shape that signal to its own advantage? The chapters that follow take up these questions in turn.The contribution is threefold. First, the chapters measure the value of flexibility by the response it produces: when consumption is rescheduled, by how much, and what this does to system cost. Second, this dissertation asks who gains from flexibility. Access to the technologies and incentives that make flexibility possible is unevenly distributed, and those who create the value of flexibility are not always those who capture its benefits. Third, it studies the institutions and market power that stand between the price and the consumer: regulators set the network tariffs and retailers set the electricity prices. These choices shape both how much flexibility is incentivised and how its gains are distributed.The first chapter analyses network-tariff adjustments for energy-sharing communities and tests their effects in a case study of a Belgian pilot. Energy communities pool locally generated renewable electricity among their members, who pay a reduced price for what they consume locally. Several European Union member states support these communities by lowering their electricity network tariffs. The chapter asks two questions. Does a community need the support to break even? And are the adjustments cost-reflective: does the community's lower tariffs match the lower network costs it actually causes? The distinction matters because the network must still be financed, at a time when the energy transition requires substantial investment in its expansion and reinforcement. When a network-tariff reduction is not cost-reflective, the shortfall must be recovered from other network users. Results show that support can be necessary for financial viability. Even a community with high self-consumption may not break even without network-tariff adjustments. However, in the community studied, the support did not affect consumption patterns. The energy community had neither real-time feedback on network constraints nor significant electricity consumption it could reschedule. The network-tariff adjustments lowered the community's costs without lowering the network costs the community imposes, and the difference is borne by other consumers. Therefore, the chapter states that support aimed at ensuring a community’s financial viability should be kept distinct from incentives intended to reward measurable network benefits.The second chapter asks what is lost when real-time pricing is simplified. Real-time pricing is the efficient benchmark, since it exposes consumers to prices that reflect hourly marginal costs. However, it has proven difficult to deploy at scale. Time-of-use pricing offers a simpler and more practical alternative: instead of prices changing every hour, the day is divided into a small number of fixed periods, such as peak and off-peak hours. The question is whether this simpler price structure remains a good alternative to activate flexibility. The answer depends on a feature usually left out in existing research. Flexible consumer tasks run for several consecutive hours, so the consumer chooses not an hour but a schedule. Modeling the decision this way separates three things: whether the price incentivizes accurately, how much the consumer gains from shifting, and what her shift does to system costs once many consumers respond simultaneously. From this perspective, time-of-use pricing is a good alternative only under specific conditions. It preserves the direction of the real-time price signal while weakening its strength, and it can concentrate demand in the same hours. Simulations of the Belgian market show that this coordination can lower system costs, but can also create new demand peaks and raise costs for consumers who do not respond.The third chapter, written with Leticia Pieraerts, asks how a monopolist retailer designs electricity contracts. Wholesale electricity is more expensive in some hours than in others, but retailers decide how much of this cost difference is reflected in the prices paid by consumers. We call this the contract's \textit{pass-through rate}. A flat price contract passes none of the difference through, while a fully dynamic contract passes it through in full. Consumers do not value this exposure equally. A flexible consumer can respond to a larger price difference by shifting consumption toward cheaper hours, while a less flexible consumer finds it more costly. The monopolist retailer can exploit this difference when designing its contracts. Pass-through becomes a screening device: the retailer gives the most flexible consumers the full, cost-reflective signal and deliberately weakens it for the less flexible, so that their contract does not attract the flexible type and the rent left to that type remains small. This distortion is not a consequence of private information alone. Marginal-cost pricing would give every consumer full pass-through, and perfect competition would do the same. The compression of the price signal arises because the retailer has market power and uses contract design to limit the rent of flexible consumers. The resulting distortion falls on the less flexible, while most of the surplus created by flexibility accrues to the retailer. As more consumers become flexible, a larger share of the gains can be captured by the retailer rather than passed on to consumers. The chapter studies how much of the price signal reaches consumers and who keeps the gains.The three chapters point to the same conclusion. Prices do not activate flexibility on their own. What activates it is the surrounding set of institutions and incentives that determine who is able to respond, how, and who is paid for responding. Three requirements follow for any policy meant to encourage retail electricity market flexibility. Policies should be cost-reflective, with support tied to measurable reductions in system or network costs and price signals sufficiently granular that they neither create arbitrary transfers nor induce shifting that provides no system benefit. Policies should be designed considering that consumers differ in their ability to respond, in the risk they can bear, and in the technology they own. And policy makers should assume that intermediaries will act strategically. Therefore, these chapters point to market design as a central determinant of how flexibility is activated, allocated, and valued. |
| Keywords: | energy transition; price signal; demand-side flexibility |
| Date: | 2026–09–25 |
| URL: | https://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/413563 |
| By: | Uzma Zia (Pakistan Institute of Development Economics, Islamabad) |
| Abstract: | Executive Summary: The dual shocks of Pakistan-Afghanistan conflict and the Middle East conflict have hit Pakistan equally as other countries worldwide. Tensions along the border are affecting Pakistan's border security, trade flows, lives and livelihood and macro-economic factors. Labor class dependent on bilateral and transit trade activities, gets affected when violence flares. These disruptions are happening at the same time when there is a conflict going on in the Middle East, involving the United States, Israel and Iran. Escalating tensions in Middle East have contributed to higher oil prices, disrupted supply chains, high business costs and reduced purchasing power of households in Pakistan as well as internationally. These combined shocks pose a risk to Pakistan's role as a regional trade gateway by undermining trade continuity, energy security, and regional connectivity. Pakistan needs an immediate policy action to protect trade, energy security and regional connectivity. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pid:pviewp:2026:76 |
| By: | Ahmad Fraz (Pakistan Institute of Development Economics, Islamabad) |
| Abstract: | Pakistan is not watching the Iran-Israel war from a distance. It is absorbing the shock through oil prices, inflation expectations, and equity repricing. As an oil-importing economy exposed to disruption in the Strait of Hormuz, Pakistan faces higher freight and fuel costs, pressure on the current account, and a rise in the discount rate applied to future cash flows. The PSX has already internalized this risk: Brent[1] rose sharply over the sample period, while domestic indices experienced a sharp correction, high volatility, and only uneven recovery. The broader policy lesson is clear. Pakistan needs stronger energy contingency planning, better macro-financial communication, and a durable reduction in its dependence on imported oil. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pid:pviewp:2026:57 |
| By: | Bilal Aftab (Pakistan Institute of Development Economics, Islamabad); Shahzada M. Naeem Nawaz (Pakistan Institute of Development Economics, Islamabad); Rubina Ilyas (Pakistan Institute of Development Economics, Islamabad) |
| Abstract: | The possible gas supply via the Iran-Pakistan pipeline is still considered a strategically significant option. However, it cannot be considered under the same conditions as were present when the agreement was signed in 2009. The possible supply of 750 MMCFD of gas could provide an additional energy source, but its economics and absorptive capacity must first be demonstrated before further consideration. The proposed pricing formula would mean that the Brent equivalent slope would be around 13.45 percent. At a Brent price of $75, this translates into $10.09 per MMBtu and the obligation to purchase almost $2.84 billion worth of gas on an annual basis. However, the key question is the total cost of delivery via pipeline (including all costs associated with construction, financing, operations, security, insurance, losses in the system, and exchange risk) versus the marginal/avoidable cost of currently used LNG supplies. Legal sanctions and supply risks remain unresolved. Iran has threatened arbitration with reported exposure of up to $18 billion, a figure that has not been independently verified or adjudicated. The limited sanctions relief issued in June 2026 (OFAC General License X) was itself revoked and replaced by a wind-down license (General License X1) on July 7, 2026, underscoring that no authorization to date has established clearance for pipeline gas, construction, or project financing. The proposed way forward would be conditional revival, subject to independent legal and technical review, sanctions clearance, renegotiated commercial terms, verified demand, and milestone-based investment. Pakistan should consider negotiating a settlement and developing a solid defense against the threat of litigation, in case these steps are not taken in the next 12-18 months. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pid:pviewp:2026:74 |
| By: | Nasir Iqbal (Pakistan Institute of Development Economics, Islamabad); Shahzada M. Naeem Nawaz (Pakistan Institute of Development Economics, Islamabad); Amna Riaz (Pakistan Institute of Development Economics, Islamabad) |
| Abstract: | The current oil price shock, emerged because of Israel-US-Iran war and its spread over the Gulf region, can have serious consequences on the fiscal consolidation efforts of the Government of Pakistan. The federal primary surplus, budgeted at Rs. 1, 706 billion (1.3% of GDP), declines sharply across fiscalrisk scenarios. Under a moderate shock ($100/bbl), it falls to Rs 1, 002 billion (0.7% of GDP), a reduction of Rs 704 billion (-0.6 percentage points). In a severe shock ($120/bbl), it drops to Rs 821 billion (0.6% of GDP), Rs 885 billion (-0.7 pp). In an extreme scenario ($144/bbl), it further declines to Rs 781 billion (0.6% of GDP), Rs 925 billion (-0.7 pp). At the same time, the fiscal deficit widens from Rs 6, 501 billion (5.0% of GDP) to Rs 7, 517 billion (5.8% of GDP), reflecting rising fiscal stress. |
| Keywords: | oil price shock Pakistan, fiscal deficit Pakistan, primary surplus Pakistan, inflation oil prices, petroleum levy Pakistan, IMF fiscal program, external sector vulnerability, energy crisis Pakistan, macroeconomic stability Pakistan, fiscal risk analysis |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pid:pviewp:2026:55 |
| By: | Abida Naurin (Pakistan Institute of Development Economics, Islamabad) |
| Abstract: | EXECUTIVE SUMMARY: Global oil prices have been increased due to the escalation of the US-Israel war with Iran, influenced by amplified geopolitical risk around the Strait of Hormuz, a corridor which transports about 20 percent of global seaborne oil trade. Due to this uncertainty crude oil prices rise by about 30 percent in early March 2026[1], demonstrating a growing geopolitical war premium rather than purely market fundamentals. Due to heavy reliance on imported energy, Pakistan remains highly vulnerable. Petroleum products account for around 30 percent of total imports, and data-based estimates suggest that every $10 per barrel rise in the price of oil increases Pakistans annual oil import bill by almost $1.8-2.0 billion. The price shock also passes directly into domestic inflation mainly through higher transport, the prices of food and energy. A three-month closure of the Strait of Hormuz can temporarily increase global oil prices to $120-150 per barrel. Under these circumstances, monthly oil import bill of Pakistan can triple to about $3.5-4.5 billion, whereas inflation could climb toward 15% to 17% from 7% recorded in February 2026. |
| Keywords: | Strait of Hormuz crisis, Pakistan oil import impact, oil price surge 2026, Pakistan inflation CPI rise, Gulf oil dependency Pakistan, energy security Pakistan, oil hedging strategy Pakistan, geopolitical oil risk, petroleum import bill Pakistan, Hormuz closure economic impact |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pid:pviewp:2026:53 |
| By: | Syed Hasanat Shah (Pakistan Institute of Development Economics, Islamabad); Wajid Islam (Pakistan Institute of Development Economics, Islamabad) |
| Abstract: | Analyze how Middle East instability and Strait of Hormuz closure impact Pakistan's trade, energy imports, and economic stability, with key policy responses. |
| Keywords: | Middle East crisis Pakistan, Strait of Hormuz impact, Pakistan trade deficit, oil price shock Pakistan, GCC trade disruption, external sector Pakistan, energy imports Pakistan, balance of payments crisis, CPEC 2.0 trade strategy, global supply chain disruption |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pid:pviewp:2026:56 |
| By: | Rubina Ilyas (Pakistan Institute of Development Economics, Islamabad) |
| Abstract: | EXECUTIVE SUMMARY: The RLNG challenge for Pakistan has evolved from a generation issue into a broader financial and fiscal risk. While RLNG generation is decreasing because of subdued demand from the grid, increasing tariffs, and fast growth of solar, the power sector is still vulnerable to long-term contracts, fixed capacity obligations, and external price shocks. RLNG still accounts for around 21 percent of total generation and 31.56 percent of thermal generation, while Pakistan remains committed to approximately 6.75 MTPA of contracted LNG supply. LNG import payments of US$3.52 billion, RLNG-linked capacity payments of 8.1 percent, and estimated tariff impacts ranging from PKR -0.29 to PKR 1.61 per kWh illustrate that declining dispatch does not automatically reduce financial exposure. This Policy Viewpoint, therefore, recommends a risk-management approach focusing on enhanced monitoring, least-cost dispatch, greater contractual flexibility, and the transparent disclosure of tariff, circular-debt and fiscal risks associated with RLNG. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pid:pviewp:2026:66 |
| By: | Daniel Heyen; Joshua Bißbort; Frederik Holtel |
| Abstract: | Carbon dioxide removal (CDR) technologies are central to most climate mitigation pathways, yet their future availability risks weakening current abatement efforts — a phenomenon known as mitigation deterrence. This paper develops a transparent two-period benchmark model to explore how political economy forces and behavioral biases shape intertemporal climate choices. We allow for general functional forms as well as uncertainty about climate damages and CDR costs. We further demonstrate the framework’s flexibility by extending it with a simple political-economy module in which lobbying over mitigation and future CDR systematically depresses abatement. The model provides a useful starting point for future research on the complex interactions between CDR expectations, current mitigation efforts, and climate policy. |
| Keywords: | carbon dioxide removal, negative emissions, mitigation deterrence, intergenerational climate policy, uncertainty, political economy |
| JEL: | Q52 Q54 Q55 D81 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13011 |
| By: | Marco A. Hernandez Vega |
| Abstract: | As the urgency to address climate change intensifies, understanding the financial implications of corporate greenhouse gas (GHG) emissions reductions has become critical. This study examines the relationship between emissions reductions and corporate financial performance (CFP) in 513 companies across advanced and emerging market economies (EMEs) from 2010 to 2022. Using a standardized emissions score to mitigate inconsistencies in greenhouse gas reporting, this work analyzes how countries' development levels and sectoral dynamics influence the relationship between GHG emissions and financial outcomes using a panel-fixed effects model. The results are mixed: emissions reductions are positively associated with CFP in advanced economies and low-emitting sectors. However, in high-emitting industries, the association is negative. In contrast, in emerging market economies, the relationship is mixed across sectors, with positive associations concentrated in the Food, Beverages, and Tobacco, as well as the utilities sectors. |
| Keywords: | Climate Change;ESG;Firms Performance;GHG Emissions |
| JEL: | M41 Q50 Q54 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:bdm:wpaper:2026-02 |
| By: | Massimo Guidolin, Serena Ionta |
| Abstract: | We investigate the transmission channels of climate policy uncertainty (CPU) to the U.S. capital market using a Bayesian Structural VAR estimated on monthly data from 1994 to 2023. By jointly modeling CPU alongside the VIX and the Financial Stress Index (FSI), we isolate the mechanisms through which climate-related regulatory uncertainty affects equity valuations. Three findings emerge. First, CPU shocks significantly depress the S&P 500 index and price–dividend ratios while raising financial stress. Second, unlike conventional uncertainty shocks– which produce demand-type disinflationary contractions– CPU innovations generate supply-driven recessions, characterized by rising goods prices alongside falling asset prices, consistent with transition-cost pressures. Third, counterfactual exercises that selectively mute financial channels reveal that systemic financial stress is the dominant propagation mechanism: shutting down the FSI channel renders equity-market responses statistically insignificant, whereas muting the VIX leaves them intact. The findings are robust across a range of identification and specification exercises, including the construction of economic confidence bands from 240 alternative recursive specifications. These results establish CPU as a structurally distinct driver for financial markets, whose transmission to valuations is critically mediated by credit and intermediation frictions rather than by forward-looking volatility. |
| Keywords: | Financial Stress, Financial Uncertainty, VIX, Stock Prices, Stock Valuations, Climate Policy Uncertainty, Climate Change. |
| JEL: | C32 E31 E44 G15 Q54 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:baf:cbafwp:cbafwp26285 |
| By: | Nathan Coadou (AMURE - Aménagement des Usages des Ressources et des Espaces marins et littoraux - Centre de droit et d'économie de la mer - IRD - Institut de Recherche pour le Développement - IFREMER - Institut Français de Recherche pour l'Exploitation de la Mer - UBO EPE - Université de Brest - CNRS - Centre National de la Recherche Scientifique); Marjolaine Frésard (AMURE - Aménagement des Usages des Ressources et des Espaces marins et littoraux - Centre de droit et d'économie de la mer - IRD - Institut de Recherche pour le Développement - IFREMER - Institut Français de Recherche pour l'Exploitation de la Mer - UBO EPE - Université de Brest - CNRS - Centre National de la Recherche Scientifique); Pascal Le Floc'H (AMURE - Aménagement des Usages des Ressources et des Espaces marins et littoraux - Centre de droit et d'économie de la mer - IRD - Institut de Recherche pour le Développement - IFREMER - Institut Français de Recherche pour l'Exploitation de la Mer - UBO EPE - Université de Brest - CNRS - Centre National de la Recherche Scientifique) |
| Date: | 2026–06–22 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05749420 |
| By: | Katsutoshi Nohara |
| Abstract: | This study applies a partial proportional-odds model to examine whether people’s psychological distance from climate change changed during a period encompassing the unprecedented heat experienced in Japan in 2023 and 2024. It also investigates how psychological distance and environmental knowledge are associated with willingness to pay for climate change mitigation measures. The study draws on two repeated cross-sectional surveys using identical questionnaires administered to different respondents in 2022 and 2025. Propensity scores and overlap weighting were used to improve the comparability of the two survey samples by balancing observed differences in age, gender, and prefecture of residence. After this adjustment, respondents in 2025 were more likely than comparable respondents in 2022 to perceive climate change as psychologically proximate. Specifically, the predicted probability of reporting a high level of psychological proximity was approximately 13 percentage points higher in 2025. Although this difference cannot be attributed exclusively to the record-breaking heat experienced in 2023 and 2024, the findings suggest that the unprecedented heat may have contributed to making climate change appear more immediate and personally relevant. Furthermore, the contingent valuation analysis shows that the positive association between environmental knowledge and willingness to pay depends on psychological distance: greater environmental knowledge is associated with higher willingness to pay, particularly among individuals who perceive climate change as psychologically close. These findings provide important insights into the design and communication of climate policies. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:toh:tupdaa:89 |
| By: | California State Transportation Agency; California Energy Commission; UC Davis Institute of Transportation Studies |
| Keywords: | Social and Behavioral Sciences |
| Date: | 2025–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsdav:qt97g6n2rj |
| By: | Guglielmo Maria Caporale; Luis Alberiko Gil-Alana; Alex Medina Sosa |
| Abstract: | This paper examines whether four AI events between 2022 and 2025 - ChatGPT, GPT-4, the EU AI Act vote, and DeepSeek - changed the behaviour of fourteen US-listed stocks. The focus of the analysis is on two utilities that signed power purchase agreements with large AI companies, Constellation Energy and Vistra, which are compared with utilities that did not. The degree of persistence of the price of each stock is estimated in the periods around the events to establish whether it has changed. Volatility changes and whether the market reaction grows or fades across the events are also investigated. The results suggest that the events considered do not affect the degree of persistence of prices; however, they have an impact on their volatility for almost every stock. Among the utilities, only Constellation and Vistra exhibit a persistence shift that survives an adjustment for developments in the wider market, whilst utilities without power purchase agreements do not. Further, the response increases from one event to the next. A specific channel is identified: AI news moves a utility's price mainly when the firm has a contract to sell power to an AI company. However, this evidence is suggestive rather than conclusive. |
| Keywords: | Artificial Intelligence (AI), fractional integration, conditional variance, AI-power demand, utility stocks, event studies, structural breaks |
| JEL: | C22 C58 G14 Q41 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13001 |
| By: | Andrea Foschi (Bank of Italy); Stefano Pica (Bank of Italy); Marianna Riggi (Bank of Italy) |
| Abstract: | We show that the stock of excess savings alters the propagation of the business cycle. It markedly weakens the transmission of monetary policy shocks to real economic activity and inflation; in contrast, in the event of a cost-push disturbance, excess savings cushion the impact on output while amplifying and prolonging the pass-through to inflation. These findings underscore the importance of incorporating balance-sheet conditions into the assessment and calibration of monetary policy. They also offer additional insights into the 2022-23 cyclical episode in the euro area: in an environment characterized by historically elevated excess savings, the surge in energy prices and the unprecedented pace of policy rate hikes resulted in resilient growth and stubbornly persistent high inflation. |
| Keywords: | excess savings, monetary policy, energy shocks, macroeconomic transmission |
| JEL: | E21 E31 E32 E52 |
| Date: | 2026–07 |
| URL: | https://d.repec.org/n?u=RePEc:bdi:opques:qef_1031_26 |
| By: | Raouf Boucekkine (Aix Marseille Univ, CNRS, AMSE, Marseille, France); Natalia Hritonenko (Department of Mathematics, Prairie View A&M University); Yuri Yatsenko (Houston Baptist University); Ullrika Sahlin (Lund University) |
| Abstract: | We study optimal growth in a Ramsey economy with irreversible pollution, where the natural absorption capacity is non-monotonic and non-concave à la Forster. In the absence of pollution control, the capital dynamics decouple from pollution, and we characterize a simple threshold on the maximal absorption capacity above which the optimal path is sustainable and below which an optimal regime of irreversible pollution sets in. We then introduce an optimal abatement pollution control to assess whether irreversible pollution ceases to be optimal. We derive a four-dimensional dynamical system for capital, consumption, pollution and the (shadow) cost of pollution, coupled with an algebraic rule for optimal abatement, which is eventually reduced to dimension three, with abatement linearly entering the pollution dynamics. Our main result is that optimal abatement shifts the irreversibility threshold but does not eliminate it. More importantly, we show that embedding the Forster's pollution dynamics into a Ramsey growth model generates a novel hybrid ecological irreversibility condition that is invisible in pollutiononly frameworks. Coupling ecosystem curvature with the social discount rate, it is structurally robust and preeminent over all feasibility conditions amenable to policy intervention, and defines the boundary between a world where sustainability is achievable and one where it is not. |
| Keywords: | Optimal growth; Optimal pollution control; Optimal irreversible regimes; Ecological sustainability; Irreversible pollution |
| JEL: | O44 Q50 Q52 Q57 |
| Date: | 2026–09–22 |
| URL: | https://d.repec.org/n?u=RePEc:aim:wpaimx:2627 |
| By: | Joseba De la Torre (Institute for Advanced Research in Business and Economics (INARBE). Departamento de Economía. Universidad Pública de Navarra (UPNA). Pamplona, 31006 (Spain)); Mar Rubio-Varas (Institute for Advanced Research in Business and Economics (INARBE). Departamento de Economía. Universidad Pública de Navarra (UPNA). Pamplona, 31006 (Spain)) |
| Abstract: | Navarre, a small region on Europe's periphery, became Europe's third largest wind market by the late 1990s, led by a public-private firm: Energía Hidroeléctrica de Navarra (EHN). This paper reconstructs the origins of that transformation using primary and secondary sources. We argue that EHN succeeded in establishing the viable commercial model in renewable energy that was later imitated and replicated. We examine three keys to this trajectory: a regional industrial policy sustained for almost three decades beyond electoral cycles; the personal leadership of those who drove and directed the project; and EHN's own business design as a mixed public-private firm that acted as the catalyst for an entire industrial ecosystem. The interaction and cohesion of these elements —institutional framework, leadership, business fabric, and social consensus— form the combination that explains Navarre's trajectory, whose in-depth study this paper does not close but rather opens as a research agenda. |
| Keywords: | Wind energy, Navarre, Business history, Regional industrial policy, Industrial cluster |
| JEL: | N74 N84 Q42 R58 |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:ahe:dtaehe:2605 |
| By: | Renzullo, Elena; Scotti, Francesco |
| Abstract: | We examine whether incentive-based policies reduce 2 emissions among beneficiary Italian firms, using project-level data from European cohesion policy. Exploiting quasi-random variation in the timing of EU-funded projects, we apply a staggered difference-in-differences design. We find robust evidence that EU climate-related incentives lower firm emissions. Recipient firms reduce 2 emissions per unit of assets by 4.6% relative to non-recipient firms, while a 1% increase in EU funds per unit of assets leads to a 1.1% reduction in emissions. The effects are larger in less developed and transition regions, where policy resources are more concentrated, and among energy-sector firms. We further show that emission reductions are mainly driven by increased R&D activity: firms receiving green EU funds raise patenting by 3.0%–3.6%, with no significant effects on employment or tangible assets. These findings highlight the potential of incentive-based climate policy. |
| Keywords: | carbon abatement;CO2 emissions;EU cohesion policy;green transition;incentive-based policies |
| JEL: | Q58 Q56 |
| Date: | 2026–09–24 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:141132 |
| By: | Hiroyuki Kasahara; Allen Peters; Oliver Xu |
| Abstract: | Machine learning predicts outcomes well, but predictive accuracy does not ensure reliable counterfactual responses. We examine how to combine machine learning and theory for measurement and counterfactual analysis, using maritime CO2 emissions where physics provides a benchmark speed response. Matching hourly tracking data for dry bulk and container ships to annual fuel consumption reported under EU regulations, we compare engineering calculations, structural regressions, hybrid models, and machine learning. Out of sample, all estimated models predict within a few percent of reported totals, outperforming standard engineering calculations. Yet pure machine learning and unrestricted structural regression imply attenuated speed responses. Hybrids preserve the structural component's speed response by excluding speed-related inputs from the machine learning component. A cost-benefit analysis of speed reductions illustrates the policy stakes: an attenuated speed response can flip the sign of net benefits. Accurate aggregate predictions therefore cannot substitute for scrutiny of the restrictions determining counterfactual responses. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.01008 |
| By: | Iosif Zimbidis; Ronnie Sircar |
| Abstract: | On April 20, 2020, the May front-month WTI oil futures contract, one day before its expiration date, opened near $\$17/$barrel and dropped far below zero in a single trading day, reaching an intraday low of $-\$40.32$ and settling at $-\$37.63$. Such market behavior was unforeseen at the time. This event, and the March 2022 nickel squeeze, illustrate how constraints on physical delivery create pressure to close futures positions and distort futures prices. We develop a feedback model that connects the resulting price distortion to a roll option, and to the imbalance between delivery-constrained long and short positions. Under lognormal benchmark dynamics, the roll-option value is shown to satisfy a pricing PDE which is nonlinear because its payoff depends on the observed futures price, which itself includes the feedback correction. Remarkably, in both cases, there is an explicit solution in terms of classical Black-Scholes-Margrabe exchange option formulas, up to solving a scalar equation. We show this allows that prices may go negative under distortion of a positive-price lognormal model. An analogous construction applies when the lognormal base is switched to Bachelier normal dynamics. Illustrations based on WTI and nickel show the imbalance required to reproduce the extreme event prices under the benchmark assumptions. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.00951 |
| By: | Sylvain Zeghni (LVMT - Laboratoire Ville, Mobilité, Transport - Université Gustave Eiffel - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris) |
| Abstract: | L'habitabilité terrestre peut être envisagée comme la capacité du système Terre à maintenir, dans la durée, des conditions physiques et écologiques compatibles avec la vie complexe et avec l'organisation des sociétés humaines. Cette propriété n'est pas indépendante des transformations de la biosphère: elle résulte d'un ensemble d'interactions entre l'atmosphère, les océans, la cryosphère, les écosystèmes et les sociétés. L'Anthropocène se caractérise précisément par une perturbation rapide de ces interactions sous l'effet des émissions anthropiques de gaz à effet de serre, de la conversion des terres et de l'intensification des usages des ressources. Cet article examine cette transformation à partir de trois entrées complémentaires: les limites planétaires, les contraintes physiologiques imposées par les chaleurs extrêmes et les dynamiques de basculement susceptibles d'affecter certains grands soussystèmes du système Terre. L'analyse montre que le risque climatique ne peut être réduit à une hausse moyenne de température. Il concerne également les marges de résilience des écosystèmes, les conditions de thermorégulation humaine, les rétroactions du carbone et de l'eau, ainsi que les capacités d'adaptation des sociétés. Cette perspective conduit enfin à considérer l'habitabilité comme une question de justice, de mobilité et de gouvernance mondiale. |
| Keywords: | Habitabilité, limites planétaires, points de bascule, niche climatique humaine, température au thermomètre mouillé |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05744366 |
| By: | Monday Sunday Adiaha (Scientific Department, Institute of Biopaleogeography named under Charles R. Darwin, Zlocieniec,) |
| Abstract: | The global climate finance landscape remains insufficient to meet Paris Agreement targets, with unclear contributions from public, private, and voluntary carbon market flows. This study analyzed the structure and sufficiency of global climate finance flows against those targets using secondary quantitative data from key repositories (CPI, MDB Climate Finance Reports, BNEF, Ecosystem Marketplace), assessed for additionality, concessionally, and Paris alignment. Total tracked climate finance flows for 2019 were approximately $579 billion, comprising $253 billion from public sources and $326 billion from private investment in renewable energy. A detailed breakdown reveals foundational but insufficient public finance: Multilateral Development Bank (MDB) climate finance totalled $61.6 billion, with 67% directed to low-and middle-income countries. Private investment was concentrated in renewable energy, with combined global wind and solar investment reaching $269 billion in 2019. The analysis identifies the Voluntary Carbon Market (VCM) as a potential bridging mechanism, though one facing severe contraction and integrity challenges. Transaction volume exceeded 100 MtCO₂e in 2020, dominated by forestry projects (52%). However, by 2023 the market value had contracted sharply to $723 million, with a 56% yearon-year volume decline, signalling buyer hesitancy due to pervasive limitations. These include uncertainty regarding additionality, permanence risk, systemic over-crediting (with a significant share of credits failing new integrity benchmarks), and insufficient equity and data governance. The study concludes that while scaling proven mechanisms like green bonds is necessary, it is insufficient alone. Aligning financial flows with climate imperatives requires coupling this scale with rigorous reforms to carbon offset verification, strengthened market governance, and more transparent reporting to address critical integrity and data quality gaps. |
| Keywords: | Climate Finance, Carbon Offsets, Carbon Market, Green Bonds, Public Finance, Climate Finance Carbon Offsets Carbon Market Green Bonds Public Finance |
| Date: | 2026–09–07 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05741625 |
| By: | Ryan Singleton (Adelaide University); Qazi Haque (Adelaide University); Firmin Doko Tchatoka (Adelaide University) |
| Abstract: | The global transition to low-carbon energy has led many countries to adopt national hydrogen strategies, yet their policy impacts and adoption drivers remain poorly understood. This paper investigates these issues using panel data for 49 countries from 2010 to 2023. Policy impacts are assessed via a staggered difference-in-differences framework, while the determinants of adoption are analysed using a fixed-effects linear probability model. We find that adoption is associated with a sustained and economically significant increase in public hydrogen R&D spending, signalling credible government commitment, and a smaller rise in carbon capture, utilisation, and storage (CCUS) R&D, reflecting continued support for fossil-fuel-linked technologies. No short-run reduction in industrial process emissions is observed, suggesting that decarbonisation effects materialise gradually. Turning to the determinants of adoption, within-country growth in renewable electricity generation emerges as the strongest predictor of adoption, highlighting the interdependence between renewable expansion and hydrogen policy formation, while macroeconomic and political factors appear largely insignificant. These results shed light on the effectiveness and determinants of national hydrogen strategies in the global energy transition. |
| Keywords: | Hydrogen policy; National hydrogen strategies;Difference-in-differences;Event study; Policy adoption; Energy transition. |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:adl:wpaper:2026-01 |
| By: | Aurélie Méjean (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris, CNRS - Centre National de la Recherche Scientifique); Florian Leblanc (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris, CNRS - Centre National de la Recherche Scientifique); Julien Lefèvre (AgroParisTech, CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris); Dimitrios Fragkiadakis; Panagiotis Fragkos; Rafael Garaffa (JRC - European Commission - Joint Research Centre [Seville]); Cormac Lynch (University of Exeter); Toon Vandyck (KU Leuven - Catholic University of Leuven = Katholieke Universiteit Leuven) |
| Abstract: | Climate policies shape inequalities through their effects on structural change via the source of income channel, and on household expenditures via the use of income channel. We compare the impact of carbon pricing on within-country inequalities when tax revenues are recycled through lump-sum transfers or labor tax cuts. We account for the impact of the labor share on inequalities, and compare results across regions with contrasted levels of development, using four macroeconomic integrated assessment models. We find that accounting for the source of income reduces the performance gap between labor tax cuts and lump-sum transfers. Also, carbon pricing with revenue recycling is compatible with reducing inequality, and can increase the consumption of the poorest quartile. We highlight the central role of labor income in shaping the distributional consequences of climate policy beyond consumption-side price effects. Our results suggest that sustaining the labor share can strengthen the progressivity of climate policies. |
| Keywords: | Structural change, Carbon tax revenue recycling, Inequality, Climate policy |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05751015 |
| By: | Mounir Dahmani (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur, Université de Gafsa) |
| Abstract: | Green bond markets have expanded rapidly, but their contribution to emission reduction remains unsettled. This paper asks whether green bond effectiveness is conditional on digital capacity, measured as the information infrastructure that carries disclosure, traceability, verification and post-issuance scrutiny. The analysis uses an annual panel of 76 countries over 2007-2021 and combines two-way fixed effects, threshold fixed effects, panel smooth-transition regression and dynamic common-correlated-effects estimation. Green bond issuance shows no stable unconditional association with CO 2 emissions per capita. Its marginal effect is positive or statistically indistinguishable from zero in low digitalisation environments, and becomes negative as countries enter a higher range of digital capacity. The continuous specification places the zero-crossing near the 59th percentile of the digitalisation distribution, while the threshold model identifies a regime split around the 70th percentile. These estimates are identified on the margin of actively issuing economies: 219 of 1072 countryyear observations record positive issuance, and 119 of them, from 28 countries, fall inside the high-capacity regime. Financial deepening follows a similar but weaker pattern: bank assets remain positively associated with emissions, though this association declines as digital capacity improves. Digitalisation and institutional quality are difficult to separate because they co-vary strongly within countries. Their common capacity component better explains when green bonds become associated with lower emissions. The pattern is consistent with an enforcement reading, in which the environmental value of climate finance depends on the digital and institutional architecture that makes claims checkable. |
| Keywords: | Digital enforcement capacity, Greenwashing, CO 2 emissions, Panel threshold models JEL classification C23, G23, G28, O33, Q54, Q56, Digital financial innovation, Climate finance, Green bonds |
| Date: | 2026–09–19 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05755623 |
| By: | SECK, Djiby (ENGIE - International Supply and Energy Management) |
| Abstract: | Près de 1, 8 million de ménages sénégalais (2024) achètent leur électricité par compteur prépayé (Woyofal) sous une tarification par blocs croissants dont le cumul se réinitialise chaque mois calendaire. Nous formalisons cette structure tarifaire et démontrons quatre propriétés : l'invariance du coût de l'énergie au fractionnement des achats ; une pénalité fiscale forfaitaire par recharge au-delà du seuil de TVA ; une discontinuité calendaire créant un arbitrage temporel pouvant atteindre 8 378 FCFA par mois et par ménage ; et une régressivité mécanique à l'encontre des compteurs partagés entre plusieurs ménages, configuration répandue dans l'habitat sénégalais. Nous proposons ensuite une réforme en quatre composantes séparables (fenêtre glissante, dilatation des tranches pour compteurs partagés déclarés, tarif social profond sous condition d'éligibilité, et tarification bi-horaire de type Boiteux–Steiner) dont nous établissons les propriétés en forme fermée : stationnarité temporelle, équité horizontale, neutralité budgétaire du ciblage (avec la condition d'admissibilité α ≥ 1 − p1/κ) et auto-financement du signal horaire au calibrage coût-reflet. Un calibrage illustratif montre qu'à enveloppe de subvention constante, un tarif social de l'ordre de 24 FCFA/kWh est atteignable pour les ménages éligibles, contre 82 FCFA/kWh servis aujourd'hui à tous les compteurs sans ciblage. L'ensemble des calculs est reproductible à partir d'un moteur tarifaire open source aligné au franc près sur les barèmes officiels. Nearly 1.8 million Senegalese households (2024) buy electricity through prepaid meters (Woyofal) under an increasing block tariff whose cumulative consumption resets each calendar month. We formalise this tariff structure and establish four properties: invariance of energy cost to purchase splitting; a lump-sum tax penalty per top-up beyond the VAT threshold; a calendar discontinuity creating an intertemporal arbitrage worth up to 8, 378 FCFA per household-month; and mechanical regressivity against meters shared by several households, a widespread configuration in Senegalese housing. We then propose a four-component reform (a rolling window, block dilation for declared shared meters, a deep means-tested social tariff, and Boiteux–Steiner peak-load pricing) and derive its properties in closed form: temporal stationarity, horizontal equity, budget neutrality of targeting (with admissibility condition α ≥ 1 − p1/κ), and self-financing of the time-of-use signal at cost-reflective calibration. An illustrative calibration shows that, at constant subsidy envelope, a social tariff of about 24 FCFA/kWh is attainable for eligible households, against the 82 FCFA/kWh currently granted to all meters without targeting. All computations are reproducible from an open-source tariff engine aligned to the franc with official schedules. |
| Date: | 2026–09–12 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:xdcrq_v1 |
| By: | Nasir Iqbal (Pakistan Institute of Development Economics, Islamabad); Shahzada M. Naeem Nawaz (Pakistan Institute of Development Economics, Islamabad) |
| Abstract: | Pakistan already has customs rules for foreign-owned bonded petroleum storage. What is missing is a bankable pilot transaction, with SIFC coordinating delivery within 120 days. At the onset of the 2026 Middle Eastern supply disruption, Pakistan lacked a dedicated strategic petroleum reserve. Almost 90 percent of Pakistan's crude oil and liquefied natural gas supplies entered through the Strait of Hormuz. As a result of the U.S.-Israel-Iran conflict, which led to significant restrictions on the strait, Pakistan had to rely on commercial stock and imported shipments. A government review (as reported in the media) on 30 March revealed approximately 23-24 days of diesel stocks and 11 days of crude oil stockpiles. It was noted that petrol availability was satisfactory (Government of Pakistan, Ministry of Finance, 2026a). The stocks mentioned serve the operational needs of the supply chain and are not emergency reserves. Oil marketing companies are required to maintain commercial stocks equivalent to at least 20 days of sales, but that requirement alone does not create a national drawdown mechanism (OGRA, 2016). International comparisons should be made here. International Energy Agency (IEA) member countries are required to maintain emergency stocks equivalent to 90 days of net imports. However, different combinations of government, agency, and industry stocks can be used to comply with this standard (IEA, n.d.). By March 2026, India had 74 days of total reserves and about 60 days of coverage, reflecting a mix of commercial stocks and its own strategic caverns (Government of India, Press Information Bureau, 2026). China does not provide a full series of stock data. However, the U.S. Energy Information Administration (EIA) estimated that nearly 1.4 billion barrels of strategic and directed commercial inventories were held at the end of 2025 (U.S. EIA, 2026). Pakistan is among the very few countries deficient in strategic or emergency reserves but has commercial stock. The development of a government-funded reserve is not feasible in the short term. In its May 2026 framework, the government proposed allocating PKR 10 per litre from the current petroleum tax, yielding approximately $700 million annually (Reuters, 2026c). Pakistan's Petroleum Minister independently estimated Pakistan's monthly crude requirement at approximately USD 550 million (Abbasi, 2026). On that basis, crude alone for 90 days would cost roughly USD 1.65 billion. The proposed fund would therefore need about 2.4 years to accumulate the purchase value, before accounting for storage, the required mix of crude and refined products, replenishment, financing and operating costs. Pakistan's USD 7 billion IMF programme further limits the scope for a large, debt-financed stock build-up in the near term (IMF, 2026). This does not mean that Pakistan must wait until it can finance every barrel itself. A practical alternative is to allow foreign suppliers to hold inventory in bonded storage on Pakistani soil, while giving Pakistan a clearly priced contractual option to purchase an agreed share during a declared supply emergency. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pid:pviewp:2026:70 |
| By: | Frank, Luis |
| Abstract: | This paper evaluates different alternatives for nowcasting the year-on-year growth rate of Argentina’s Monthly Economic Activity Estimator (EMAE). A reduced set of high-frequency economic indicators - electricity demand, real tax revenue, automobile sales, and cement consumption - is used for the period from January 2015 to June 2026. An autoregressive distributed lag (ARDL) model, a dynamic factor model based on principal component analysis, and three regularization methods - LASSO, RIDGE, and Elastic Net - are compared. The results show that the ARDL model provides the best in-sample fit, with an R^2=0.92, and statistical evidence of a long-run relationship between EMAE and the indicators considered. The LASSO, RIDGE, and Elastic Net models achieve similar levels of fit, while offering advantages in dealing with multicollinearity and, in the case of LASSO and Elastic Net, allowing for variable selection. The dynamic factor model exhibits a lower fit (R^2=0.64), but provides a more parsimonious representation by summarizing the information contained in the indicators into a single factor. In terms of contemporaneous effects, cement consumption and electricity demand show the strongest associations with EMAE growth. The results should be interpreted with caution, since the high R^2 values obtained by the ARDL and regularized models reflect in-sample fit and, on their own, do not establish which methodology has greater predictive ability. |
| Keywords: | nowcasting; economic activity; EMAE; ARDL; LASSO; Elastic Net; principal component analysis |
| JEL: | C32 C53 |
| Date: | 2026–09–05 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:131074 |
| By: | Hammed Oluwaseyi Musibau (Adelaide University); Joaquin Vespignani (University of Tasmania); Maria Belen Yanotti (University of Tasmania) |
| Abstract: | We investigate the impact of environmental performance on economic growth and assess the role of governance quality using a global dataset of 206 countries between 1995 and 2022. To address endogeneity concerns, we employ fixed effects estimation and Lewbel’s heteroskedasticity-based two stage least squares estimator, which is well suited for settings where external instruments are unavailable. The findings show that improvements in environmental performance, measured through greenhouse gas emissions per capita and emissions intensity, exert a positive and statistically significant effect on GDP per capita growth. This result is robust across alternative specifications, inequality-based heterogeneity analyses, and regional subsamples. |
| Keywords: | Environmental performance; Governance; Economic growth; Emissions; Global panel |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:adl:wpaper:2026-10 |
| By: | Alice Albonico (University of Milano-Bicocca); Guido Ascari (University of Pavia, De Nederlandsche Bank, CEPR); Qazi Haque (Adelaide University); Kostas Mavromatis (De Nederlandsche Bank, University of Amsterdam); Andra Smadu (De Nederlandsche Bank) |
| Abstract: | We develop and estimate an open economy DSGE model for the euro area where global energy prices and the exchange rate jointly determine domestic inflation, because imported energy, priced in foreign currency, enters both consumption and production. Energy and exchange-rate disturbances account for the bulk of short-run volatility in headline euro area inflation, with energy price shocks driving most of the post-pandemic surge. Because energy and non-energy goods are poor substitutes, an adverse energy price shock raises import values, deteriorating the trade balance and depreciating the real exchange rate through the net-foreign-asset and UIP channels. The exchange-rate channel strengthens monetary transmission and improves the short-run inflation-output trade-off relative to a non-energy economy. Optimal policy can exploit this channel rather than looking through energy price shocks. The case for looking through such shocks becomes stronger when the central bank assigns a greater weight to output gap stabilization and prices become stickier. |
| Keywords: | Monetary policy; Inflation; Energy; Bayesian estimation |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:adl:wpaper:2026-07 |
| By: | Charles Labrousse; Yann Perdereau |
| Abstract: | The distributive effects of carbon taxation are critical for its political acceptability and depend on both income and geographic factors. Using French administrative data, household surveys, and matched employer–employee records, we document that rural households spend 2.8 times more on fossil fuels than urban households and work in firms that emit 2.7 times more greenhouse gases. We incorporate these facts into a spatial heterogeneous-agent model with migration, housing and wealth accumulation, bridging spatial and macroeconomic approaches. Carbon taxes generate 56% larger welfare losses for rural households than for urban households, as the former may be trapped due to mobility frictions and homeownership. While uniform or income-based rebates reduce inequality along the income dimension, they leave large spatial disparities that must be offset through location-based transfers. These results suggest that carbon policies should account for spatial differences to improve political feasibility. |
| Keywords: | Carbon Tax, Inequalities, Revenue Recycling, Spatial and Macroeconomic Models, Migration |
| JEL: | C61 E62 H23 Q43 Q58 R13 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:banfra:1063 |
| By: | Aitor Ciarreta; Peru Muniain; Ainhoa Zarraga |
| Abstract: | The increasing volatility of electricity prices driven by renewable energy integration, market shocks, and regulatory changes has reinforced the need for forecasting methods that go beyond point predictions and accurately describe the full conditional price distribution. This paper applies the Generalised Additive Models for Location, Scale and Shape (GAMLSS) framework to forecast Spanish day-ahead electricity prices using hourly data from 2020 to 2024. Alternative specifications based on Normal, Johnson's SU (JSU), and Sinh-Arcsinh (SHASH) distributions are considered, allowing the location, scale, and shape parameters to vary with market fundamentals, including electricity demand, renewable generation, seasonal effects, and regulatory and geopolitical risk factors. Forecasts are generated using a rolling-window approach and evaluated through the mean absolute error (MAE), pinball loss, and Diebold-Mariano tests. The results show that flexible distributional specifications improve forecasting performance relative to a naive benchmark and the standard normal specification. While SHASH and JSU specifications provide the lowest point forecasting errors, the hourly analysis reveals substantial intraday variation in relative performance across specifications. JSU specification with all four parameters driven by covariates achieves the best probabilistic forecasting performance, particularly in the tails of the distribution. Diebold-Mariano tests confirm the statistical significance of these improvements. These findings highlight the importance of modelling time-varying shape distributional parameters and demonstrate the value of GAMLSS models for forecasting and risk management in increasingly volatile electricity markets. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.01465 |
| By: | Lewoye Bantie Baylie (Department of Economics and Statistics, University of Salerno, Italy); Anna Maria Ferragina (Department of Economics and Statistics, University of Salerno, Italy); Inmaculada Martínez-Zarzoso (Dept of Economics and Center for Statistics, Georg-August Universitaet Goettingen, Göttingen, Germany & Dept of Economics, Universitat Jaume I, Castellón, Spain); Stefano Iandolo (Department of Economics and Statistics, University of Salerno, Italy) |
| Abstract: | This paper provides causal evidence that carbon leakage under the EU Emissions Trading System (EU ETS) operates through global supply-chain linkages. Exploiting the phased implementation of the EU ETS as a natural experiment, we construct a granular country–sector–year panel combining bilateral trade data with multi-regional input–output tables to estimate the effect of carbon regulation on trade in intermediate goods and embodied emissions. We find that in sectors covered by the ETS, imports of intermediate goods from non-ETS countries are around 8% higher, and the carbon content of those imports is 11% higher in manufacturing, the sector group in which the scheme’s coverage and traded intermediate inputs overlap. The main results are based on Poisson pseudomaximumlikelihood estimates, complemented with a log-linear specification that provides an exact additive decomposition of the effect. On the export side, the carbon content of regulated sectors’ shipments falls in manufacturing, and the decomposition attributes that decline to a reduction in the volume exported rather than to cleaner production. Our analysis also shows the existence of sectoral heterogeneity. Sectors with stronger upstream and downstream supply-chain integration import less additional embodied carbon, whereas sectors with weaker linkages show larger leakage effects. The composition result is corroborated by a staggered difference-in-differences specification on the intensive margin. The results identify embodied emissions in intermediate inputs as a key channel of carbon leakage and suggest that effective climate policy requires well designed carbon border adjustments with supply-chain-sensitive allowance allocation mechanisms, and stronger international policy coordination. |
| Keywords: | EU ETS; Carbon leakage; Global value chains; Staggered differencein- differences; Event study; PPML. |
| JEL: | F14 F18 Q54 Q56 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:jau:wpaper:2026/10 |
| By: | Runyao Yu; Jochen L. Cremer; Pierre Pinson; Jalal Kazempour; Leo Semmelmann; Takuji Matsumoto; Derek W. Bunn |
| Abstract: | Power systems with increasing variable renewable generation face greater uncertainty in scheduling and balancing. Intraday and balancing electricity markets facilitate position adjustments and real-time balancing close to delivery. As delivery approaches, continuous intraday market participants exposed to imbalance settlement adjust their positions by trading additional volumes to reduce their imbalance exposure. We conjecture that positions remaining open after intraday trading, together with demand and supply uncertainties affecting physical market participants, influence price formation in the balancing market. This cross-market interaction is, however, rarely studied. To understand this interaction, this paper uses probabilistic modeling to examine how intraday orderbook information reflects subsequent imbalance price formation in Germany and Austria. We compare orderbook representations based on open, high, low, close, and volume, Volume-Weighted Average Price (VWAP), and last mid price across multiple horizons. Each representation is evaluated using the self product, neighboring products, and the product from the neighboring country. We then compare the best orderbook setting with fundamental feature sets and their combinations, followed by an ablation study of the available training history. We show that VWAP with neighboring products provides the best performance in both countries. Combining orderbook and fundamental information reduces testing loss in Germany but increases it in Austria. Using all available observations provides the best overall performance, while excluding 2022 can reduce loss for extreme price samples. These results reveal and help explain country-dependent interactions between the intraday and balancing markets. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.37903 |
| By: | Rohan Best (Macquarie University); Duygu Yengin (The University of Adelaide); Andrew Taylor (Charles Darwin University); Maneka Jayasinghe (Charles Darwin University); Ruth Wallace (Charles Darwin University) |
| Abstract: | Inequalities in income, housing, and health between Indigenous and non-Indigenous Australians are well documented, yet differences in energy outcomes remain understudied. While prior research has largely focused on remote areas or specific aspects, this paper provides the first national-level analysis of Indigenous households’ experiences in the energy market, measuring the existence, scale, and structural drivers of energy inequality. Two indicators are examined: difficulties in paying energy bills on time and self-reported inability to heat homes adequately. Across two decades and independent datasets, Indigenous households are 9–10 percentage points more likely to experience energy stress, a difference that persists after accounting for income. Wealth emerges as the strongest explanatory factor, with housing tenure, education, and financial resilience also contributing substantially. Objective measures—arrears, disconnections, and hardship program participation—account for around 43% of the observed gap and provide practical means of identifying households at risk of energy stress. Energy stress is highly persistent, with households that had prior bill payment difficulties 47 percentage points more likely to encounter similar challenges again in 2023. These findings show that energy inequality is not merely a matter of short-term affordability but reflects deeper structural dimensions of economic inequality. Policies centred on income support alone are unlikely to eliminate these disparities. Access to modest emergency funds of only a few thousand dollars reduces the observed gap by about 73%, highlighting the potential of targeted, government-backed assistance to strengthen household resilience and prevent disconnections. |
| Keywords: | Indigenous Australians; First Nations; Energy inequality; Financial resilience; HILDA Survey. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:adl:wpaper:2025-06 |
| By: | Alfirević, Nikša; Bilić, Ivana; Mateljak, Željko |
| Abstract: | This paper examines the characteristics of economics and business students, aiming to predict their willingness to make lifestyle sacrifices to promote environmental sustainability and mitigate climate change. We use the survey data from 416 business students from five countries in the region of South East Europe (SEE). Results of statistical analysis show that gender (female) and the level of studies (higher study levels) can be associated with stronger expectations of lifestyle sacrifices, with the marginal role of self-reported belonging to the social class. We did not find any specific country differences within the SEE region. Our results provide a starting point for future empirical research on accepting pro-environmental change in higher education and suggest that behavioral trade-offs can be associated with gender effects and exposure to higher education curriculum. |
| Keywords: | climate change, lifestyle sacrifices, economics and business students, South East Europe (SEE) |
| JEL: | Q54 D91 I23 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esconf:343402 |
| By: | Céline Antonin (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Eric Heyer (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po) |
| Abstract: | Avant le déclenchement du conflit, le marché du pétrole était bien approvisionné. Malgré des tensions géopolitiques persistantes -guerre en Ukraine, sanctions contre les majors russes Rosneft et Lukoil -, les fondamentaux plaidaient pour une modération : l'offre mondiale était en excédent, et l'OPEP+ manœuvrait prudemment pour éviter un effondrement des cours. En début d'année 2026, une légère remontée des prix s'était néanmoins dessinée, portée par les tensions entre l'Iran et les États-Unis, propulsant brièvement le Brent au-dessus de 70 $ le baril. Du côté de l'offre, l'OPEP+ a augmenté sa production plus vite que prévu dès avril 2025, en supprimant progressivement ses coupes de 2, 2 millions de barils par jour (Mbj), avant de marquer une pause au premier trimestre 2026. Par ailleurs, en mars 2026, huit pays membres ont décidé de lever leurs coupes volontaires supplémentaires de 1, 65 Mbj 2 , en s'accordant sur une hausse de 206 000 bj à partir d'avril 2026. Sur le marché du gaz, la situation avait elle aussi fini par se détendre. Le premier semestre 2025 avait pourtant été difficile : le TTF avait culminé autour de 47 € le mégawattheure (MWh) début 2025, pénalisé par l'arrêt du transit russe via l'Ukraine. La montée en puissance rapide du gaz naturel liquéfié (GNL) mondial, portée notamment par la nouvelle capacité américaine de Plaquemines, avait sensiblement soulagé les marchés au second semestre, ramenant les prix spot à la baisse, autour de 30 €/MWh, en Europe comme en Asie. À la veille du choc, le marché gazier européen se trouvait donc dans une phase de détente relative, avec des stocks en cours de reconstitution et une offre mondiale en forte croissance. [Premiers paragraphes] |
| Keywords: | énergie, inflation, conjoncture, déficit public, politique budgétaire, politique monétaire, taux souverain |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05753619 |
| By: | Kauhanen, Antti; Koski, Heli; Kuusi, Tero; Kässi, Otto; Rouvinen, Petri; Wang, Maria |
| Abstract: | Abstract Technological progress is the most important source of economic growth, but its effects on productivity and well-being depend on how new technologies are adopted and how labor and capital are reallocated to new activities. This report brings together findings from the Cartagena project, conducted by ETLA and funded by Business Finland, on the digital and clean transitions and the economic policies supporting them. The results indicate that AI exposure in Finland has so far not been systematically associated with weaker employment or wage outcomes among young workers, nor does AI use appear to have reduced employee well-being. Information based on personal consumption data can influence consumer choices, although the effects are moderate on average. The productivity effects of the green transition depend critically on whether resources move toward high- or low-productivity clean activities. The effectiveness of business subsidies likewise depends on their ability to generate new investment, technology adoption, and structural change. |
| Keywords: | Technological change, Artificial intelligence, Green transition |
| JEL: | O33 J24 Q58 |
| Date: | 2026–09–23 |
| URL: | https://d.repec.org/n?u=RePEc:rif:briefs:186 |
| By: | Sangwon Lee (Korea Institute for Industrial Economics and Trade) |
| Abstract: | The continuing military confrontation between the US and Iran has produced an energy shock much like the one of 2022. That shock exposes a structural vulnerability rooted in the gap between the pace at which fossil fuel systems are being wound down and the pace at which renewable systems are being built, and it makes the case for re-examining the green transition as a question of resilience under external shock rather than one of speed.<p> Korea carries what this study calls a triple exposure structure: high energy import dependence, a large manufacturing share, and a high share of energy consumed by industry. That combination leaves the country especially vulnerable to a vicious circle in which energy price shocks erode corporate profitability and then depress investment. Operating margins at energy-intensive fi rms did in fact fall during the 2022 crisis.<p> Major economies have each mobilized fiscal and financial instruments against transition risk in their own way, but Korea’s fiscal capacity and manufacturing-centered industrial structure limit how far those approaches can simply be transplanted. This study therefore proposes a risk-responsive transition strategy built on three axes: stabilizing costs in the short term by improving how industrial electricity tariff s are operated; securing investment capacity in the medium term by making transition fi nance effective and introducing carbon contracts for difference; and upgrading the industrial structure over the long term by accelerating the shift toward high-value-added industries. |
| Keywords: | energy security; industrial green transition; energy price shocks; transition finance; carbon contracts |
| JEL: | Q43 Q48 Q58 L52 |
| Date: | 2026–08–31 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kietrp:023644 |
| By: | Gonzalez-Navarro, Marco; Hall, Jonathan D.; Wheeler, Harrison; Williams, Rik |
| Abstract: | We study how ride-hailing and public transit interact – an open question with importantimplications for transportation policy and urban form. We develop a model of mode choice that features three key mechanisms: (i) substitution, whereby riders switch from Uber to transit near stations; (ii) last-mile complementarity, whereby Uber is used to access transit; and (iii) a dynamic choice-set effect, whereby outbound mode choice constrains return options, givingUber option value. Using proprietary Uber trip data around 650 rail station openings worldwide, we estimate how ride-hailing responds when public transit improves. We document three patterns consistent with these mechanisms: Uber usage rises sharply within 100 meters of new stations (last-mile complementarity), declines locally among nearby residents and workers (substitution), and falls modestly overall for these users as local reductions are partially offsetby increased Uber usage elsewhere (option value). Estimating the model on these moments, we find that all three channels are quantitatively important, with substitution the largest individualchannel but last-mile complementarity and option value together more than offsetting it, so that Uber and transit are net complements. Policy implications include: (a) a ride-hailing tax induces users to switch to private vehicles rather than transit; (b) a subsidy for last-mile ride-hailing trips is more effective at increasing transit use when it targets the per-kilometercost rather than the fixed cost; and (c) increases in transit use are best induced by a congestion charge that subsidizes transit fares rather than by policies relying on ride-hailing taxes and/or last-mile subsidies. |
| Keywords: | Social and Behavioral Sciences, ride-hailing, subways, public transit |
| Date: | 2026–09–29 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:agrebk:qt29v1x3gc |
| By: | Felix Reichelk |
| Abstract: | This paper introduces and studies the Multi-Objective Enterprise Green Supply Chain Network Design problem (MOEDGSCND) an extension of the well known Multi-Objective Supply Chain Network Design (MO-SCND), in this case a three-objective combinatorial optimisation problem that simultaneously minimises total cost f1, carbon dioxide emissions f2, and customer dissatisfaction f3 over binary decisions on which distribution centres to open and how to assign customer zones to open facilities. The problem generalises capacitated facility location and is known to be NP-hard. Furthermore this paper lays out a formal specification of decision variables, objective functions, all constraints and then investigates and compares three solution approaches using a single numerical instance: (A) exact weighted-sum integer linear programming solved via PuLP, (B) three Fully Polynomial-Time Approximation Schemes (FPTAS) providing (.94 + $\epsilon$)-guarantee approximations for $\epsilon$ := 0.15, and (C) two baseline heuristics for comparison. On an eight-customer, five-candidate-DC instance the exact solver certifies the optimal Pareto front across eight weight combinations, and all three FPTAS variants achieve their approximation guarantees, finishing within milliseconds compared to centiseconds for the exact ILP using the PuLP solver on this scale. |
| Date: | 2026–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.11971 |
| By: | Walter Kurz; Wojtek Stricker |
| Abstract: | European electricity trading in the EU operates as a constrained multi-layer system in which legal design, exchange microstructure, and network physics are executed jointly across forward, day-ahead, intraday, and balancing horizons. This paper develops a functional architecture for AI-supported trading that is aligned with market-coupling mechanics, cross-zonal transfer constraints, and compliance obligations under REMIT, MiFID II, MiFIR, and EMIR. The contribution is a formal system specification composed of a decision-state vector, residual-exposure accounting, constrained optimization objective, executable-action permission gate, and fail-closed AI control logic with auditable records. The analysis maps major Nominated Electricity Market Operator (NEMO) venues and related exchange operators into an operational venue topology and identifies where cross-border coordination fails in practice: interface-level timing, permission heterogeneity, and balancing-layer coupling. The resulting framework proposes how AI can be deployed as a bounded decision component inside regulated market operation with explicit governance, rather than as an unconstrained prediction layer. |
| Date: | 2026–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2609.29108 |