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on Energy Economics |
| By: | Llavador, Humberto; Roemer, John E.; Stoerk, Thomas |
| Abstract: | The Paris Agreement is designed to increase climate ambition gradually through a process of ratcheting up. What is the plausible endpoint of this process? To answer this question, we develop a tractable integrated assessment model in which countries interact through a decentralized general equilibrium and negotiate unanimously over a global carbon budget, with all mitigation implemented via a global carbon price. We prove the existence and uniqueness of a unanimous international agreement on global emissions, in which carbon pricing revenues are redistributed across countries in proportion to marginal climate damages. In a quantitative application for 154 countries, the resulting equilibrium limits global mean surface temperature change to 1.51°C, at a carbon price of 320 USD/tCO2. The associated international transfers of carbon pricing revenue are progressive toward lower-income countries and amount to about 0.8% of global GDP annually — an order of magnitude larger than the Paris Agreement’s climate finance target. |
| Keywords: | climate economics;climate policy;international environmental agreement;Paris agreement |
| JEL: | J1 |
| Date: | 2026–09–24 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:141247 |
| By: | Joseph E. Aldy; Michael W. Toffel; Alison J. Ong; Lavender Yang |
| Abstract: | Many large, publicly-traded companies adopt voluntary greenhouse gas emission reduction commitments in the presence of a fragmented public policy landscape. To explore the potential emission implications of such commitments, we develop a framework for understanding how firms’ voluntary emission targets interact with carbon pricing, regulatory mandates, subsidies, and heterogeneous policies across political jurisdictions. This analysis highlights the difficulty of distinguishing incremental voluntary emission abatement from policy-induced emission reductions. We introduce the Salata Institute Corporate Climate Targets Database, which we produced from public domain reports published by Russell 3000 firms over 2000-2024. The database documents the growth, form, scope, and sectoral distribution of voluntary greenhouse gas emission targets, including net-zero, carbon-neutral, carbon-reduction, energy-related, and qualitative commitments. Comparing this database with CDP, a non-profit organization formerly known as the Carbon Disclosure Project and the most common source of corporate emission targets used in the research literature, reveals substantial omissions in their survey-based data, especially in recent years. We show that voluntary corporate targets often mirror government-established goals and public policies, and some firms benchmark their internal carbon prices to existing carbon taxes and emission trading systems. The paper concludes by outlining empirical challenges and future research needs for evaluating the emission impacts of voluntary commitments. |
| JEL: | M48 Q54 Q58 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35869 |
| By: | Fatima Zahrae Tair; Youssef Samihi (UIT - Université Ibn Tofaïl) |
| Abstract: | Abstract: The transition to renewable energy (RE) is now a global necessity to mitigate climate change and reduce greenhouse gas emissions. Despite declining technology costs, private investment in RE projects remains constrained by multiple barriers. While previous research has identified numerous barriers to renewable energy investment, most studies have focused on individual categories of barriers or specific national contexts. Consequently, there is still limited evidence providing an integrated assessment of the relative importance of different barrier dimensions and comparing their prevalence between developed and developing countries. This study addresses this gap through a systematic synthesis of the existing literature. Using the PRISMA methodology, this study systematically reviews 26 peer-reviewed articles indexed in Scopus and Web of Science to identify and synthesize the barriers limiting private investment in renewable energy projects. The identified barriers were grouped into six dimensions: economic and financial, governance and institutional, market-related, geographical and ecological, technological, and sociocultural. The review shows that governance and institutional barriers are the most frequently reported, appearing in 77% of the selected studies (20/26), followed by economic and financial barriers (69%, 18/26), market-related barriers (62%, 16/26), sociocultural barriers (58%, 15/26), technological barriers (54%, 14/26), and geographical and ecological barriers (46%, 12/26). The comparison also highlights clear differences between economic contexts. Developing countries are primarily constrained by limited access to finance, weak institutional capacity, and restricted investment resources, whereas developed countries more frequently face challenges related to regulatory complexity, market design, and public acceptance of renewable energy projects. These findings suggest that policies aimed at mobilizing private investment should be tailored to national contexts by combining stable regulatory frameworks, targeted financial instruments, and stronger institutional support to accelerate the deployment of renewable energy. |
| Keywords: | Q20, P48, P28, PRISMA JEL Classification : O13, systematic review, barriers, private investment, renewable energy, renewable energy private investment barriers systematic review PRISMA JEL Classification : O13 P28 P48 Q20 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05773820 |
| By: | Marco Due\~nas; Antoine Mandel |
| Abstract: | A growing number of countries are adopting policies to reduce greenhouse-gas emissions, a process expected to reshape production systems and labour markets by altering relative prices and changing production and demand patterns across sectors. We develop an agent-based monetary input--output network model to analyse the medium-term effects of climate policies on production networks and sectoral labour allocation. The model features heterogeneous industries and households, incorporates greenhouse-gas emissions accounting, and is calibrated to a multi-regional input--output database covering the world economy. We simulate two alternative climate-policy scenarios over 2026--2035: one based on countries' nationally determined contributions and another targeting larger reductions in global emissions. The results reveal significant economy-wide reallocation: fossil-energy sectors contract, low-carbon energy sectors expand, and their positions within production networks change asymmetrically. Fossil energy loses relevance as a direct supplier and exerts less forward influence, while its remaining production becomes more dependent on intermediate inputs and upstream suppliers; low-carbon energy primarily strengthens its role as a supplier. Carbon pricing also generates sectoral labour gaps that, under mobility frictions, imply greater potential transitional unemployment. Because the model allows only limited technological change and adjustment within existing production links, the simulations provide a counterfactual assessment of how existing production structures respond to a relatively rapid climate transition, revealing the adjustment pressures that emerge when policy ambitions advance faster than the productive system's capacity to adapt. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.04018 |
| By: | OECD |
| Abstract: | Transition finance has emerged as an approach to financing companies and activities that are not yet aligned with environmental goals but are pursuing credible transition pathways. This paper examines how enabling policies shape the mobilisation of transition finance and the credibility and economic feasibility of corporate transitions. Drawing on case studies of Japan, the European Union and the United Kingdom, a structured review of 167 academic and institutional studies, and a 2026 OECD survey of 121 financial institutions and non-financial companies, it provides new evidence on the conditions under which credible transition pathways can become commercially viable and financeable. The analysis assesses how specific policy instruments and broader features of the policy environment, including policy direction, durability and implementation, interact with sectoral pathways and real-economy factors such as technology costs and maturity, infrastructure availability, market demand and expected revenues. It also considers how cross-border differences in transition-related policy and regulatory frameworks form part of the wider conditions shaping investment and financing. The paper is relevant to policymakers, financial institutions and companies involved in transition-related investment, planning and financing. |
| JEL: | Q56 |
| Date: | 2026–10–05 |
| URL: | https://d.repec.org/n?u=RePEc:oec:envaaa:278-en |
| By: | Farid Farrokhi; Ahmad Lashkaripour; Homa Taheri |
| Abstract: | A critical tension in global governance is that trade agreements have evolved largely in isolation from climate policy. This paper shows that the two domains generate systematic cross-externalities: larger gains from trade are associated with greater climate externalities imposed on partners, while linking carbon taxes to trade agreements produces distributive externalities that undermine the balance of trade concessions. To address this tension, we present a framework to integrate harmonized carbon pricing into the WTO subject to institutional and political-feasibility constraints. We explore two linkage designs. The first is a centralized Climate Fund, where all members apply a common demand-side carbon tax and contribute a portion of the revenues to the fund, capped by fiscal constraints. The Fund then reallocates these contributions to balance the tax burden across countries, subject to informational constraints. Quantitative analysis shows that even a simple fund allocation rule can sustain a carbon price of $138 per ton of CO2, reducing global emissions by 54%. The main binding constraint is informational: knowing the precise incidence of the carbon tax across countries ex ante would raise the feasible price to $265. The second is a decentralized design without transfers. Each member meets a carbon tax revenue floor but retains full discretion over its mix of demand-side and supply-side taxes. Energy exporters choose supply-side taxes while energy importers opt for demand-side taxes. These choices organically balance the tax burden and yield a 47% reduction in global emissions, almost rivaling the centralized Climate Fund. |
| JEL: | F1 H23 Q5 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35834 |
| By: | Gandhi, Piyush; Hagerty, Nick; Zucker, Ariel |
| Abstract: | Energy efficiency is a global priority, but investments in energy efficiency do not always deliver the expected benefits. This paper studies micro-irrigation systems (MIS), a technology thought to reduce the energy required for irrigation by as much as 70 percent. We installed individual meters to directly measure the energy consumption of several hundred farmers in Gujarat, India, and linked the meter data with survey data to yield a uniquely comprehensive view into energy use patterns in smallholder agriculture. We document two facts. One, energy use varies widely across farmers, and this variation is unexplained by factors such as farm area or village geography. Two, MIS users in our sample consume 30 to 40 percent more energy than non-users of MIS. This difference does not appear to be fully explained by observable differences across farmers nor by rebound effects, suggesting that the energy efficiency gains of MIS under real-world conditions may be disappointing. Our results highlight a need for increased attention to the details of implementation and further research into the actual benefits of resource-conserving technologies. |
| Keywords: | 4404 Development Studies (for-2020), 44 Human Society (for-2020), 2 Zero Hunger (sdg), Energy efficiency, Rebound effect, Irrigation, Technology subsidies, Energy (science-metrix), 3304 Urban and regional planning (for-2020), 4407 Policy and administration (for-2020), 4802 Environmental and resources law (for-2020) |
| Date: | 2026–12–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:ucscec:qt8gn3x7gz |
| By: | Imke Rhoden |
| Abstract: | Mitigation pathways require fossil power plants to retire well before the end of their technical lives, yet retirement decisions are typically derived from cost-minimizing system models rather than from the decision facing the plant's owner. This study investigates the carbon price threshold at which closure becomes more advantageous for an operator, as well as the ongoing costs associated with continued emissions. A finite-horizon Markov decision process is solved plant by plant for the European fossil fleet of 850 units, with a carbon price that moves stochastically and plants that age deterministically. The price process is constructed so that widening its range leaves the expected price unchanged, isolating the effect of uncertainty from the effect of price level. Closure thresholds fall below recent EU allowance prices for all fuels considered, and the sensitive range lies well beneath them, so further price increases are unlikely to be the binding instrument for retiring this fleet. Because fuel costs rather than emissions determine how much margin a carbon price must erode, the least carbon-intensive capacity retires first. Uncertainty raises the thresholds by about a tenth at an unchanged expected price: a credibly stable carbon price retires the same capacity as a volatile price roughly a tenth higher. Policy credibility therefore substitutes for price level. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.07239 |
| By: | Montacer Ben Cheikh Larbi (ULR - La Rochelle Université); Sina Belkhiria (ISG - Institut Supérieur de Gestion de Tunis [Tunis] - Université de Tunis) |
| Abstract: | This study provides a robust analysis of environment-adjusted airline efficiency under a dual-disposability assumption for undesirable output. It employs also a two-stage methodology to investigate the complex and heterogeneous relationships between airline operational profiles and their environmental efficiency. Technical efficiency is estimated in the first step using a Data Envelopment Analysis (DEA) based on the Directional Distance Function (DDF) under both assumptions of the technological characterization of gas emissions, contractible versus non-contractible. In the second step, to analyze the factors influencing the estimated efficiency scores, a Tobit second-stage regression is employed. Results show that efficiency scores under strong disposability are systematically and significantly higher than those obtained under weak disposability, with an average difference of 11.9 percentage points. The findings also indicate a positive and statistically significant relationship between the LCC variable and technical efficiency, implying that airline groups with LCC subsidiaries achieve higher efficiency levels. Based on their specific trade-off between operational and environmental inputs, the analysis of technical efficiency elasticities classifies airlines into five groups. These range from "Strong Proactive Environmental Performers" to "Low Efficiency High-Cost" groups, whose efficiency improvements are structurally linked to either an optimization or a deterioration of Greenhouse Gas (GHG) emissions performance. The technical efficiency elasticity with respect to revenue share and to fuel efficiency are parallel across all airlines, while the elasticity for GHG consistently exhibits the opposite sign. We provide one of the few systematic comparisons of efficiency scores under weak versus strong disposability. This comparison allows us to quantify the systematic contraction in measured efficiency that occurs when greenhouse gas emissions are modeled as a technologically costly output rather than a costless byproduct. |
| Keywords: | Environmental efficiency GHG emissions Airline Directional distance function, Directional Distance Function, Airline, GHG Emissions, Environmental Efficiency |
| Date: | 2027–03 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05768890 |
| By: | Romain Houssa; Jolan Mohimont |
| Abstract: | This paper develops a dynamic general equilibrium model of the global crude oil market that delivers horizon-dependent price elasticities of oil supply and demand, arising from the gradual adjustment of oil producers and consumers over time. We refer to elasticities beyond the impact horizon as dynamic elasticities. We derive closed-form expressions for the elasticities, which allow us to impose transparent prior restrictions in the empirical analysis and to quantify how dynamic elasticities shape the propagation of structural shocks to oil prices and global real activity. We estimate the model with Bayesian methods using monthly data on industrial production and key oil-market indicators — production, inventories, and prices. Diffuse priors on dynamic elasticities imply elasticity profiles that are essentially flat across horizons. By contrast, informative priors — or an expanded information set including drilling activity under diffuse elasticity priors — yield elasticities that rise with the horizon, increase the contribution of supply shocks to fluctuations in oil prices and real activity, and reduce that of oil-consumption demand shocks. |
| Keywords: | oil market, real business cycle (RBC), Bayesian estimation, dynamic elasticities, oil supply and demand |
| JEL: | C32 C11 E32 Q41 Q43 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_13037 |
| By: | Diego R. Känzig; James H. Stock; Luca Zanotti |
| Abstract: | We study how the shale revolution and the U.S. transition from petroleum importer to net exporter have changed the macroeconomic effects of oil shocks. Using oil supply news shocks identified from OPEC announcements, a time-varying model of the U.S. macroeconomy shows that the contractionary effects weakened over time and eventually became expansionary. State-dependent local projections link this change to the U.S. petroleum trade balance. The improvement goes beyond mechanical net export effects: as the terms-of-trade response turns more favorable, consumption, equity valuations, and activity strengthen broadly across sectors and regions, pointing to general-equilibrium income and wealth effects. A counterfactual analysis of the 2022 oil price surge implies sharply different paths for U.S. activity, prices, and monetary policy under the propagation mechanisms prevailing before the shale boom vs. the early 2020s. |
| JEL: | C32 E31 E32 F41 Q43 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35864 |
| By: | Joshua S. Graff Zivin; Johnny Huynh; Timothy Frank Justicz; Adriana Lleras-Muney; Matthew J. Neidell |
| Abstract: | We provide the first causal evidence on how long-term exposure to fine particulate matter (PM2.5) at contemporary ambient levels contributes to the development of chronic disease in a young, initially healthy population. Our analysis links detailed personnel records for roughly 150, 000 U.S. Army soldiers to high-resolution annual measures of PM2.5. Because soldiers enter service exceptionally healthy and receive uniform access to care, new diagnoses reflect pollution’s physiological impact rather than preexisting conditions or differential health care access. They are also required to relocate based on the needs of the Army, which provides us with quasi-random variation in initial duty-station assignments that we use as an instrument for average annual pollution exposure over a soldier’s career. We find that sustained PM2.5 exposure substantially increases circulatory disease, particularly hypertension, with mixed evidence on respiratory conditions that are sensitive to specification. Exposure over shorter durations, by contrast, has little detectable effect, a pattern consistent with the cumulative nature of pollution’s health burden. These findings demonstrate that even moderate long-term exposure to air pollution can erode health capital in ways that are invisible to studies focused on short-run variations or mortality alone, and they highlight the importance of regulatory standards that account for chronic exposure risks. |
| JEL: | I10 J10 Q53 |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35871 |
| By: | Virginie Lavoye; Olivia Petit (Kedge BS - Kedge Business School); Anssi Tarkiainen; Jenni Sipilä |
| Abstract: | Encouraging online green purchasing requires overcoming the abstract nature of e-commerce and making the environmental benefits of green products more tangible. Augmented reality (AR) is a promising tool that allows consumers to try on green products virtually, fostering self-proximity-the perception that the augmented selfrepresentation is close to oneself. We explore how and under what conditions AR-enabled self-proximity enhances consumer responses to green products. We find that AR-enabled self-proximity enhances the personal relevance of green products, heightens the anticipated warm glow, and improves consumer responses to green products. AR is particularly effective in promoting green purchasing because it heightens anticipated warm glow, which in turn leads to higher purchase intentions for green products than for generic ones. We highlight the need to carefully design AR experiences that emphasize self-relevance and intrinsic rewards to maximize impact, offer practical recommendations, and suggest avenues for future research in this growing area of study. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05732303 |
| By: | International Monetary Fund |
| Abstract: | The Gulf Cooperation Council countries have successfully weathered recent turbulence in the Middle East, and their economic prospects remain favorable. Nonhydrocarbon activity has been strong amid reform implementation, although overall growth has decelerated due to cuts in oil production. The growth outlook is positive, as the envisaged easing of oil production cuts and natural gas expansion spur the recovery in the hydrocarbon sector, while the nonhydrocarbon economy continues to expand. External buffers remain comfortable despite current account balances having narrowed. Risks around the outlook are broadly balanced in the near term. More challenging medium-term risks, especially in the context of geoeconomic fragmentation and climate change, call for action on policy priorities to continue to strengthen the private sector and to diversify the economy. |
| Keywords: | economic diversification; financial stability; fiscal sustainability; GCC; productivity improvements; regional integration; GCC country; policy priority; B. GCC; GCC well; GCC public sector balance sheet; Labor markets; Fiscal rules; Total factor productivity; Global; Middle East; Middle East and Central Asia |
| Date: | 2024–12–19 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfpps:2024/066 |
| By: | Théotime Coudray (UVSQ - Université de Versailles Saint-Quentin-en-Yvelines); Sandrine Michel (UMR ART-Dev - Acteurs, Ressources et Territoires dans le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - UPVD - Université de Perpignan Via Domitia - CNRS - Centre National de la Recherche Scientifique - UM - Université de Montpellier - UMPV - Université de Montpellier Paul-Valéry) |
| Abstract: | In the context of the ongoing Energy Transition (ET), power system flexibility has emerged as a critical requirement for integrating increasing shares of Variable Renewable Energies (VREs) into electricity mixes. Because these resources are inherently location-specific, their large-scale deployment calls for a rethinking of how the balance between supply and demand is achieved. In this paper, we propose a multi-regional optimization framework to balance residual load using existing flexibility tools, including dispatchable generation, storage, demand response (DR), and inter-regional exchanges. Applying this framework to a cluster of four southern French regions for the full year 2023, we find that the residual load is met by an overwhelmingly low-carbon dispatchable mix dominated by nuclear baseload, that inter-regional exchanges constitute the primary flexibility channel and generate substantial economic value through congestion rents (∼ 0.91 billion euros). We confirm the robustness of these findings through a dedicated sensitivity analysis spanning the hydro energy budget and the load recovery parameter. These results suggest that introducing an intermediate regional layer for the operation and coordination of power system flexibility could be beneficial from both a technical and an economic perspective. |
| Keywords: | Power System Multi-Scale Variable and Renewable Energies (VRE) Residual Load Flexibility Energy Modeling 1, Power System, Multi-Scale, Variable and Renewable Energies (VRE), Residual Load, Flexibility, Energy Modeling 1 |
| Date: | 2026–12 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05739909 |
| By: | Angela Martiradonna |
| Abstract: | Climate policy changes production costs and can reshape the geography of production. We study this spatial channel in a focused model where mobile industrial activity responds to local attractiveness, agglomeration strengthens attractiveness, and carbon policy lowers the profitability of emissions-intensive locations. The model yields an explicit carbon-policy threshold separating spatial instability from stability. When emissions intensity rises with local industrial density, spatial concentration raises aggregate emissions even with unchanged total industrial activity. Embedding these dynamics in a two-jurisdiction policy game creates a wedge between regional and collective incentives: each government values the industrial activity located within its own territory, while aggregate welfare internalizes the effect of policy on economy-wide concentration. With transferable utility, cooperation can select a policy on the stable side of the threshold while the non-cooperative policy lies on the unstable side. A numerical exercise illustrates this regime change. European regional evidence, based on industrial emissions and gross value added at NUTS2 level, documents a positive emissions-activity association and identifies the empirical quantities needed to measure relocation and concentration effects. The analysis links climate cooperation to the spatial organization of production and establishes a benchmark for policy-induced industrial relocation. |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2610.10939 |
| By: | Javier Flórez Mendoza; Robert Stehrer |
| Abstract: | Abstract: This policy brief discusses recent macroeconomic developments in the North African economies of Algeria, Egypt, Libya, Morocco, Tunisia, and Sudan as well as recent patterns of trade with the European Union (EU) and Austria, pointing to opportunities as well as challenges. Against a backdrop of supply-chain disruptions, geopolitical fragmentation, and rising vulnerabilities associated with technology dominance, critical raw materials, and energy security, North Africa has acquired renewed strategic relevance for European economic policy. The region combines geographic proximity to the EU along with sizeable markets, a young population, substantial renewable-energy potential, strategic transport corridors, and growing capabilities in sectors linked to the green and digital transitions. For the EU and Austria, deeper economic engagement with North Africa can support the diversification of suppliers, reduce excessive dependencies, and strengthen supply-chain resilience. The potential extends beyond the traditional exchange of fuels and raw materials to environmental technologies and renewable energy. A forward-looking European strategy should therefore combine trade with investment in infrastructure, human capital, renewable-energy systems, and partnerships. Initiatives such as the EU’s Global Gateway, Austria’s Africa Strategy, and the proposed Hydrogen South Corridor can help to connect North African production and energy potential more closely with European markets while supporting regional integration. |
| Keywords: | international trade, Austrian Foreign Trade, exports |
| Date: | 2026–10 |
| URL: | https://d.repec.org/n?u=RePEc:wsr:pbrief:y:2026:m:10:i:75 |