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on Energy Economics |
| By: | Masahiro Tanaka |
| Abstract: | This paper introduces a quasi-Bayesian approach for local projection instrumental-variables (LP-IV) estimation. It builds a moment-based quasi-posterior using the generalized method of moments (GMM) objective and applies a roughness-penalty prior to smooth impulse responses over different horizons. The approach maintains the key first-order features of traditional LP-IV methods, while enhancing stability in finite samples and allowing for joint inference through simultaneous bands. Simulations indicate that this regularization decreases root mean squared error compared to standard GMM, especially at medium and longer horizons. An application to Danish electricity markets highlights the method's practical usefulness. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.15966 |
| By: | David Newbery |
| Keywords: | Transmission constraints, access regimes, variable renewable electricity, storage, curtailment, zonal pricing |
| JEL: | H23 L94 Q28 Q42 Q48 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:enp:wpaper:eprg2608 |
| By: | Thomas K. Kloster; Fred Espen Benth |
| Abstract: | We conduct the first rigorous study of electricity price volatility for the full panel of electricity prices across three European generation zones. By interpreting the observed day-ahead prices as local averages of a latent price process governed by a stochastic partial differential equation, we develop estimators of the weekly integrated variance. The inherently infinite dimensional setting introduce several complications that are not relevant in the conventional finite dimensional semimartingale setting, and we spend considerable effort in dealing with these. In particular, we must account for both mean-reversion in prices and semigroup-smoothing in the estimated variance. We provide a detailed decomposition and interpretation of the empirical estimates across three vastly different European generation zones, namely Germany, Norway, and Spain. Our findings indicate that each zone has very different drivers of volatility, and that the impact of generation variables differs considerably. We document that leverage effects appear to be present at first sight, but disappear once we condition on suitable state variables, thereby showing that electricity price volatility does not generally exhibit asymmetric responses to price shocks. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.13320 |
| By: | Johan Albrecht (-) |
| Abstract: | Europe's €1.2 trillion grid investment challenge by 2040 is commonly framed as a financial challenge. This paper argues that the central obstacle is institutional: Europe's hybrid liberalization model generates a structural mismatch between energy system transformation ambitions and governance capacity. Drawing on political economy and infrastructure governance theory, this paper develops an integrated governance framework identifying four interconnected failures rooted in the institutional incompatibility between the liberalization paradigm and the coordination requirements of the energy transition. First, we face a liberalization paradox as fixed market outcomes are increasingly imposed on free market platforms, while four competing design logics — geoeconomic, capitalist, ecological, and social-integrative — operate without any hierarchical guidance. Second, permitting bottlenecks reflect not bureaucratic inefficiency but decades of accumulated democratic preferences, requiring a new theory of necessary infrastructure. Third, flexibility governance misframes behavioral adaptation as techno-economic optimization, undermining civic legitimacy at scale. Fourth, grid congestion forces grid operators or regulators into reactive industrial policy decisions without democratic mandate. These failures compound in the financing dimension: incentive misalignments, fiscal deterioration, and fragmented EU instruments produce reactive and inadequate investment. The framework demonstrates that technical and financial interventions — however substantial — cannot substitute for the institutional reconstruction that transformation requires. As European coordination emerges as a precondition for grid development, the paper raises the fundamental question of whether the era of market liberalization is giving way to a new era of system planning. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:rug:rugwps:26/1142 |
| By: | Green, R.; Newbery, D. M. |
| Abstract: | This article surveys Britain’s groping attempts at delivering adequate volumes of RES at an acceptable system cost, and proposes reforms to support design and transmission charging. Littlechild as the first electricity regulator oversaw the first auctions for renewable electricity contracts. Renewable Obligation certificates added a premium to the market price and accelerated deployment at high cost, until replaced by Contracts for Difference for wind and solar PV, now auctioned. Firm access and locational transmission pricing can work if support is suspended in negative price periods and transmission charges for new entrants are based on marginal expansion costs. The proposed new subsea HVDC links from Scotland would require new windfarms to have capacity f actors of 50% to compete with windfarms in England of 34% capacity factors, while onshore links would deliver at current modest transmission charges. |
| Keywords: | Renewable Electricity Support Schemes, Auctions, Curtailment, Locational Pricing |
| JEL: | L94 Q28 Q42 Q48 |
| Date: | 2026–03–18 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2636 |
| By: | Runyao Yu; Julia Lin; Derek W. Bunn; Jochen Stiasny; Wentao Wang; Yujie Chen; Tara Esterl; Peter Palensky; Jochen L. Cremer |
| Abstract: | Accurate and efficient imbalance electricity price forecasting is critical for industrial energy trading systems, especially as battery assets and automated bidding pipelines increasingly participate in balancing markets. However, real-time forecasting is complicated by nonlinear market-rule-based price formation, heterogeneous input signals, and incomplete data availability caused by communication delays, publication lags, and measurement outages. This paper proposes a market-rule-informed neural forecasting framework that embeds imbalance price formation rules into the latent space of an expressive neural network. The proposed framework preserves raw signal information while exploiting transparent market-rule priors. We further analyze operational robustness by removing price-component information and characterize how forecasting performance scales with input length and forecasting horizon. Experimental results show that the proposed model achieves competitive forecasting performance with substantially fewer trainable parameters and shorter training time than generic deep learning baselines. Experimental results show that the proposed model achieves competitive forecasting performance with substantially fewer trainable parameters and shorter training time than generic deep learning baselines, demonstrating that market-rule priors and expressive neural networks should be jointly used for accurate and computationally sustainable forecasting in industrial energy trading applications. The implementation is publicly available at https://runyao-yu.github.io/MRINN/. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.09061 |
| By: | Flinner, Susanne; Lehmann, Paul; Reda, Milan Jakob |
| Abstract: | Albeit heat pumps are viewed as a key technology to decarbonize buildings, their upfront costs exceed investment costs for fossil boilers. These excess investment costs for heat pumps over fossil boilers are heterogeneously distributed across and within income groups, depending on building characteristics and local climate conditions. This paper investigates vertical and horizontal inequalities associated with investments in heat pumps as opposed to fossil heating systems, assessing them in absolute and income-relative terms. Using German survey data on building type, age, insulation condition, living area, and local climate, we estimate household-specific excess investment costs and analyze their relationship with income. In absolute terms, investment costs are equally distributed across income groups. However, when measured relative to income, distributional effects are regressive. Regarding the drivers of these effects, we show that lower-income households tend to live in smaller, older, and less well-insulated buildings than higher-income households. In contrast, for higher-income households, excess costs are largely driven by their comparatively larger living areas. Consequently, households across income groups face, on average, similar excess costs, albeit for different reasons. We also observe substantial horizontal inequalities in both absolute terms and relative to household income, reflecting considerable cost variations within income groups, depending on the combination of building type, building age, insulation condition and living area. Again, the drivers of these horizontal inequalities vary across income groups. We find that mitigating both vertical and horizontal inequalities requires targeted subsidies that take into account not only income differences but also substantial heterogeneity in building characteristics. |
| Keywords: | Heat pump investment, Decarbonization, Cost distribution |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ufzdps:341101 |
| By: | Rivera, Nathaly M.; Ruiz-Tagle, J. Cristobal; Spiller, Elisheba |
| Abstract: | Renewable energy can yield social benefits through local air quality improvements and their subsequent effects on human health. We estimate some of these benefits using data gathered during the rapid adoption of large-scale solar power generation in Chile over the last decade. Relying on exogenous variation from solar irradiation and incremental solar generation capacity over time, we find that solar energy displaces coal generation and curtails hospital admissions due to respiratory diseases. These effects are largely manifested in cities downwind of and near coal plants that are displaced by the introduction of new solar. The reduction in exposure to air pollution from these displaced coal plants seems to be driving this relationship. Our results help quantify the health benefits that can be achieved through greater renewable energy investments. |
| Keywords: | coal displacement; coal power plants; developing countries; Latin America; morbidity; pollution; power plants; solar generation |
| JEL: | I18 L94 Q42 Q53 |
| Date: | 2024–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:123756 |
| By: | Cass, Leanne; Frattini, Federico Fabio; Saussay, Aurélien; Sato, Misato; Vona, Francesco |
| Abstract: | There is growing evidence that green jobs have higher skill requirements, but whether they offer sufficient wage incentives to encourage workers to acquire those skills remains unclear. We study the green wage premium and its drivers to isolate the average return to green tasks using online job vacancy (OJV) data for EU countries over the period 2018-2023. We develop a transparent LLM-based approach to classify job vacancies as green when they list at least one green task. Green jobs pay a premium of 5.5% relative to comparable postings within the same occupation, and this estimate is little changed when controlling for nonmonetary job attributes making these jobs more attractive. Roughly half of this premium is explained by firm fixed effects, consistent with an important role for firm rents. An Oaxaca-Blinder decomposition shows that the higher skill complexity explains a further one tenth of the premium, leaving a residual return to green tasks of around 2%. The green wage premium is higher outside the manufacturing sector, and for low-carbon roles. |
| Keywords: | Climate Change, Environmental Economics and Policy, Sustainability |
| Date: | 2026–05–21 |
| URL: | https://d.repec.org/n?u=RePEc:ags:feemwp:401248 |
| By: | Roni Blushtein-Livnon; Tal Svoray; Itay Fischhendler; Havatzelet Yahel; Emir Galilee |
| Abstract: | In traditional rural societies, where social ties are embedded in physical space, the diffusion of emerging technologies may be amplified through socio-spatial contagion (SSC). Such processes may play a key role in accelerating residential PV adoption in off-grid regions. Yet empirical evidence on SSC in PV adoption remains largely limited to affluent, grid-connected settings, while off-grid regions often lack systematic installation records. To address these gaps, we use a deep learning segmentation model to extract PV installations from a decade-long series of remote sensing imagery across 507 off-grid settlement clusters (hereafter, communities). This enables data-driven spatio-temporal point pattern inference of SSC in data-scarce contexts. SSC is quantified through the range and intensity of clustering of new installations around prior adopters, and the dynamics of these dimensions are linked to adoption outcomes. We found that SSC is nearly ubiquitous, often spanning most of the community's spatial extent, while exhibiting substantial heterogeneity in intensity. Although SSC intensifies over time, its effects remain temporally concentrated, peaking within 1 to 2 years of nearby installations and weakening thereafter. SSC intensity is positively associated with adoption rates in both cross-sectional and temporal analyses. However, the relationship between SSC range and adoption changes over time - in early diffusion phases, adoption growth is associated with range expansion, whereas in later phases it is associated with range contraction. This shift reflects a transition from clustering to consolidation of installations. These findings highlight the potential of seeding interventions to accelerate PV diffusion in off-grid regions. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.09642 |
| By: | Ankel-Peters, Jörg; Bensch, Gunther; Vance, Colin |
| Abstract: | Lipscomb, Mobarak, and Barham (2013) document large positive effects of electrification in Brazil due to broad-based improvements in labor productivity. They instrument electrification by simulating a hypothetical power grid roll-out driven solely by geographic factors. Their estimates are not robust to repeated runs of the simulation, which in most cases lead to weak instruments. Furthermore, removing coding errors turns the main outcomes and most originally identified mechanisms statistically insignificant in most of the repeated runs, even when using a specification proposed in a corrigendum published by the original authors. |
| JEL: | C26 O13 C52 O18 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:i4rdps:294 |
| By: | Restrepo, Laura; Parés Olguín, Francisco; Ramji, Aditya; Bastida-Escamilla, Eduardo; Rivera-Royero, Daniel |
| Abstract: | Este reporte está disponible en español en: https://escholarship.org/uc/item/1570t84x This report presents the findings of a collaborative applied research initiative on the electrification of light commercial vehicle (LCV) fleets in Mexico. Conducted by the Global South Center for Clean Transportation (GSC) at UC Davis, the study began with a set of semi-structured interviews with fleet operators and supply chain managers. These interviews helped identify key operational concerns, barriers, and opportunities, and informed the design of the broader industry survey discussed in this report. |
| Keywords: | Engineering, Social and Behavioral Sciences |
| Date: | 2026–05–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsdav:qt5824s35r |
| By: | Valencia-Clavijo, Felipe (Dataplicada) |
| Abstract: | This paper investigates whether first-time battery electric vehicle (BEV) buyers differ systematically from repeat EV owners in their pro-environmental attitudes within California’s Clean Vehicle Rebate Project (CVRP). Building on behavioral environmental economics and the moral licensing literature, this paper examines whether a salient pro-environmental action, purchasing a BEV, may be associated with weaker stated concern for reducing greenhouse gas (GHG) emissions among new adopters. Across multiple specifications, first-time BEV buyers are significantly less likely than repeat owners to rate reducing GHG emissions as “extremely important” (p < 0.01), a robust attitudinal gap that persists after adjusting for demographics, household characteristics, income, and survey year. Alternative explanations, such as the technology adoption lifecycle dynamics or income-based financial motivations, receive little empirical support, suggesting that motivational heterogeneity or a mechanism consistent with moral licensing better accounts for the observed differences. Evidence for behavioral rebound is limited and fragile. First-time adopters exhibit at most weak, specification-sensitive tendencies toward longer single trips, and show no differences in annual driving. Overall, the results indicate that incentive projects successfully expand EV adoption but also attract consumers with more diverse and often weaker environmental commitments. These findings underscore the importance of integrating behavioral insights into environmental policy design, particularly when high-salience green actions may interact with attitudes and downstream behaviors in complex ways. |
| Date: | 2026–05–12 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:zk4eg_v1 |
| By: | Maksymilian Bielecki; Anna Kowalska-Pyzalska; Ewa Neska |
| Abstract: | Renewable Energy Communities (RECs) are a key instrument of the EU's participatory energy transition, yet their uptake remains negligible in Central and Eastern Europe despite rapid prosumer growth. This study examines how Polish photovoltaic prosumers and prospective adopters (N = 969) evaluate design trade-offs embedded in alternative REC models and how these evaluations shape participation intentions. Using exploratory factor analysis, hierarchical OLS regression, and quantile regression, we identify the attitudinal structure underlying REC acceptance and capture heterogeneity across the willingness distribution. The results show that preferences for risk sharing consistently predict higher participation readiness across all motivation levels (β = 0.24, p |
| Keywords: | Renewable Energy Community; participation intentions; quantile regression; risk sharing; prosumer behaviour; Poland |
| JEL: | Q42 Q48 D91 O33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ahh:wpaper:worms2602 |
| By: | Anna Alberini (AREC, University of Maryland, College Park); Levan Bezhanishvili (Charles University, Environment Center); Milan Scasny (Charles University, Environment Center, and Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Roberton C. Williams III (AREC, University of Maryland, College Park) |
| Abstract: | We examine the response of residential customers to an extreme price change accompanied by a "notch" - 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. The latter exhibit pronounced bunching of consumption just below or at 200 m3 during the pandemic free gas months, a pattern that was not present before and vanishes quickly thereafter. No such pattern is observed among the control group households. 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%. |
| Keywords: | Extreme price changes; price elasticity of demand; difference-in-difference; synthetic difference-in-difference |
| JEL: | Q41 Q48 L95 H23 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:fau:wpaper:wp2026_07 |
| By: | Alessandra Manzini (CY - CY Cergy Paris Université); Irina Martynova; Jing Yu; Xiaoyu Bi; Jordi Jacas Biendicho; Jordi Arbiol; Qing Sun; Chaoqi Zhang; Andreu Cabot |
| Abstract: | The global transition toward efficient, sustainable, and cost-effective energy storage is accelerating, driven by efforts to decarbonize key sectors. Among emerging technologies, sulfur-based conversion cathodes have garnered significant attention as promising candidates for next-generation batteries due to their exceptional theoretical energy density, low cost, and material abundance. Their successful deployment could advance critical applications, including electric mobility, renewable energy integration, and grid stabilization. Despite this potential, sulfur cathodes face persistent limitations that have prevented commercialization. Unlike reviews focusing primarily on materials innovations in idealized settings, this work provides a critical, user-focused assessment that prioritizes challenges of scalable manufacturing and operation under practical conditions. We analyze fundamental failure mechanisms under realistic parameters, including high sulfur loading, lean electrolyte, and limited lithium anode excess, that cause performance to diverge dramatically from target metrics. By synthesizing recent advancements in mechanistic understanding, host design, and interface engineering, we identify key bottlenecks hindering large-scale production. The review concludes with strategic pathways spanning materials design, device architecture, and market integration to bridge the gap between laboratory research and real-world application.The global push toward electrification and substantial greenhouse gas emission reductions is intensifying the need for sustainable technological solutions across the automotive sector and other energy-intensive industries. In this context, energy storage plays a pivotal role, serving as a critical enabler for low-carbon transportation, renewable energy integration, and grid resilience. The rapidly increasing demand for high-performance, scalable, and environmentally sustainable energy storage systems underscores the urgency of selecting appropriate battery technologies. This requires careful consideration of battery chemistries that can satisfy both short-term performance targets and long-term resource, cost, and sustainability constraints.At present, lithium-ion batteries (LIBs) dominate the energy storage market, with cell costs averaging approximately €110/kWh 1-3 . However, the pricing of LIBs remains highly sensitive to fluctuations in the cost of critical raw materials such as nickel, cobalt, and lithium, which have experienced significant volatility, reaching a peak in 2022 followed by a notable decline in 2024 4 . While recent reductions in raw material prices have temporarily eased cost pressures, this downward trend is not expected to be sustainable.Upstream supply chains are facing increasing strain, and projections indicate that future mineral demand will substantially exceed historical levels 5 . Achieving global decarbonization targets will require a sharp rise in the production of key metals such as cobalt, copper, tin, and zinc. However, expanding supply is hindered by long project lead times, declining ore grades, and increasing geopolitical and environmental constraints 5 . Establishing a stable and equitable pricing environment that ensures upstream viability while maintaining downstream affordability is therefore essential to support the continued growth and sustainability of LIB technologies. At the same time, these structural limitations highlight the urgent need to diversify battery chemistries by exploring alternative systems based on more earthabundant, geopolitically secure, and cost-effective materials to enhance the long-term resilience and scalability of energy storage infrastructure.Battery manufacturers and end users must remain agile in adapting to rapidly evolving technologies, supply chain limitations, and shifting market dynamics 1 . Battery cost continues to be a critical determinant of the competitiveness and scalability of energy storage systems. Affordable electric vehicles (EVs) offering long range, rapid charging, and robust safety, along |
| Keywords: | Batteries, Next generation, Technology, Sulfur cathodes, Critical Raw Materials CRM |
| Date: | 2026–04–10 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05618205 |
| By: | Jerry Anunrojwong; Baosen Zhang |
| Abstract: | Residential batteries increasingly serve two roles: they can earn money by arbitraging wholesale prices and providing grid services, and they provide backup power during outages. This dual use creates a basic tradeoff between earning market value and preserving outage readiness. Coordination across many batteries can help, but a provider cannot treat the fleet as a single virtual battery when each household is promised its own backup protection. We compare standalone control, in which each home is dispatched independently, with pooling, in which homes are coordinated while each battery retains its own state of charge and household-specific backup requirement. Both regimes are implemented as model predictive control problems with 15-minute decision intervals and evaluated using household telemetry together with ERCOT market inputs. The empirical design focuses on the 543 homes in our sample that can support at least one backup product in standalone operation and studies backup caps ranging from 2 to 24 hours. Lower caps relax backup obligations, while the 24-hour cap coincides with assigning each home its own longest feasible backup tier. Pooling remains beneficial in this service-constrained setting, but its value declines smoothly as backup obligations tighten. Standalone firm margin ranges from \$11.06 per home per week at the 2-hour cap to \$10.79 at the 24-hour cap, while pooling benefit falls from \$1.49 to \$1.27 per home per week. Relative to standalone firm margin, pooling is worth about 13.5% at the 2-hour cap and about 11.8% at the 24-hour cap. Coordination therefore still helps after preserving household-level backup guarantees, but its value declines as backup obligations tighten. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.17723 |
| By: | Isabel Figuerola-Ferretti; Eduardo S. Schwartz |
| Abstract: | Hydropower is a renewable and flexible energy source that provides essential storage capacity and enhances grid stability. Among storage technologies, pumped hydro energy storage (PHES) remains the most cost-effective solution for long-duration energy storage and plays a key role in power systems with increasing penetration of variable renewable energy. As electricity prices become more relevant under the energy transition, understanding the optimal operation and valuation of PHES assets is increasingly important from a financial perspective. This paper develops a market-based framework that models a PHES facility as a profit-maximizing asset operating in liberalized electricity markets. Using an optimal control approach calibrated with real life technical and operational parameters of the La Muela pumped storage plant and observed electricity prices from the Spanish wholesale market, the model derives an economically intuitive trigger (switching) price governing optimal pumping and generation decisions while accounting for reservoir water inventory dynamics and electricity price uncertainty. The results show that inventory dynamics and electricity price seasonality are central to PHES valuation and optimal operation. |
| JEL: | G19 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35201 |
| By: | Lohawala, Nafisa (Resources for the Future); McCormack, Kristen (Resources for the Future); DeAngeli, Emma (Resources for the Future); Kota, Ambarish; Ziegler, Ethan (Resources for the Future); Krupnick, Alan (Resources for the Future); Spiller, Beia (Resources for the Future); Wear, David N. (Resources for the Future); Wibbenmeyer, Matthew (Resources for the Future) |
| Abstract: | Overlapping economic, energy security, and environmental rationales have contributed to relatively broad political support for biofuel policy in the United States over time. Biofuels can reduce reliance on imported petroleum, create new markets for agricultural and forestry products, and are often discussed as a potential near-term option for decarbonizing difficult-to-electrify sectors such as aviation, marine shipping, and heavy-duty transport. Expanding biofuel production, however, can impact land and water use, biodiversity, and competition with food crops, and there is ongoing debate about how biofuel production, and the policies that support it, affect greenhouse gas emissions. Drawing on a 2025 Resources for the Future webinar series and a follow-up expert discussion with participants from industry, policy, and academia, this report discusses the potential role of biofuels in the energy transition, provides an overview of key areas of debate in life-cycle assessment and indirect land use change modeling, and highlights lessons from experience with existing federal and state biofuel policies. The report concludes by identifying policy-relevant knowledge gaps and research needs. |
| Date: | 2026–05–12 |
| URL: | https://d.repec.org/n?u=RePEc:rff:report:rp-26-09 |
| By: | OECD |
| Abstract: | This paper provides a comparative analysis of industrial policy expenditures across 20 OECD countries over 2019-2023 based on the Quantifying Industrial Strategies (QuIS) database. On average, industrial policy support has increased, with total grants and tax expenditures rising from 1.34% to 1.55% of GDP between 2019 and 2023. This growth was driven mainly by increased public support for fixed capital investment, energy cost relief, and the energy transition. Sectoral support remains central, particularly in energy, manufacturing, and transport. Grant spending (notably through EU-funded programmes) increased more strongly than tax expenditures, while financial instruments remained stable at 0.92% of GDP. Despite perceptions of a proliferation of new industrial policy instruments, most policies predate 2019 and exhibit long lifespans. |
| Date: | 2026–05–20 |
| URL: | https://d.repec.org/n?u=RePEc:oec:stiaac:192-en |
| By: | Eliseo Curcio |
| Abstract: | Selecting the right electricity market region for a hyperscale AI datacenter requires reasoning across live electricity prices, grid carbon intensity, technology cost trajectories, and causal grid dynamics -- a multi-step, multi-source analytical task that static knowledge benchmarks cannot evaluate. We introduce EnergyAgentBench, the first agentic benchmark grounded in live electricity market data for this problem class. The benchmark comprises 70 task variants across five families: datacenter siting under cost-carbon trade-offs (F1), long-horizon portfolio siting (F1-LH), lifetime LCOE ranking over multi-decade cost trajectories (F2), 30-year portfolio optimization (F2-LH), and causal grid diagnosis (F3). Tasks require 3 to 48 sequential tool calls against live endpoints from the QuarluxAI infrastructure platform, the U.S. Energy Information Administration (EIA), and the National Renewable Energy Laboratory (NREL) with ground truth derived from trained XGBoost cost-surface models (R^2 0.967--0.995) and the NREL Annual Technology Baseline 2024. We evaluate nine models across Anthropic, OpenAI, and HuggingFace over 1, 414 runs at three random seeds. Claude Sonnet 4.6 achieves the highest overall score (0.900) at one-quarter the cost of Claude Opus 4.7 (0.889). Claude Haiku 4.5 leads on long-horizon procedural siting (0.986), outperforming all frontier models including those costing 16x more per run. F3 Causal is the most discriminating family, with a 30.7-point spread between Sonnet (0.793) and Llama 3.3 70B (0.486), versus a 6.6-point spread on F1 Siting. A failure taxonomy of 135 coded failures identifies null-value integration in NREL ATB trajectories as the dominant failure mode (70%), followed by premature commitment on causal tasks (20%) and adversarial injection blindness (6%). Benchmark code, run trajectories, and the failure taxonomy dataset are publicly released. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.15230 |
| By: | Dunkle Werner, Karl; Jarvis, Stephen |
| Abstract: | Utility companies recover their capital costs through regulator-approved rates of return. Using a comprehensive database of utility rate cases, we find a significant premium for regulated returns on equity relative to several capital cost benchmarks. We show that firms decide strategically when to initiate new rate cases, such that regulated returns respond more quickly to increases in underlying capital cost benchmarks than to decreases. Higher regulated returns incentivize utilities to own more capital: a one percentage point rise in return on equity corresponds to an increase in capital assets of 2%–4%. Overall we find excess costs to U.S. consumers averaging $7 billion per year. |
| Keywords: | utility; rate of return; regulation; electricity; natural gas; capital investment |
| JEL: | Q40 L51 L94 L95 |
| Date: | 2026–07–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:138375 |
| By: | Campiglio, Emanuele; Dietz, Simon; Venmans, Frank |
| Abstract: | The transition to a low-carbon economy is constrained by frictions in scaling up clean energy and phasing out existing fossil-fuel assets. This paper studies what optimal climate policy looks like in these circumstances, with the authors exploring the tension between the urgent need for rapid greenhouse gas emissions reductions, on the one hand, and concerns about the feasibility and cost of achieving them, on the other. The authors model a scenario in which reducing emissions requires capital to be reallocated from dirty to clean energy production under real-world constraints. A central feature is the introduction of heterogeneous dirty capital – i.e. capital whose emissions intensity varies depending on the fuel and technology used – which the authors calibrate using detailed firm-level data. This allows the authors to identify a highly emissions-intensive subset of assets: the ‘dirty tail’. The model shows that large emissions reductions can be achieved by targeting the early retirement of the dirty tail, rather than reducing all fossil capital proportionately. The authors’ modelling includes limits to how quickly clean capital can be scaled up and dirty capital can be retired. This implies that the transition cannot occur instantaneously, creating capital inertia that constrains the speed of emissions reductions. The authors calibrate these adjustment costs on recent episodes of rapid energy system expansions and coal phase-outs. The main result is that, despite these constraints, the optimal transition to a low-carbon economy is rapid and front-loaded. Emissions fall steeply in the near term, driven by immediate disinvestment from the assets in the dirty tail, followed by a more gradual phase in which remaining dirty capital is allowed to depreciate, while clean capital continues to expand. Overall, the paper shows that taking transition constraints seriously changes how emissions reductions are achieved, emphasising the composition and timing of capital reallocation. However, these constraints do not overturn the case for rapid decarbonisation. Instead, they point to the importance of targeted, early action on the most polluting assets, as well as action to ease bottlenecks in expanding clean capital. Key points for decision-makers: Rapid reductions in global emissions are optimal climate policy, even when accounting for constraints on the speed of the transition. Global emissions should be halved in the next ten years. Early retirement of the most polluting assets (the ‘dirty tail’) allows large emissions cuts at low cost, even after accounting for the legal, institutional and political costs of doing so. Effective climate mitigation can, in principle, be achieved by targeting the concentration of emissions in the dirty tail. A globally harmonised carbon tax would be the most efficient way of achieving this, but difficult in practice. Alternative effective policies at the international level include targeted finance and technology transfer to support early retirement of high-emissions assets in developing countries. Examples of this approach include the Just Energy Transition Partnerships under the Paris Agreement and coal transition vehicles. Alternative effective policies targeting the early retirement of the dirty tail at the national level include government-mandated phase-out schedules, reverse auctions, performance standards and feebate schemes. Easing bottlenecks on the clean side of the low-carbon transition will increase the pace of emissions reductions. Constraints on the rate of clean-capital expansion, arising from manufacturing capacity, supply chains, permitting and infrastructure, materially affect the pace of emissions reductions, especially after the dirty tail is eliminated. This highlights the importance of developing policies that relax these constraints, including support for manufacturing capacity, permitting reform, grid infrastructure and supply chains for critical materials. This is an update to the authors’ original working paper of the same name, which was first published in December 2022. |
| Keywords: | adjustment costs; carbon price; climate change; low-carbon transition; stranded assets; technological progress; uncertainty |
| JEL: | C61 E22 H23 Q54 Q55 |
| Date: | 2026–05–07 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:138475 |
| By: | Fabian Herweg (University of Bayreuth); Botond Köszegi (University of Bonn); Klaus M. Schmidt (LMU Munich) |
| Abstract: | Policymakers seek to reduce environmentally harmful production by leveraging consumers' demand for low-externality products. Should the exchange of such products be organized under the standard principle of ``one market for one good", creating a separate market for green goods and integrating regional green markets? We show that this reduces harmful production if and only if green demand is sufficiently strong relative to green supply. Otherwise, a ``demand displacement effect" arises: stronger demand for green goods induces substitution toward brown goods, thereby increasing externalities. This effect interacts with other policy instruments. |
| Keywords: | green markets; socially responsible consumers; externalities; market segmentation; demand displacement; environmental policy; |
| JEL: | D62 D64 Q58 |
| Date: | 2026–05–11 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:572 |
| By: | Léa Marquet (Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement); Philippe-E. Roche (NEEL - HELFA - Hélium : du fondamental aux applications - NEEL - Institut Néel - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes); Gaëlle Lefort (Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement); Tamara Ben-Ari (Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement) |
| Abstract: | Global passenger air traffic has rapidly rebounded after the lifting of COVID-19 travel restrictions, often exceeding pre-pandemic levels. However, evidence on whether business travel has undergone lasting, sector-specific reconfigurations remains scarce. Here we provide a large-scale post-pandemic sectoral analysis, focusing on academia, a highly airmobile sector but equipped with digital alternatives to physical travel. Using a comprehensive French national dataset covering more than 110 000 academic staff and nearly one million business trips between 2019 and 2024, we show that academic air travel has not rebounded but instead stabilized at around 50% of its pre-pandemic level. This decline holds across distances, research disciplines, and travel motives, and translates into a twofold reduction in travel-related greenhouse gas emissions, well beyond institutional climate targets. A decomposition indicates that this reduction is primarily driven by a contraction in flight frequency. Although rail travel declined relative to 2019, we document a marked air-to-rail modal shift at a continental scale and a relative increase in long-distance rail travel. Together, these patterns point to a durable reconfiguration of professional mobility norms rather than a demand contraction. The pronounced drop observed in this sector contrasts sharply with national and Western European air mobility trends, challenging narratives of an inevitable post-covid rebound. This reconfiguration of mobility patterns in academia also challenges influential notions such as the ‘knowledge-action gap' and the ‘fly or die' hypothesis, and provides new insights into the relationship between environmental awareness, professional constraints, and behavior. More broadly, the emergence of these new mobility norms, which occurred in the absence of binding regulations, highlights the role of social and organizational dynamics in driving low-carbon transitions and shaping mobility-related mitigation strategies. |
| Keywords: | behavior change, modal shift, air mobility, academic carbon footprint |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05618002 |
| By: | Assiya Utzhanova (Eurasian National University); Tom Vinaimont (Nazarbayev University, Graduate School of Business) |
| Abstract: | Financialization of commodity markets is the growing trend whereby participants treat commodities as financial assets. This paper examines whether managed money flows affect the convenience yield in crude oil markets. We employ a dataset that disaggregates the open interest between commercial participants and managed money. We find that changes in the net position of managed money have a significant negative effect on the net convenience yield, indicating that flows into long positions exert upward pressure on futures prices relative to spot prices. We show that this effect is significantly different from that of commercial participants, whose changes in positions do not seem to impact net convenience yields. We control for changes in inventories and volatility levels. Higher inventories, unsurprisingly, lead to a lower net convenience yield, consistent with the theory of storage. Volatility has heterogeneous effects: higher oil-specific volatility (OVIX) decreases net convenience yields, while higher financial volatility (MOVE) increases them. The latter effect, however, seems to be driven by a short but turbulent period with negative oil prices. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:asx:nugsbw:2026-05 |
| By: | Rim Berahab |
| Abstract: | Climate policy is increasingly reshaping the conditions under which firms participate in international markets. As some jurisdictions introduce carbon border adjustments, lifecycle emissions standards, and supply-chain traceability requirements, market access is starting to be made conditional on verifiable characteristics of production processes, such as carbon intensity, embedded emissions, and input sourcing, rather than solely on product characteristics or prices. This paper examines how these emerging climate-linked measures operate as eligibility regimes that require firms to measure, document, and verify embedded emissions and supply-chain attributes, using standardized methodologies. To clarify the economic logic of these mechanisms, the paper first makes a functional comparison with rules of origin, highlighting common features related to eligibility criteria, documentation, and supply-chain tracing. It then analyzes the European Union Batteries Regulation, which links market participation to lifecycle carbon-footprint disclosure and traceability, and the United States Inflation Reduction Act, which aimed to reshape supply chains through localization incentives and manufacturing subsidies. The paper finally examines the strategic responses available to economies outside the main standard-setting blocs, including regulatory alignment, dual compliance across regulatory regimes, and market reorientation toward less-demanding jurisdictions. |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpcoen:pp_11-26 |
| By: | Guerriero, Arthur Zito; Kapeller, Jakob; Ankel-Peters, Jörg |
| Abstract: | The social cost of carbon (SCC) isthe central concept of benefit-cost analysis in climate economics. The SCC provides guidance on the urgency of climate policy as it expresses the present value of expected future damages associated with the emission of one additional ton of CO2. This paper summarizes key normative assumptions underlying the calculation of the SCC and illustrates how these crucially affect the magnitude of final estimates. Building on a social welfare framework, we discuss the treatment of risk, time (discounting), and inequality (equity weights). Moreover, we present the normative choices related to how SCC estimates monetize non-market damage, in particular the loss of human lives. Based on a database of 515 studies with original SCC estimates (Tol, 2026), we document how the literature deals with these normative issues. In doing so, we find significant variation in the treatment of normative aspects across studies, but also across different normative dimensions. For instance, while the literature justifies the use of a time discount rate based on the assumption of diminishing marginal utility, equity aspects between countries or regions are often ignored. We conclude by stressing that while the SCC can help structuring societal deliberation about climate policy, greater clarity and transparency on the underlying normative assumptions is necessary. |
| Abstract: | Die sozialen Kosten von Kohlenstoff (SCC) sind das zentrale Konzept der Kosten-Nutzen-Analyse in der Klimawirtschaft. Die SCC geben Aufschluss über die Dringlichkeit klimapolitischer Maßnahmen, da sie den Barwert der erwarteten zukünftigen Schäden ausdrücken, die mit der Emission einer zusätzlichen Tonne CO2 verbunden sind. Dieser Beitrag fasst die wichtigsten normativen Annahmen zusammen, die der Berechnung der SCC zugrunde liegen, und veranschaulicht, wie diese die Höhe der endgültigen Schätzungen entscheidend beeinflussen. Aufbauend auf einem Rahmenkonzept der sozialen Wohlfahrt diskutieren wir die Behandlung von Risiko, Zeit (Diskontierung) und Ungleichheit (Gerechtigkeitsgewichte). Darüber hinaus stellen wir die normativen Entscheidungen vor, die damit zusammenhängen, wie SCC-Schätzungen nichtmarktbezogene Schäden, insbesondere den Verlust von Menschenleben, monetarisieren. Basierend auf einer Datenbank mit 515 Studien mit originären SCC-Schätzungen (Tol, 2026) dokumentieren wir, wie die Literatur mit diesen normativen Fragen umgeht. Dabei stellen wir erhebliche Unterschiede in der Behandlung normativer Aspekte nicht nur zwischen den Studien, sondern auch zwischen verschiedenen normativen Dimensionen fest. Während die Literatur beispielsweise die Verwendung eines zeitlichen Diskontsatzes auf der Grundlage der Annahme abnehmender Grenznutzen rechtfertigt, werden Gerechtigkeitsaspekte zwischen Ländern oder Regionen oft ignoriert. Abschließend betonen wir, dass die GSK zwar dazu beitragen kann, die gesellschaftliche Debatte über Klimapolitik zu strukturieren, jedoch mehr Klarheit und Transparenz hinsichtlich der zugrunde liegenden normativen Annahmen erforderlich ist. |
| Keywords: | climate change, social welfare, normativity, discounting, distribution, risk, value-neutrality |
| JEL: | D61 D63 Q54 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:341095 |
| By: | Petre Caraiani (Institute for Economic Forecasting, Romanian Academy, Romania, Bucharest University of Economic Studies, Romania); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa) |
| Abstract: | Using a unique firm-level survey from the Bureau of Economic Research in South Africa covering a panel of 1, 444 South African firms surveyed at quarterly frequency between 2000 and 2023, we examine how global oil news shocks shape firms' inflation and wage expectations. We identify exogenous oil supply news shocks following Kanzig (2021) and embed them in a fixed-effects panel regression that controls for domestic macroeconomic and financial conditions through four estimated factors. A one-quarter-lagged oil news shock has a positive and statistically significant effect on firm-level inflation expectations (0.14 percentage points at the one-year horizon, 0.09 at two years) and wage expectations (0.13 percentage points). The responses are robust to alternative shock identifications and sub-sample estimations. Sectoral analysis reveals heterogeneity, more substantial for wage, that we interpret in light of two channels documented in the literature -- cost pass-through and salience. The findings have direct implications for inflation-targeting policy in emerging economies, particularly in light of South Africa's ongoing debate over a lower target. |
| Keywords: | oil shocks, firm-level expectations, inflation, wages |
| JEL: | C67 E31 E32 Q43 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:pre:wpaper:202615 |
| By: | Davit Gondauri; Mikheil Batiashvili |
| Abstract: | This article develops the concept of the agentic economy and diagnoses its measurable preconditions: a transition in which economic action is increasingly distributed among humans, AI agents, industrial robots, executable protocols, compute infrastructures, and energy systems. The paper argues that classical categories such as labour, capital, firm, market, productivity, and trust remain necessary but incomplete when technologies prepare decisions, coordinate workflows, support tasks, verify transactions, and reshape responsibility. Methodologically, the study uses a conceptual-empirical quantitative diagnostic design rather than a causal econometric model. It relies on public institutional data on AI investment, AI adoption, robot installations and operational stock, data-centre electricity demand, and labour-market reallocation. The reported values are transformed through transparent indicators such as relative growth, CAGR, growth multipliers, stock-flow ratios, concentration ratios, and HHI. The results show that AI adoption is accelerating, AI investment signals broad capital allocation, industrial robots represent persistent cyber-physical action capacity, compute expansion increases data-centre electricity pressure, and labour projections are more consistent with task reallocation than labour disappearance. The article contributes an action-capacity framework linking model/software-agent capacity, robotic capacity, compute-energy coupling, protocolisation, auditable trust, and human sovereignty. It concludes that the agentic economy is not yet a completed global order, but its transition pressure is measurable enough to require a distinct economic vocabulary, reproducible diagnostics, and future sector-level measurement. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.18935 |
| By: | Nehrkorn, Katarina (Resources for the Future); Elkerbout, Milan (Resources for the Future) |
| Abstract: | With the growing number of carbon pricing policies and border measures around the world, a central challenge is determining how to account for carbon prices that are already paid in the country of origin. Border measures are typically designed to prevent carbon leakage by equalizing carbon costs across jurisdictions, but doing so requires translating diverse carbon pricing designs into comparable measures of carbon cost. Without such recognition, producers may effectively be charged twice for the same ton of carbon emitted.As the first operational carbon border adjustment mechanism (CBAM), the EU CBAM provides a concrete framework for addressing this issue. The regulation does so by specifying that “an authorized declarant may claim … a reduction in the number of CBAM certificates to be surrendered … only if the carbon price has been effectively paid in the country of origin, ” and that “any rebate or other form of compensation” must be taken into account (Regulation (EU) 2023/956 establishing a Carbon Border Adjustment Mechanism, Article 9). This requirement highlights a central challenge: determining what constitutes a carbon price that has been “effectively paid, ” particularly across jurisdictions with different policy designs.This “double counting” concern is particularly salient in a world where carbon pricing also occurs at the subnational level. In countries such as the United States, Canada, and China, carbon pricing systems often operate at the state or provincial level. As interest in carbon pricing continues to grow, partly due to the crediting mechanism of the EU CBAM (Clausing et al. 2024), the question of whether and how to recognize these subnational policies becomes increasingly important for the incentives it creates. In a country like the United States, where a national carbon price is currently politically unlikely, maintaining incentives for states to enact carbon pricing may be attractive to support emissions reductions.Determining how to account for carbon prices already paid is not a purely technical exercise. Different approaches lead to different economic and geopolitical outcomes via spillover incentives, environmental effectiveness, administrative complexity, and international equity. More flexible approaches to recognizing carbon pricing may better encourage policy spillovers; however, this may weaken the ability of the implementing jurisdiction to protect their industry and equalize carbon costs.This issue brief investigates how carbon prices paid in a country of origin could be accounted for under border measures, with a particular focus on subnational carbon pricing systems. We begin by discussing the relevance of subnational policies in international trade and the extent to which they already shape market access and regulatory conditions. We then outline the key challenges associated with defining “effective payment, ” particularly in the context of subnational carbon pricing systems. Building on a framework proposed by Wildgrube et al. (2024), we evaluate different approaches to crediting carbon prices—including actual payment, average price, and hybrid methods—and assess how these approaches shape incentives for producers, subnational jurisdictions, and importing authorities. Throughout, we highlight the trade-offs between administrative feasibility, accuracy in measuring effective carbon costs, and the broader implications for policy design. We illustrate these issues using trade between the European Union and California as a motivating case study. |
| Date: | 2026–05–11 |
| URL: | https://d.repec.org/n?u=RePEc:rff:ibrief:ib-26-04 |
| By: | Paul Champey; Léopold Gosset |
| Abstract: | In May 2025, the NGFS published its first short-term climate scenarios. If Europe were to experience a combination of particularly severe weather events, France could lose 7.4% of its GDP. The French economy would benefit from a gradual and efficient low-carbon transition, but would be negatively affected if the transition was delayed and disorderly. <p> En mai 2025, le NGFS a publié ses premiers scénarios climatiques de court terme. La France pourrait subir une perte de 7, 4% du PIB si l'Europe connaissait une combinaison d’évènements météorologiques particulièrement sévères. L’économie française bénéficierait par ailleurs d’une transition bas-carbone graduelle et efficiente, mais serait négativement affectée par une transition retardée et désordonnée. |
| Date: | 2026–04–22 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:econot:447 |
| By: | Sandra Bohmann; Lars Felder; Peter Haan; Merve Kucuk; ; Laura Schmitz; Jürgen Schupp |
| Abstract: | Carbon pricing can deliver large emissions reductions, but public opposition remains a key barrier. We study how support for carbon tax-and-transfer schemes depends on policy design and information provision in a large-scale survey experiment with German respondents. Explaining the policy mechanism robustly increases support across price levels. Information on distributional consequences raises support only when revenue recycling is sufficiently generous, and can secure majority approval even at high carbon prices. Individualized cost information increases support among those who overestimated costs, with no backlash for under-estimators when redistribution is high. These effects operate through distinct fairness channels: information shapes both self- and other-regarding justice perceptions, and while self-interest predicts support, other-regarding concerns — particularly for the poor — are an independent driver of policy acceptance. Our findings suggest that political feasibility hinges not only on policy design, but on making the mechanism understood and its distributional implications visible. |
| Keywords: | Climate policy, distributional effects, public support, justice perceptions |
| JEL: | Q52 Q58 H23 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2164 |
| By: | Virginia Gianinazzi; Victoire Girard; Mehdi Lehlali; Melissa Porras Prado |
| Abstract: | This paper examines how Socially Responsible Investment (SRI) capital affects the environmental footprint of multinational enterprises. We exploit the inverse relationship between local pollution and high-frequency-and-precision satellite-based measurements of vegetation health, captured through the normalized difference vegetation index (NDVI). Combining NDVI with SRI ownership data for 52, 806 facilities belonging to 911 multinationals in 124 countries between 2006 and 2020 allows us to leverage both cross-sectional and within-facility variation in SRI exposure over time. We find that, on average, greater SRI ownership is associated with improved vegetation health in surrounding areas, consistent with reductions in firm-induced environmental damage. Using mergers as a plausibly exogenous source of variation in SRI ownership corroborates these findings. However, exploiting the global structure of multinational production networks, we find a striking asymmetry: improvements near facilities located in OECD countries coincide with deterioration near the same firms’ facilities in non-OECD countries, consistent with pollution offshoring. Finally, we show that this asymmetry intensifies with more active investor oversight, suggesting that investor engagement alone is insufficient to mitigate environmental harm in the absence of strong domestic regulation or global coordinated monitoring. |
| Keywords: | Socially Responsible Investment (SRI), Multinational Enterprises (MNEs), Normalized Difference Vegetation Index (NDVI), Plant-Level Pollution, Institutional Investors |
| JEL: | F23 G23 O33 Q56 Q58 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:unl:novafr:wp2505 |
| By: | Miller, Marshall; Fulton, Lewis |
| Abstract: | California has set some of the most ambitious clean-truck goals in the world. Governor Newsom’s 2020 Executive Order includes a goal that all medium- and heavy-duty trucks be zero-emission by 2045 where feasible. To meet this goal, the California Air Resources Board (CARB) approved two regulations focusing on trucks—the Advanced Clean Trucks rule, requiring manufacturers to sell zero-emission trucks (ZETs), and the Advanced Clean Fleets rule, requiring fleets to purchase them. Both rules are not currently active, but the targets and aggressive schedules for ZET adoption re-main. This situation creates uncertainty for manufacturers, fleets, and infrastructure providers. |
| Keywords: | Engineering |
| Date: | 2026–05–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsdav:qt8bw8b4fx |
| By: | Sebastian Galiani; Franco Mettola La Giglia; Raul A. Sosa |
| Abstract: | Public summaries of IPCC climate assessments lean toward the more severe end of the technical evidence. The pattern appears at two stages: the IPCC’s lead authors and member governments produce the Summary for Policymakers (SPM) from the Technical Summary (TS), and newspapers then cover the SPM. We use LLMs to score about 114, 000 matched claim pairs from all six Assessment Reports (1990 to 2023) and ten major US and UK outlets. Both stages systematically shift toward the more severe end of the source while staying inside the IPCC’s accepted scientific ranges. The shift comes mainly from emphasizing higher-impact magnitudes within reported ranges, less from uncertainty compression, and almost none from selecting worst-case emissions scenarios. Left- and right-leaning outlets show similar patterns. |
| JEL: | D83 Q54 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35216 |
| By: | Tal, Gil; Nordhoff, Sina; Hardman, Scott; Steren, Aviv; Konstantinou, Theodora; Garcia Sanchez, Juan C; Garas, Dahlia; Favetti, Matthew |
| Abstract: | This study examines the used plug-in electric vehicle market in California through an integrated analysis of Department of Motor Vehicles household registrations from 2023, S&P Global interstate transfer data from 2016 to 2023, and a statewide survey of vehicle owners with approximately 3, 396 respondents. This includes understanding socio-economic, demographic, geographic, and behavior of not only buyers of used PEVs but also buyers of new and used internal combustion engine (ICE) vehicles. The analysis provides empirical evidence on consumer behavior, market dynamics, and barriers to adoption that can inform policy decisions aimed at expanding plug in electric vehicle access across California’s population. |
| Keywords: | Social and Behavioral Sciences |
| Date: | 2026–05–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsdav:qt2x10s12n |
| By: | Grynberg, Charlotte; Vinci, Francesca; De Sanctis, Alessandro |
| Abstract: | The European energy market remains heavily reliant on imported fossil fuels and fragmented across Member States. This leaves the EU exposed to high and volatile energy prices, posing risks to its growth outlook and its international competitiveness. As the EU advances its energy security and climate neutrality objectives, the role of electricity and renewable energy is set to increase at the expense of fossil fuels. This paper argues that achieving a genuine European Energy Union would help to reach these goals and identifies five key policy priorities to support this process: strengthening cross-border infrastructure; mobilising innovative green finance; investing in tools to support flexibility and matching of supply and demand; improving the efficiency and harmonisation of energy taxation; and establishing a coherent industrial policy for clean tech. JEL Classification: Q40, Q41, Q48, O25, F15 |
| Keywords: | clean-tech industrial policy, EU energy market integration, European integration, industrial competitiveness, renewable energy |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbops:2026388 |
| By: | Ikonnikova, Svetlana; Steinbuks, Jevgenijs |
| Abstract: | This study introduces a novel quantitative method to assess the willingness to pay for emerging technologies, such as hydrogen, as substitutes for fossil fuels in industrial production. A three-step framework is developed to derive the willingness-to-pay function based on industrial competition and market entry theory, relying exclusively on pre-entry market information. First, a system of equations is specified linking domestic consumption, production, and prices to fossil input prices, which proxy marginal production costs. Second, the market equilibrium parameters required for numerical willingness-to-pay estimation are empirically estimated using industry-level data. Third, an industrial competition model incorporating entry by producers adopting new technology is constructed, allowing willingness to pay to be expressed as a function of conventional input costs, operational efficiency, and demand conditions. The framework is applied to hydrogen use in ammonia production, using consumption and trade data from 2000–24 for 16 major fertilizer-producing countries across four regions. The results highlight substantial cross-country heterogeneity, a binding hydrogen price threshold for large-scale adoption, and the limited effectiveness of carbon policies in accelerating hydrogen uptake. |
| Date: | 2026–03–19 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11338 |
| By: | Aryee-Boi, Nii Lantey Malik; Hauck, Isabella; Noisten, Anna Lotta; Weinhold, Maurice |
| Abstract: | The European Union (EU) Emissions Trading System (ETS) is an example of market-based environmental governance. While it has delivered measurable emission reductions in covered sectors, especially after major post-2013 reforms, its fairness, legitimacy, and transformative capacity remain contested. Therefore, this paper asks to what extent the EU ETS has contributed to emission reductions in the EU and what limitations emerge when it is assessed from a social-ecological economics (SEE) perspective. Using a qualitative, literature-based approach, it combines empirical studies on environmental and economic impacts of the ETS with a comparative theoretical framework that contrasts neoclassical environmental economics with SEE. The analysis shows that, on neoclassical terms, the ETS qualifies as a relatively efficient and adaptive carbon market, achieving targeted abatements at limited aggregate costs. However, when evaluated against broader criteria of ecological adequacy, distributional justice, governance and power, transformation potential and precaution, the system's marketcentred architecture commodifies atmospheric capacity, leaves the scale of socioeconomic metabolism and growth dependence largely untouched, and only partially addresses inequalities through ex post correction. In doing so, the paper bridges mainstream carbon pricing debates with SEE, arguing that emissions trading can support mitigation but must be subordinated to more far-reaching strategies of regulation, sufficiency, and socio-ecological provisioning if the EU is to align climate policy with planetary boundaries and social justice. |
| Keywords: | Emissions Trading, neoclassic, socio-ecological economics, European Union |
| JEL: | F55 Q52 Q56 Q57 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ipewps:341097 |
| By: | Castellini, Marta; Ushakova, Nadezhda; Vergalli, Sergio |
| Abstract: | Although the circular economy (CE) is recognised as a key climate mitigation strategy, its integration within global climate frameworks, such as those developed by the Intergovernmental Panel on Climate Change (IPCC) in its Assessment Reports, remains unclear. This study provides a systematic analysis of how the circular economy is framed in the climate-mitigation context of the IPCC Sixth Assessment Report using a mixed-methods approach that combines computational text analysis with qualitative content analysis through sentence-level manual coding. Eight Chapters relevant to the mitigation were examined and findings show that CE is most frequently framed as a supporting strategy (44.3%), followed by implicit (29.3%) and primary roles (26.4%), while being unevenly distributed across sectors, with the strongest representation in industry. |
| Keywords: | Climate Change, Resource/Energy Economics and Policy, Sustainability |
| Date: | 2026–05–14 |
| URL: | https://d.repec.org/n?u=RePEc:ags:feemwp:401219 |
| By: | Brochard, Algirdas; Ashraf, Shafaq; Davies, Ella; Hajagos Toth, Akos; Jahn, Valentin; Modirzadeh, Seyed Alireza |
| Abstract: | Understanding exactly what constitutes a climate solution is challenging with definitions diverging across frameworks and jurisdictions. This has important implications for investors seeking to allocate climate capital to finance the low-carbon transition, write Algirdas Brochard, Shafaq Ashraf, Ella Davies, Ákos Hajagos-Tóth, Valentin Jahn and Seyed Alireza Modirzadeh. |
| JEL: | F3 G3 |
| Date: | 2026–05–14 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:138468 |
| By: | Otaviano Canuto; Jorge Arbache |
| Abstract: | Decarbonization is reconfiguring global relative prices. As clean energy, natural capital, and location-specific assets become dominant industrial inputs, the relative cost of producing low-carbon goods is increasingly determined by geography. Two systematic distortions explain why the expected reallocation of investment toward renewable-rich economies remains incomplete. First, industrial policy interventions, including subsidies, trade barriers, and certification systems, disconnect effective prices from underlying structural costs. Second, institutional failures create demand uncertainty that leaves structurally competitive projects unbankable. Together, these distortions generate static misallocation, leading to slower technological learning, higher fiscal burdens, delayed emissions reductions, and suppressed industrial opportunities in developing economies. This paper is part of broader research on powershoring and green comparative advantage, which focuses on the idea that decarbonization is a spatial and price reorganization of global production, in addition to a technological transition. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:rpcoen:pp_13-26 |
| By: | Koichiro Ito; James M. Sallee; Jonathan (Andrew) Smith |
| Abstract: | How should policymakers evaluate policy impacts when firms design products for global markets? Standard economic analyses typically focus on domestic outcomes, implicitly assuming that policies affect only the jurisdiction in which they are enacted. Yet multinational firms often harmonize product design across markets, creating the potential for policies implemented in one country to generate global spillovers through changes in product attributes. We call this phenomenon "attribute propagation" and develop a framework to measure and assess its quantitative importance. Applying this framework to an environmental policy affecting automobiles, we find that a fuel-economy subsidy in Japan led to significant improvements in the fuel economy of vehicles sold in the United States. We then develop a model of multinational automobile markets featuring cross-market cost complementarity as a key mechanism driving attribute propagation. Using the estimated model, we conduct counterfactual simulations to quantify environmental benefits accounting for the policy’s global spillover effects. We find that global spillover effects are first-order—a majority of the CO2 emissions reductions induced by the Japanese policy arise through its impact on the U.S. automobile market. These findings suggest that standard economic analyses that abstract from attribute propagation can substantially understate the full policy impact. More broadly, attribute propagation provides a new lens for evaluating environmental, safety, antitrust, and technology policies in a global economy. |
| JEL: | L0 Q4 Q5 R4 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35197 |
| By: | Candeias, Marta; Boavida, Nuno; Moniz, António Brandão |
| Abstract: | This publication was developed as a result of national case studies and independent desk research within the European project Metallica and serves as a comprehensive guide and analysis for stakeholders in the metal sector. This document aims to outline challenges posed by the twin transition – the digitalization process of work and sustainability of production process - while emphasizing the role of workers' participation in preventing and resolving disputes. A conclusion may be considered as the need for clear national strategies to guide the transformation of the metal sector. There is strong agreement that employer strategies must prioritize employee inclusion, with structured opportunities for participation in planning and implementation. The role of trade unions is evolving. Unions are seen not only as defenders of workers' rights but increasingly as strategic actors in shaping the transition. All countries identify skill development — both technical and soft — as foundational for a just transition. Finally, all cases acknowledged the inevitability of workplace reorganization and call for pre-emptive and structured consultation mechanisms, especially regarding AI, data governance, and occupational safety. |
| Keywords: | Twin Transition, Metal Sector, Workers’ Participation, Conflict Prevention, Social Dialogue |
| JEL: | J52 J53 M12 M14 O14 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esrepo:340899 |
| By: | Chanda, Arka |
| Abstract: | This report analyses emerging best practice on just transition in listed equity markets, drawing on the practices and policies of a subset of investment managers (IMs) focused on sustainable and socially responsible investing. It examines how just transition considerations are being embedded within investment policies and practices, and identifies the current frontiers of just transition practice in this asset class. Listed equity markets represent one of the most significant pools of capital with direct exposure to sectors central to a low-carbon transition, and therefore also to just transition risks and opportunities. While climate considerations and now relatively well established within listed equity markets and strategies, the integration of just transition considerations remains comparatively nascent. Understanding what is happening at the forefront of current just transition practice in listed equities is therefore both timely and necessary. The report draws on a review of policy and reporting documentation, alongside a series of semi‑structured interviews with 26 IMs leading on sustainability practice in listed equities. The sample is not representative of the entire market, but rather, a selection designed to explore the evolving frontiers of just transition practice in listed equities, as well as the key opportunities and barriers to further progress. |
| Keywords: | capital markets; institutional investors; agriculture and nature; energy; industry; global; policy |
| JEL: | F3 G3 R14 J01 N0 |
| Date: | 2026–05–19 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:138506 |
| By: | Ricardo Carciofi (Universidad de Buenos Aires. Facultad de Ciencias Económicas. Instituto Interdisciplinario de Economía Política (IIEP UBA–CONICET). Buenos Aires, Argentina.); Alejandro Einstoss (Universidad de Buenos Aires. Facultad de Ciencias Económicas. Instituto Interdisciplinario de Economía Política (IIEP UBA–CONICET). Buenos Aires, Argentina.) |
| Abstract: | El conflicto entre Estados Unidos, Israel e Irán ha desatado un nuevo shock en los precios internacionales del petróleo y encuentra a la Argentina en una posición inédita: la de un exportador neto de hidrocarburos. El foco de este trabajo está en los mecanismos de formación de precios domésticos y en la capacidad del país para amortiguar perturbaciones externas de alta intensidad. Con ese objetivo, se revisa la literatura sobre volatilidad de commodities, enfermedad holandesa y maldición de los recursos naturales, y se analizan las experiencias internacionales relevantes —Noruega, Chile, Brasil y España— como referencias de política. A partir de ese marco, el trabajo evalúa los instrumentos vigentes en Argentina —retenciones a las exportaciones y rol amortiguador de YPF— y concluye que ambos resultan insuficientes ante shocks de magnitud e incertidumbre como el actual. La transformación productiva impulsada por Vaca Muerta no ha sido acompañada por el diseño institucional necesario para estabilizar precios y capturar renta de manera ordenada. En ese contexto, las provincias productoras —beneficiarias directas del alza de regalías— emergen como el eslabón más viable para construir un mecanismo de estabilización compatible con las restricciones del federalismo argentino. Las conclusiones del trabajo destacan la necesidad de abrir un debate sobre la arquitectura regulatoria que es necesario construir. |
| Keywords: | Petróleo; Volatilidad de precios; Vaca Muerta; Fondos de estabilización; Federalismo fiscal; Política energética; Argentina; Renta de recursos naturales |
| JEL: | G51 H53 I38 O17 |
| Date: | 2026–04 |
| URL: | https://d.repec.org/n?u=RePEc:ake:iiepdt:2026-120 |
| By: | Gil Aluja, Jaime (Université de Barcelone) |
| Abstract: | This paper presents the Theory of Forgotten Effects, which has shown significant promise in developing algorithms applied to practical projects, particularly through the Barcelona Humanist Economy (APPBHE) platform. The theory is rooted in Kaufmann and Gil Aluja’s work, demonstrating its formal novelty and practical usefulness by addressing second-generation effects that frequently go unnoticed in direct interactions. Additionally, the paper discusses an optimization algorithm targeting the decarbonization of Europe. This algorithm facilitates optimal decision-making concerning energy consumption to mitigate CO2 emissions through the production of various goods and services. By incorporating both direct and secondary effects, the algorithm aims to account for previously overlooked impacts. Thus, the framework outlined in this paper supports the formulation of humanistic algorithms capable of addressing diverse social challenges effectively and comprehensively |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:ror:wpince:260512 |
| By: | Mubenga-Tshitaka, Jean- Luc |
| Abstract: | The paper investigates the impact of unemployment on the environmental quality known as the environmental Phillips Curve (EPC) hypothesis by accounting for the heterogeneity among African countries. To the best of our knowledge, no prior study has examined the environmental-unemployment nexus in the African context. The annual data of unemployment, gross domestic product, population growth, usage of renewable, non-renewable energy, urbanization and ecological footprints from 1990 to 2021 are sourced from the World Bank and Global Footprint network. A set of methods is employed for empirical analysis. The results confirm there is a trade-off between the unemployment rate and the environmental quality in Africa. However, when the heterogeneous effect is considered. The findings reveal that unemployment in Africa has detrimental effect on the environmental quality. The effect becomes more significant in higher percentile. Policy implications are discussed. |
| Keywords: | Ecological footprint, Unemployment, environmental Phillips curve, heterogeneous, Kenel-Based Regularized Least Squares, Africa |
| JEL: | E24 Q01 Q56 Q59 |
| Date: | 2026–05–09 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:129052 |
| By: | Abrell, Jan; Zaklan, Aleksandar |
| Abstract: | We analyze the extent to which marginal producers in four European day-ahead electricity markets pass through short-run marginal cost, and its components fuel and carbon cost, to wholesale electricity prices. Parametric estimates show that pass-through is complete in France and Germany, and incomplete in the Iberian and Dutch markets, mainly driven by fuel cost. For carbon cost, pass-through is more heterogeneous, with the evidence suggesting over-shifting in Germany and the Netherlands. Semi-parametric estimates show that pass-through increases with demand. In sum, we show that despite being located in interconnected power markets, electricity consumers receive different fuel and carbon price signals. |
| JEL: | Q54 Q58 L94 Q41 |
| Date: | 2026–05–07 |
| URL: | https://d.repec.org/n?u=RePEc:bsl:wpaper:2026/04 |
| By: | Otaviano Canuto |
| Abstract: | The U.S.–China technological rivalry has become a central axis of global economic and geopolitical competition. While the United States continues to lead in frontier innovation—most notably in advanced semiconductors and artificial intelligence (AI)—China has consolidated strengths in large-scale implementation, manufacturing capacity, and control over critical segments of global supply chains. These advantages are especially visible in clean energy technologies and in the processing and refinement of critical minerals and rare earths. The rivalry now unfolds across multiple frontlines, extending beyond innovation itself to encompass infrastructure, energy availability, and technology deployment across the New South. Its outcome will depend less on breakthrough inventions alone than on each country’s capacity to integrate technology, industrial policy, and energy systems into cohesive national strategies. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ocp:pbtrad:pb07_26 |
| By: | Alvaro Pedraza; Tomas Williams; Federica Zeni |
| Abstract: | Although the climate benefit of carbon abatement does not depend on where it occurs, firms do not treat carbon offsets as geographically fungible. Using transaction-level data on corporate retirements in voluntary carbon markets, we show that foreign firms retire disproportionately more offsets in countries where they operate, but these local retirements are systematically lower quality than the same firms' retirements elsewhere. We distinguish two mechanisms. Operational presence may improve screening of local projects, or it may raise the private value of visible local sourcing. The evidence supports the second mechanism. The quality gap declines with firm experience, consistent with learning, but is strongest in settings where local visibility is likely to matter most, including countries with higher climate ambition and weaker governance. Subsidiary-entry events corroborate the within-firm pattern: when a firm establishes a new subsidiary in a country, retirements there rise sharply, but these offsets come from lower-quality projects than the firm's retirements in other countries. Finally, in project segments where demand is dominated by firms with local operations, prices are less closely aligned with project integrity. The results reveal a demand-side distortion in markets for global public goods, whereby location-specific reputational benefits shift demand toward lower-quality supply and weaken the informational content of prices. |
| Keywords: | Voluntary carbon markets; Operational footprint; Local Goodwill; Carbon offset quality. |
| JEL: | F18 L14 Q54 Q58 G32 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:gwc:wpaper:2026-010 |
| By: | Stefano Carattini; Garth Heutel; Givi Melkadze; Inès Mourelon |
| Abstract: | We study how climate policy can interact with distortionary fiscal policy and potentially lead to transition risk. Using an environmental dynamic stochastic general equilibrium model that features financial frictions and preexisting labor and capital taxes, we simulate a carbon tax and an abatement subsidy under different scenarios for returning carbon tax revenue or financing the subsidy. We find novel policy implications and important differences between the carbon tax and the subsidy. Under both policies, transition dynamics can differ sharply from long-run outcomes. For the carbon tax, transition dynamics depend on both financial frictions and the choice of revenue recycling. For the abatement subsidy, distortionary financing can generate contractionary transition dynamics, because of financial frictions. Macroprudential policy can mitigate transition risk under the carbon tax but has little effect under the subsidy. |
| JEL: | G21 H23 Q54 Q58 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:35202 |
| By: | Madjid Eshaghi Gordji; Mohammadali Berahman; Hasti Eshaghi |
| Abstract: | Why do societies remain stuck in inferior institutions even when superior al ternatives are widely recognized? This paper develops a model in which agents choose not only actions within a game but also transformations of the game it self. Transformations may be soft, changing payoffs through taxes or subsidies, or hard, changing feasibility through deletion or replacement of actions. Within a coordination model with status-quo bias (switching cost) and boundedly rational play (logit quantal response), we show that these interventions are qualitatively different: finite taxes shift behavior continuously but cannot eliminate residual use of the inherited action, whereas deletion bypasses inertia by removing the action from the feasible set. We further characterize how antagonistic social preferences at the meta level can block reforms that are individually beneficial for every player. The framework provides a formal rationale for why hard feasibility restrictions of ten dominate soft price incentives under inertia, with direct applications to climate transition (carbon tax vs. fossil-fuel phase-out) and platform regulation (fines vs. deletion of addictive features). |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.21656 |
| By: | Lizhong Zhang; Junqi Liu; Jianxiao Wang; Lei Zhu |
| Abstract: | The increasing penetration of renewable energy necessitates improved power system flexibility, driving the deployment of independent energy storage operators (ESOs). Existing research extensively investigates capacity sizing for price-taker storage systems or the operational coordination of aggregated distributed resources, lacking the joint optimization of capacity planning and multi-market bidding for a price-maker ESO with hybrid energy storage system (HESS) that preserves the technological heterogeneity of the integrated components. We propose a bi-level optimization framework to jointly optimize profit-oriented decisions on capacity and multi-market operation. The upper-level problem determines the optimal capacities of two heterogeneous storage systems while coordinating their bidding across day-ahead joint energy-reserve and real-time balancing markets. The lower-level problems represent market clearing of the system operator (SO). The model is reformulated into a mixed-integer linear program and solved with a Benders' decomposition algorithm. Results demonstrate that the ESO can allocate capacity between energy arbitrage and reserve provision strategically. The system with the high power-to-capacity ratio is used to capture arbitrage profits while the system with low power-to-capacity ratio is used to specialize in reserve markets. There can be internal power transfer between storage systems if there exist grid access constraints. The framework provides differentiated bidding strategies and market participation flexibility for HESS to enhance overall profitability. |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2605.17867 |