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on Energy Economics |
| By: | Jeremy Proz; Martin Huber |
| Abstract: | Collusion and capacity withholding in electricity wholesale markets are important mechanisms of market manipulation. This study applies a refined machine learning-based cartel detection algorithm to two cartel cases in the Italian electricity market and evaluates its out-of-sample performance. Specifically, we consider an ensemble machine learning method that uses statistical screens constructed from the offer price distribution as predictors for the incidence of collusion among electricity providers in specific regions. We propose novel screens related to the capacity-withholding behavior of electricity providers and find that including such screens derived from the day-ahead spot market as predictors can improve cartel detection. We find that, under complete cartels - where collusion in a tender presumably involves all suppliers - the method correctly classifies up to roughly 95% of tenders in our data as collusive or competitive, improving classification accuracy compared to using only previously available screens. However, when trained on larger datasets including non-cartel members and applying algorithms tailored to detect incomplete cartels, the previously existing screens are sufficient to achieve 98% accuracy, and the addition of our newly proposed capacity-withholding screens does not further improve performance. Overall, this study highlights the promising potential of supervised machine learning techniques for detecting and dismantling cartels in electricity markets. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.09885 |
| By: | Jieyu Chen; Sebastian Lerch; Melanie Schienle; Tomasz Serafin; Rafal Weron |
| Abstract: | The growing importance of intraday electricity trading in Europe calls for improved price forecasting and tailored decision-support tools. In this paper, we propose a novel generative neural network model to generate probabilistic path forecasts for intraday electricity prices and use them to construct effective trading strategies for Germany's continuous-time intraday market. Our method demonstrates competitive performance in terms of statistical evaluation metrics compared to two state-of-the-art statistical benchmark approaches. To further assess its economic value, we consider a realistic fixed-volume trading scenario and propose various strategies for placing market sell orders based on the path forecasts. Among the different trading strategies, the price paths generated by our generative model lead to higher profit gains than the benchmark methods. Our findings highlight the potential of generative machine learning tools in electricity price forecasting and underscore the importance of economic evaluation. |
| Keywords: | Intraday electricity market; Probabilistic forecast; Path forecast; Prediction bands; Energy score; Machine learning; Generative neural network; Trading recommendations |
| JEL: | C22 C32 C45 C51 C53 Q41 Q47 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ahh:wpaper:worms2505 |
| By: | Jinbo Cai; Wenze Li; Wenjie Wang |
| Abstract: | With stakeholder-level in-market data, we conduct a comparative analysis of machine learning (ML) for forecasting electricity prices in Singapore, spanning 15 individual models and 4 ensemble approaches. Our empirical findings justify the three virtues of ML models: (1) the virtue of capturing non-linearity, (2) the complexity (Kelly et al., 2024) and (3) the l2-norm and bagging techniques in a weak factor environment (Shen and Xiu, 2024). Simulation also supports the first virtue. Penalizing prediction correlation improves ensemble performance when individual models are highly correlated. The predictability can be translated into sizable economic gains under the mean-variance framework. We also reveal significant patterns of time-series heterogeneous predictability across macro regimes: predictability is clustered in expansion, volatile market and extreme geopolitical risk periods. Our feature importance results agree with the complex dynamics of Singapore's electricity market after de regulation, yet highlight its relatively supply-driven nature with the continued presence of strong regulatory influences. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.07477 |
| By: | Catherine Bobtcheff; Philippe De Donder; François Salanié |
| Abstract: | We set up a static model of electricity provision in which delivery to consumers is only imperfectly reliable. Blackouts can be either rolling or systemic; in both cases a price cap becomes active on the wholesale market. We show that for any given value of the price cap, one can decentralize optimal allocations thanks to two types of regulatory instruments: a retail tax, and capacity subsidies. Some properties follow. If demand is affected by multiplicative shocks only, capacity subsidies are exactly financed by the revenues from the retail tax. If moreover the distribution of systemic blackouts is exogenous, a price cap is sufficient, provided it is set at the value of lost load. In all other cases, all instruments are needed, and capacity subsidies need to be differentiated, based on the correlation between available capacity and its social value. We also discuss the impacts of a carbon tax on supply, demand, and optimal regulation. |
| Keywords: | electricity, reliability, renewables, climate change |
| JEL: | D24 Q41 Q42 Q48 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12092 |
| By: | Arkadiusz Lipiecki; Kaja Bilinska; Nicolaos Kourentzes; Rafal Weron |
| Abstract: | We introduce the concept of temporal hierarchy forecasting (THieF) in predicting day-ahead electricity prices and show that reconciling forecasts for hourly products, 2- to 12-hour blocks, and baseload contracts significantly (up to 13%) improves accuracy at all levels. These results remain consistent throughout a challenging 4-year test period (2021-2024) in the German power market and across model architectures, including linear regression, a shallow neural network, gradient boosting, and a state-of-the-art transformer. Given that (i) trading of block products is becoming more common and (ii) the computational cost of reconciliation is comparable to that of predicting hourly prices alone, we recommend using it in daily forecasting practice. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.11372 |
| By: | liu, kerry |
| Abstract: | The rapid rise of China’s electric vehicle industry - especially its booming exports - has drawn global attention. This study provides a distinctive analysis of the industry’s political economy from a domestic Chinese perspective. Although the electric vehicle sector contributes only modestly to China’s overall economy, it remains one of the few dynamic areas in an otherwise sluggish post-COVID landscape. Drawing on Baidu Index data as of 30 June 2025, the study shows how the Chinese government showcases the electric vehicle industry as a flagship of industrial upgrading and New Quality Productive Forces, using it to boost national confidence. However, its impact varies depending on the target audience and specific events. |
| Date: | 2025–08–22 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:9zqk2_v1 |
| By: | Fitzpatrick, Aoife Claire |
| Abstract: | In 2023, the transportation sector in Europe contributed 25% of CO2 emissions, with almost no reduction since 2010. Despite government policies promoting decarbonization, public adoption of electric vehicles (EVs) remains limited. This study, involving 5, 500 German participants from a pre-registered survey and experiment, identifies information frictions and mixed beliefs about EV sustainability as key barriers. Two treatments-highlighting EVs' environmental benefits and public policies-both increased participants' likelihood of choosing an EV, but only the environmental treatment raised willingness to pay more. The findings underscore the need for clear, accurate information to complement policy efforts, reducing disinformation and amplifying the impact of initiatives to meet climate goals. |
| Keywords: | Electric Vehicles, Consumer Behaviour, Behavioural Economics, GreenTransition |
| JEL: | D12 D91 G11 G18 G53 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:safewp:324654 |
| By: | Phoebe Koundouri; Angelos Alamanos; Giannis Arampatzidis; Stathis Devves; Tatiana Pliakou; Christopher Deranian |
| Abstract: | Achieving climate neutrality in Europe is a critical goal, yet there is no model-based assessment detailing the key factors and assumptions of each Member State's National Energy and Climate Plan (NECP). Filling that gap, we evaluated 35 NECPs and simulated them together in a single energy-emissions model, creating a consolidated European National Commitments (NC) scenario. We built a LEAP (Low Emissions Analysis Platform) model covering energy consumption and production in the residential, industrial, agricultural, transport (terrestrial, maritime, aviation), and services sectors. For each fuel type and end use, we calculated multi�pollutant greenhouse gas emissions. Under the NC scenario, significant emissions reductions emerge across all sectors by 2050, driven by energy efficiency gains and cleaner fuel mixes. However, achieving these reductions depends on fully implementing 35 NECPs, which vary substantially in their timelines, ambition levels, data granularity, and fuel-trade assumptions. We highlight these inconsistencies and offer policy recommendations tailored by sector, country, and policy frameworks, providing critical insights to ensure a feasible, holistic and equitable transition. |
| Keywords: | National Energy and Climate Plans (NECPs), Europe, Energy-Emissions, LEAP, Policy Recommendations |
| Date: | 2025–08–26 |
| URL: | https://d.repec.org/n?u=RePEc:aue:wpaper:2550 |
| By: | Abdullah Al Noman; Hasibul Hassan Siam |
| Abstract: | This study examines the economic social and environmental impacts of electric vehicle adoption in Bangladesh using survey data from 57 respondents and secondary research. Findings show strong public perception of electric vehicles as cost effective with ninety three percent agreement and environmentally beneficial with eighty two point five percent agreement. Electric vehicles have potential to reduce fuel imports lower operational costs and create over fifty thousand jobs by 2030. Socially electric vehicles improve mobility for low income groups with seventy five point four percent agreement and increase safety although adoption remains mostly in urban areas. Environmentally electric vehicles could reduce carbon dioxide emissions by up to thirty percent per kilometre and lower particulate matter levels by twenty to twenty five percent in Dhaka along with a three to five decibel reduction in traffic noise. Main barriers include high purchase costs limited charging infrastructure and low public awareness of policies. Policy recommendations include tax incentives solar powered charging stations and battery recycling regulations. This research concludes that strategic electric vehicle adoption could advance Bangladesh's sustainable transportation economic resilience and public health goals. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.08398 |
| By: | Kannan, Sangita Gayatri; Toman, Michael A. (Resources for the Future); Htun, Tinzar |
| Abstract: | Growing adoption of electric vehicles (EVs) increases the demand for critical minerals used in EV batteries and motors. The stability and reliability of supply chains for these materials are significant concerns because of the geographic concentration of supplies. While supply-side policies such as development of new sources are important, so is innovation in both recovering and processing minerals and in battery and magnet designs that affect mineral demands.This issue brief considers questions related to innovation that affects supply chains for EV critical minerals and the policy challenges in scaling up nascent technologies for commercial deployment. It is motivated by a March 2024 webinar organized by Resources for the Future with experts from academia, the automotive industry, and the federal government. |
| Date: | 2025–01–17 |
| URL: | https://d.repec.org/n?u=RePEc:rff:ibrief:ib-25-01 |
| By: | Hönow, Nils Christian; Helmers, Viola; Yang, Eva H. |
| Abstract: | Riding electric bicycles and using public transport are popular alternatives to private car use. Utilizing data from a 2022 survey of 6, 285 participants in Germany, we examine who typically owns e-bikes or public transport tickets. We firstly employ regression analyses to identify correlations between individual characteristics and ebike as well as ticket ownership, respectively. We find that e-bike owners tend to be older, earn higher incomes, often reside in more rural areas, and are more likely to be male. For public transport ticket ownership, these associations are largely reversed. Through latent class analyses, we identify distinct groups of e-bike and ticket owners. In a second step, we investigate associations between e-bike or ticket ownership and car use through propensity score matching and regression analyses. We find that, compared to non-owners, owners of either alternative exhibit lower car use, with the difference being larger for public transport ticket owners. |
| Abstract: | Sowohl die Nutzung von E-Bikes (Pedelecs) und als auch von öffentlichen Verkehrsmitteln sind bereits beliebte Alternativen zur Autonutzung. Auf Basis von Daten aus einer 2022 Befragung mit 6, 285 Teilnehmenden aus Deutschland untersuchen wir, wer die typischen Besitzerinnen und Besitzer von E-Bikes oder Zeitkarten für den ÖPNV sind. Mithilfe von Regressionsanalysen identifizieren wir Korrelationen zwischen verschiedenen Merkmalen und dem Besitz von E-Bikes bzw. Zeitkarten. Wer ein E-Bike besitzt ist tendenziell älter, hat ein höheres Einkommen und lebt eher in ländlichen Gebieten. Bei Menschen die Zeitkarten für den ÖPNV besitzen kehren sich diese Korrelationen größtenteils um. Durch Latent Class Analysen klassifizieren wir typische Nutzergruppen von beiden Verkehrsmitteloptionen. In einem zweiten Schritt untersuchen wir mithilfe von Propensity-Score-Matching und Regressionsanalysen Zusammenhänge zwischen der Intensität der Autonutzung und dem Besitz von E-Bikes oder Zeitkarten und finden heraus, dass in beiden Fällen der Besitz mit einer geringeren Autonutzung zusammenhängt. Allerdings ist diese Korrelation bei ÖPNV-Karten-Besitz wesentlich größer. |
| Keywords: | E-bike (electric bicycle), public transport, travel mode choice, car use, latent class analysis, propensity score matching |
| JEL: | L92 R22 R41 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:324661 |
| By: | Bergman, Aaron (Resources for the Future); Peplinski, McKenna (Resources for the Future); Rennert, Kevin (Resources for the Future); Roy, Nicholas (Resources for the Future) |
| Abstract: | The Inflation Reduction Act replaced an assortment of technology-specific tax credits for clean electricity with two “technology-neutral” tax credits, the 45Y and 48E tax credits (named after their sections in the tax code). The 45Y tax credit is a “production” tax credit, which pays a set amount for every unit of electricity generated, while the 48E tax credit is an “investment” tax credit that pays a fraction of the capital cost for a qualifying generation or storage technology. Unlike previous iterations, these tax credits apply to any technology that can produce electricity with zero emissions. For more details, see On Deck for Treasury: The Inflation Reduction Act’s New Approach to Clean Electricity Tax Credits and The US Department of the Treasury’s Proposed Guidance for the Tech-Neutral Tax Credits Importantly, the expiration of these tax credits is based on the overall carbon intensity of the electricity sector rather than any specific year.As the new administration and Congress contemplate proposals for the budget reconciliation process, these and other tax credits in the Inflation Reduction Act are on the table for potential repeal. In this issue brief, we explore the consequences of a repeal of these tax credits for retail electricity prices, consumer electricity bills, government expenditures, clean electricity, and emissions.In addition to our reference case, we examine three additional scenarios to assess the impacts of high and low natural gas prices, as well as high electricity demand, on the consequences of a repeal. These scenarios encompass the main parameters known to affect electricity prices. Natural gas prices have displayed wide variation historically, and greater exports of natural gas would put upward pressure on electricity prices. Increased electricity demand, driven by electrification of end-uses or to power data centers and artificial intelligence, would also put upward pressure on electricity prices. We use a high-demand scenario taken from the National Renewable Energy Laboratory’s Electrification Futures Study to account for these factors.We find that repealing these tax credits is modeled to:Increase nationally averaged electricity rates by roughly 5–7 percent across modeled scenarios in 2030, reaching a peak of 6–10 percent higher in 2035. These rate impacts translate into a $75–$100 increase in national average annual electricity bills in 2030, with a peak increase of $100–$150 per year (real 2023 dollars). Rate increases differ significantly by region, with the highest impact seen in the upper plains states ($300–$400 per year increases in the West North Central census region).Reduce tax expenditures by $227–$315 billion dollars over the ten-year budget window (2025–2034, cumulative nominal dollars). After 2035, the annual reduction in tax expenditures is $48–$63 billion per year, declining to $24–$47 billion per year in 2040.Increase power sector carbon dioxide emissions by 350 Mt–400 Mt CO₂ in 2035, with a cumulative increase in power sector emissions of 3, 500 Mt–4, 500 Mt CO₂ between 2025 and 2040.Reduce wind generation capacity in 2035 by 125 GW–225 GW and solar capacity in 2035 by approximately 175 GW. This is a coincidental convergence in 2035. The range increases to 175–225 GW in 2036 and remains at that level through the end of the projection period. |
| Date: | 2025–03–27 |
| URL: | https://d.repec.org/n?u=RePEc:rff:ibrief:ib-25-06 |
| By: | Roy, Nicholas (Resources for the Future); Palmer, Karen (Resources for the Future) |
| Abstract: | On June 11, 2025, the US Environmental Protection Agency (EPA) proposed a repeal of the existing Greenhouse Gas Standards and Guidelines for Fossil-Fired Power Plants, hereafter referred to as the Carbon Pollution Standards (CPS). EPA’s repeal is part of the new administration’s deregulatory agenda for the US power sector, whose stated goals are to lower costs and to meet rising electricity demand. The proposed repeal would lead to measurable changes in outcomes for the nation’s electric power sector, especially when assessed in conjunction with the One Big Beautiful Bill Act (OBBBA) and updated electricity demand forecasts.Policymakers and the public alike are paying attention to the action’s likely result of slowing US greenhouse gas emission reductions. In this issue brief, we consider the economic costs of the greenhouse gas emissions unabated due to this repeal and evaluate other costs and benefits for the US population from the proposed repeal using updated data.Indeed, according to our analysis: if the EPA conducted a cost-benefit analysis using updated electricity demand projections and including the electricity tax credit changes from the OBBBA, then the repeal of the CPS would fail a traditional cost-benefit test—even without factoring in the increase in greenhouse gas emissions.With the repeal of the CPS, US residents will likely see:Increases in coal generation of 169–456 TWh by 2040, or 4.8–8.7 times as much coal generation as was expected with the regulations in place.An increase in cumulative CO2 emissions from the power sector by 1.2–5.8 gigatons by 2050.A net increase of 2.1–3.3 percent annually in national average electricity prices from now to 2050. This combines the 1–1.4 percent decrease from CPS repeal with the OBBBA increases of 3.3–4.7 percent over the same period.Net increases in average net household electricity costs of $67–$97 per year in the 2030s, driven by the CPS’s decreases of $19–$24 annually and the OBBBA’s increases of $87–$121 annually over the same time period. However, CPS repeal savings for households increase in the 2040s to $34–$44 annually on average per household over the decade due to coal plants remaining online.Increases in health damages that exceed the savings from lower compliance costs. The climate and health damages from this regulatory repeal will be 4–8 times the savings from reduced compliance costs across the modeled sensitivities. Considering solely the health effects along with the power sector’s financial outcomes, there is a total net cost of $128.9 billion (2024 US dollars) through 2050 to US society in our central case. |
| Date: | 2025–08–06 |
| URL: | https://d.repec.org/n?u=RePEc:rff:ibrief:ib-25-10 |
| By: | Prest, Brian C. (Resources for the Future); Krupnick, Alan (Resources for the Future); Wingenroth, Jordan (Resources for the Future) |
| Abstract: | Long one of the world’s largest natural gas producers, the United States has now leaned into exporting the fuel overseas in the form of liquefied natural gas, or LNG. US LNG exports rose from less than 0.1 billion cubic feet per day (Bcf/d) in 2015 to nearly 12 Bcf/d in 2023. The United States has now surpassed Australia and Qatar as the world’s largest LNG exporter.Following a year-long pause in approvals of new LNG export permits, in December 2024 the Department of Energy (DOE) published “Energy, Economic, and Environmental Assessment of U.S. LNG Exports” (DOE 2024), a report assessing the consequences of continued increases in US LNG exports out to 2050. On January 21, 2025, the newly inaugurated Trump administration lifted the permitting pause and extended the window for submitting public comment on the report through March 20. This still-live report estimates how an expansion of US LNG exports would affect domestic energy prices and global greenhouse gas (GHG) emissions, along with many other economic and societal outcomes. Other views on the matter include an analysis by S&P Global (Yergin et al. 2024).The complex modeling needed to make predictions necessarily requires many assumptions, some of which are subject to critique and debate. Rather than taking on the entire DOE report, we focus on four aspects of the modeling effort: (i) methane emissions that leak from the gas supply chain, (ii) impacts on US natural gas prices, (iii) projections of the highly uncertain future global demand for US LNG, and (iv) how energy consumers may substitute between LNG imports and other energy sources. Where appropriate, we also compare our findings with the S&P Global report. |
| Date: | 2025–03–04 |
| URL: | https://d.repec.org/n?u=RePEc:rff:ibrief:ib-25-05 |
| By: | Roy, Nicholas (Resources for the Future); Burtraw, Dallas (Resources for the Future) |
| Abstract: | The California Air Resources Board is considering three different emissions budget pathways for upcoming rulemaking that would achieve the same cumulative emissions reductions by 2045. We analyzed each budget’s impact on revenues and how an emissions containment reserve (ECR) could be used to bolster revenues. We find the following:Over the next five years, CARB’s identified Smoothed Option 1 which would have a slower reduction in the emissions budget before 2030 would yield about $100 million dollars more revenue to the Greenhouse Gas Reduction Fund (GGRF) in 2026, rising to nearly $1 billion more revenue in 2030 than the other options. In the long term through 2045, cumulative revenues from Smoothed Option 2 and the original Standardized Regulatory Impact Assessment (SRIA) budget are larger than Smoothed Option 1. However, near-term revenues may be more important to fund investments to accelerate the energy transformation, especially given California’s current budget deficit. Smoothed Option 1 would also sustain a decline each year in the annual emissions budget, although initially at a slower rate than the alternatives.The addition of an Emissions Containment Reserve (ECR) would support allowance prices when they are low and increase and stabilize revenues for the GGRF. In the low allowance demand scenario, we find the ECR could boost cumulative GGRF revenues by $3.5 billion over the rest of this decade. Through 2045, GGRF revenues could increase by over $21 billion. |
| Date: | 2024–07–31 |
| URL: | https://d.repec.org/n?u=RePEc:rff:ibrief:ib-24-08 |
| By: | Roy, Nicholas (Resources for the Future); Burtraw, Dallas (Resources for the Future) |
| Abstract: | This issue brief examines how a small reform to the California carbon market could improve affordability by delivering billions of dollars to harden infrastructure, advance climate goals, and improve affordability in California. This reform kicks in only when allowance prices are low, harvesting emissions reductions when they are low cost.The state’s most impactful efforts to reduce greenhouse gas emissions have been sector-specific policies such as building standards, vehicle efficiency standards, the renewable portfolio standard, and other measures. In this context, the cap-and-trade program contributes a numerical carbon budget for covered sectors and generates revenues to the Greenhouse Gas Reduction Fund to fund investments.The cap-and-trade program also improves affordability by lowering cost.Although sector-specific policies have been effective in driving emissions reductions, the average cost per ton reduced by these policies has typically been greater than the cost of emissions reductions under the cap-and-trade program, as identified by the price of an emissions allowance. For instance, the 2022 Scoping Plan estimated average annual cost (2022-2035) per ton of emissions reductions under most regulatory measures would be multiple times greater than the price of an emissions allowance, which represents the marginal cost of emissions reductions motivated by the carbon market. An exception is the zero-emissions vehicle standard, another market-based mechanism, and measures to reduce vehicle miles traveled, which have negative costs.In other words, every emissions reduction motivated by the carbon market represents a cost savings for California.A reform that would further improve the cost effectiveness of California’s climate policy portfolio is the introduction of an Emissions Containment Reserve (ECR), which we describe below, and which exists in other robust carbon markets. We find that in 2023-24, improved market design through the introduction of an Emissions Containment Reserve would have collected nearly $1.5 billion in benefits for ratepayers and the state’s Greenhouse Gas Reduction Fund.An ECR would improve the contribution of emissions reductions from the cap-and-trade program in accelerating decarbonization of the state’s economy and boost ratepayer climate dividend and to the state’s Greenhouse Gas Reduction Fund. Moreover, this feature would be triggered only when allowance prices are low and when emissions reductions driven by the carbon market are less expensive than sector specific regulation, contributing in multiple ways to affordability in California. We identify several other benefits of an Emissions Containment Reserve including better alignment of the carbon market with the state’s overall climate policy portfolio, and reduced market uncertainty. |
| Date: | 2025–01–27 |
| URL: | https://d.repec.org/n?u=RePEc:rff:ibrief:ib-25-03 |
| By: | Domeshek, Maya (Resources for the Future) |
| Abstract: | In November of 2023, the governor of Michigan signed a package of climate bills (Executive Office of the Governor 2023) that sets a 100 percent clean electricity target for 2040, one of the earliest in the United States (CESA n.d.). In 2020, the governor issued an executive order setting a goal for the state to reach net zero carbon emissions by 2050 (Executive Directive 2020-10 2019); in 2022, the MI Healthy Climate Plan was released, outlining actions the state could take by 2030 to work toward that goal (EGLE 2022). The state’s largest investor-owned utilities had previously set voluntary decarbonization targets: DTE for 2050 (DTE Energy 2019) and Consumers Energy for 2040 (Consumers Energy 2020). Fall 2023’s legislative package included six pieces of legislation: SB 271 on clean electricity, HB 5120 on renewables permitting, SB 277 on siting solar on farmland, SB 273 on efficient electrification, SB 519 on helping workers transition out of the fossil sector, and SB 502 on the utility integrated resource planning (IRP) process. This brief compares the provisions of the legislation with the state’s existing plan and utility plans to evaluate the progress the state has made toward institutionalizing electricity decarbonization. |
| Date: | 2024–07–23 |
| URL: | https://d.repec.org/n?u=RePEc:rff:ibrief:ib-24-07 |
| By: | Santiago Barbosa Naranjo (Universidad del Rosario [Bogota]); Antoine Godin (AFD - Agence française de développement, ACT - Analyse des Crises et Transitions - LABEX ICCA - UP13 - Université Paris 13 - Université Sorbonne Nouvelle - Paris 3 - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité - Université Sorbonne Paris Nord - Université Sorbonne Paris Nord); Gustavo Adolfo Hernandez Diaz (National University of Colombia); Guilherme Riccioppo Magacho (AFD - Agence française de développement, CEPN - Centre d'Economie de l'Université Paris Nord - Université Sorbonne Paris Nord); Yehison Mejia Ascanio (National University of Colombia); Annabelle Moreau Santos (AFD - Agence française de développement) |
| Abstract: | Based on input-output matrices, the final chapter explores Colombia's structural dynamics in the light of the low-carbon transition. It first examines the openness of the economy and the productive matrix, highlighting how premature deindustrialisation has historically affected the country. The results indicate uneven structural changes between sectors, with significant transformations in the industrial sector under the influence of globalisation and the need to substitute domestic inputs, leading to a weakening of production chains and a reduction in economic complexity. Demand was the driving force behind production growth, hampered by limited technological progress and import substitution. Next, the chapter uses a sectoral perspective to highlight the country's current challenges in reducing GHG emissions, highlighting the fiscal, external, and socio‑economic vulnerabilities affecting its decarbonisation efforts. Results show that Colombia is indeed exposed to transition risks, with almost 20% of the wage bill depending on sunset industries. Furthermore, about 60% of foreign currency revenue and 20% of fiscal revenue come directly from oil and coal, making it vulnerable in both external and fiscal dimensions. Agriculture, agribusiness, and tourism could partly reduce the negative impacts of decarbonisation and help secure economic stability, moving away from dependence on oil and coal. |
| Abstract: | Basándose en las matrices de insumo-producto, el último capítulo analiza la dinámica estructural de Colombia a la luz de la transición hacia una economía baja en carbono. En primer lugar, examina la apertura de la economía y la matriz productiva, destacando cómo la desindustrialización prematura ha afectado históricamente al país. Los resultados indican cambios estructurales desiguales entre sectores, con transformaciones significativas en el sector industrial bajo la influencia de la globalización y la necesidad de sustituir insumos nacionales, lo que ha llevado a un debilitamiento de las cadenas de producción y a una reducción de la complejidad económica. La demanda ha impulsado el crecimiento de la producción, obstaculizado por el limitado progreso tecnológico y la sustitución de importaciones. A continuación, el capítulo utiliza una perspectiva sectorial para resaltar los retos actuales del país en la reducción de las emisiones de GEI, destacando las vulnerabilidades fiscales, externas y socioeconómicas que afectan a sus esfuerzos de descarbonización. Los resultados muestran que Colombia está realmente expuesta a los riesgos de transición, ya que casi el 20% de la masa salarial depende de las industrias en declive. Además, cerca del 60% de los ingresos en divisas y el 20% de los ingresos fiscales proceden directamente del petróleo y el carbón, lo que la hace vulnerable tanto en la dimensión externa como en la fiscal. La agricultura, la agroindustria y el turismo podrían reducir en parte los efectos negativos de la descarbonización y contribuir a garantizar la estabilidad económica alejándose de la dependencia del petróleo y el carbón. |
| Abstract: | Basé sur des matrices entrées-sorties, le dernier chapitre s'intéresse aux dynamiques structurelles de la Colombie à l'aune de la transition bas carbone. Il examine d'abord l'ouverture de son économie et de sa matrice productive, en soulignant l'impact qu'a eu, historiquement, la désindustrialisation prématurée du pays. Les résultats indiquent des changements structurels inégaux entre les secteurs, avec des transformations significatives dans le secteur industriel sous l'influence de la mondialisation et de la nécessité de substituer des intrants nationaux, ce qui a entraîné un affaiblissement des chaînes de production et une réduction de la complexité économique. La demande a été le moteur de la croissance de la production, entravée par des progrès technologiques limités et la substitution des importations.Ensuite, le chapitre adopte une perspective sectorielle pour mettre en évidence les défis actuels du pays en matière de réduction des émissions de GES, en soulignant les vulnérabilités fiscales, externes et socio-économiques qui affectent ses efforts de décarbonisation. Les résultats montrent que la Colombie est effectivement exposée aux risques de transition, près de 20 % de la masse salariale dépendant des industries en déclin. En outre, environ 60 % des recettes en devises et 20 % des recettes fiscales proviennent directement du pétrole et du charbon, ce qui rend le pays vulnérable à la fois sur le plan extérieur et sur le plan fiscal. L'agriculture, l'agro-industrie et le tourisme pourraient en partie réduire les impacts négatifs de la décarbonisation et contribuer à garantir la stabilité économique, en s'éloignant de la dépendance au pétrole et au charbon. |
| Keywords: | Carbon neutrality, Social inclusion, Colombia, Climate finance, Energy transition, Sustainable development, Climate resilience, Transition énergétique, Inclusion sociale, Financement climatique, Résilience climatique, Développement durable, Neutralité carbone, Colombie |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05209518 |
| By: | Leonardo Rojas Rodriguez (National University of Colombia. Laboratory (UNAL), Bogotá,); Álvaro Martín Moreno Rivas (National University of Colombia. Laboratory (UNAL), Bogotá,) |
| Abstract: | This chapter presents a general overview of the macroeconomic and environmental characteristics of the Colombian economy. The main thread of the analysis seeks to establish the structural specificities of the economy and the institutional constraints that define the initial conditions for shaping an ordered and sustainable process of decarbonisation of productive activities. This characterisation is fundamental for situating the expectations and objectives of adaptation to climate change in the short, medium, and long term. Taking a holistic view of the transformation processes—which includes adapting different theoretical models—, the responsibilities of institutional actors are evaluated in terms of their use of material and energy resources, as well as their greenhouse gas (GHG) emissions. This evaluation takes place within the framework of structural feasibility for transformation, the limits of which are defined by the three gaps of the economy: the external sustainability gap (growth restricted by the balance of payments); the social gap (the need to overcome levels of inequality and poverty); and the environmental gap (requirements to achieve environmental efficiency targets and fulfil Paris Agreement commitments to reduce GHG emissions by 2030). |
| Abstract: | Ce chapitre présente un aperçu général des caractéristiques macroéconomiques et environnementales de l'économie colombienne. Le fil conducteur de l'analyse vise à établir les spécificités structurelles de l'économie et les contraintes institutionnelles qui définissent les conditions initiales pour façonner un processus ordonné et durable de décarbonisation des activités productives. Cette caractérisation est fondamentale pour situer les attentes et les objectifs d'adaptation au changement climatique à court, moyen et long terme. En adoptant une vision holistique des processus de transformation — qui inclut l'adaptation de différents modèles théoriques —, les responsabilités des acteurs institutionnels sont évaluées en termes d'utilisation des ressources matérielles et énergétiques, ainsi que de leurs émissions de gaz à effet de serre (GES). Cette évaluation s'effectue dans le cadre de la faisabilité structurelle de la transformation, dont les limites sont définies par trois écarts de l'économie : l'écart de durabilité externe (croissance limitée par la balance des paiements) ; l'écart social (la nécessité de surmonter les niveaux d'inégalité et de pauvreté) ; l'écart environnemental (les exigences pour atteindre les objectifs d'efficacité environnementale et respecter les engagements de l'Accord de Paris visant à réduire les émissions de GES d'ici 2030). |
| Keywords: | Energy transition, Social inclusion, Climate finance, Sustainable development, Climate resilience, Carbon neutrality, Développement durable, Résilience climatique, Neutralité carbone, Transition énergétique, Inclusion sociale, Financement climatique |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05163818 |
| By: | Jhan Andrade Portela (National University of Colombia); Juan Felipe Herrera Sarmiento (National University of Colombia, Università Bocconi); Antoine Godin (AFD - Agence française de développement, ACT - Analyse des Crises et Transitions - LABEX ICCA - UP13 - Université Paris 13 - Université Sorbonne Nouvelle - Paris 3 - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité - Université Sorbonne Paris Nord - Université Sorbonne Paris Nord); Sakir Devrim Yilmaz (AFD - Agence française de développement); Diego Alejandro Guevara |
| Abstract: | Colombia faces multiple challenges in climate change mitigation and adaptation as well as biodiversity protection, which require significant investments made by the public and private sectors. Using the SFC model presented in Chapter 2, this chapter analyses some of the macroeconomic, fiscal, and external sector impacts of the investments made to meet Colombia's Nationally Determined Contribution (NDC) by 2030, achieve carbon neutrality by 2050, and become more resilient to climate change. The analysis shows that these investments have multiple social, economic, and environmental returns, which allows us to envision these investments beyond a cost narrative. They will however generate short-to-medium-term fiscal and external sector pressures that may become vulnerabilities and transition risks in the absence of appropriate policy responses. A more ambitious policy of structural change is necessary to ensure the viability and sustainability of the transition. The scenarios tested include different financing approaches—ranging from conventional to mixed financing methods—and quantify different rates of decline in fossil fuel exports by 2.5% annually from 2023, alongside a 10% increase in the propensity to export non-traditional goods over a 15-year period. |
| Abstract: | Colombia se enfrenta a múltiples retos en materia de mitigación y adaptación al cambio climático, así como de protección de la biodiversidad, que requieren la realización de importantes inversiones por parte de los sectores público y privado. Utilizando el modelo SFC presentado en el Capítulo 2, esta sección analiza algunos de los impactos macroeconómicos, fiscales y externos de las inversiones realizadas para cumplir con la Contribución Nacionalmente Determinada (NDC) de Colombia para 2030, lograr la neutralidad de carbono para 2050 y ser más resilientes al cambio climático. El análisis muestra que estas inversiones tienen múltiples beneficios sociales, económicos y ambientales, lo que permite contemplarlas más allá de una narrativa de costes. Sin embargo, generarán presiones fiscales y exteriores a corto y medio plazo que pueden convertirse en vulnerabilidades y riesgos de transición en ausencia de respuestas políticas adecuadas. Es necesaria una política más ambiciosa de cambio estructural para garantizar la viabilidad y la sostenibilidad de la transición. Los escenarios contemplados incluyen distintos enfoques de financiación -desde los métodos convencionales hasta métodos de financiación mixtos- y cuantifican diferentes tasas de caída de las exportaciones de combustibles fósiles en un 2, 5% anual a partir de 2023, junto con un aumento del 10% de la propensión a exportar bienes no tradicionales a lo largo de un periodo de 15 años. |
| Abstract: | La Colombie est confrontée à de multiples défis en matière d'atténuation du changement climatique et d'adaptation à ses effets, ainsi que de protection de la biodiversité, qui nécessitent des investissements importants de la part des secteurs public et privé. À l'aide du modèle SFC présenté au chapitre 2, ce chapitre analyse certains des impacts macroéconomiques, fiscaux et sur le secteur extérieur des investissements réalisés pour atteindre la contribution déterminée au niveau national (CDN) de la Colombie d'ici 2030, parvenir à la neutralité carbone d'ici 2050 et accroître la résilience au changement climatique. L'analyse montre que ces investissements ont de multiples retombées sociales, économiques et environnementales, ce qui nous permet de ne pas uniquement envisager ces investissements sous le prisme des coûts. Ils engendreront toutefois des pressions budgétaires et sectorielles externes à court et à moyen terme, qui pourraient devenir des vulnérabilités et des risques de transition en l'absence de réponses politiques appropriées. Une politique plus ambitieuse de changement structurel est nécessaire pour assurer la viabilité et la durabilité de la transition. Les scénarios testés incluent des variations dans les approches de financement - allant du financement conventionnel au financement mixte - et quantifient différents taux de déclin des exportations de combustibles fossiles de 2, 5 % par an à partir de 2023, ainsi qu'une augmentation de 10 % de la propension à exporter des biens non-traditionnels sur une période de 15 ans. |
| Keywords: | Carbon neutrality, Social inclusion, Colombia, Climate finance, Energy transition, Sustainable development, Climate resilience, Colombie, Neutralité carbone, Développement durable, Résilience climatique, Financement climatique, Inclusion sociale, Transition énergétique |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05208200 |
| By: | Antoine Godin (AFD - Agence française de développement, ACT - Analyse des Crises et Transitions - LABEX ICCA - UP13 - Université Paris 13 - Université Sorbonne Nouvelle - Paris 3 - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité - Université Sorbonne Paris Nord - Université Sorbonne Paris Nord); Sakir Devrim Yilmaz (AFD - Agence française de développement); Jhan Andrade Portela (National University of Colombia); Diego Alejandro Guevara |
| Abstract: | Based on the analysis of three scenarios of oil and coal exports over the period 2023–2050, this chapter highlights the greater macroeconomic and financial fragility that the global low-carbon transition (and subsequent decline in demand for fossil fuels) may entail for the Colombian economy. The decline in fossil fuel exports will deeply affect Colombia's real and external sectors and deteriorate its fiscal and financial conditions. Ensuring a constant stream of international flows can help mitigate the negative impacts of the global transition in the long term. Still, the main driver of a recovery lies in industrial policy. Colombia will need to reduce its import dependency and diversify its exports (increasing the export base with sophisticated and higher value-added goods and services)—which will require coordinated actions between industry, finance, and the government. Implementing these policies early is a priority, since such structural transformations take time to materialise. |
| Abstract: | A partir del análisis de tres escenarios de exportaciones de petróleo y carbón simulados entre 2023-2050, este capítulo subraya la mayor fragilidad macroeconómica y financiera que la transición mundial hacia una economía de bajo carbono (y la subsiguiente reducción de la demanda de combustibles fósiles) podría implicar para la economía de Colombia. La disminución de las exportaciones de combustibles fósiles afectará profundamente a los sectores real y exterior del país y deteriorará sus condiciones fiscales y financieras. Asegurar un volumen constante de flujos internacionales puede ayudar a mitigar los impactos negativos de la transición global a largo plazo. Aun así, el principal motor de la recuperación reside en la política industrial. Colombia tendrá que reducir su dependencia de las importaciones y diversificar sus exportaciones (aumentando la base exportadora con bienes y servicios sofisticados y de mayor valor añadido), lo que requerirá acciones coordinadas entre la industria, las finanzas y el gobierno. La aplicación temprana de estas políticas es prioritaria, ya que estas transformaciones estructurales tardan en materializarse. |
| Abstract: | Sur la base de l'analyse de trois scénarios d'exportations de pétrole et de charbon sur la période 2023-2050, ce chapitre met en évidence la plus grande fragilité macroéconomique et financière que la transition mondiale vers une économie bas carbone (et le déclin subséquent des combustibles fossiles) pourrait entraîner pour l'économie colombienne. Le déclin des exportations de combustibles fossiles affectera profondément les secteurs réel et extérieur de la Colombie et détériorera ses conditions fiscales et financières. La garantie d'un volume constant de flux internationaux peut contribuer à atténuer les effets négatifs de la transition mondiale à long terme. Toutefois, le principal moteur de la reprise réside dans la politique industrielle. La Colombie devra réduire sa dépendance à l'égard des importations et diversifier ses exportations (en augmentant la base d'exportation avec des biens et services sophistiqués et à plus forte valeur ajoutée) – ce qui nécessitera des actions coordonnées entre les secteurs l'industriels, financiers et le gouvernement. La mise en oeuvre rapide de ces politiques est une priorité, car ces transformations structurelles prennent du temps pour se concrétiser. |
| Keywords: | Climate resilience, Sustainable development, Energy transition, Carbon neutrality, Social inclusion, Climate finance, Colombia, Développement durable, Neutralité carbone, Colombie, Transition énergétique, Inclusion sociale, Financement climatique, Résilience climatique |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05208165 |
| By: | Tas, Emcet Oktay; Canpolat, Ezgi; Cole, Megan; Setyowati, Abidah Billah; Woodhouse, Jasminah |
| Abstract: | This paper provides a spatial analysis of coal transition vulnerability in Indonesia. It uses a mixed-methods approach that combines quantitative data on exposure, sensitivity, and adaptive capacity to coal transition, summarized in a Coal Transition Vulnerability Index, with qualitative insights from stakeholder consultations and interviews. The paper explores the socioeconomic implications of dependence on coal and potential shifts in production patterns for communities and workers. It finds that vulnerability to coal transition is geographically concentrated, with provinces like East Kalimantan, South Kalimantan, and South Sumatra exhibiting high susceptibility due to their dependence on coal mining and coal-fired power generation. Case studies and qualitative findings further illustrate the localized nature of vulnerability, and the potential challenges faced by communities due to impending mine closures. The paper underscores significant socioeconomic and local impacts, particularly on employment within the coal value chain; highlights the disproportionate effects on vulnerable groups, including women, youth, indigenous communities, and informal workers; and highlights the need for inclusive and tailored strategies for managing the socioeconomic impacts of coal transition. |
| Date: | 2025–08–18 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11188 |
| By: | Cristiano Salvagnin; Vittorio del Tatto; Maria Elena De Giuli; Antonietta Mira; Aldo Glielmo |
| Abstract: | We propose to use a recently introduced non-parametric tool named Differentiable Information Imbalance (DII) to identify variables that are causally related -- potentially through non-linear relationships -- to the financial returns of the European Union Allowances (EUAs) within the EU Emissions Trading System (EU ETS). We examine data from January 2013 to April 2024 and compare the DII approach with multivariate Granger causality, a well-known linear approach based on VAR models. We find significant overlap among the causal variables identified by linear and non-linear methods, such as the coal futures prices and the IBEX35 index. We also find important differences between the two causal sets identified. On two synthetic datasets, we show how these differences could originate from limitations of the linear methodology. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.15667 |
| By: | Balakina, Olga; Christiansen, Charlotte; Kallestrup-Lamb, Malene |
| Abstract: | This paper examines how offering sustainable investment options influences sustainable consumption behavior. We combine a natural experiment in which individuals receive an option to switch to a pension plan with a strong sustainability profile with detailed household register data. This sustainable option improves sustainable consumption, as reflected in electric vehicle adoption and reduced vehicle emissions. The effect is primarily driven by individuals who do not choose the sustainable plan. We show that making sustainable investment available can create positive spillover effects on other sustainable behaviors, highlighting the potential of financial tools to support broader societal change. |
| Keywords: | Household finance, sustainable investments, sustainable consumption, pension investments, sustainable pension plans, electric vehicles |
| JEL: | G11 G51 D14 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:safewp:324640 |
| By: | Frondel, Manuel; Kaestner, Kathrin; Krieg, Marielena; Vance, Colin |
| Abstract: | Numerous measures have been taken in recent years to achieve climate protection targets in Germany's building sector. With the newly established Ariadne German Heating and Housing Panel (GHHP), the prerequisite for a well-founded evaluation of the effectiveness, distribution effects, and acceptance of climate policy measures in the heating sector has been created for the first time. Funded by the Federal Ministry of Education and Research (BMBF) as part of the Kopernikus project Ariadne, the GHHP is a series of annual surveys on the heating transition. It comprises around 15, 000 participating households in Germany, 65% of which are owner-occupied households with the remaining 35% renters. In addition to eliciting detailed information on the building stock, existing heating systems, heating costs and the socio-economic characteristics of the households, the survey examines energy modernization measures that have already been carried out or are planned. The survey also records households' perception and acceptance of policy instruments in the building sector that are being discussed and have already been introduced. The first survey took place in 2021, with subsequent surveys to be continued annually until 2026. |
| Abstract: | In den vergangenen Jahren wurden zahlreiche Maßnahmen ergriffen, um die Klimaschutzziele im Gebäudesektor in Deutschland zu erreichen. Mit dem neu eingerichteten Ariadne Wärme- und Wohnen-Panel wurde erstmals die Voraussetzung für eine fundierte Evaluierung der Wirksamkeit, der Verteilungseffekte und der Akzeptanz von klimapolitischen Maßnahmen im Wärmesektor geschaffen. Das vom Bundesministerium für Bildung und Forschung (BMBF) im Rahmen des Kopernikus-Projekts Ariadne geförderte Wärme- und Wohnen-Panel ist eine Reihe von jährlichen Befragungen zur Wärmewende. Sie umfasst rund 15.000 teilnehmende Haushalte in Deutschland, von denen 65% Eigentümerhaushalte und die restlichen 35% Mieter sind. Neben detaillierten Informationen zum Gebäudebestand, den vorhandenen Heizungsanlagen, den Heizkosten und den sozioökonomischen Merkmalen der Haushalte werden auch bereits durchgeführte oder geplante energetische Modernisierungsmaßnahmen untersucht. Außerdem wird die Wahrnehmung und Akzeptanz von diskutierten und bereits eingeführten politischen Instrumenten im Gebäudesektor durch die Haushalte erfasst. Die erste Erhebung fand 2021 statt, weitere Erhebungen werden jährlich bis 2026 durchgeführt. |
| Keywords: | Household panel, heating transition, rate of modernization, acceptance |
| JEL: | Q3 Q4 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:324659 |
| By: | Fay\c{c}al Djebari; Kahina Mehidi; Khelifa Mazouz; Philipp Otto |
| Abstract: | This paper examines several network-based volatility models for oil prices, capturing spillovers among OPEC oil-exporting countries by embedding novel network structures into ARCH-type models. We apply a network-based log-ARCH framework that incorporates weight matrices derived from time-series clustering and model-implied distances into the conditional variance equation. These weight matrices are constructed from return data and standard multivariate GARCH model outputs (CCC, DCC, and GO-GARCH), enabling a comparative analysis of volatility transmission across specifications. Through a rolling-window forecast evaluation, the network-based models demonstrate competitive forecasting performance relative to traditional specifications and uncover intricate spillover effects. These results provide a deeper understanding of the interconnectedness within the OPEC network, with important implications for financial risk assessment, market integration, and coordinated policy among oil-producing economies. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.15046 |
| By: | Raimi, Daniel (Resources for the Future); Doctor, Sarah; Kaufman, Noah; Whitlock, Zachary (Resources for the Future) |
| Abstract: | In the early years of the shale revolution, some prominent voices argued that the boom would be short-lived (Hughes 2013). As recently as 2018, some warned that the inevitable bust would even pose risks to the US financial system (McLean 2018). But today, more than 15 years after companies began producing substantial quantities of natural gas and oil from shale and other “tight” rocks, the revolution marches onward, with US oil and gas production at all-time highs. In 2023, the country produced about 13 million barrels of crude oil per day (mb/d) and more than 40 trillion cubic feet of natural gas (EIA 2024a, 2024b) and was the global leader in both categories. |
| Date: | 2025–02–26 |
| URL: | https://d.repec.org/n?u=RePEc:rff:ibrief:ib-25-04 |
| By: | Aguilera, Florencia; Reyes, René; Schueftan, Alejandra; Zerriffi, Hisham; Sanhueza, Rafael |
| Abstract: | Fuelwood consumption in the residential sector has been widely studied worldwide, being family income and other socio-demographic variables commonly identified as its major drivers. In this review, we questioned these findings by including people's preferences/perceptions and context-specific variables in the analysis, and their joint effect on households' energy choices. For this purpose, we performed a meta-analysis based on an econometrical model covering 69 studies (228 observations) on fuelwood consumption and energy transition. We conclude that people's preferences/perceptions have been undervalued in comparison to socioeconomic variables, which are more easily measured by using surveys –or they are already included in preexisting datasets-, especially when researchers are not familiar with local sociocultural and environmental contexts (traditions, status, and worldviews, among others). When people's preferences/perceptions are included in models, the commonly detected effects of gender and family income on energy transition significantly decrease, while the effect of people's schooling remains. This opens the discussion whether it is correct to tackle the dilemma about residential fuelwood consumption through policies that are based on variables like income, instead of more seriously trying to understand local contexts, and also it highlights the role that people's schooling has on energy transition beyond economic aspects. If we take into account that people's decisions about energy includes highly behavioral elements on the personal and household levels, shaped by education, we will be able to develop targeted public policies that allow for a more sustainable use of energy in the residential sector. |
| Keywords: | cooking stoves; energy transition; fuelwood; household energy consumption; logit; traditional fuels |
| JEL: | J1 |
| Date: | 2024–10–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:124605 |
| By: | Furse, Simon |
| Abstract: | This paper examines two literatures that try to understand the biophysical constraints placed on the economy and economic growth. Firstly, exergy economics uses the second law of thermodynamics to examine the aggregate exergy conversion process to the useful stage. This shows the dependency of the economy on physical laws and highlights the limits to continued productivity growth. I argue that exergy economics provides a vital contribution to economics, but previous attempts to integrate it into an economic framework are undermined by a reliance on the neoclassical production function. Secondly, ecological macroeconomics examines biophysical constraints to the economy using heterodox economic theory and models. My review of this literature shows that productivity growth is often modelled as unconnected to energy and materials and able to increase exponentially into the future despite biophysical constraints. The paper argues that biophysical limits to productivity growth need to be considered alongside the more commonly modelled damage functions and limits to resource availability and quality in ecological macroeconomics. |
| Keywords: | Exergy, Energy, Societal Exergy Analysis, Ecological Macroeconomics, Technical Change, Production Functions, Limits to Growth |
| JEL: | E12 O44 Q43 Q57 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ipewps:324638 |
| By: | Chetana Chaudhuri (National Council of Applied Economic Research); Subrata Rath (National Council of Applied Economic Research); Ujala Kumari (National Council of Applied Economic Research); Sanjib Pohit (National Council of Applied Economic Research); Soumi Roy Chowdhury (Institute of Rural Management Anand) |
| Abstract: | AIndia has pledged to reach net zero emissions by 2070, and set an ambitious renewable energy (REN) target of 500 GW from non-fossil sources by 2030. At present, total RENbased electricity generation capacity in India is 220.10 GW (31 March 2025). To achieve its climate goals, it is essential for India to strengthen its REN sector at both the national and subnational levels to harness its potential. In this paper, we analyse public sector expenditure on the REN sector, and discuss the public finance strategies adopted by states, their utilisation rates, and priorities in public expenditure in terms of schemes and subsidies related to REN. Based on our analysis we have formulated recommendations for the 16th Finance Commission. We have estimated the amount of green grants for states, taking into account the potential and progress in various REN sectors across states. We also discuss the challenges and list short-term recommendations (the low-hanging fruit) and long-term recommendations to enhance states’ performance in achieving the targets of the green transition. Our analysis shows that while fore-runner states in terms of public expenditure on REN, like Chhattisgarh, prioritise subsidies for solar pumps, Gujarat demonstrates a more diversified approach, investing in large-scale solar-wind hybrid parks, microgrids, and decentralised systems. In contrast, Rajasthan, despite its high renewable potential, spends a very small share of its budget on REN. Tamil Nadu, Andhra Pradesh, Tripura, and Jammu & Kashmir have no identifiable budgeted spending for REN through public finances, while Himachal Pradesh, Madhya Pradesh, Karnataka, Assam, and Telangana spend a miniscule amount from their budgets (less than 0.01%) on REN. The majority of the states spend more on revenue than on capital, resulting in the lack of asset creation and infrastructural support in this sector. States also suffer from poor fiscal planning. Haryana, Gujarat, Uttar Pradesh, and Maharashtra spend significantly on subsidies for renewables, while Chhattisgarh and Jharkhand, though providing subsidies on other components of the energy sector, do not report giving subsidies for REN. These differences underscore the need for strategic, well-targeted financing that aligns state actions with their technical and economic potential. Renewable energy technologies are highly capital-intensive with substantial upfront costs. Both government entities and other financial lenders have a back-log of nonperforming assets (NPAs), and the uncertainty of investments returns in this sector makes long-term financing stressful. The financial health of DISCOMs and the lack of green priority specifications in financial frameworks add to the problem. The REN sector, being at a nascent stage of development, also faces substantial operational and institutional challenges like land acquisition, technical and regulatory barriers to solar rooftop panels, poor transmission infrastructure, policy misalignments between central and state governments, and so on. A lack of awareness which creates resistance to the adoption of REN and land-use conflicts are also concerns. To overcome these challenges, this study includes a list of recommended financial incentives, and infrastructural and regulatory support, and an approach toward public expenditure on this sector. Our study suggests that to meet the government REN target of installed capacity of 500GW by 2030, the Finance Commission needs to provide green energy grants to states. We estimate that, considering the potential, installed capacity, and present trend in spending on new energy and REN, the average yearly grant requirement for all states would be around Rs. 14, 064 crore over the next five years to reach this target. Given the high risks and low returns in this sector, public investment must lead the way. Keywords: Public Financing of Renewable Energy, Finance Commission, Green Grants, Challenges in Renewable Energy Sector |
| Keywords: | Public Financing of Renewable Energy, Finance Commission, Green Grants, Challenges in Renewable Energy Sector |
| JEL: | H30 H61 H71 H72 H77 |
| Date: | 2025–08–03 |
| URL: | https://d.repec.org/n?u=RePEc:nca:ncaerw:186 |
| By: | Maczulskij, Terhi; Jurvanen, Outi |
| Abstract: | Abstract This paper examines how firms’ environmental performance responds to product- and destination-specific export demand shocks in their export markets. We draw on unique administrative data for Finnish manufacturing firms from 1999 to 2018, matched with national customs records, greenhouse gas emissions, and energy use. The results show that while export demand shocks significantly increase firms’ export volumes and energy consumption, they do not improve overall environmental performance. Specifically, we find no significant effects on carbon intensity or total energy intensity, although fuel intensity declines, particularly in more polluting industries. Heterogeneity and mechanism analyses further reveal that financially weaker firms experience increases in emissions and carbon intensity, suggesting that financial constraints may limit their ability to adopt cleaner technologies. Overall, the findings highlight the critical role of firm-level characteristics in shaping the environmental consequences of trade shocks and suggest that export-promotion policies should account for firms’ financial capacities to support green investments and sustainable outcomes. |
| Keywords: | Emissions, Energy expenditure, Energy intensity, Export demand shock, Firm-level, Carbon intensity |
| JEL: | D22 F22 O30 |
| Date: | 2025–08–25 |
| URL: | https://d.repec.org/n?u=RePEc:rif:wpaper:132 |
| By: | Torijano, Eugenio |
| Abstract: | En este documento se presentan cuadros regionales y nacionales con datos estadísticos del subsector hidrocarburos de los ocho países que conforman el Sistema de la Integración Centroamericana (SICA): Belice, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panamá y la República Dominicana. Se elaboró gracias a la colaboración de las instituciones nacionales y regionales del sector petrolero de los países del SICA. El informe consta de seis grupos de cuadros, todos referidos al petróleo (petróleo crudo y productos derivados) y gas natural: i) valor de las importaciones y precios; ii) balances de petróleo, derivados y gas natural; iii) consumo interno de hidrocarburos; iv) consumo de energía proveniente de hidrocarburos; v) procedencia de las importaciones y la capacidad de almacenamiento, y vi) estructura de los mercados. La sección de gráficos y mapas se divide en cuatro: i) procedencia de las importaciones; ii) evolución y estructura de los precios de los combustibles; iii) consumo de los derivados del petróleo y gas natural, y iv) impacto de las importaciones en la balanza comercial. |
| Date: | 2025–07–09 |
| URL: | https://d.repec.org/n?u=RePEc:ecr:col094:82024 |
| By: | Sophie Clot (EDHEC - EDHEC Business School - UCL - Université catholique de Lille); Gilles Grolleau (ESSCA - ESSCA – École supérieure des sciences commerciales d'Angers = ESSCA Business School); Lisette Ibanez (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier) |
| Abstract: | This study investigates the extent to which people are subject to moral licensing in the environmental domain by examining moral dynamics at a disaggregated level. Using Giving and Taking games with environmental NGOs, we found that aggregate results hide important heterogeneity. Half of the participants engaged in compensatory behavior, with highly environmentally concerned individuals compensating more frequently. Men were more consistent than women, but when they adopted moral licensing, their compensation was significantly greater than that of women. These findings suggest opportunities for improving environmental policy effectiveness. |
| Keywords: | taking game, moral in(consistency), licensing, dictator game, cleansing |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05148018 |
| By: | Agnieszka Kulesa |
| Abstract: | Climate change is a global problem – it requires the cooperation of countries all over the world and the implementation of sustainable development concepts. In mBank-CASE Seminar Proceedings no. 177 authors describe the ways selected Polish regions tackled the challenges of transition towards sustainable energy. Agnieszka Kulesa, Vice-President of CASE Management Board, focuses on Lusatia, Upper Nitra and Greater Poland and the way these regions handled the transition, highlighting the role of lignite mining. Aleksandra Gawlikowska-Fyk, Energy Forum expert and director of the Electricity comments on Agnieszka’s findings. Next chapters focus on the way two cities in Poland managed to make their way through an energy transition: Konin – described by Piotr Korytkowski, Its President, and Wałbrzych – by Andrzej Kosiór, Head of the Strategic Management Office. |
| Keywords: | energy transition, lignite, Greater Poland, Upper Nitra, Lusatia, Lower Silesia, Konin region, local government |
| JEL: | P28 Q32 |
| Date: | 2024–08–20 |
| URL: | https://d.repec.org/n?u=RePEc:sec:mbanks:0177 |
| By: | Saroj Bhattarai; Arpita Chatterjee; Gautham Udupa |
| Abstract: | We estimate distributional implications of global food and oil price shocks by utilizing monthly panel data on consumption and income from India, and an IV strategy that removes variation coming from global demand shocks. While both shocks lead to stagflationary aggregate dynamics, they differ in terms of distributional consequences. Consumption of lower income deciles is affected more by exogenous increases in food prices, while consumption of both tails of the income distribution is affected similarly by exogenous increases in oil prices. These heterogeneous negative consumption responses largely mirror the pattern of heterogeneity in wage income responses. Increases in relative expenditure of food, despite a rise in the relative local price of food, provides clear evidence for non-homothetic demand in non-durable consumption. Estimating the slopes of the Engel curve by impulse response matching, we find that food, compared to fuel, is a necessary consumption good for all income groups. Comparing the model predictions with the empirical consumption responses, we decompose the role played by wage income, relative price changes, and non-homotheticity in explaining our results. |
| Keywords: | Global Price shocks; Food prices; Oil prices; Inequality; Household heterogeneity; Household consumption; Necessary good; Non-homotheticity; India |
| JEL: | E31 E32 F62 O11 |
| Date: | 2025–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgif:1414 |
| By: | Rode, Johannes; Römer, Daniel; Salzgeber, Johannes |
| Abstract: | Demand for electric vehicles is growing, both in Germany and around the world. Electric vehicles are also becoming more important for the German export market. In the first quarter of 2025, more than one in four cars exported from Germany was a battery-electric vehicle (BEV). On average, 82, 000 BEVs worth EUR 3.4 billion were exported each month. Germany now generates a higher export surplus with BEVs than with other cars. The value of exports of BEVs exceeds the value of imports by a factor of 5. Besides, electric vehicles offer increasingly greater climate benefits. According to the KfW Energy Transition Barometer, one third of the electricity used to charge EVs in Germany is now self-generated and green, a new record. Consumer concerns about electric vehicles are decreasing. Approaches to increase EV uptake include removing information deficits, providing incentives for time-optimised charging and improving the conditions for charging in multi-family homes. |
| Date: | 2025–08–05 |
| URL: | https://d.repec.org/n?u=RePEc:dar:wpaper:156659 |
| By: | Schreiner, Lena; Beyer, Andreas |
| Abstract: | How does environmental, social and governance regulation of banks affect capital provision to the sustainability transition? As ambitious sustainability targets face funding challenges, the financial sector is tasked with channeling more private capital into sustainable investments. However, scaling sustainable technologies often requires investment in non-ESG-compliant assets. The mobility transition to electric vehicles, for example, demands increased supply of battery raw materials like Lithium, Cobalt, Manganese, and Nickel. This paper analyzes how ESG regulation impacts capital provision to mining companies supplying these materials. Concretely, we assess effects of the European Union’s Sustainable Finance Disclosure Regulation and of the Taxonomy on banks’ public holdings and cost of capital, using two large, novel data sets. We find that the introduction of the ESG regulations has a dampening effect on banks’ holdings in battery raw material mining companies, in particular those with poor ESG performance. The companies’ cost of capital and lending behavior remain unchanged. JEL Classification: G21, G28, Q50 |
| Keywords: | banking, ESG regulation, lending, public holdings, sustainable finance |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253089 |
| By: | Gadžo, Amra; Babajic, Amra; Nuhanović, Amra |
| Abstract: | This study explores the impact of educating households on energy savings and its subsequent effect on reducing energy consumption and pollution. The research was conducted on a sample of 10, 044 household owners in the Tuzla Canton of the Federation of Bosnia and Herzegovina. During the first round of household visits, data on individual household electricity consumption for the past twelve months were collected, education on possible energy savings in households was conducted, and four standard light bulbs were replaced with four LED light bulbs. After one year, a second round of data collection on household electricity consumption for twelve months was conducted. The paper presents comparative indicators of electricity consumption before and after education, achieved savings in consumption, and the calculation of reduced harmful emissions into the air. The research results showed that educating household owners about possible energy savings resulted in an increase in their efforts to achieve energy savings. The value of the achieved energy savings amounts to 4.47% in percentage terms, 1, 962, 676.50 kWh in absolute terms, the recalculated value of savings in EUR amounts to 166, 079, while the value of reduced air emissions amounts to 2, 345, 398.42 kg CO2. The highest energy savings were achieved in the municipality of Kalesija at 8.76%, while the lowest were in the city of Živinice at 2.64%. The results of this study will contribute to the literature gap in understanding the importance of educating the population, their behavioural characteristics, potential energy savings, and the cost-benefit analysis of such energy-saving projects. |
| Keywords: | education of household owners, energy savings, reduction of energy consumption, reduction of air pollution |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esconf:324466 |
| By: | Roy, Nicholas (Resources for the Future); Burtraw, Dallas (Resources for the Future) |
| Abstract: | As recent events have shown, the impact of climate change on affordability for California households substantially dominates the cost of efforts to reduce greenhouse gas emissions. An important opportunity to mitigate emissions exists on natural and working lands. These investments also can improve the state’s resilience to the changing climate. These opportunities are not directly regulated under the carbon market because of the difficulty in monitoring and enforcing regulatory actions. Instead, the market directs investments through the offset program. A potential reform to the offsets program could yield additional hundreds of millions of dollars for the Greenhouse Gas Reduction Fund to drive further investments. |
| Date: | 2025–01–23 |
| URL: | https://d.repec.org/n?u=RePEc:rff:ibrief:ib-25-02 |
| By: | Leo Reutter (University of Kassel); Bernadetta Winiewska (ITG Dresden (Institut für Technische Gebäudeausrüstung Dresden Forschung und Anwendung GmbH)) |
| Abstract: | Due to rent control, the primary landlord-tenant dilemma prevents landlords from recovering costs of energy-efficiency retrofits, which mainly benefit tenants. This necessitates tenancy law to allocate retrofit and energy costs adequately. We analyze the impact of Germany's current system and three reform options on both parties' finances using simulations across various building sizes and retrofit ambitions. We find that, in general, investment costs exceed energy savings. Only two of the reform options consistently incentivize landlord investment, albeit at tenants’ expense, while the status quo system and the third reform option almost always incentivize landlords to forego retrofits. A sensitivity analysis shows these systems’ effectiveness is barely affected by the details of German general tenancy law and local rent markets’ characteristics (rent levels and their inflation, valuation of energy efficiency). Designing landlords’ retrofit premia to depend on the technically estimated energy demand cost savings is especially promising, contingent on reliable energy performance data. |
| Keywords: | Landlord-tenant dilemma, Tenancy law, Allocation of retrofit and energy costs, Simulation model |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:mar:magkse:202508 |
| By: | Ko, Eunice; Krupnick, Alan (Resources for the Future); Bautista, Eddie; Look, Wesley (Resources for the Future); Robertson, Molly (Resources for the Future) |
| Abstract: | The New York Department of Environmental Conservation (DEC), the New York State Energy Research and Development Authority (NYSERDA), and the New York Governor are currently finalizing draft regulations that will determine how an economy-wide emissions cap-and-trade system (also referred to as “NYCI” by the State) will work in New York State. The regulations will influence how much and how equitably greenhouse gas (GHG) and copollutant emissions are reduced. Advocates, such as New York City Environmental Justice Alliance and New York Renews, referring to the program as “cap-trade-and-invest, ” have been calling for guardrails in the program to make sure the State complies with the Climate Leadership and Community Protection Act (or the “Climate Act”), and that disadvantaged communities (DACs) do not experience more air pollution or slower, lower rates of air quality improvement compared to non-DACs. Advocacy groups have also been calling for regulations that will bolster the amount of program revenue for climate investment and action.Our research to date has analyzed different cap-trade-and-invest policy designs and their corresponding GHG emissions, copollutant emissions, and household cost impacts. Previous work conducted by Resources for the Future (RFF) and New York City Environmental Justice Alliance (NYC-EJA), Krupnick et al. (2024) and Robertson et al. (2024), found that the cap-trade-and-invest program can reduce GHG and copollutant emissions. The research presented in this issue brief shows that guardrails, such as restricted trading, facility-specific caps, and obligating the electricity sector improve air quality for New Yorkers, especially those in DACs. Earlier reports offer more detail on overall emissions changes across the state and generator-level emissions changes in the power sector. Separate air quality modeling from the emissions modeling was needed because the relationship between direct emissions and local air quality is highly affected by complex chemical processes and atmospheric conditions.In this report, we leverage the emissions findings reported in Krupnick et al. (2024) and Robertson et al. (2024) to conduct a robust air quality analysis using a state-of-the-art atmospheric model initially used in Krupnick et al. (2023). Emissions changes in sulfur dioxide, nitrous oxides, and direct PM2.5 are used to estimate local PM2.5 concentrations at a 4km2 grid resolution. We focus on PM2.5 concentrations because this pollutant is tied directly to health and wellness outcomes, and small changes in concentrations can lead to meaningful impacts on mortality and chronic disease (e.g., asthma) rates (Di et al. 2017; Krewski et al. 2009; Lepuele et al. 2012).This analysis compares tract-level air quality estimates for four policy cases:The Business as Usual (BAU) case, which includes the NY Clean Energy Standard, the Regional Greenhouse Gas Initiative (RGGI), Inflation Reduction Act (IRA) policies, renewable generation mandates, zero emissions vehicle mandates, and other existing policies. In this case, there is no cap-trade-and-invest program.The Electricity not Obligated Case (ENOC), where cap-trade-and-invest is implemented in New York State, but the electricity sector is not covered. Power sector facilities in the state are still required to purchase allowances from the RGGI market.The Full Trading Case (FTC), where cap-trade-and-invest is implemented, electricity is covered under cap-trade-and-invest, and there is full trading across sectors.The Restricted Trading Case (RTC), where cap-trade-and-invest is implemented, electricity is covered under cap-trade-and-invest, and there are sector-specific caps and facility-specific caps on power generators that constrain trading.Our air quality analysis reveals:Each modeled cap-trade-and-invest policy design delivers air quality benefits across a variety of community types in New York State. The greatest air quality improvements for disadvantaged communities and all other communities are delivered by the RTC, and the smallest benefits are delivered by the ENOC.The greatest average air quality improvements in all cases are found in disadvantaged communities, particularly those with high historic air pollution, high vulnerability scores, or high environmental burden scores on the state’s disadvantaged community index.The greatest air quality improvements in all cases are in New York City.In each policy case, a small fraction of tracts experience smaller air quality improvements than those expected in the BAU. The ENOC has the greatest number of tracts with these smaller improvements, while the FTC has the least. |
| Date: | 2024–10–17 |
| URL: | https://d.repec.org/n?u=RePEc:rff:ibrief:ib-24-10 |
| By: | Arkadiusz Lipiecki; Kaja Bilinska; Nikolaos Kourentzes; Rafal Weron |
| Abstract: | We introduce the concept of Temporal Hierarchy Forecasting (THieF) in predicting day-ahead electricity prices and show that reconciling forecasts for hourly products, 2- to 12-hour blocks, and baseload contracts significantly (up to 13%) improves accuracy at all levels. These results remain consistent throughout a challenging 4-year test period (2021-2024) in the German power market and across model architectures, including linear regression, a shallow neural network, gradient boosting, and a state-of-the-art transformer. Given that (i) trading of block products is becoming more common and (ii) the computational cost of reconciliation is comparable to that of predicting hourly prices alone, we recommend using it in daily forecasting practice. |
| Keywords: | Electricity price; Temporal Hierarchy Forecasting (THieF); Forecast reconciliation; Regression; Machine learning |
| JEL: | C22 C45 C51 C53 Q41 Q47 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ahh:wpaper:worms2506 |
| By: | Rennert, Kevin (Resources for the Future); Ho, Mun (Resources for the Future); Nehrkorn, Katarina (Resources for the Future); Elkerbout, Milan (Resources for the Future) |
| Abstract: | Carbon–intensity-based border measures, in which a country imposes tariffs on imported goods according to their carbon emissions from each unit of production, have emerged as a key element of the trade and climate policy conversation in the United States and abroad. Proponents of such measures in the US Congress have cited multiple potential benefits, including supporting domestic competitiveness, reducing emissions in US-consumed goods, and reducing the emissions intensity of domestic manufacturing.There have been few detailed studies of the effects of US border measures based on carbon intensity, despite their current policy relevance and long history in the carbon pricing literature. In part, this is due to inherent challenges in the analysis of such border measures, including limited data on the carbon intensities of products worldwide, the complexity of trade relationships, and the myriad potential responses to such measures by actors throughout the global economy.Here, we use a global economic model to assess the effects of a border measure stylized after the Foreign Pollution Fee Act of 2025 (FPFA) introduced to the 119th Congress by Senators Bill Cassidy (R-LA) and Lindsey Graham (R-SC). The FPFA would impose tariffs on a set of covered products including iron and steel, aluminum, cement, glass, fertilizer, hydrogen, solar products, and long-duration storage, based on their relative carbon intensities compared to US production.We find that the FPFA would:Shift US imports toward countries with lower carbon intensity manufacturing: Imports for covered products are reduced from countries facing the carbon tariffs (e.g. China, Mexico, and India) and increase from countries exempt from the tariffs (e.g. the European Union, United Kingdom, and Japan) due to their lower carbon intensity of manufacturing for those products.Increase US manufacturing of covered products: The carbon tariffs protect US manufacturing of covered products, thereby raising their output: cement (+9.1 percent), aluminum (+7.9 percent), iron and steel (+7.4 percent), metal products (+3.7 percent).Raise revenue: Annual revenues from the policy are projected to be $2.8 billion (in 2024$) in the first year and total $33.3 billion over ten years.Have a minimal effect on global emissions: Changes in trade patterns and increased US manufacturing would reduce the embodied emissions of US imported goods, but reshuffling of global trade for covered products offsets the reduction of US imported emissions. US emissions increase due to greater domestic manufacturing. The net effect is that global emissions are relatively unchanged by the policy.Reduce output in downstream industries: Industries such as construction and transportation equipment manufacturing use covered products as inputs, exposing them to higher costs. US production from such downstream industries is projected to fall by 0.2–2 percent. |
| Date: | 2025–05–21 |
| URL: | https://d.repec.org/n?u=RePEc:rff:ibrief:ib-25-07 |
| By: | Clay, Karen (Carnegie Mellon University); Hernandez-Cortes, Danae (Arizona State University); Jha, Akshaya (Carnegie Mellon University); Lewis, Joshua (University of Montreal); Miller, Noah (University of Southern California); Severnini, Edson (Boston College) |
| Abstract: | This paper examines the relative contributions of siting decisions and post-siting demographic shifts to current disparities in exposure to polluting fossil-fuel plants in the United States. Our analysis leverages newly digitized data on power plant siting and operations from 1900-2020, combined with spatially resolved demographics and population data from the U.S Census from 1870-2020. We find little evidence that fossil-fuel plants were disproportionately sited in counties with higher Black population shares on average. However, event study estimates indicate that Black population share grows in the decades after the first fossil-fuel plant is built in a county, with average increases in Black population share of 4 percentage points in the 50-70 years after first siting. These long-run demographic shifts are driven by counties that first hosted a fossil-fuel plant between 1900-1949. We close by exploring how these long-run demographic shifts were shaped by the Great Migration, differential sorting in response to pollution, and other factors. Our findings highlight that the equity implications of siting long-lived infrastructure can differ dramatically depending on the time span considered. |
| Keywords: | environmental justice, fossil-fuel power plants, infrastructure siting, demographic shifts |
| JEL: | N52 N92 Q40 Q52 Q53 Q56 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18052 |
| By: | Edenhofer, Ottmar; Kalkuhl, Matthias; Stern, Lennart |
| Abstract: | This paper examines how donor countries can be motivated by self-interest to fund emission reductions in low- and middle-income countries (LMICs). While not solving the broader climate cooperation problem, we propose pragmatic measures that do not require global consensus on future climate risks or binding commitments. We quantify the unilateral benefits for donors - reduced climate damages and improved terms-of-trade from lower fossil fuel prices - resulting from financing fossil fuel demand reductions. To address project-level finance inefficiencies, we introduce jurisdictional reward funds targeting governments, which also generate implicit wealth transfers to LMICs. A self-enforcing coalition of fossil fuel importers, such as the European Union and China, could mobilize USD 66 billion annually for mitigation in LMICs, cutting emissions by 1060 Mt CO₂ per year and transferring USD 33 billion per year. LMICs additionally benefit from USD 78 billion in reduced climate damages and USD 19 billion from lower fuel prices. We explore coalition stability, geopolitical considerations, and how broader tax and reward mechanisms could further improve global climate, forest, and health outcomes. |
| Keywords: | Jurisdictional Reward Funds, tax coalitions, fuel market leakage, global public goods, terms-of-trade effects, demand-side climate policy |
| JEL: | H23 H87 F55 Q41 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkwp:324658 |
| By: | Dirk Schoenmaker; Willem Schramade |
| Abstract: | Our model provides a bird’s eye view of a country’s exposure to transition |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:bre:wpaper:node_11190 |
| By: | International Monetary Fund |
| Abstract: | The financial sector in Canada is exposed to both physical and transition climate risks. Floods and wildfires are prominent hazards, and climate change could increase their intensity. As a major fossil fuel producer, Canada is also exposed to transition risks, the 10th largest global emitter, and has committed to reduce emissions by 40–45 percent by 2030 relative to 2005. |
| Date: | 2025–08–08 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfscr:2025/234 |
| By: | Zhou, Weizhong; Liu, Chunlu; Zhou, Yu; Li, Qihui; Wang, Yuanhua |
| Abstract: | As an environmental policy, the Action Plan of Atmosphere Pollution Control in Beijing-Tianjin-Hebei and Surrounding Areas in Autumn and Winter (Action Plan of APC) was implemented in 2017, with the goal of achieving the sustainable growth of the regional economy. This study examines the effect of the Action Plan of APC on green total factor productivity (GTFP) in the Chinese construction industry employing a difference-in-differences (DID) approach. The findings indicate the following: Firstly, the environmental policy of the Action Plan of APC has significantly improved the GTFP of the aforementioned areas, and the result is still valid after robustness testing; secondly, the dynamic effect testing reveals that the influence follows an increasing trend over time; thirdly, due to the different degrees of marketization, the influence of the Action Plan of APC on GTFP in Chinese construction industry exhibits notable regional heterogeneity. From the perspectives of both the government and enterprises, this study offers recommendations for promoting the GTFP of China’s construction industry. It also provides a novel framework for assessing the effect of environmental policies on the GTFP of the Chinese construction industry. |
| Keywords: | air pollution; green growth; GTFP; DID model |
| JEL: | R14 J01 |
| Date: | 2025–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129092 |
| By: | Godinho, Enzo; Mattos, Beatriz |
| Abstract: | This paper investigates the role of the New Development Bank (NDB) in challenging global financial hierarchies while fostering an ecological transition. The NDB, established by BRICS, has a mechanism of providing development finance in local currency, which could reduce dependency on core currencies like the dollar (USD) and the euro (EUR), offering an alternative for peripheral economies to finance sustainable development. Given the institutionalization of the green economy agenda and the rise of green finance, the paper raises elements to assess the NDB's contribution to the ecological transition through its investment strategy. Our analysis builds on structuralist and dependency theories, identifying three interlinked hierarchies - productive, currency, and environmental - that shape global financial asymmetries. We examine the NDB's project portfolio from 2016 to 2024 and the interplay between the projects' area of operation, currency of funding, and country of implementation. The findings indicate that, while the NDB has made strides in funding sustainable infrastructure, its operations remain largely embedded within dominant currency systems. |
| Keywords: | New Development Bank (NDB), BRICS, Green Finance, Currency Hierarchy, Ecological Transition, Development Finance, Sustainable Infrastructure |
| JEL: | F33 F55 O44 Q56 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ipewps:324644 |
| By: | Balleer, Almut; Hirsch, Michael; Nöller, Marvin |
| Abstract: | We present evidence that air pollution negatively affects current well-being. To do so, we create a new dataset, matching particulate matter concentration at the exact day and location with individual-level survey responses about current life satisfaction. The panel structure of our data allows us to overcome several identification challenges in the literature. Additionally, we show how aggregation of air pollution across time and space mis-measures the relevant exposure. Our results further suggest that air pollution affects current well-being mostly through negative emotions like sadness or worry. We estimate the willingness to pay for clean air that refers to the direct, immediate effects of air pollution and can be mapped well to economic models. |
| Abstract: | Luftverschmutzung beeinflusst das aktuelle Wohlbefinden negativ. Wir zeigen dies anhand eines neuen Datensatzes, in dem wir die Feinstaubkonzentration an einem bestimmten Tag und Ort mit individuellen Umfrageantworten zur aktuellen Lebenszufriedenheit abgleichen. Dank der Panelstruktur unserer Daten können wir hierbei mehrere Identifikationsprobleme aus der Literatur überwinden. Wir zeigen zudem, wie die Aggregation von Luftverschmutzung über Zeit und Raum zu einer falschen Messung der relevanten Belastung führt. Unsere Ergebnisse deuten darauf hin, dass Luftverschmutzung das aktuelle Wohlbefinden vor allem durch negative Emotionen wie Traurigkeit oder Sorgen beeinflusst. Darüber hinaus schätzen wir die kurzfristige Zahlungsbereitschaft für saubere Luft, die gut in ökonomische Modelle überführt werden kann. |
| Keywords: | Subjective well-being, air pollution, willingness to pay, compensating variation |
| JEL: | H41 I31 Q53 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:324660 |
| By: | Davit Narmania (Management and Administration Department, Ivane Javakhishvili Tbilisi State University); Eka Chokheli (Management and Administration Department, Ivane Javakhishvili Tbilisi State University); Manana Kharkheli (Management and Administration Department, Ivane Javakhishvili Tbilisi State University); Mikheil Makasarashvili (Management and Administration Department, Ivane Javakhishvili Tbilisi State University); Giorgi Morchiladze (Management and Administration Department, Ivane Javakhishvili Tbilisi State University); Shorena Davitaia (Management and Administration Department, Ivane Javakhishvili Tbilisi State University); Nino Vardiashvili (Management and Administration Department, Ivane Javakhishvili Tbilisi State University) |
| Abstract: | Energy security, which in its essence implies the ability to provide reliable, sustainable, and affordable energy, is a pressing global challenge of the modern era. Geopolitical instability, problems in the supply of energy resources and processes caused by climate change have made it a critical priority on the global agenda and forced countries to reconsider their energy strategies. Dependence on fossil fuels carries high risks, given supply difficulties, price volatility, and adverse environmental impacts. Accordingly, governments and industries are trying to develop modern approaches, which include diversification of energy sources, increasing the share of renewable energy, digitalization of energy infrastructure, development of predictive models for risk assessment, innovation, and greater investment in the creation of new, more sustainable systems. Increasing attention is being paid to the development of smart grids, energy storage systems and cross-border energy interconnections. Steps taken in this direction make energy networks more secure and provide flexible solutions in various critical situations.Artificial intelligence is driving significant changes in the field of energy security. Its role is particularly important in energy demand forecasting, optimizing energy distribution, identifying causes of disruptions, and mitigating failures in the event of supply disruptions. Alongside the growth of digitization, cyber threats are also on the rise, representing a major challenge in the field of energy security. Strengthening cybersecurity measures is essential to prevent potential attacks on energy networks. To ensure a secure and sustainable energy future, it is necessary to strengthen global cooperation, which includes both political and technological innovations. The aim of this article is to examine contemporary trends and approaches in energy security, analyze existing challenges, and emphasize the necessity of innovation and international cooperation in ensuring energy security, as the synergy of technological innovations, political reforms, and international collaboration is crucial for effectively addressing energy challenges. |
| Keywords: | Energy security, Energy diversification, Innovations |
| JEL: | Q40 Q42 Q48 |
| URL: | https://d.repec.org/n?u=RePEc:sek:iacpro:15216678 |
| By: | Voraprapa Nakavachara; Chanon Thongtai; Thanarat Chalidabhongse; Chanathip Pharino |
| Abstract: | This paper investigates whether climate-friendly food products command a price premium in consumer markets. Using product-level data from a supermarket in Sweden, we examine the relationship between front-of-package climate impact scores and retail prices, controlling for product size, nutritional content, and fixed effects. Contrary to the intuitive expectation of a positive green premium, we find no evidence that climate-friendly products are priced higher. In some product categories, products with better climate scores are in fact associated with lower prices, suggesting a negative premium, an outcome that gives rise to what we refer to as the green premium puzzle. We argue that market frictions such as competing consumer priorities, psychological distance from climate issues, and skepticism toward environmental labeling may suppress the price signals intended to reward sustainable consumption. These findings offer important insights for producers, retailers, and policymakers seeking to align climate goals with effective market incentives in the transition toward a more sustainable society. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.10333 |
| By: | Lapo Santarlasci; Armando Rungi; Antonio Zinilli |
| Abstract: | This paper introduces Natural Language Processing for identifying ``true'' green patents from official supporting documents. We start our training on about 12.4 million patents that had been classified as green from previous literature. Thus, we train a simple neural network to enlarge a baseline dictionary through vector representations of expressions related to environmental technologies. After testing, we find that ``true'' green patents represent about 20\% of the total of patents classified as green from previous literature. We show heterogeneity by technological classes, and then check that `true' green patents are about 1\% less cited by following inventions. In the second part of the paper, we test the relationship between patenting and a dashboard of firm-level financial accounts in the European Union. After controlling for reverse causality, we show that holding at least one ``true'' green patent raises sales, market shares, and productivity. If we restrict the analysis to high-novelty ``true'' green patents, we find that they also yield higher profits. Our findings underscore the importance of using text analyses to gauge finer-grained patent classifications that are useful for policymaking in different domains. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.02287 |
| By: | Brian P. Hanley |
| Abstract: | In a series of papers, Garrett, et al, presents a thermodynamic economic model first laid out in "Are there basic physical constraints on future anthropogenic emissions of carbon dioxide?". This model contains a key conceptual issue that obscures a robust system. This system can link to the Energy Based Cobb-Douglas equation. The key conceptual problem is the belief that $\lambda$, the symbol for growth in Garrett 2011 would disprove the model if it was not constant. However, $\lambda$ cannot be a constant in an economic model, because $\lambda$, with dimension [$\frac{E}{\$ \; GWP}$], represents the aggregate efficiency of all of the more than 359 million firms (and by extension, households) making products globally. To clarify it, I define this aggregate production function distribution as $\Lambda(t) \equiv \sum {\lambda_i(t) \cdot \frac{P_i}{GWP}}$, and with light algebra assign a version of the Energy Based Cobb-Douglas (EBDC) function to $\lambda$. There are various falsified speculations in the body of work that appear to mostly follow from the original issue. The 50 year stable relation of $W$ to $E$ is close, but the trend is not flat. The form and degree to which the "long arm of history" speculation may be true remains to be fully considered, but is falsified in the form presented. The speculation in Garrett 2022 that $\frac{dE}{dt}\rightarrow0$ can cause real GDP to go to zero by inflation is falsified. By generating a dataset going back to -14, 000 CE, the speculative $W$ curve appears largely confirmed. The $E$ curve is quite far off prior to 1970 back to 1 CE due to overestimation of pre-industrial energy. By correcting and improving on the foundation issue of Garrett's yeoman effort, improving $E$ and some equation presentation formalism, a robust thermodynamic model of the global economy emerges that is straightforward and practical. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.08723 |
| By: | Mengting Li (School of Finance, Nanjing University of Finance and Economics, Nanjing 210023, China); Yu Wei (School of Finance, Yunnan University of Finance and Economics, Kunming 650221, China); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Oguzhan Cepni (Ostim Technical University, Ankara, Turkiye; University of Edinburgh Business School, Centre for Business, Climate Change, and Sustainability; Department of Economics, Copenhagen Business School, Denmark) |
| Abstract: | This paper investigates the dynamic risk spillovers and frequency-domain connectedness between climate-related financial risk, traditional market volatility, and key macroeconomic variables in the overall European Union region. Employing a novel Mixed-Frequency Vector Autoregression with Frequency Domain Decomposition (MF-VAR-FDD) model, we analyze a unique dataset comprising weekly volatility indices for carbon (Carbon VIX), gold (Gold VIX), oil (Oil VIX), and equities (Euro VIX), alongside monthly data for industrial production, the ECB's shadow short rate, and inflation. This methodology allows for a nuanced decomposition of risk transmission across short-term (high-frequency) and long-term (low-frequency) horizons, providing critical insights that are obscured in common-frequency analyses. Our empirical results reveal a distinct asymmetry in the risk network: financial and commodity volatility indicators consistently act as net transmitters of risk, whereas macroeconomic fundamentals are systemic net receivers. The total spillover index is highly time-variant, exhibiting significant spikes that coincide with major economic and geopolitical events. The frequency decomposition further demonstrates that high-frequency (0-3 months) spillovers are predominantly driven by interactions within financial markets, with the Euro VIX playing a central role. Conversely, low-frequency (beyond 3 months) spillovers are more structural, with commodity price volatility (Oil VIX) and monetary policy expectations (ECB SSR) emerging as the largest long-term risk transmitter and receiver, respectively. More importantly, we find the prominent and pervasive role of the Carbon VIX as a source of systemic risk. Across the full sample, the Carbon VIX emerges as the most powerful net risk transmitter, indicating that volatility originating from the carbon market significantly propagates throughout the financial and macroeconomic system. Our findings, robust to alternative model specifications, underscore the imperative for policymakers and investors to integrate carbon market dynamics into their risk management frameworks and highlight the inadequacy of traditional models that ignore mixed-frequency information. |
| Keywords: | Carbon price uncertainty, Macroeconomy, Mixed-frequency Spillover, Time- and Frequency Domain |
| JEL: | C32 E30 E44 G10 Q02 Q54 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:pre:wpaper:202527 |
| By: | Bhardwaj, Tanush (George Mason University) |
| Abstract: | Climate change continues to escalate, yet the United States still sees limited legislative action due to political polarization and concerns over economic impacts. In contrast, many countries globally have taken pragmatic action, demonstrating the effectiveness of climate legislation when supported by unified political will. Prior studies of the international adoption of climate change legislation have shown that new policies have increasingly been implemented since the turn of the 21st century, with numerous factors affecting the rate of adoption. This study analyzes climate legislation adopted between 2000 and 2022 in European Union and BRICS countries to identify effective frameworks for adoption in the US. The countries were chosen to diversify the sample data by including differing economic drivers and political landscapes. Using a quantitative approach, this analysis consists of 91 multivariate linear regressions, to examine correlations between policy aspects—categorized by instrument, sector, type, and objective—and CO₂ emissions per capita. The models control for GDP per capita, population, fossil fuel percentage, and carbon pricing in order to validate comparison across countries. Findings reveal that policies involving tendering schemes, general legislative measures, low-carbon technology promotion, fuel switching, and climate adaptation are consistently associated with statistically significant reductions in emissions (p-value < 0.05). The results suggest that a data-backed approach can contribute to bipartisan climate policy and highlight policy aspects which reduce emissions while supporting favorable economic outcomes. This research informs a policy proposal tailored to the US to serve as guidance for lawmakers in implementing effective climate policy measures. |
| Date: | 2025–08–15 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:rpqst_v1 |
| By: | Prest, Brian C. (Resources for the Future) |
| Abstract: | The US government leases a substantial amount of federally owned lands for oil and gas development, accounting for approximately 12 percent of national oil production and 11 percent of national natural gas production in 2023, not counting production in offshore US waters. Yet approaches to the oil and gas federal leasing can vary widely between administrations. For example, under the Trump administration, oil and gas leasing ranged from 1.1 million acres to 2.2 million acres per year, compared to a range of 75, 000 to 249, 000 acres under the Biden administration (figures corresponding to fiscal years 2017–2020 and 2021–2023, respectively). Actions to expand or restrict the federal land available for lease in a given year can clearly affect fossil fuel production and global greenhouse gas emissions in the long run, but assessments of such effects have been limited due to inherent complexities and substantial uncertainty. Estimating the effects of expanded oil and gas leasing is important to inform broader policy deliberations around energy policy and permitting reform. In this issue brief, I model the global emissions consequences of a sustained expansion of federal leasing at peak levels from the last decade. The goal of this research is to provide a bounding analysis, estimating the uncertainty range for a high leasing case based solely on authorities within the existing scope of the executive branch. This analysis specifically does not estimate the emissions effects of onshore oil and gas provisions in the recently introduced Energy Permitting Reform Act of 2024 (EPRA). The onshore oil and gas provisions in EPRA are likely to have a more modest effect on emissions than the high leasing scenario analyzed here (see Discussion).This issue brief builds on past research (e.g., Prest et al. 2024; Prest 2022) to estimate the magnitude of emissions increases from a sustained expansion of oil and gas leasing on federal lands. Evaluating the emissions effects of expanded leasing is particularly challenging, as it involves understanding the anticipated effect of lease sales on oil and gas drilling on federal lands; the resulting increase in federal oil and gas production; the amount of production “leakage, ” meaning partial substitution of production between federal lands and other sources of supply; and the greenhouse gas emissions resulting from the net increase in global oil and gas consumption. The central estimate suggests that perpetually expanded oil and gas leasing on federal lands at annual rates consistent with the fastest pace of leasing over the past decade would increase cumulative global greenhouse gas emissions by 1.2 gigatons (billion metric tons) of CO2 equivalent (GtCO2e) over 2024–2050, under a 100-year global warming potential (GWP). For reference, this 1.2 GtCO2e value corresponds to approximately 43 million tons CO2e per year over that 27-year window, or about 0.1 percent of current annual global greenhouse gas emissions. This increase is relative to a business-as-usual (BAU) baseline of about half that amount of leasing. An extensive set of sensitivity analyses suggests that emissions increases are highly unlikely to be outside the 0.6 to 2.1 GtCO2e range. On a territorial emissions accounting basis, US emissions account for approximately 0.2 GtCO2e of the global increase of 1.2 GtCO2e estimated in the central case. This analysis covers onshore development on federal lands and does not consider the potential impacts of expanded offshore development, which accounts for another 14 percent of national US oil production and 2 percent of national gas production. |
| Date: | 2024–09–03 |
| URL: | https://d.repec.org/n?u=RePEc:rff:ibrief:ib-24-09 |
| By: | Kakeu, Justin (Resources for the Future); Ziegler, Ethan (Resources for the Future); Holmes, Brandon (Resources for the Future) |
| Abstract: | Air pollution is the leading environmental cause of death and disease globally (Wright and Pant, 2024). In 2021, household and ambient air pollution was the second leading risk factor for premature death, killing over 8.1 million people (Health Effects Institute 2024). Even in an energy-intensive world, many of these deaths are avoidable and can be prevented through the proper understanding and regulation of pollutants.Although PM₂.₅ and ozone are considered to be the deadliest pollutants, there are hundreds of pollutants that can be harmful to human health (Ingram 2024). Currently, governmental bodies and policies take a fragmented approach to the research and regulation of these pollutants; different departments regulate different pollutants, and pollutants are studied and regulated independent of one another (Greenbaum and Shaikh 2010). This fragmentation in regulation includes cap-and-trade systems, which are used to manage the emissions of different pollutants such as CO₂, SO₂, and NO₂.This issue brief will explore the concept of implementing a multipollutant cap-and-trade program, as opposed to the traditional single-pollutant model. This system would provide heterogeneous firms with a variety of emission permits to choose from, each representing a specified bundle of pollutants. Such a model would allow governments to regulate the total amount of each pollutant emitted while simultaneously accounting for the effects of pollutant interactions. While this issue brief focuses on the potential for a multipollutant cap-and-trade model, it is important to note that cap and trade is not the only regulatory strategy available. Direct command-and-control regulations—such as setting specific technology standards or emission limits for pollutants—also provide a pragmatic starting point (Stavins 2004). In fact, given the technical and institutional complexities involved in multipollutant assessment, establishing robust command-and-control frameworks may serve as a foundation from which a transition to a market-based multipollutant cap-and-trade system could be built over time.This issue brief is associated with an accompanying working paper about the detailed structure of a multipollutant permit model (Kakeu 2025). Despite the technical and institutional barriers that have hindered the adoption of multipollutant regulations in recent history, there are many benefits associated with transitioning to multipollutant frameworks. This goes beyond replacing single-pollutant cap-and-trade systems with multipollutant ones; an overall restructuring of the methodologies, communication, research, and action on and about the health effects of air pollution to a more holistic perspective is imperative. |
| Date: | 2025–06–16 |
| URL: | https://d.repec.org/n?u=RePEc:rff:ibrief:ib-25-09 |
| By: | Jun Cui |
| Abstract: | This study examines the relationship between human-AI technology integration transformation and green Environmental, Social, and Governance (ESG) performance in Chinese retail enterprises, with green technology innovation serving as a mediating mechanism. Using panel data comprising 5, 400 firm-year observations from 2019 to 2023, sourced from CNRDS and CSMAR databases, we employ fixed-effects regression models to investigate this relationship. Our findings reveal that human-AI technology integration significantly enhances green ESG performance, with green technology innovation serving as a crucial mediating pathway. The results demonstrate that a one standard-deviation increase in human-AI integration leads to a 12.7% improvement in green ESG scores. The mediation analysis confirms that approximately 35% of this effect operates through enhanced green technology innovation capabilities. Heterogeneity analysis reveals stronger effects among larger firms, state-owned enterprises, and companies in developed regions. These findings contribute to the growing literature on digital transformation and sustainability by providing empirical evidence of the mechanisms through which AI integration drives environmental performance improvements in emerging markets. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2507.03057 |
| By: | Marie Arnold; Jonathan Brandt; Geert Tjarks; Anna Vanselow; Richard Hanke-Rauschenbach |
| Abstract: | A key factor in reducing the cost of green hydrogen production projects using water electrolysis systems is to minimize the degradation of the electrolyzer stacks, as this impacts the lifetime of the stacks and therefore the frequency of their replacement. To create a better understanding of the economics of stack degradation, we present a linear optimization approach minimizing the costs of a green hydrogen supply chain including an electrolyzer with degradation modeling. By calculating the levelized cost of hydrogen depending on a variable degradation threshold, the cost optimal time for stack replacement can be identified. We further study how this optimal time of replacement is affected by uncertainties such as the degradation scale, the load-dependency of both degradation and energy demand, and the costs of the electrolyzer. The variation of the identified major uncertainty degradation scale results in a difference of up to 9 years regarding the cost optimal time for stack replacement, respectively lifetime of the stacks. Therefore, a better understanding of the degradation impact is imperative for project cost reductions, which in turn would support a proceeding hydrogen market ramp-up. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.16370 |
| By: | Elkerbout, Milan (Resources for the Future); Nehrkorn, Katarina (Resources for the Future); Kleimann, David |
| Abstract: | Because countries decarbonize at different rates, leakage—the displacement of emissions as emitters respond to the costs of climate policy—has become a concern (Elkerbout 2024). Leakage is a potential problem in the European Union (EU) and United Kingdom (UK), where manufacturers face carbon costs through domestic carbon pricing programs but importers of similar goods do not. Even in countries with no domestic carbon price, differences in average carbon intensity between domestic and foreign producers can motivate the introduction of new fees on imports—as with the Republican proposal for a Foreign Pollution Fee Act in the United States.To mitigate the risk of leakage and protect the competitiveness of domestic industries, carbon border adjustment mechanisms (CBAMs) seek to level costs between domestic and foreign producers. Such policies to address leakage and level the playing field in international trade in turn raise equity concerns. Some imports that might be affected by CBAMs originate in developing countries, including least-developed ones, which are responsible for small shares of global greenhouse gas emissions and negligible shares of historical emissions. This makes CBAMs relevant to fundamental international climate policy governance issues: how to distribute the efforts of cutting global emissions, given widely divergent stages of economic development and historical responsibility across roughly 200 nations. |
| Date: | 2025–05–28 |
| URL: | https://d.repec.org/n?u=RePEc:rff:ibrief:ib-25-08 |
| By: | Cathy Yi‐Hsuan Chen (University of Glasgow, Adam Smith Business School; Humboldt Universität zu Berlin); Abraham Lioui (EDHEC Business School); O. Scaillet (Swiss Finance Institute - University of Geneva) |
| Abstract: | Voluntary carbon disclosure collapses into a paradox of green silence: firms choose to disclose emissions based on strategic incentives (e.g., correcting vendor overestimates), while high emitters may exploit vendor estimation bias. Mirroring Heckman sample selection bias, this selfcensorship skews disclosed emissions into non-random samples, distorting climate risk pricing and policy. We bridge economic problem and machine learning, proposing a Heckman-inspired three-step framework in high-dimensional settings to correct for strategic non-disclosure and ensure variable selection consistency in the presence of sample selection bias. By integrating kernel group lasso (KG-lasso) and double machine learning (DML) from neighbouring firms, i.e., using information from carbon next door, we unveil systematic underestimation: empirical analysis of 3444 unique US firms (2010-2023) rejects the null of no selection bias. Our findings indicate that voluntary disclosure induces adverse selection, where green silence rewards polluters and undermines decarbonization. Underestimation translates to a $2.6 billion shortfall in tax revenues and up to $525 billion hidden social cost of carbon. |
| Keywords: | carbon emissions, machine learning, sample selection |
| JEL: | C12 C13 C33 C51 C52 C82 Q52 Q54 Q56 Q58 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp2566 |
| By: | Osswald do Amaral, Francisco; Zetzmann, Steffen |
| Abstract: | We examine how rising energy costs affect rental housing markets and inequality. Using listing data for the 30 largest German cities from 2015-2024, we find that higher energy prices are passed through to net rents in high-rent segments, where inefficient properties see significant rent reductions, but not in lower-priced segments. This asymmetry reflects tighter markets and lower demand elasticity in the affordable segment. Consequently, low-income households face much larger increases in total housing costs. Our results show how segmented housing markets can amplify inequality when energy prices rise, highlighting important distributional implications for climate policy. |
| Keywords: | Housing Markets, Energy Prices, Climate Change, Inequality |
| JEL: | R31 Q41 Q54 D31 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkwp:324656 |
| By: | Beiser McGrath, Liam |
| Abstract: | In an era of prolonged economic stagnation and global shocks, a central question is how individuals’ material conditions shape support for policy interventions and goals. In recent years, energy insecurity, the inability to easily meet the costs of household energy, has emerged as a key factor in explaining declining household living standards and difficulties meeting the costs of living. This paper examines how energy insecurity affects policy preferences in the context of the UK’s recent energy crisis. Utilising an original survey fielded in the United Kingdom in August 2022, the paper examines how energy insecurity shapes preferences for compensationand investment-based policy preferences for energy, climate, and social policy. The results find that support for energy, climate, and social policy depends on individuals’ energy insecurity. Additionally, while compensatory and investment based policies see similar levels of support in terms of energy policy, there is differentiation in the other policy areas. Energy insecure individuals significantly prioritise investment-based climate policy and compensation-based social policy. These results hold even after adjusting for general concerns with the cost of living. The results help us understand how policy preferences are sensitive to changing economic conditions, and the impact of the energy crisis for a broader set of policy preferences. |
| Keywords: | energy insecurity; energy policy; public opinion; renewable investment; social policy; energy politics |
| JEL: | J1 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:128882 |