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on Energy Economics |
| By: | Bekkers, Eddy; Yilmaz, Ayse Nihal; Métivier, Jeanne; Tresa, Enxhi; Iunius, Lory; Xu, Ankai |
| Abstract: | In this paper we explore the impact of decarbonization on international trade and development employing a recursive dynamic Computable General Equilibrium (CGE). We develop three long run stylized climate change scenarios: (i) Global Inaction (GI); (ii) Divided World (DW); and (iii) Cooperation towards Net Zero (CNZ). The CNZ scenario encompasses comprehensive measures resulting in a significant reduction in emissions to approximately 10 billion tons by 2050, contrasting with escalating emissions under GI and stagnation under DW. The analysis shows that the share of energy trade in total trade would fall substantially in CNZ, from 11% to 3%. Furthermore, the share of energy exported falls drastically since electricity is less tradable than fossil fuels. Exports of fossil fuel dependent countries will shift from fossil fuels to emission intensive trade exposed sectors and sophisticated manufacturing. |
| Keywords: | decarbonisation policies, net zero, energy trade, diversification |
| JEL: | F13 F18 F64 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:wtowps:330671 |
| By: | Laura Archer-Svoboda; Tomasz Orpiszewski; Mark Thompson; Martin Schnauss |
| Abstract: | Swiss real estate funds face growing pressure to reduce carbon emissions and achieve Switzerland’s ambitious net-zero target by 2050. Meeting this goal requires energy-efficient buildings and a transition away from fossil fuel-based heating systems. Understanding the current energetic state of these buildings is essential to align with climate commitments. This study introduces a systematic approach to quantifying climate-driven obsolescence within the building portfolios of Swiss real estate funds, providing a foundation for assessing the resources necessary to transition to an energy-efficient, low-carbon future. Leveraging a unique dataset from over 9, 000 buildings across 40 funds listed in the SXI Broad Real Estate Index, we develop a methodology to evaluate obsolescence using thermal transmittance (U-values) of building components and heating system types. Using a weighted multivariate logistic function, buildings are categorized along a spectrum from “highly efficient” to “obsolete.” The ratings are consolidated at the fund level, enabling better comparability of the state of the building stock across funds. The findings reveal that the median age of buildings in Swiss REFs exceeds 40 years, indicating that a significant portion of the stock is entering the stage where energetic refurbishments are required. Energy inefficiencies are widespread: 85% of walls exceed permissible U-value thresholds, and over 70% of buildings rely on fossil fuel heating systems—significantly higher than the national residential average. Renovation rates remain below 1%, raising critical concerns about the feasibility of achieving net-zero goals. Geographic disparities exacerbate these challenges, with cantons such as Geneva and Vaud exhibiting disproportionately high reliance on oil heating. This research highlights the urgent need for targeted policy interventions and increased renovation activity to decarbonize the sector. The proposed methodology equips fund managers and policymakers with tools to benchmark energy performance, prioritize renovations, and strategically align portfolios with Switzerland’s net-zero objectives. |
| Keywords: | Energy Efficiency; Net-Zero Emissions; Obsolescence; Real Estate Funds |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_174 |
| By: | Brehmer, Sarah; Cézanne, Thibault; Kirschenmann, Karolin; Zilke, Philip |
| Abstract: | Nearly two decades of green bond issues have ignited various research questions and fields surrounding the topic. It is therefore time to take stock. Green bonds were launched with the goal of greening the financial sector by investing the generated funds into sustainable projects that support the transition to a resilient, climate-neutral economy. But are green bonds living up to their promise? In this policy brief, we provide evidence on the role that green bonds can play in the green transition. Our findings are based on a recent project funded by the German Federal Ministry of Research, Technology and Space (BMFTR). When examining the potential distortionary effects of policy interventions (such as green government bond issues) in the green bond market, we only find small effects on average, even though those are stronger for large and specific interventions. Looking at green bond auction design from a theoretical perspective, it can be seen that strategic bidding behaviour can incentivise investors to shift their portfolios towards green investments in general. When banks issue green bonds, they increase the financing of green firms in the form of sustainability-linked loans. As a result, environmental benefits materialise as recipient firms reduce their emissions. These effects are only evident for firms that are already greener than others, however, so more targeted incentives seem needed to channel financial flows more effectively into sustainable transition projects. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewpbs:331234 |
| By: | Sandy Bond |
| Abstract: | The Paris Accords (previously named the Kyoto Protocol) is an international environmental treaty intended to reduce greenhouse gas concentrations in the atmosphere to help tackle climate change, and its associated effects such as more extreme weather events and sea-level rise. Improving energy efficiency of buildings and appliances is the most cost-effective way of reducing greenhouse gas (GHG) emissions. A report by the U.S. Climate Change Science Program estimates that homes can achieve carbon emission reductions up to 70% with current best practices (McMahon et al., 2007). New building energy codes and legislation have been introduced to address this but deal with new homes primarily. Industry too, has been pro-active with the introduction of various home rating tools. However, one of the limiting factors to achieving these efficiencies is individual behavior change and the public policies necessary to catalyze these changes. This paper outlines the results of research carried out in St. Augustine Beach, Florida in 2020 and again in 2025. St. Augustine is one of many chronically flooded communities along Florida's 1, 200-mile coastline. Climate change has resulted in more extreme weather events in the nation’s oldest city, such as hurricanes Mathew (2016) and more recently Milton (2024), that caused significant damage to homes and buildings. Fortunately, the City of St Augustine Beach recently passed resolutions on sea level rise and climate change to help raise awareness of these issues. The research adopted a survey approach to help gauge the perceptions of the community toward climate change and the motivation of individuals to reduce their carbon emissions, in the face of increasing extreme weather events. Just prior to the first survey in 2020 the State has experienced more devastation from hurricanes Ian (2022), Idalia (2023) and both Helene and Milton in 2024. The broad aim of the research was initially to examine the lifestyle choices of residents in relation to climate change and to educate them on actions they can take to reduce their carbon footprint under three categories: transportation; food production and diet, and buildings. The second survey was to gauge if these attitudes have changed with the more recent weather events and with the pronounced difficulty in obtaining insurance cover. Further, with the introduction of the Inflation Reduction Act 2022, the survey aimed to educate residents about the tax credits, loans and grants available to them and how to apply to assist them in their transition to a decarbonized lifestyle. The results will help identify what behavioral and policy changes are needed to increase the uptake of energy efficiency and sustainability practices by householders to reduce their carbon footprint. With the likelihood that President-elect Trump will withdraw from the Paris climate agreement, it is even more imperative that local communities act to address climate change. |
| Keywords: | Climate Change; Energy Efficiency; Resident perceptions; sustainability |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_23 |
| By: | Mirjam Sophie Mauel; Elisabeth Beusker |
| Abstract: | The European Union aims to significantly reduce greenhouse gas emissions in the building sector by 2050, with Germany targeting a climate-neutral residential building stock by 2045. In this context, serial retrofitting, an innovative approach to the energy-efficient modernisation of buildings, is becoming increasingly important. The serial retrofitting approach places particular emphasis on improving the energy efficiency of the building by targeting the building envelope and the building systems technology. The standardisation and prefabrication of construction elements, in conjunction with the optimisation of processes throughout the entire value chain, has the potential to reduce renovation time and costs while achieving high energy efficiency standards such as NetZero. Preliminary market analyses in Germany indicate the presence of further potential for savings through economies of scale and learning effects. Serial retrofitting has seen particular advancement in the context of multi-family houses, which account for approximately 53% of all residential units in Germany. This market segment harbours significant potential, as many of these buildings have inadequate energy efficiency due to their age. The primary stage of the study is to examine the potential offered by serial retrofitting measures, particularly for multi-family houses in Germany, and the energy savings that can be achieved consequently. To this end, relevant data sets are statistically analysed to present initial results on the potential energy savings and the scalability of these measures. The analysis is based on a range of structural, energy-related, and technical parameters, including year of construction, gross floor area, energy efficiency standard, energy source and primary energy consumption. The objective of this study is to statistically evaluate and quantify the potential of serial retrofitting to decarbonise the residential building stock. |
| Keywords: | Decarbonisation potential; Residential building stock; Serial retrofitting |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_165 |
| By: | Karen Davtyan (Departament of Applied Economics, Universitat Autònoma de Barcelona, Spain); Adel R. Kalozdi (Departament of Applied Economics, Universitat Autònoma de Barcelona, Spain) |
| Abstract: | This paper investigates the effect of climate- and energy-related (green) communication by the European Central Bank (ECB) on the performance of renewable and fossil-based energy sectors. Using a sentence-embedding natural language processing method, we identify 247 ECB speeches from 2015 to 2024 that explicitly reference both climate and energy themes, categorize them, and compute a green score for each. The analysis reveals prominent topics of climate and financial risk, and monetary policy and economic conditions, along with consistently positive and trust-related emotional cues. We then use high-frequency identification to estimate the effect of ECB green speeches on the return differential between the green and the brown energy sectors. The results show that such ECB communication positively and significantly affects sectoral relative returns, highlighting the communicative role of the ECB in influencing the relative performance of green and brown energy sectors. The results remain robust across a series of sensitivity analyses. The effect does not change significantly with respect to the outbreak of the Russian–Ukrainian war or the ECB communication topics. |
| Keywords: | central bank communication, ECB green speeches, text analysis, high-frequency identification, energy sectors |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:uab:wprdea:wpdea2515 |
| By: | Viet Nguyen-Tien |
| Abstract: | To what extent has the rise of clean energy technologies created new vulnerabilities in global supply chains? In this paper, I study the role of a new type of 'input uncertainty' associated with critical minerals that underpin the deployment of clean energy technologies. I combine firm-level performance data for publicly listed companies worldwide with textual information from quarterly earnings conference calls to construct text-based measures of technological involvement and mineral exposure. As a first result, my methodology is validated by the strong co-occurrence of clean energy technologies and critical mineral usage across transcripts. In a second result, I model the impact of critical mineral-related input uncertainty on firm performance which shows clear impacts for lithium and copper-related risks across different regions. Finally, I produce text-based evidence on how firms are mitigating supply chain risk, distinguishing between long-term process innovation and short-run operational measures. Overall, I find that new supply chain risks related to critical minerals are limited, most likely to the early stage of development of the sector. |
| Keywords: | critical minerals, energy transition, risk, exposure, sentiment, circular economy, material substitution, Green Growth |
| Date: | 2025–11–03 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2133 |
| By: | Velloso, Helvia; Perrotti, Daniel E.; Sobreira, Rudá |
| Abstract: | This study examines the role of green, social, sustainable, and sustainability-linked (GSSS) bonds in financing the energy transition in Latin America and the Caribbean (LAC). It combines a descriptive assessment of sectoral bond issuance patterns from 2014 to 2024 with an econometric exercise focusing on the region’s top five issuers. The results indicate that GSSS bonds have contributed to the expansion of renewable energy capacity but have not yet produced a structural shift in the overall energy mix. These findings underscore both the opportunities and limitations of sustainable finance, highlighting the importance of complementary policies, market reforms, and effective governance to maximize its transformative potential. |
| Date: | 2025–10–15 |
| URL: | https://d.repec.org/n?u=RePEc:ecr:col034:82543 |
| By: | Lucas W. Davis; Paige E. Weber |
| Abstract: | Hundreds of power plants have closed in the United States since 2010, including 130+ gigawatts of coal and 50+ gigawatts of natural gas. In this paper, we highlight the potential for regulation to distort this type of exit decision. Using generator-level data from 2010–2023, we show that regulated units have been 45% less likely to exit than unregulated units. For unregulated units, exit decisions are made based on wholesale electricity prices, ongoing capital costs, and other traditional economic factors. In contrast, owners of regulated units are largely insulated from these factors and, in some cases, have a strong incentive to continue operating capital-intensive equipment. Previous work documents how this regulatory distortion affects investment decisions. Our paper emphasizes that these same incentives affect exit decisions as well. |
| JEL: | D24 L94 Q41 Q48 Q54 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34454 |
| By: | Manuel C. Kathan (University of Augsburg); Raphaela Roeder (University of Augsburg); Sebastian Utz (University of Augsburg); Martin Nerlinger (University of St. Gallen - School of Finance; Swiss Finance Institute) |
| Abstract: | We examine how changes in competition affect firms’ carbon performance. Exploiting reductions in import tariffs as a quasi-natural experiment that increases competitive pressure, we find that stronger competition improves firms’ carbon efficiency through lower Scope 1 and 2 emission intensities. These results remain robust to alternative specifications, heterogeneous treatment effects, and placebo tests. Mechanism analyses indicate systematic differences in firms’ strategic responses. High-emission firms tend to adopt visible environmental actions and reallocate resources toward intangible assets, whereas low-emission firms increase investment and financing activities. Overall, our results highlight competition as a determinant of corporate decarbonization, suggesting that market forces can complement regulatory approaches to improving firms’ environmental performance. |
| Keywords: | Carbon Emissions, Environmental Performance, Sustainability, Competition, Import Tariffs, Quasi-Natural Experiment |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp2588 |
| By: | Timilsina, Govinda R. |
| Abstract: | This study investigates the factors responsible for the poor performance of 67 electric utilities in 47 countries, using descriptive data from the World Bank, the International Energy Agency, the U.S. Energy Information Administration, and national sources. The findings show that both cost-side and revenue-side factors are responsible for the poor financial performance of electric utilities. More than two-thirds of vertically integrated utilities and electricity distribution utilities are unable to cover their operational and debt service costs by their revenues. The main causes of the poor financial performance are high fuel costs (particularly oil), low capacity factors, low capital and labor productivity, high transmission and distribution losses, and leakage in electricity bill collections. The study finds that in these countries, despite their much lower per capita income, consumers face relatively higher electricity tariffs than in many countries around the world. The study also finds that if the transmission and distribution losses were reduced to the current level of South Africa (11 percent) and the leakages in bill collection were eliminated, several electric utilities that are currently operating at a loss would have higher revenue than their operational cost. The findings indicate that policy makers in the region should focus on a portfolio of policies, including switching from expensive generation to emerging cheaper options, improving factor productivities, having efficient institutions and governance, reducing transmission and distribution losses, improving bill collection, and reforming tariffs. The policy priorities could vary across countries, depending on the roles of various factors contributing to poor financial performance. |
| Date: | 2025–11–10 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11257 |
| By: | Ezio Micelli; Giulia Giliberto; Eleonora Righetto |
| Abstract: | Deep retrofits are essential to reducing energy consumption and emissions, aligning with the European EPBD's goals for energy-efficient buildings. However, the financial viability of such interventions remains uncertain. The aim is to assess the financial feasibility of extensive retrofits using the MESA business model, with a focus on off-site production processes, a unique feature of the Energiesprong. Energiesprong is a pioneering approach to residential building energy retrofit that maximises time and operating costs by utilising off-site renovation technologies and long-term energy performance contracts. The research evaluates two primary demand profiles in two urban contexts with distinct real estate dynamics, using net present value (NPV) analysis to assess the financial feasibility relative to initial investment costs. The findings indicate that, despite notable benefits such as value proposition for higher energy efficiency, deep retrofits are not financially viable under current costs and technologies without upfront external contributions. The research further incorporates the impacts of economies of scale and technological learning, which are central to the MESA-Energiesprong model. It suggests a learning curve that links reduced construction costs to the growing number of renovated buildings. The dynamic evaluation highlights the value of the construction cost at which the retrofit becomes financially feasible and that, without government contributions, the financial viability of deep retrofits could improve over time as the sector scales. These findings provide policymakers with valuable insights, aiding the development of more effective public policies that promote building efficiency through off-site construction and optimise contributions distribution based on regional variations. |
| Keywords: | Business Models; Energy efficiency retrofit; Green premium price; off-site construction |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_167 |
| By: | Leonard Missbach; Jan Christoph Steckel |
| Abstract: | We analyze the horizontal and vertical distributional impacts of climate policy by examining heterogeneity in households’ carbon intensity of consumption. We construct a novel dataset that includes information on the carbon intensity of 1.5 million individual households from 88 countries. First, we show that horizontal differences are generally larger than vertical differences. Then, we use supervised machine learning to analyze the non-linear contribution of household characteristics to the prediction of carbon intensity of consumption. Household income, proxied by total household expenditures, is usually an insufficient predictor for the additional costs of carbon pricing. Including household-level information beyond household income increases the accuracy of prediction. We identify six clusters of countries that differ in the distribution of climate policy costs and their determinants. Our results highlight that, depending on the context, some compensation policies may be more effective in reducing horizontal heterogeneity than others. |
| Keywords: | climate policy, distributional effects, inequality, transfers |
| JEL: | C38 C55 D30 H23 Q56 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12258 |
| By: | Yongyang Cai |
| Abstract: | Integrated Assessment Models (IAMs) are pivotal tools that synthesize knowledge from climate science, economics, and policy to evaluate the interactions between human activities and the climate system. They serve as essential instruments for policymakers, providing insights into the potential outcomes of various climate policies and strategies. Given the complexity and inherent uncertainties in both the climate system and socio-economic processes, understanding and effectively managing uncertainty within IAMs is crucial for robust climate policy development. This review aims to provide a comprehensive overview of how IAMs handle uncertainty, highlighting recent methodological advancements and their implications for climate policy. I examine the types of uncertainties present in IAMs, discuss various modeling approaches to address these uncertainties, and explore recent developments in the field, including the incorporation of advanced computational methods. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.00378 |
| By: | Yannick Schmidt; Sven Bienert |
| Abstract: | We present a comprehensive benchmark study on embodied carbon emissions associated with (energetic) retrofits during the use phase of multi-family housing in the German residential market, conducted in response to Scope 3 accounting requirements under CSRD/ESRS. The introduction of these reporting obligations has left many companies struggling to meet the new standards, particularly when addressing the Scope 3 emissions within their operations. Despite these requirements, benchmarks to assess the carbon intensity of retrofit actions—whether for investors or construction companies—have been largely absent. This study establishes a benchmark for Scope 3 emissions from retrofits of varying scales. It draws on data from large German housing companies, collectively representing over 1.2 million rental units. The analyzed sample includes approximately 130 datasets of completed maintenance and modernization projects from nine housing companies. The dataset spans a wide range of building types and construction age classes, ensuring the results are representative and applicable to the broader German housing market. Retrofits are categorized into five clusters, ranging from basic maintenance tasks (e.g., refurbishing vacant units) to comprehensive energy-efficiency upgrades (e.g., façade insulation, heating system replacements). Each cluster accounts for the embodied carbon emissions of various products and processes, enabling a detailed assessment of emission contributions and the development of reliable benchmarks. To standardize data collection, a purpose-built recording sheet was developed for documenting measures and materials. Life cycle phases A1 to A3 (“Cradle to Gate”) were analyzed to quantify total upfront carbon emissions, with phases A4 and A5 extrapolated using empirical data from specific measures and products. This research provides actionable insights for housing companies to enhance their Scope 3 carbon accounting. It also supports the development of effective strategies to reduce embodied emissions associated with property modernization projects, offering a critical tool for achieving compliance and driving sustainability in the housing sector. |
| Keywords: | benchmarking; Embodied Carbon; Esg; reporting |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_35 |
| By: | Cavalcanti, T.; Mohaddes, K.; Nian, H.; Yin, H. |
| Abstract: | This paper investigates the pass-through of environmental compliance costs along supply chains. We compile a firm-level dataset linking regulated firms in pollution-intensive industries with their top five clients and suppliers. We find that clients of regulated firms invest less in R&D, employ fewer skilled R&D staff, and produce fewer innovations than clients of less regulated firms, while no comparable effects are observed for suppliers. The pass-through is stronger with larger trade volumes, higher input prices faced by clients, and in markets where regulated firms hold greater market power or clients face intense competition. Policy simulations suggest that green technology incentives for regulated firms and R&D subsidies for their clients can mitigate these adverse effects and raise social welfare by enhancing both innovation and environmental quality. |
| Keywords: | Environmental Compliance, Supply Chains, Pass-Through, R&D, Innovation |
| JEL: | O30 Q01 Q55 |
| Date: | 2025–10–18 |
| URL: | https://d.repec.org/n?u=RePEc:cam:camdae:2568 |
| By: | Fourné, Marius |
| Abstract: | Climate policies do not operate in isolation but propagate through global production networks, affecting industries beyond national borders. This paper combines international input-output data with a granular instrumental variable approach to capture how foreign regulations transmit through upstream and downstream linkages. Distinguishing between market-based policies, non-market regulations, and technology support, the analysis shows that foreign climate policies can enhance domestic productivity, with effects shaped by industry characteristics and operating through technological adjustment along supply chains. The results underscore the importance of accounting for international spillovers when evaluating the economic impact of environmental regulation. |
| Keywords: | climate policy, environmental regulations, global value chains, green innovation, international trade, productivity |
| JEL: | F18 L16 O44 Q37 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwhdps:330918 |
| By: | Harald Mayr; Mateus Souza |
| Abstract: | We leverage quasi‐experimental variation to study how group size influences free‐riding behavior within a high‐expense environment. When buildings lack apartment‐specific heat meters, tenants use simple heuristics to split a common bill. We estimate that the staggered rollout of a corrective technology, “submetering, ” reduces heating expenses by 17%, on average. Machine learning techniques uncover substantial heterogeneity, consistent with strategic exit of free‐riders and coordination failures in large buildings. Tenants in smaller buildings show minimal response and are surprisingly price elastic. Only a minority of households exploits the free‐riding incentives. Targeted submetering policies can be much more cost‐effective than universal mandates. |
| Keywords: | Free-riding, submetering, individual billing, heating energy, tragedy of the commons, welfare |
| JEL: | D62 Q41 Q52 |
| Date: | 2025–01 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_629v2 |
| By: | Stefano Carattini; Fabian Dvorak; Ivana Logar; Begum Ozdemir-Oluk |
| Abstract: | Corporate social responsibility and the private provision of (global) public goods are of key interest to economists and policymakers. Over the last few years, many more private companies made their operations carbon neutral. It is an empirical question how consumers value carbon-neutral and low-carbon products, which we address as follows. First, we provide a meta-analysis of the literature. We analyze consumers’ demand for carbon-neutral and low-carbon products, based on an overall sample of 29, 666 participants. The focus is on average willingness to pay for carbon reductions as well as on the characteristics of the underlying literature, which is mainly based on stated preferences and controlled environments. Second, we leverage information on prices and product characteristics from one of the largest online marketplaces, Amazon’s. Using a hedonic approach, we infer from revealed preferences on consumers’ valuation of carbon- neutral products. The staggered process of carbon-neutral certification leads to a series of quasi-natural experiments, which we use for identification purposes. We find that the literature suggests a positive willingness to pay for carbon reductions that exceeds most estimates of the social cost of carbon. However, this finding is not supported by the hedonic analyses, where we do not find evidence that consumers value carbon neutrality. |
| Keywords: | corporate social responsibility, pro-social behavior, stated and revealed preferences, meta-analysis, hedonic analysis, carbon-neutral labels |
| JEL: | D12 D22 H41 Q51 Q54 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12232 |
| By: | Kleingraeber, Sebastian; Efken, Josef |
| Keywords: | Resource/Energy Economics and Policy |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:gewi24:364719 |
| By: | Mr. Marco Gross; Mr. Jinhyuk Yoo; Hugo Rojas-Romagosa; Mr. Salim Dehmej; Zulma Barrail; Hannah Sheldon |
| Abstract: | We present the ENV-FIBA macro-micro model framework that can be used to analyze the climate-macro-financial consequences of climate scenarios and related policy counterfactuals. The model consists of a multi-country Computable General Equilibrium (CGE) core and a connected micro simulation module for an economy’s individual nonfinancial firms and banks. The climate-macro-financial scenario simulations are anchored in future temperature and emission pathways, alongside policy assumptions regarding carbon taxation, fiscal revenue recycling and reinvestment, optional carbon border adjustment mechanisms, and others. We illustrate the use of the model for Japan. We emphasize, exemplify with the model, and recommend in general: (1) that physical and transition risk effects be modeled jointly to a maximal extent (given their intertwined nature); (2) that it is important to consider bank balance sheets that are dynamic (not static), to capture the differential growth of emmission intensive industries that may shrink, opposed to those that may flourish; and (3) related to the latter, that such dynamically evolving lending has primary impacts on bank solvency via interest income, along with quantitatively often smaller impacts through loan losses from borrower defaults. |
| Keywords: | Climate risk analysis; CGE modeling; micro-macro simulations |
| Date: | 2025–11–07 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2025/230 |
| By: | Ishwar Khatri; Phuong Bui; Are Oust; Ole Jakob Sønstebø |
| Abstract: | The real estate sector can play a crucial role in the carbon transition due to its substantial contribution to energy consumption and carbon emissions. The number of environmentally certified residential and commercial properties is on the rise, and previous studies have shown that such certifications are associated with price and rental premiums. However, research on capital market dynamics in real estate remains limited. This study focuses on environmental certifications within REITs and explores their relationship with debt financing. Specifically, we examine the cost of debt, leverage ratio, and debt structure among REITs worldwide. Our sample includes over 300 REITs from 20 countries, spanning the period from 2002 to 2022. The study proposes several hypotheses. First, it posits a negative association between environmental certification and cost of debt financing. Second, we hypothesis that the relevance of environmental certification to real estate sector is crucial to have lower debt costs. Third, there is a negative association between environmental certification and leverage ratio. Fourth, environmental certification affects the debt structure of REITs. Fifth, the association between environmental certification and cost of debt financing is moderated by the climate risk level at the country level. The examination using pooled regression and propensity score matched sample provides some evidence supporting proposed hypotheses. First, the findings indicate a negative association between environmental certifications and the cost of debt financing. Second, we find that REITs’ general environmental management systems (ISO certification) is insignificant to cost of debt indicating that environmental certification specific to the real estate sector matters. Third, we find insignificant relationship between environmental certification and leverage. Fourth, the analysis shows that environmental certifications are positively correlated with the use of unsecured debt and fixed-rate debt, suggesting the financial flexibility and reduced interest rate risk of debt. Finally, we find that climate risk level positively moderates the relationship between environmental certification and debt costs. |
| Keywords: | Debt financing; debt structure; Environmental certification; REITs |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_133 |
| By: | Kerem Yavuz Arslanli; Ayse Buket Onem; Maral Tascilar; Cemre Ozipek; Maide Donmez; Belinay Hira Guney; Sule Tagtekin; Candan Bodur; Yulia Besik |
| Abstract: | The catastrophic consequences of the February 2023 earthquakes in Türkiye have accentuated the pressing necessity for resilient and sustainable reconstruction in disaster-stricken regions. This research paper investigates the potential for low carbon investments in the real estate sector to catalyze the recovery and redevelopment of earthquake-affected areas. By employing demand modeling techniques and scrutinizing key market indicators, the study endeavors to identify investment opportunities that can yield both economic and environmental benefits. The paper leverages a comprehensive dataset encompassing 81 cities from 2013 to 2024, facilitating a robust analysis of residential market dynamics, energy consumption patterns, and socioeconomic factors. Through the application of random-effects GLS regression, the research elucidates the determinants of housing demand and the feasibility of low carbon interventions in post-disaster settlements. The findings provide invaluable insights for policymakers, investors, and real estate professionals aspiring to promote sustainable and resilient reconstruction efforts. By emphasizing the potential for low carbon investments to stimulate economic recovery while concurrently mitigating climate change impacts, this paper contributes to the burgeoning body of knowledge on green real estate and disaster risk management. |
| Keywords: | demand modeling, ; disaster recovery, ; low carbon real estate, ; resilient reconstruction, |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_288 |
| By: | D\'avid Csercsik; \'Ad\'am Sleisz |
| Abstract: | When the traded energy and reserve products between zones are co-allocated to optimize the infrastructure usage, both deterministic and stochastic flows have to be accounted for on interconnector lines. We focus on allocation models, which guarantee deliverability in the context of the portfolio bidding European day-ahead market framework, assuming a flow-based description of network constraints. In such models, as each unit of allocated reserve supply implies additional cost, it is straightforward to assume that the amount of allocated reserve is equal to the accepted reserve demand quantity. However, as it is illustrated by the proposed work, overprocurement of reserves may imply counterintuitive benefits. Reserve supplies not used for balancing may be used for congestion management, thus allowing valuable additional flows in the network. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.01877 |
| By: | Ondine Berland (London School of Economics); Marion Leroutier (Institute for Fiscal Studies) |
| Date: | 2025–11–10 |
| URL: | https://d.repec.org/n?u=RePEc:ifs:ifsewp:25/53 |
| By: | Martins, Igor F. B. Martins (Örebro University School of Business); Virbickaitè, Audronè (CUNEF University, Madrid, Spain); Nguyen, Hoang (Linköping University); Hedibert, Freitas Lopes (Insper Institute of Education and Research) |
| Abstract: | This paper proposes a mixed-frequency stochastic volatility model for intraday returns that captures fast and slow level shifts in the volatility level induced by news from both low-frequency variables and scheduled announcements. A MIDAS component describes slow-moving changes in volatility driven by daily variables, while an announcement component captures fast eventdriven volatility bursts. Using 5-minute crude oil futures returns, we show that accounting for both fast and slow level shifts significantly improves volatility forecasts at intraday and daily horizons. The superior forecasts also translate into higher Sharpe ratios using the volatilitymanaged portfolio strategy. |
| Keywords: | Intraday volatility; high-frequency; announcements; MIDAS; oil; sparsity. |
| JEL: | C22 C52 C58 G32 |
| Date: | 2025–11–07 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:oruesi:2025_012 |
| By: | Mahdi Goldani |
| Abstract: | The policy environment of countries changes rapidly, influencing macro-level indicators such as the Energy Security Index. However, this index is only reported annually, limiting its responsiveness to short-term fluctuations. To address this gap, the present study introduces a daily proxy for the Energy Security Index and applies it to forecast energy security at a daily frequency.The study employs a two stage approach first, a suitable daily proxy for the annual Energy Security Index is identified by applying six time series similarity measures to key energy related variables. Second, the selected proxy is modeled using the XGBoost algorithm to generate 15 day ahead forecasts, enabling high frequency monitoring of energy security dynamics.As the result of proxy choosing, Volume Brent consistently emerged as the most suitable proxy across the majority of methods. The model demonstrated strong performance, with an R squared of 0.981 on the training set and 0.945 on the test set, and acceptable error metrics . The 15 day forecast of Brent volume indicates short term fluctuations, with a peak around day 4, a decline until day 8, a rise near day 10, and a downward trend toward day 15, accompanied by prediction intervals.By integrating time series similarity measures with machine learning based forecasting, this study provides a novel framework for converting low frequency macroeconomic indicators into high frequency, actionable signals. The approach enables real time monitoring of the Energy Security Index, offering policymakers and analysts a scalable and practical tool to respond more rapidly to fast changing policy and market conditions, especially in data scarce environments. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.05556 |
| By: | Handan Kaplan; Kerem Yavuz Arslanli |
| Abstract: | In response to the global acceleration of electric vehicle (EV) adoption, this study repositions EV charging stations as strategic urban real estate assets rather than mere technical infrastructure. It highlights the untapped potential of charging infrastructure to contribute to sustainable urban mobility, spatial efficiency, and real estate value generation when optimally located. Recognizing current limitations in site selection—often driven by technical feasibility alone—the research proposes a location-based, investment-oriented site selection model that integrates urban planning, spatial accessibility, and economic feasibility into a cohesive decision-support framework. Focusing on Istanbul as a case study, the model operates under a fixed investment budget, aiming to identify optimal locations that maximize usage potential and return on investment (ROI). The analytical framework is grounded in the DIKW (Data–Information–Knowledge–Wisdom) hierarchy and applies a four-stage methodology: data collection, spatial analysis, multi-criteria decision-making (AHP, Fuzzy AHP, SWARA), and portfolio-based evaluation. Geographic Information Systems (GIS) were used to process and visualize key indicators, including population density, transportation networks, land values, and existing charging station locations. The study’s criteria are categorized into urban, economic, and environmental dimensions. While energy infrastructure data were limited, the model is designed to be scalable and adaptable for future data integration. Rooted in location theory, Highest and Best Use (HBU) analysis, and portfolio management principles, the model frames EV charging stations as components of a broader urban investment strategy. Ultimately, the research offers a spatially explicit, data-driven tool for public and private stakeholders, facilitating strategic decision-making in EV infrastructure deployment. The model’s flexible structure allows for adaptation across diverse urban contexts, contributing to both economic and spatial sustainability in EV infrastructure planning. |
| Keywords: | EV Charging Stations; Multi-Criteria Decision Making (MDM); Real Estate Investment; site selection |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_292 |
| By: | Ann-Kristin Becker (University of Cologne); Erik Hornung (University of Cologne) |
| Abstract: | Industrialization boosts aggregate incomes, but its distributional effects remain debated. We study the impact of coal-driven industrialization on unskilled labor incomes using novel panel data on wages from 667 Prussian localities (1800-1879), extended with county-level data through 1914. Exploiting spatial variation in coal proximity in difference-in-differences and event-study designs, we find that wage gains in coal-rich regions emerged once industrialization accelerated in the 1850s and continued to grow until WWI. Evidence from 3, 000 household accounts shows that coal proximity raised labor incomes primarily for low-skilled workers, with weaker effects for high-skilled and mechanical occupations. This pattern suggests that industrialization reduced wage inequality by compressing the local skill premium. Mediation analysis indicates that wage gains for unskilled workers were primarily driven by technology adoption and the increasing demand for low-skilled labor, rather than by sectoral change or the spread of the factory system. |
| Keywords: | Industrialization, Labor income, Energy transition, Structural change, Technological change, Deskilling ´ |
| JEL: | C23 J31 N33 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ajk:ajkdps:378 |
| By: | George, Babu (Alcorn State University) |
| Abstract: | State Public Service Commissions face complex decisions when utilities incur extraordinary costs from disasters, fuel price spikes, or emergency infrastructure repairs. This paper examines five primary cost recovery methods, i.e., immediate pass-through, short-term amortization, rate base inclusion, securitization, and deferral, analyzing their distinct impacts on utility financial stability, customer affordability, and regulatory transparency. Drawing on a literature review of utility regulation theory, financial mechanisms, and empirical evidence, the study synthesizes theoretical foundations including natural monopoly theory and the regulatory compact with practical regulatory considerations. A detailed hypothetical case study included as appendix demonstrates how a $25 million extraordinary cost would be recovered under each method, providing complete mathematical calculations, customer bill impacts across residential, commercial, and industrial classes, and total cost comparisons over recovery periods ranging from three months to twenty years. The analysis reveals fundamental trade-offs: immediate recovery minimizes total costs but creates severe bill shock, while securitization offers the lowest monthly impact but highest total cost due to extended interest payments. The paper emphasizes that transparent modeling, reproducible calculations, and meaningful public engagement are essential for regulatory legitimacy. It concludes with best practice recommendations for regulators, utilities, and consumer advocates, arguing that method selection must be context-dependent, balancing cost magnitude, customer economic conditions, utility financial health, and regulatory precedent to achieve equitable and sustainable outcomes. |
| Date: | 2025–10–28 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:49r5w_v1 |
| By: | Elveren, Adem Yavuz |
| Abstract: | Introduction: Global military expenditure increased to about $2.4 trillion in 2023, basically driven by the Russia-Ukraine war and other geopolitical tensions (SIPRI 2024). According to SIPRI, the 6.8% rise in total military spending was the largest since 2009. As a result, the global military burden reached 2.3% of world GDP, with governments allocating an average of 6.9% of their budgets to defense. Policymakers frequently frame high levels of military spending as indispensable for maintaining deterrence and protecting national interests, thereby legitimizing disproportionate defense budgets. However, higher levels of military expenditure do not necessarily translate into greater peace or stability. On the contrary, they tend to intensify arms races and escalate geopolitical rivalries, thereby heightening the likelihood of conflict (UN 2025). A growing body of empirical evidence indicates that military spending crowds out resources vital for social investment, poverty reduction, quality and extensive education and healthcare, gender equality, infrastructure development, and environmental protection (Elgin et al. 2022; UN Women 2022; Elveren 2025a). (...) |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cessdp:330668 |
| By: | Wetjen, Enna Marleen; Latacz-Lohmann, Uwe |
| Keywords: | Resource/Energy Economics and Policy |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ags:gewi24:364762 |