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on Energy Economics |
| By: | Nicholas Bloom; Philip Bunn; Paul Mizen; Prachi Srivastava; Gregory Thwaites; Ivan Yotzov |
| Abstract: | We analyse the importance of climate-related investment using a large economy-wide survey of UK firms. Over half of firms expect climate change to have a positive impact on their investment in the medium term, with around a quarter expecting a large impact of over 10%. Around two-thirds of these investments are expected to be in addition to normal capital expenditure, with some firms investing less elsewhere. These investments will be driven by larger firms as well as those in more energy-intensive sectors. Climate investments are expected mainly in switching to green energy sources and improving energy efficiency, and firms expect to finance these mainly using internal cash reserves. Overall, although firms are expecting to invest more resources in adapting to climate change, under reasonable assumptions, these investments are still not sufficient to meet the estimated targets implied by the UK Net Zero Pathway. |
| Keywords: | UK Economy, investment, climate change, Green Growth |
| Date: | 2025–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2077 |
| By: | Aghion, Philippe; Barrage, Lint; Hemous, David; Liu, Ernest |
| Abstract: | We analyze a model of green technological transition along a supply chain. In each layer, a good is produced with a dirty technology, or, if the required "electrification" innovation has occurred, with a clean technology which uses the immediate upstream good. We show that the economy is characterized by a single equilibrium but multiple steady-states, and that even in the presence of Pigouvian environmental taxation, a targeted industrial policy is generally necessary to implement the social optimum. We also show that: (i) small, targeted, industrial policy may bring large welfare gains; (ii) a government which is constrained to focus its subsidies to electrification on one particular sector, should primarily target downstream sectors; (iii) when extending the model so as to allow for supply chains also for the dirty technology, overinvesting in electrification in the wrong upstream branch may derail the overall transition towards electrification downstream. Finally, we illustrate our model with a calibration to decarbonization of global iron and steel production via hydrogen direct reduction, and show that, absent industrial policy, the economy can get stuck in a "wrong" steady-state with CO2 emissions vastly above the social optimum even with a carbon price in place. |
| Keywords: | technological change; green growth; supply chain; industrial strategy |
| JEL: | Q50 |
| Date: | 2024–07–10 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126750 |
| By: | Lebrand, Mathilde Sylvie Maria; Vasishtha, Garima; Yilmazkuday, Hakan |
| Abstract: | This paper investigates the effects of real energy price shocks on the current account balances of 45 emerging market and developing economies using country-specific structural vector autoregression models. The empirical results suggest that a 1 percent increase in real oil prices results in up to 0.11 percentage point cumulative improvement in the current account balances of oil exporters after five years, while a similar shock to real natural gas prices results in up to 0.06 percentage point improvement in the current account balances of natural gas exporters after five years. Real coal price shocks result in higher current account balances of oil exporters and natural gas exporters, suggesting substitution of coal with oil and natural gas in such cases. When the contributions of alternative real energy prices to the variance of current account balances are compared, oil price shocks dominate those of natural gas and coal prices. On the source of oil price shocks, the results support the view that the effects of oil demand shocks on current account balances are different from those of oil supply shocks. The results are robust to alternative specifications and identification schemes. |
| Date: | 2023–12–01 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10623 |
| By: | Colmer, Jonathan; Lagakos, David; Shu, Martin |
| Abstract: | This paper asks whether increasing productivity in the electricity sector can yield larger long-run GDP gains than suggested by electricity's small share of aggregate economic activity. We answer this question using a dynamic model in which electricity is a strong complement to other inputs in production. We parameterize the model using our own new measures of electricity-sector TFP across countries. The model predicts modest long-run GDP gains from improving electricity-sector TFP, contrary to the notion that electricity is a weak link. Parameterizations that make electricity a weak link mostly require the electricity sector to be counterfactually large or unproductive. |
| Keywords: | electricity; economic development; weak link; tfp |
| JEL: | O11 O4 Q43 |
| Date: | 2024–01–03 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126817 |
| By: | Francisco, Kris A. |
| Abstract: | Socialized pricing mechanisms are common in utility services like electricity because these services are critical for daily activities and are therefore considered vital for economic growth. The aim of such mechanisms is to redistribute financial resources from well-off to marginalized consumers. This approach is seen as a way to improve the availability and affordability of essential services, thus enhancing overall social welfare. However, while the rationale for socialized pricing mechanisms is widely accepted, discussions related to funding have induced much debate. Some studies have found that subsidies for electricity end up benefiting middle-income and high-income households instead of the poor, exposing possible targeting issues (Mayer et al. 2015, Trimble et al. 2011, Komives et al. 2009). Motivated by these discussions, this study examines two currently implemented socialized pricing mechanisms in the Philippine Electric Power Industry, namely: (1) the lifeline rate and (2) the senior citizen rate. The analysis employed data from the Household Energy Consumption Survey and the Family Income and Expenditure Survey, which showed that the rules for availing of the discounts are prone to leakages, favoring electricity consumers who can afford to pay their electricity consumption at full price. Some recommendations for addressing implementation issues are presented in this paper. Comments on this paper are welcome within 60 days from the date of posting. Email publications@pids.gov.ph. |
| Keywords: | utility services;electricity;socialized pricing;Philippine Electric Power Industry |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:phd:dpaper:dp_2024-47 |
| By: | Selod, Harris; Steinbuks, Jevgenijs; Trotter, Ian Michael; Blankespoor, Brian |
| Abstract: | This paper uses four decades of data on Brazilian municipalities to study the separate and joint impacts of highway and electricity infrastructure access on local economic outcomes. The identification strategy employs difference-in-difference estimators with staggered adoption design. The results show strong contemporaneous effects of electrifying municipalities that already have access to a highway, whereas electrification or highway provision alone may, at best, have no effect. Infrastructure investments also facilitated long-lasting structural transformation effects, with both types of infrastructure access spurring growth of the industrial output share. |
| Date: | 2024–05–23 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10785 |
| By: | Eriksson, Mathilda; del Valle, Alejandro; De La Fuente, Alejandro |
| Abstract: | This paper studies how air quality around combustion power plants changes in response to hydrological droughts that affect hydropower generation. Using fixed-effect and post-double selection methods, the paper analyzes a unique plant-level panel of fine particulate matter concentrations and meteorological conditions spanning 20 years at monthly frequency. The findings show that, on average, hydrological droughts lead to 0.83 micrograms per cubic meter excess fine particulate matter, equivalent to a 5.3 percent increase from non-drought conditions. Counterfactual simulations for the region indicate that this excess fine particulate matter may have resulted in up to 10, 000 premature deaths annually. Combining the estimates with climate, demographic, and policy projections, the paper also shows that this health burden will likely persist over the next four decades. |
| Date: | 2024–05–03 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10760 |
| By: | Feng, Zixin; Zhao, Qunshan; Heppenstall, Alison |
| Abstract: | The growth of electric vehicle adoption in the UK has reached a bottleneck due to the limited availability of public chargers. Understanding the usage patterns of existing public chargers and the factors influencing them is necessary for planning future charging infrastructure. Using charging session data from public EV chargers in Great Britain, collected between December 6, 2023, and March 31, 2024, we analysed usage patterns and driving factors in three case regions: Greater London, Greater Manchester, and the Central Belt of Scotland. Spatial regression models were applied to explore relationships between public charger usage rates and various contextual factors over space and time. Our findings show significant regional differences in public charger usage patterns. In Greater London, the higher prevalence of flats limits access to home charging, leading to greater reliance on public chargers, particularly for nighttime charging near residential flats. There is also a high preference for faster charging options and quick turnaround times, likely driven by high parking fees and the intensive travel schedules caused by traffic congestion. In Greater Manchester, drivers rely more on public chargers located in areas densely populated with flats, whereas areas with higher densities of houses or terraces show lower reliance on public chargers. In the Central Belt of Scotland, demand for public chargers is particularly high near motorways, likely due to the significant volume of long-distance commutes between major cities in the region. Overall, these findings highlight the importance of developing region-specific strategies for charger deployment to support a sustainable and efficient charging network. |
| Date: | 2025–02–19 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:u5yn3_v1 |
| By: | Ashish Ashok Uikey (Symbiosis International (Deemed University)); Ruturaj Baber (Christ University, Bengaluru, India); Zericho R Marak (Symbiosis International (Deemed University)) |
| Abstract: | The present study leverages the Stimulus-Organism-Behavior-Consequence (SOBC) framework to investigate how green transparency influences green brand loyalty and repurchase intention among electric vehicle consumers. Specifically, it examines the mediating roles of brand image and brand credibility in the relationships among green transparency, green brand loyalty, and repurchase intention. Data collected from 386 electric vehicle users were analyzed using Partial Least Squares-Structural Equation Modeling (PLS-SEM). Results reveal that green transparency positively impacts brand image and brand credibility, which subsequently enhances green brand loyalty and repurchase intention. Mediation analysis further highlights brand image and brand credibility as critical mechanisms linking green transparency to green brand loyalty. This study extends the SOBC framework to green marketing, offering theoretical and practical insights into fostering sustainable consumer behavior. By emphasizing the role of green transparency in building credible and compelling brand narratives, the findings guide marketers in cultivating consumer trust and loyalty while supporting policymakers in formulating transparency regulations for a sustainable marketplace. |
| Keywords: | Brand credibility, Brand image, Electric vehicles, Green brand loyalty, Green marketing, Green transparency, Repurchase intention |
| Date: | 2025–01–31 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04925852 |
| By: | Kaba, Kabinet; Tchana Tchana, Fulbert |
| Abstract: | Although access to reliable electricity enables manufacturing companies to increase their output, there have been few studies of the distribution of output growth between export and domestic markets. Although some papers have examined the impact of electricity reliability on exports (in volume terms or dummy terms), little is known about the way electricity reliability can push existing manufacturing firms more into the export market. Using the World Bank Enterprise Surveys, this paper examines a sample of 13, 025 manufacturing firms surveyed in 39 Sub-Saharan African countries between 2006 and 2022. The paper employs the entropy balancing approach to examine how access to reliable electricity affects the distribution of manufacturing firms' sales between export and domestic markets. The results show that for medium-sized manufa cturing firms, electricity access increases the share of exports in total sales at the expense of the share of domestic sales. However, the results for small and large manufacturing companies are not statistically significant. Among medium-sized manufacturing enterprises, domestic companies improve their exports relative to domestic sales when they have access to electricity, with mixed results for foreign companies. Even in resource-intensive countries, electricity access enhances the share of exports relative to domestic sales. The intra-sectoral structural change induced by power access is not limited to medium-sized companies in the manufacturing sector; the same pattern is observed in the service sector with mixed findings. |
| Date: | 2024–05–15 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10770 |
| By: | Goicoechea, Ana; Lang, Megan Elizabeth |
| Abstract: | Low- and middle-income countries (LMICs) face a disproportionate burden from climate change, potentially threatening the operations and profitability of firms. Simultaneously, firms in LMICs may contribute to climate change through the emissions associated with production. This paper synthesizes the empirical evidence on the links between climate change and firms in LMICs. It identifies three major gaps: poor geographic coverage, little discussion of how market failures interact with climate change in ways that constrain firm decisions, and an overall greater focus on policies for mitigation than adaptation. |
| Date: | 2023–12–13 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10644 |
| By: | Behrer, Arnold Patrick; Heft-Neal, Sam |
| Abstract: | Air pollution is a major threat to health, and the dangers are particularly acute in low- and middle-income countries. However, little is known about how the burden of pollution is spread across the wealth distribution in these countries. This paper uses new data providing high-resolution wealth estimates for more than 100 low- and middle-income countries, combined with equally high-resolution estimates of air pollution, to estimate how wealth is correlated with ambient air pollution around the world. The findings show that on average air pollution is positively correlated with wealth, but the relationship is highly heterogeneous across countries. The fact that air pollution and wealth are both disproportionately high in urban areas, where economic activity is largely concentrated, appears to drive this relationship. When the analysis is limited to anthropogenic sources of pollution, the relationship becomes less heterogeneous and more systematically positive. The paper also examines the relationship between pollution exposure and wealth within large cities around the world. Again, the findings show substantial heterogeneity across cities. The paper explores several hypotheses for this heterogeneity but does not find a single explanation. Economic concentration within cities appears to explain some of the relationship. Cities with more concentrated economic opportunity tend to have more positive correlations between pollution and wealth. |
| Date: | 2024–01–31 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10689 |
| By: | Hoy, Christopher Alexander; Kim, Yeon Soo; Nguyen, Minh Cong; Sosa, Mariano Ernesto; Tiwari, Sailesh |
| Abstract: | This study examines which factors influence support for reducing fossil fuel subsidies and what types of information shift people’s views through surveying 37, 000 respondents across 12 middle-income countries that provided over US$750 billion in explicit and implicit subsidies for fossil fuels in 2022. Respondents were randomly allocated to receive information about the relative cost of fossil fuel subsidies, how they are regressive, or worsen climate change and air pollution. They were then asked about their support for reforms with and without accompanying policies. These treatments, particularly about environmental damage, increased support for reforms in countries that primarily subsidize gasoline and among respondents who perceive themselves to be middle class. Around 30 percent of respondents supported reducing fossil fuel subsidies in isolation, but this share increased to over 95 percent if accompanying policies were implemented. These findings help inform governments about how to build public support for phasing out fossil fuel subsidies. |
| Date: | 2023–11–22 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10615 |
| By: | Aidah Nanyonjo (Cambridge Resource International Inc.); Mikhail Miklyaev (Department of Economics Queen’s University, Canada, and Cambridge Resource International Inc.) |
| Abstract: | The Electricity Sector Investment Appraisal Manual provides a comprehensive framework for the planning, appraisal, and development of electricity sector projects in Mozambique. It emphasizes the efficient allocation of public resources by ensuring that projects demonstrate economic viability, cost-effectiveness, and alignment with national energy and development goals. The manual provides robust methodologies for conducting Cost-Benefit Analysis (CBA) and Cost-Effectiveness Analysis (CEA), ensuring that electricity projects deliver maximum social and economic benefits. Illustrative case studies, such as the Manica Mini Hydropower Project (MHPP), demonstrate the application of the manual’s methodologies. This project serves as a practical example of addressing rural electrification challenges through renewable energy while aligning with national development strategies and Sustainable Development Goals (SDGs). Given Mozambique’s vulnerability to climate-related risks, the manual places significant emphasis on Climate Change Risk Screening. Projects are categorized into adaptation, resilience, and mitigation initiatives, with tools provided to integrate climate-proofing measures that ensure long-term sustainability. The Electricity Sector Investment Appraisal Manual is an essential resource for ensuring that electricity sector investments in Mozambique are economically viable, socially beneficial, and environmentally sustainable. By providing clear guidelines and practical tools, the manual enhances the quality of project development, improves transparency, and contributes to the country’s sustainable energy development. |
| Keywords: | Cost-benefit analysis (CBA), Cost-effectiveness analysis (CEA), Climate change risk screening, Climate-proofing, Infrastructure sustainability, Mozambique, Sustainable Energy, Electricity sector |
| JEL: | D61 L91 R42 Q48 Q54 |
| URL: | https://d.repec.org/n?u=RePEc:qed:dpaper:4635 |
| By: | Foroogh Nazari Chamaki (Department of Economics Queen’s University, Canada, and Cambridge Resource International Inc.); Mikhail Miklyaev (Department of Economics Queen’s University, Canada, and Cambridge Resource International Inc.) |
| Abstract: | The Electricity Sector Investment Appraisal Manual provides a comprehensive framework for the planning, appraisal, and development of electricity sector projects in Mozambique. It emphasizes the efficient allocation of public resources by ensuring that projects demonstrate economic viability, cost-effectiveness, and alignment with national energy and development goals. The manual provides robust methodologies for conducting Cost-Benefit Analysis (CBA) and Cost-Effectiveness Analysis (CEA), ensuring that electricity projects deliver maximum social and economic benefits. Illustrative case studies, such as the Manica Mini Hydropower Project (MHPP), demonstrate the application of the manual’s methodologies. This project serves as a practical example of addressing rural electrification challenges through renewable energy while aligning with national development strategies and Sustainable Development Goals (SDGs). Given Mozambique’s vulnerability to climate-related risks, the manual places significant emphasis on Climate Change Risk Screening. Projects are categorized into adaptation, resilience, and mitigation initiatives, with tools provided to integrate climate-proofing measures that ensure long-term sustainability. The Electricity Sector Investment Appraisal Manual is an essential resource for ensuring that electricity sector investments in Mozambique are economically viable, socially beneficial, and environmentally sustainable. By providing clear guidelines and practical tools, the manual enhances the quality of project development, improves transparency, and contributes to the country’s sustainable energy development. |
| Keywords: | Cost-benefit analysis (CBA), Cost-effectiveness analysis (CEA), Climate change risk screening, Climate-proofing, Infrastructure sustainability, Mozambique, Sustainable Energy, Electricity sector |
| JEL: | D61 Q42 Q48 Q54 |
| URL: | https://d.repec.org/n?u=RePEc:qed:dpaper:4634 |
| By: | Robert Hill; Leigh Neethling; Morné Oosthuizen (Development Policy Research Unit, University of Cape Town) |
| Abstract: | In an attempt to mitigate their effect on climate change, a number of economies have already, or are in the process of shifting away from a reliance on coal-based power. This just energy transition means that many existing jobs in the coal industry will be lost in favour of so-called “green jobs”, which aim to contribute positively and sustainably to the environment. South Africa is one such economy that is embarking on the process of a just transition. But, given that the coal industry is predominantly represented by young people in the province of Mpumalanga, it is not clear how or if this vulnerable group will transition into newly created green jobs. Making use of occupational relatedness metrics, this research investigates the feasibility of green job opportunities to capture displaced youth in Mpumalanga, depending on their employment history. Results of this desktop study – which forms part of a larger cross-country study funded and led by the University of Cambridge – suggest that green jobs are relatively different to the existing experience and task competences of young people, and thus some form of reskilling programme is likely to be necessary for young people to take full advantage of the employment opportunities offered by green jobs. |
| Keywords: | Just transition; green jobs; youth employment; occupational relatedness; Mpumalanga |
| JEL: | E24 J24 J40 J62 O13 Q01 Q20 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:ctw:wpaper:202406 |
| By: | Winkler-Seales, Hernan Jorge; Di Maro, Vincenzo; Montoya Munoz, Kelly Yelitza; Olivieri, Sergio Daniel; Vazquez, Emmanuel Jose |
| Abstract: | A growing body of literature investigates the labor market implications of scaling up “green” policies. Since most of this literature is focused on developed economies, little is known about the labor market consequences for developing countries. This paper contributes to filling this gap by providing new stylized facts on the prevalence of green occupations and sectors across countries at varying levels of economic development. Green occupations are defined using the Occupational Information Network, and green sectors are those with relatively lower greenhouse gas emissions per worker. The paper offers an initial assessment of how the implementation of green policies—aimed at expanding green sectors and strengthening the relative demand for green skills—may affect workers in developing economies. It finds that the share of green jobs is strongly correlated with the level of gross domestic product per capita across countries. When controlling for unobserved heterogeneity, a 1 percent increase in gross domestic product per capita is associated with 0.4 and 4.1 percentage point increases in the shares of new and emerging, and enhanced skills green jobs, respectively. The paper then focuses on Latin America and finds that only 9 percent of workers have a green job with respect to both occupation and sector. The findings show that within countries, workers with low levels of income and education are more likely to be employed in non-green sectors and occupations, and to lack the skills for a greener economy. This evidence suggests that complementary policies are needed to mitigate the potential role of green policies in widening income inequality between and within countries. |
| Date: | 2024–06–06 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10794 |
| By: | Mosomi, Jacqueline; Cunningham, Wendy |
| Abstract: | To adequately prepare the labor force for the green economy, policy makers and workers require a detailed understanding of the nature of green jobs. This study profiles green jobs in the South African labor market. It uses labor force survey data and applies an occupational task-based approach to identify current green occupations and associated jobs, count them, and profile their workers and wages. The findings show that 5.5 to 32 percent of South Africa’s jobs can be labeled as “green, ” where the former estimate uses a strict definition and the latter uses a broad definition. The share of strictly green jobs has not changed over the past eight years. While 65 percent of strictly green occupations can be classified as high (skill) occupations, only 55 percent of workers are in these occupations, reflecting numerous employment opportunities in mid-level and elementary green occupations. Strictly green occupations tend to be male-dominated and held by prime-age (25–44) workers with post-secondary school. However, the profile of those in the greenest of the green occupations shows that they are older (age 45–65) workers and Black Africans with lower than completed high school education. Policies to prepare South Africans to engage in the green economy include developing a strategy to teach new and existing workers to use green technologies; targeting green occupations in youth development programs; making a concerted effort to support women in science, technology, engineering, and mathematics; helping low-skilled green workers to organize and improve their work conditions; and continuing to collect and analyze data for better tracking South Africa’s progress in becoming a green labor force. |
| Date: | 2024–05–21 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10779 |
| By: | Robert D. Metcalfe; Sefi Roth |
| Abstract: | Exposure to ambient air pollution has been shown to be detrimental to human health and productivity, and has motivated many policies to reduce such pollution. However, given that humans spend 90% of their time indoors, it is important to understand the degree of exposure to Indoor Air Pollution (IAP), and, if high, ways to reduce it. We design and implement a field experiment in London that monitors households’ IAP and then randomly reveals their IAP in real-time. At baseline, we find that IAP is worse than ambient air pollution when residents are at home and that for 38% of the time, IAP is above World Health Organization standards. Additionally, we observe a large household income-IAP gradient, larger than the income-ambient pollution gradient, highlighting large income disparities in IAP exposure. During our field experiment, we find that the randomized revelation reduces IAP by 17% (1.9 μg/m³) overall and 34% (5 μg/m³) during occupancy time. We show that the mechanism is households using more natural ventilation as a result of the feedback (i.e., opening up doors and windows). Finally, in terms of welfare, we find that: (i) households have a willingness to pay of £4.8 ($6) for every 1 μg/m ³ reduction in indoor PM2.5; (ii) households have a higher willingness to pay for mitigation than for full information; (iii) households have a price elasticity of IAP monitor demand around -0.75; and (iv) a £1 subsidy for an IAP monitor or an air purifier has an infinite marginal value of public funds, i.e., a Pareto improvement. |
| JEL: | Q5 Q53 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33510 |
| By: | Oscilowicz, Emilia; Solís, Guadalupe A.; Martinez, Laura; Németh, Jeremy; Simon, Gregory L.; Makarewicz, Carrie; Dickinson, Katherine; McKenzie, Lisa M.; Scandlyn, Jean; Erices-Ocampo, Paulina |
| Abstract: | Community air pollution science is widely viewed as a powerful public health and urban planning tool that can empower communities to push for policy change to benefit public health outcomes. A review of 131 studies highlights a bias toward the evaluation of low-cost sensor performance. We draw attention to the 10 studies (10%) that address a research-to-policy gap through distinct theories of change. Recommendations include addressing research gaps such as equitable sensor distribution, expanding focus to the Global South, and establishing engagement with policymakers early on in community science research. |
| Date: | 2024–06–10 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:mxv5k_v1 |
| By: | Baquie, Sandra; Behrer, Arnold Patrick; Du, Xinming; Fuchs Tarlovsky, Alan; Nozaki, Natsuko Kiso |
| Abstract: | Air pollution profoundly impacts welfare, causing more deaths globally than malnutrition, AIDS, tuberculosis, and malaria combined. In the Georgian capital, Tbilisi, air pollution levels exceed international standards and surpass levels in other cities in the region. The average monthly PM2.5 concentration in Tbilisi is 20 Micrograms per cubic meter, four times higher than the World Health Organization’s annual recommended limit. This paper uses multiple data sources — administrative data, satellite imagery, private real estate transactions, and traffic data — to estimate the impact of air pollution on the health and productivity of people in Tbilisi. It estimates that a 1 percent increase in PM2.5 levels corresponds to a 0.24 percent increase in respiratory hospitalization rates. A 1 percent increase in PM2.5 is also associated with a 0.2 percent decrease in rental prices. All the estimates are lower bounds of the total impact of air pollution as they only account for short-term consequences. The study shows that traffic and industrial activity are significant drivers of air pollution in Tbilisi. The paper also estimates the positive co-benefits of potential carbon pricing policies from air pollution reduction. Adopting a carbon tax of $25 per ton would reduce hospitalizations by 0.44 percent per district by 2036, while increasing rental prices by 0.38 percent. |
| Date: | 2023–12–12 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10643 |
| By: | Julia Mink |
| Abstract: | I estimate the causal impact of short-term exposure to nitrogen dioxide (NO2), ground-level ozone (O3), and particulate matter (PM) on healthcare costs in France. I construct a large-scale dataset by linking administrative healthcare expenditures for a nationally representative sample with high-resolution air pollution and meteorological data. To address endogeneity concerns related to economic activity, I implement an instrumental variable (IV) strategy that exploits weekly variations in altitude atmospheric conditions—such as thermal inversions, wind speed, and the height of the planetary boundary layer—that predict local pollutant concentrations yet are unlikely to affect healthcare utilization except through pollution. My findings reveal that air pollution, even at concentrations below current European air quality standards, imposes annual healthcare costs that exceed earlier estimates by a factor of ten. Heterogeneity analyses show that pollution affects multiple medical specialties, including cardiology, pulmonology, and ophthalmology, while placebo specialties, such as trauma surgery, exhibit no significant effects. Contrary to prior work focusing on children and the elderly, I find that adverse health outcomes extend across all age groups, demonstrating broader population vulnerability. Moreover, marginal effects prove larger at lower pollution levels, implying a concave doseresponse function that underscores the potential for substantial cost savings from even modest pollution abatement in relatively clean areas. These results suggest that earlier cost-benefit analyses likely undervalue the societal gains from stricter environmental regulation. |
| Keywords: | Air pollution, healthcare cost, instrumental variables |
| JEL: | Q51 Q53 I12 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_650 |
| By: | Orecchia, Carlo; Cala, Valerio Ferdinando; de Cristofaroa, Fabiana; Dudu, Hasan |
| Abstract: | One of Italy’s key objectives is to reform and modernize the tax system to increase tax efficiency and improve environmental sustainability and regional economic outcomes, in line with the European Union strategy. Within the framework of the European Green Deal, Italy is committed to contributing to the goal of becoming the first climate neutral region by 2050 (the “Fit for 55” package). As an intermediate step toward the 2050 target, the European Union must reduce greenhouse gas emissions by at least 55 percent by 2030 compared to 1990 levels. Carbon pricing is at the core of the proposal, but its full implementation is also expected to have regressive effects, harming poorer households, and adverse economic impacts, reducing firms’ competitiveness. This paper evaluates the effects of the carbon pricing proposal of the “Fit for 55” package on welfare, sectoral production, and income distribution. To tackle the adverse social and economic effects, it compares different revenue recycling schemes shifting the tax burden from major direct and indirect taxes to carbon emissions. It finds that well-targeted revenue recycling policies might significantly reduce the negative effects. The analysis adopts the Italian Regional and Environmental Computable General Equilibrium of the Department of Finance model, which is a new (recursive) dynamic computable general equilibrium model developed by the Italian Ministry of the Economy with technical assistance from the World Bank. It has a detailed energy specification that allows for capital/labor/energy substitution in production, intra-fuel energy substitution across all demand agents, a multi-output and multi-input production structure, an extended energy system with 11 different types of technologies, multiple households to address distributional impacts, and detailed information on the Italian tax system. |
| Date: | 2023–10–26 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10592 |
| By: | Kraynak, Daniel Christopher; Timilsina, Govinda R.; Alberini, Anna |
| Abstract: | This study investigates the emission reduction effects of a mix of market-based climate policies in Australia, where a dramatic ramp-up of incentives for renewable electricity generation was paired with a short-lived carbon tax. A synthetic control method is employed to estimate the joint effect of the policies. Contrary to the general perception in the existing literature, this study shows that the green electricity and carbon tax policies together caused a 7 percent reduction in emissions per capita from 2009 to 2018. The emission reduction impacts attenuated when the carbon price was repealed, and the renewable targets were softened. The study also finds that the policy mix did not reduce the production of Australian coal and may have expanded its export. The findings suggest that even imperfect climate change mitigation policies can have substantial and persistent effects on emissions as well as unintended consequences. |
| Date: | 2024–06–24 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10812 |
| By: | Colmer, Jonathan; Qin, Suvy; Voorheis, John; Walker, Reed |
| Abstract: | This paper uses administrative tax records linked to Census demographic data and high-resolution measures of fine small particulate (PM2.5) exposure to study the evolution of the Black-White pollution exposure gap over the past 40 years. In doing so, we focus on the various ways in which income may have contributed to these changes using a statistical decomposition. We decompose the overall change in the Black-White PM2.5 exposure gap into (1) components that stem from rank-preserving compression in the overall pollution distribution and (2) changes that stem from a reordering of Black and White households within the pollution distribution. We find a significant narrowing of the Black-White PM2.5 exposure gap over this time period that is overwhelmingly driven by rank-preserving changes rather than positional changes. However, the relative positions of Black and White households at the upper end of the pollution distribution have meaningfully shifted in the most recent years. |
| Keywords: | air pollution; income; environmental inequality; decomposition |
| JEL: | H00 H40 Q50 |
| Date: | 2024–01–18 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126758 |
| By: | Bauer, Adam Michael; Mcisaac, Florent John; Hallegatte, Stephane |
| Abstract: | The Paris Agreement established that global warming should be limited to “well below” 2°C and encouraged efforts to limit warming to 1.5°C. Achieving this goal presents a challenge, especially given (i) economic inertia and adjustment costs, which penalize a swift transition away from fossil fuels, and (ii) climate uncertainty that, for example, hinders the ability to predict the amount of emissions that can be released before a given temperature target is exceeded. This paper presents a modeling framework that explores optimal decarbonization investment strategy when both adjustment costs and climate uncertainty are present. The findings show that climate uncertainty impacts investment in three ways: (i) the cost of policy increases, especially when adjustment costs are present; (ii) abatement investment is front-loaded relative to the certainty policy; and (iii) the sectoral allocation of investment changes to favor declining investment pathways rather than bell-shaped paths. The latter effect is especially pronounced in hard-to-abate sectors, such as heavy industry. Each of these effects can be traced back to the carbon price distribution inheriting a “heavy tail” when climate uncertainty is present. The paper highlights how climate uncertainty and adjustment costs combined result in a more aggressive least-cost strategy for decarbonization investment. |
| Date: | 2024–03–28 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10743 |
| By: | Burgold, Peter; Ernst, Anne; Hinterlang, Natascha; Jäger, Marius; Stähler, Nikolai |
| Abstract: | In this paper, we compare the economic and welfare implications of two carbon pricing policies, namely the European Cap and Trade (CaT) regime and the Chinese Tradeable Performance Standard (TPS). The former sets an economy-wide emissions target and forces firms to purchase sufficient certificates. The latter sets an emissions intensity and requires firms with a higher intensity to either abate or buy emissions allowances from firms with lower-than-target intensities. It can be shown that TPS is equivalent to CaT when carbon pricing revenues are redistributed to firms according to output. In a dynamic multi-sector general equilibrium TANK model, we show that TPS outperforms a CaT regime that redistributes carbon revenues to households in a lump-sum manner, both, in terms of output gains and welfare due to lower costs on the production side. However, CaT with labor tax reduction increases welfare most because it alleviates distortions on the production side and improves the income situation of all households. |
| Keywords: | Carbon Pricing, Cap and Trade, Tradable Performance Standard, Dynamic General Equilibrium Model, Sectoral Heterogeneity, Input-Output Matrix |
| JEL: | E32 E62 H23 H32 Q58 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bubdps:311837 |
| By: | Granata, Julia; Posadas, Josefina |
| Abstract: | The coexistence of several definitions of green jobs and measurement instruments gives room for mismatches between those concepts and their application to research questions. This paper first presents an organizing framework for the existing definitions, measurement instruments, and policy frameworks. It then delves into discussing two appropriate approaches for identifying green occupations to guide skills development policy: the task-content and the skills approaches. In the process, it introduces a novel methodology with a dictionary of green terms for identifying green tasks and occupations. This methodology, utilizing text analysis, demonstrates superior performance compared to the well-known O*NET Green Economic Project classification, particularly for developing countries. Lastly, the paper applies this methodology to Indonesia, a middle-income country, and utilizes various data sources to showcase the utility of the dictionary and text analysis exercise. |
| Date: | 2024–04–17 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10753 |
| By: | Schmitz, Tom; Colantone, Italo; Ottaviano, Gianmarco I. P. |
| Abstract: | This paper shows how to combine microeconometric evidence on the effects of environmental policy with a macroeconomic model, accounting for general equilibrium spillovers that have mostly been ignored in the literature. To this end, we study the effects of a recent US air pollution policy. We use regression evidence on the policy's impact across industries and local labor markets to calibrate a quantitative spatial model allowing for general equilibrium spillovers. Our model implies that the policy lowered emissions by 11.1%, but destroyed approximately 250'000 jobs. Ignoring spillovers overestimates job losses in polluting industries, but underestimates job losses in clean industries. |
| Keywords: | environmental policy; employment; trade; clean air act |
| JEL: | E24 Q50 Q53 |
| Date: | 2024–07–09 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126761 |
| By: | Priftis, Romanos; Schoenle, Raphael |
| Abstract: | We construct a New-Keynesian E-DSGE model with energy disaggregation and financial intermediaries to show how energy-related fiscal and macroprudential policies interact in affecting the euro area macroeconomy and carbon emissions. When a shock to the price of fossil resources propagates through the energy and banking sector, it leads to a surge in inflation while lowering output and carbon emissions, absent policy interventions. By contrast, imposing energy production subsidies reduces both CPI and core inflation and increases aggregate output, while energy consumption subsidies only lower CPI inflation and reduce aggregate output. Carbon subsidies instead produce an intermediate effect. Given that both energy subsidies raise carbon emissions and delay the “green transition, ” accompanying them with parallel macroprudential policy that taxes dirty energy assets in bank portfolios promotes “green” investment while enabling energy subsidies to effectively mitigate the adverse effects of supply-type shocks, witnessed in recent years in the EA. JEL Classification: E52, E62, H23, Q43, Q58 |
| Keywords: | DSGE model, energy sector, energy subsidies, financial frictions, macroprudential policy |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253032 |
| By: | Pérez-Sebastián, Fidel; Serrano Quintero, Rafael; Steinbuks, Jevgenijs |
| Abstract: | How does the misallocation of complementary public capital affect the spatial organization of economic activity To answer this question, this paper endogenizes the government's decision to invest in the transport and electricity networks. A novel multi-sector quantitative spatial equilibrium model incorporates the quality of the electric power and the road transportation infrastructure networks, which determine sectoral productivities and trade costs. Simulation results for the Brazilian economy point to significant welfare gains from reallocating infrastructure investment. Spatial and fiscal complementarities in heterogeneous infrastructure provision determine a sizeable part of those gains. Misallocation of both infrastructure investments is positively associated with local political support for the incumbent authority. |
| Date: | 2023–12–18 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10650 |
| By: | Helmers, Viola; Van der Werf, Edwin |
| Abstract: | The taxation of aviation is a frequently discussed component of governments' efforts to mitigate greenhouse gas emissions. This study examines the impact of the German aviation tax on passenger numbers during the period 2011-2019 using five panel data estimators and a Specification Curve Analysis (SCA) to assess the robustness of the results to changes in the specifications of the econometric model. Employing five base models, we find that the tax induced a 6-11% reduction in the number of passengers departing annually from Germany in the first two years after implementation. For later years, estimated effects are more ambiguous. The SCA, comprising 175 alternative specifications, corroborates our main findings while showing a slightly wider range of effect sizes, especially on the upper bound. The results show that the choice of econometric method can affect research outcomes, especially for the fourth year of the tax and onward. |
| Abstract: | Die Besteuerung des Luftverkehrs ist eine häufig diskutierte Maßnahme von Regierungen zur Verringerung von Treibhausgasemissionen. Diese Studie untersucht die Auswirkungen der deutschen Luftverkehrsteuer auf Passagierzahlen im Zeitraum 2011-2019 mit Hilfe von fünf Paneldatenschätzern und einer Specification Curve Analysis (SCA), um die Robustheit der Ergebnisse gegenüber Änderungen in den Spezifikationen des ökonometrischen Modells zu bewerten. Unter Verwendung von fünf verschiedenen Schätzern stellen wir fest, dass die Steuer in den ersten beiden Jahren nach Einführung der Steuer zu einem Rückgang der Anzahl der jährlich aus Deutschland abfliegenden Passagiere um 6-11 % führte. Für die nachfolgenden Jahre sind die geschätzten Effekte uneindeutig. Die SCA, welche weitere 175 alternative Spezifikationen umfasst, bestätigt unsere Hauptergebnisse und zeigt eine etwas breitere Spanne von Effektgrößen, insbesondere im oberen Bereich. Unsere Ergebnisse zeigen, dass die Wahl der ökonometrischen Methode die Ergebnisse maßgeblich beeinflussen kann, in diesem Fall insbesondere für die Effekte ab dem vierten Jahr der Steuer. |
| Keywords: | Aviation policy, aviation tax, passenger tax, transport economics, dynamic panel model, specification curve analysis |
| JEL: | C21 C23 H23 R48 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:312424 |
| By: | Antweiler, Werner |
| Abstract: | When faced with making economic trade-offs between lower upfront purchase costs and lower operating costs, many consumers experience "capital bias", a phenomenon that is tantamount to discounting future costs excessively. Consumers may therefore end up with investments that are sub-optimal on a life-cycle cost basis. Capital bias can affect the purchase of many goods that could lower greenhouse gas emissions such as electric vehicles, heat pumps, or more efficient appliances. The benecial effect of carbon pricing can be thwarted by capital bias when technology usage is price-inelastic and benecial environmental gains occur mostly at the extensive margin (replacements) rather than the intensive margin (usage). Policies other than carbon pricing may be needed to induce consumers to shift to product choices that are superior on a lifecycle cost that includes external costs from greenhouse gas emissions (or other negative externalities). This paper provides a novel theoretical micro-economic analysis of the problem coupled with an investigation about competing policy interventions. Conventional carbon pricing can be ineffective in the presence of consumer myopia, while subsidy (or penalty) schemes that influence the purchase decision can be effective especially when they are conditioned on a usage threshold and/or offer incentives proportional to usage. There is scope for alternative policy designs that can overcome consumer myopia as a hurdle to adopting energy-ecient durable goods. The theoretical analysis is rounded out with empirical simulations focusing on electric vehicle adoption. |
| Abstract: | Wenn es darum geht, einen wirtschaftlichen Kompromiss zwischen niedrigeren Anschaffungskosten und niedrigeren Betriebskosten zu finden, unterliegen viele Verbraucher einem "capital bias", ein Phänomen, das einer übermäßigen Diskontierung künftiger Kosten gleichkommt. Dies kann dazu führen, dass die Verbraucher Investitionen tätigen, die im Hinblick auf die Lebenszykluskosten suboptimal sind. Kapitalverzerrungen können sich auf den Kauf vieler Güter auswirken, die die Treibhausgasemissionen senken könnten, wie Elektrofahrzeuge, Wärmepumpen oder effizientere Geräte. Die positive Wirkung der Kohlenstoffbepreisung kann durch Kapitalverzerrungen vereitelt werden, wenn der Technologieeinsatz preisunelastisch ist und die positiven Umweltauswirkungen am extensiven Rand (Ersatz) zu verorten sind, nicht am intensiven Rand (Nutzung). Andere politische Maßnahmen als die Preisgestaltung können nötig sein, um die Verbraucher dazu zu bewegen, sich für Produkte zu entscheiden, die in Bezug auf die Lebenszykluskosten günstiger sind, die die externen Kosten von Treibhausgasemissionen (oder andere negative externe Effekte) einschließen. Dieses Papier liefert eine neuartige theoretische mikroökonomische Analyse des Problems in Verbindung mit einer Untersuchung über konkurrierende politische Interventionen. Konventionelle Bepreisung von Kohlenstoff kann unwirksam sein, wenn die Verbraucher kurzsichtig handeln. Subventions- (oder Straf-)Regelungen, die die Kaufentscheidung beeinflussen, können vor allem wirksam sein, wenn sie an einen Schwellenwert für den Verbrauch gebunden sind und/oder Anreize bieten, die proportional zum Verbrauch sind. Es gibt Spielraum für alternative politische Konzepte, mit denen die Kurzsichtigkeit der Verbraucher als Hindernis für die Einführung von energieeffizienten langlebigen Güter überwunden werden kann. Die theoretische Analyse wird durch empirische Simulationen abgerundet, die sich auf die Einführung von Elektrofahrzeugen fokussiert. |
| Keywords: | Carbon pricing, internalities, capital bias, environmental policy |
| JEL: | Q58 Q48 D11 D83 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:312427 |
| By: | Artuc, Erhan; Sommer, Konstantin Heinrich Ludwig |
| Abstract: | This paper analyzes the effects of carbon taxation and border carbon adjustments in a setting where firms can choose to respond to taxation by abating or by outsourcing part of their production. For this, this paper sets up a general equilibrium trade model, calibrated with world trade and input-output data that features a discrete choice production structure, where the producers choose between outsourcing or abating emission-intensive intermediate production steps. The paper finds that border adjustments that cannot target scope 3 emissions can lead to outsourcing, and thus leakage, further down the value chain, but nevertheless induce higher abatement both in the countries that impose the border adjustment and in the ones affected by it. |
| Date: | 2024–01–11 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10665 |
| By: | Boeing, Geoff (Northeastern University); Pilgram, Clemens; Lu, Yougeng |
| Abstract: | This study estimates the relationships between street network characteristics and transport-sector CO2 emissions across every urban area in the world and investigates whether they are the same across development levels and urban design paradigms. The prior literature has estimated relationships between street network design and transport emissions---including greenhouse gases implicated in climate change---primarily through case studies focusing on certain world regions or relatively small samples of cities, complicating generalizability and applicability for evidence-informed practice. Our worldwide study finds that straighter, more-connected, and less-overbuilt street networks are associated with lower transport emissions, all else equal. Importantly, these relationships vary across development levels and design paradigms---yet most prior literature reports findings from urban areas that are outliers by global standards. Planners need a better empirical base for evidence-informed practice in under-studied regions, particularly the rapidly urbanizing Global South. |
| Date: | 2024–01–02 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:r32vj_v1 |
| By: | He He; Kim, Chaeyoung |
| Abstract: | Correctly pricing private vehicles and their use is paramount to building sustainable, safe, and equitable transportation systems. However, determining the “right” price – the combination of taxes on vehicle purchase, ownership, and use – is a complex problem. Although a rich literature exists on the subject, it is built on evidence from developed countries. This paper synthesizes the lessons learned from the literature, theoretical and empirical, on vehicle and fuel taxation for managing private vehicle demand. In particular, the paper examines the efficiency and distributional impacts of purchase, ownership, and use taxes. The literature is unequivocal that taxing use dominates taxing purchase or ownership on efficiency grounds. Nonetheless, the latter instruments can still have important roles to play, for example, addressing specific market failures, for equity and political acceptability considerations, or for ease of enforcement. The paper also discusses the practical challenges of saliency, gaming, and evasion of taxes; how the effectiveness of taxes as policy instruments also depends on the availability of alternatives to driving; and what the emergence of electric vehicles means for optimal taxation. Importantly, the paper considers how these lessons, mostly derived from high-income countries with mature automobile markets, apply to developing contexts. In addition to the policy discussion, the paper conducts two exercises compiling empirical evidence. It compiles and compares estimates of the externality costs associated with private vehicle use, including congestion, local air pollution, greenhouse gas emissions, injuries, and noise. Similarly, it compiles and compares demand response elasticities to vehicle purchase, ownership, and use taxes. Both serve as useful references for researchers, development practitioners, and policy makers. |
| Date: | 2023–12–15 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10647 |
| By: | Bøler, Esther Ann; Holtsmark, Katinka; Ulltveit-Moe, Karen Helene |
| Abstract: | We analyze how a major negative shock to the producers of fossil fuels may lead to a shift from dirty to clean R&D along the supply chain. First, we develop a theoretical framework of directed technical change, showing that adjustment costs in R&D activity can lead fossil energy sector suppliers to shift their R&D activity towards clean innovation more than other firms, as a consequence of a negative oil price shock. Second, we investigate the impact of a major drop in the oil price in 2014 on clean R&D. Relying on rich firm level trade data, we propose a novel method of identifying firms' exposure to the price shock. We find that more exposed firms increased their clean R&D investments more than less exposed firms. Our findings contribute to the understanding of the drivers of clean technological change, which is vital to assess the effectiveness of different climate policy measures, including carbon pricing. |
| Keywords: | clean innovation; supply chains; carbon pricing |
| JEL: | F18 O31 Q55 Q58 |
| Date: | 2024–12–13 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126766 |
| By: | Rosenow, Samuel Kaspar; Mealy, Penelope Ann |
| Abstract: | Reaching net-zero emissions by 2050 requires unprecedented scaling up in the global deployment of critical decarbonization technologies, such as solar photovoltaics, wind turbines, and electric vehicles (EVs). This challenge is currently rife with risks and rewards. With global production perceived to be concentrated in a small number of countries, mitigating against possible supply-side risks has become an urgent policy priority for many countries. At the same time, these technologies’ high-growth potential offer lucrative rewards for countries able to strategically position themselves to produce requisite materials, components or assemble final products. As green industrial policies have become an increasingly popular tool for shoring up supply chains and stimulating production in key green sectors, this paper presents a data-driven framework for identifying which countries could have key strengths and latent comparative advantages in the production of solar PV, wind turbines and EVs. It constructs a new dataset of traded products, components, and materials associated with decarbonization technologies and develops new indices capturing countries’ current export strengths and future diversification potential in the global value chains of these technologies. It also highlights products with supply risks due to high market concentration levels and those with development rewards in terms of their potential for growth, knowledge spillovers, and technological upgrading. Our analysis suggests that there is plenty of opportunity to diversify these value chains across a larger number of countries and reduce risks associated with reliance on only a few countries. |
| Date: | 2024–02–07 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10696 |
| By: | Colmer, Jonathan; Qin, Suvy; Voorheis, John; Walker, Reed |
| Abstract: | This paper explores the relationships between air pollution, income, wealth, and race by combining administrative data from U.S. tax returns between 1979-2016, various measures of air pollution, and sociodemographic information from linked survey and administrative data. In the first year of our data, the relationship between income and ambient pollution levels nationally is approximately zero for both non-Hispanic White and Black individuals. However, at every single percentile of the national income distribution, Black individuals are exposed to, on average, higher levels of pollution than White individuals. By 2016, the relationship between income and air pollution had steepened, primarily for Black individuals, driven by changes in where rich and poor Black individuals live. We utilize quasi-random shocks to income to ex-amine the causal effect of changes in income and wealth on pollution exposure over a five-year horizon, finding that these income-pollution elasticities map closely to the values implied by our descriptive patterns. We calculate that Black-White differences in income can explain ~10 percent of the observed gap in air pollution levels in 2016. |
| Keywords: | income; inequality; air pollution |
| JEL: | H0 H4 Q5 R0 |
| Date: | 2024–11–12 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126791 |
| By: | Vesa Pursiainen (University of St. Gallen; Swiss Finance Institute); Hanwen Sun (University of Bath, School of Management); Yue Xiang (Durham University) |
| Abstract: | Higher exposure to competition – measured by product fluidity – is associated with higher carbon emission intensity. This result is robust to using instrumental variables to obtain exogenous variation in fluidity. The positive relationship between competition and carbon emissions is stronger for firms in areas less concerned about climate change. It is also stronger in areas with weaker social norms. Our results suggest that shorttermism is not the primary driver, as the emissions-competition link is at least as strong for firms with longer-term-oriented shareholders. Our findings suggest that policies promoting competition may be at odds with climate change abatement. |
| Keywords: | carbon emissions, carbon intensity, competition |
| JEL: | D40 G30 M14 Q50 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp2516 |
| By: | Calice, Pietro; Demekas, Dimitri G. |
| Abstract: | Recent calls on central banks and financial regulators to use the tools at their disposal to help mitigate the negative economic and social impacts of climate policies are based on several false analogies between the energy transition and the “just” energy transition. The same false analogies explain why voluntary efforts to incorporate just transition considerations into private financial decisions and products copying approaches from climate finance have so far failed to gain traction. None of the above invalidates the just transition as a political aspiration. However, only the government has the legitimacy and authority to identify the regions or sectors where the negative impacts of the energy transition are to be mitigated, determine the extent and instruments for this mitigation, and adjust them over time in line with shifting social preferences. This is an essentially political task that cannot be delegated to technocratic agencies. Nevertheless, within the parameters established by the government, central banks and financial regulators can play a supporting role by ensuring accurate data on the social impact of the energy transition, enforcing disclosure requirements, sensitizing financial firms to just transition–related risks, and raising awareness among financial firms. However, they must be cautious not to overstep their mandate, and remain mindful of the limitations of their toolkit and of the risks and potential unintended consequences of their actions. |
| Date: | 2024–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10685 |
| By: | Timilsina, Govinda R.; Sebsibie, Samuel |
| Abstract: | The Arab Republic of Egypt is the 24th largest carbon dioxide emitter from fossil fuel combustion in the world and the third largest emitter in the Middle East and North Africa region after the Islamic Republic of Iran and Saudi Arabia. Egypt has set a target of reducing one-third of its national greenhouse gas emissions under the Paris Climate Agreement. Pricing instruments, such as the removal of existing fossil fuel subsidies and the introduction of a carbon tax, help the country to achieve its emission reduction targets. However, the economic, social, and environmental impacts of such policies are unknown. This study develops a computable general equilibrium model for Egypt to investigate the economic, distributional, and climate change mitigation effects of fossil fuel subsidy removal and introduction of a carbon tax under alternative schemes to recycle the saved subsidies and carbon tax revenues. Four revenue recycling schemes are considered: public debt reduction, equal or progressive cash transfers to households, and cutting corporate income taxes. The numerical results indicate that removing existing petroleum subsidies and introducing of a carbon tax of LE 600 per ton of carbon dioxide would reduce national carbon dioxide emissions by up to 11 percent without significantly affecting the economy. When the saved subsidies and carbon tax revenues are given back to households through cash transfers, the income of poorer households would rise relative to that of richer households, ensuring that this revenue recycling scheme is progressive. The policies affect commodity prices and sectoral output not only in different magnitudes, but also in different directions across the revenue recycling schemes. |
| Date: | 2024–06–04 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10791 |
| By: | Stacciarini, João Henrique Santana (Federal University of Goiás); Gonçalves, Ricardo Junior de Assis Fernandes |
| Abstract: | The energy transition has driven the rapid expansion of associated technologies, such as solar panels, wind turbines, and electric vehicles. Although promoted as clean and renewable, these technologies, due to their intrinsic characteristics, rely heavily on minerals for their manufacturing - many of which have recently been classified as critical. This article examines the impact of the significant increase in demand for these minerals. Using the International Renewable Energy Agency’s definition of critical minerals - which includes cobalt, nickel, copper, lithium, and rare earth elements - we conducted extensive data collection, systematization, and analysis on a global scale to identify the main producing countries and the contexts surrounding their extraction. The results reinforce a historical pattern in which most critical minerals for the energy transition originate from Global South nations, predominantly in Africa, Asia, and Latin America. In countries where environmental, social, and economic regulations are often more flexible, the profitability of large international corporations is favored. Furthermore, our findings reveal that, in many cases, the extraction of these minerals is linked to severe social, environmental, and economic impacts, ranging from extreme pollution and worker contamination by toxic metals to the financing of militias associated with authoritarian military regimes. These issues, often overlooked in dominant energy transition narratives, deserve greater attention and reflection from both the scientific community and society at large. |
| Date: | 2025–02–16 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:n8m57_v1 |
| By: | Ha, Jongrim; Kose, Ayhan; Ohnsorge, Franziska Lieselotte |
| Abstract: | This paper examines the drivers of fluctuations in global inflation, defined as a common factor across monthly headline consumer price index (CPI) inflation in G7 countries, over the past half-century. It estimates a Factor-Augmented Vector Autoregression model where a wide range of shocks, including global demand, supply, oil price, and interest rate shocks, are identified through narrative sign restrictions motivated by the predictions of a simple dynamic general equilibrium model. The authors report three main results. First, oil price shocks followed by global demand shocks explained the lion’s share of variation in global inflation. Second, the contribution of global demand and oil price shocks increased over time, from 56 percent during 1970–1985 to 65 percent during 2001–2022, whereas the importance of global supply shocks declined. Since the pandemic, global demand and oil price shocks have accounted for most of the variation in global inflation. Finally, oil price shocks played a much smaller role in global core CPI inflation variation, for which global supply shocks were the main source of variation. These results are robust to various sensitivity exercises, including alternative definitions of global variables, different samples of countries, and additional narrative restrictions. |
| Date: | 2023–12–18 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10648 |
| By: | Leonelli, Giulia Claudia |
| Abstract: | The exercise of environmental ‘leverage’ via trade-related measures and trade in environmental goods offers opportunities to tackle the climate crisis and advance transnational decarbonization. Inward-looking, adversarial, and short-term national security-centred approaches, however, are disrupting the trade and climate change mitigation linkage. This article employs the race for critical raw materials and US and EU strategies to promote the net-zero transition at the domestic level as case studies to illustrate the environmental pitfalls of the ‘securitization’ of the trade and climate change mitigation nexus. The article demonstrates that the pursuit of strategic dominance in key net-zero sectors, attempts to exclude systemic rivals and reshore supply chains, opportunistic forms of friendshoring and loose agreement on regulatory means jeopardize recourse to environmental ‘leverage’ and undermine decarbonization at both national and transnational levels. This analysis casts a light on the inherent tension between national security and climate change mitigation. Taking stock of these findings, the article advocates a radically different approach to the governance of the trade and climate change mitigation nexus. |
| Keywords: | decarbonisation; national security; critical raw materials; net-zero transition; Inflation Reduction Act; industrial policy; reshoring; friendshoring |
| JEL: | L81 |
| Date: | 2025–01–30 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:120553 |
| By: | Rude, Britta Laurin; Robayo, Monica |
| Abstract: | Energy poverty has gained attention in the context of increasing energy prices and the recent energy crisis in Europe. However, measuring energy poverty and characterizing the energy poor are challenging, given that expenditure surveys (household budget surveys) often need more information to characterize the energy poor. Additionally, there is no consensus on how to measure and monitor energy poverty. It is also unknown how and why it differs from income poverty. While income poverty relies on a well-defined poverty line, energy poverty does not have a clearly defined energy poverty line that indicates the minimum energy necessary for satisfying basic needs. In addition, monetary poverty and other welfare measures are measured with income in EU countries using the European Survey of Income and Living Conditions. Therefore, it is not straightforward to characterize energy affordability among the monetary income poor or to estimate the overlap between official income poverty and energy poverty. This paper explores statistical matching as a potential strategy to overcome these data challenges in the context of Bulgaria. Via data fusion, a unique dataset is generated that contains information on energy spending shares, income-based indicators of poverty and inequality, and additional variables on households' living conditions and welfare. For this purpose, the paper first generates a harmonized dataset, which consists of the European Survey of Income and Living Conditions and household budget survey data. It then employs different imputation models and chooses the best-performing one to impute energy spending shares into data. Based on the resulting dataset, it overlays energy poverty with monetary poverty. The findings show that a large share of the energy poor is not income poor, calling for differentiated policy measures to tackle energy poverty. Importantly, these findings depend on the underlying definition of energy poverty. This paper contributes to a growing body of literature exploring the potential of statistical matching to improve the current data environment in the European Union. |
| Date: | 2024–06–24 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10818 |
| By: | Pia Andres |
| Abstract: | Should policymakers protect European firms by restricting imports of solar technology from China? Pia Andres finds that Chinese competition has resulted in many European firms going out of business, but it has also prompted more intense innovative activity among some of those that have survived. |
| Keywords: | Green Growth, Economic geography, Globalisation, Technological change |
| Date: | 2025–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepcnp:694 |
| By: | Unnada Chewpreecha; Dennig, Francis; Hansen, Ib |
| Abstract: | AbstractTo achieve substantial emission reductions, widespread low-carbon technology adoption is vital. The process by which new technologies are developed and adopted and how their costs evolve is critical to understanding decarbonization. Modeling of this process requires a tool that realistically describes several phenomena related to technology adoption in different sectors, including technology diffusion, investment decisions, evolution of technology costs, and technology lock-in, among others. This paper introduces FTT-FLEX, a simplification of the Future Technology Transformation model. FTT-FLEX is suitable for application as a single-country, standalone tool or in connection with a macroeconomic model. FTT-FLEX captures the core country-level of features of Future Technology Transformation (knowledge spillovers as the driver of technology cost and inertia in the adoption of new technologies) as they pertain to an individual country and greatly reduces the data required as compared with the global Future Technology Transformation model. As presented, FTT-FLEX is a natural complement to country-specific macroeconomic models that analyze the decarbonization of key emitting sectors in small developing countries. The utility of F TT-FLEX is demonstrated by a decarbonization analysis for the power sector in Guinea-Bissau. |
| Date: | 2024–05–08 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10767 |
| By: | Shaiara Husain (Business School, University of Western Australia); Kazi Sohag (Graduate School of Economics and Management, Ural Federal University, Russia); Yanrui Wu (Business School, The University of Western Australia) |
| Abstract: | Pro-environmental technologies, environmental taxes and environmental protection expenditure are three important policy tools for patronizing renewable energy production (REP) in OECD countries. With this background, we evaluate the efficacy of environmental policies in promoting renewable energy production by applying the CS-ARDL method and panel data of 24 OECD economies incorporating the role of proven reserve oil during 1990-2022. The empirical analysis of this study demonstrates that the environmental policy stringency, encompassing market and non-market approaches, is positively affiliated with the growth in REP. Our findings also affirm the proposition that proven oil reserves are antagonistic to the growth of renewable energy production considering the intergenerational energy security aspect. Positive shock in oil price augments the renewable energy production validating the substitution effect between renewable energy and non-renewable energy. Our findings are robust when alternative measures of policy stringency, considering both supply-side (cost-push) and demand-side (demand-pull) socio-technical incentives are used. The empirical findings reinforce existing market-based mitigation policies to promote renewable energy production adhering to the energy security agenda of sustainable development goals. |
| Keywords: | Renewable Energy, Environmental Policy Stringency, Panel Data Analysis, OECD Countries |
| JEL: | C23 Q21 Q28 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:uwa:wpaper:24-02 |
| By: | Arroyo Marioli, Francisco; Khadan, Jeetendra; Ohnsorge, Franziska Lieselotte; Yamazaki, Takefumi |
| Abstract: | Almost two-thirds of emerging market and developing economies rely heavily on resource sectors for economic activity, fiscal and export revenues. In these economies, economic planning requires sound baseline projections for the global prices of the commodities they rely on and a sense of the risks around such baseline projections. This paper presents a model suite to prepare well-founded forecasts for the global prices for oil and six industrial metals (aluminum, copper, lead, nickel, tin, and zinc). The model suite adapts six approaches used in the literature and tests their forecast performance. Broadly speaking, futures prices or bivariate correlations performed well at short horizons, and consensus forecasts and a large-scale macroeconometric model performed well at long horizons. The strength of Bayesian vector autoregression models lies in generating forecast scenarios. The sizable forecast error bands generated by the model suite highlight the need for policy makers to engage in careful contingency planning for higher or lower prices. |
| Date: | 2023–11–21 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10611 |
| By: | Cotofan, Maria; Kuralbayeva, Karlygash; Matakos, Konstantinos |
| Abstract: | This study examines how regional temperature variations across OECD countries influence political behavior and support for offset policies. Our analysis reveals that exposure to higher temperatures correlates with political moderation, reduced backing for extreme and populist parties, heightened climate concerns, and increased support for environmentally conscious agendas. These effects are primarily driven by older individuals, who exhibit increased concerns about climate change and the economic costs of climate policies following temperature spikes. Moreover, they express support for policies aimed at mitigating these economic impacts. Conversely, younger individuals show less apprehension about the economic consequences of climate policies and demonstrate readiness to bear them, including through higher energy bills. These findings emphasize the necessity of accounting for age-related perspectives when formulating effective climate policies for the future. |
| Keywords: | preference formation; environmental policies; policy support; voting |
| JEL: | D83 H23 H31 Q58 |
| Date: | 2024–04–15 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:126818 |
| By: | Lall, Somik V.; Rajan, Raghuram Govind; Schoder, Christian |
| Abstract: | This paper proposes an objective way of estimating and allocating “differentiated” responsibilities for carbon emissions across countries. These responsibilities translate into specific obligations and incentives for future emission reductions and support for adaptation, mitigation, and development. The proposals in this paper should be seen as a starting point for an informed and productive debate. Under the Global Carbon Reduction Incentive, every country that emits more than the per capita global average pays into a global incentive fund. This annual payment will be calculated based on the “excess” emissions per capita, the country’s population, and a dollar amount called the Global Carbon Incentive. Countries below the global per capita average would receive a payout commensurate with their “under-emission.” The United States and China are the two biggest emitters and, assuming a Global Carbon Incentive of $10, they jointly would contribute more than $70 billion to the fund, from which nations such as India, Nigeria, Pakistan, Bangladesh, and Indonesia would be the major recipients. An important adjustment to the Global Carbon Reduction Incentive is to focus on consumption rather than production—a country should not avoid responsibility for the carbon it consumes by outsourcing production to another country. The proposal considers that countries that have used more of the collective carbon budget have benefited from the associated development and should pay for it. The proposal also considers methane emissions as well as crediting countries for their efforts toward preventing deforestation. |
| Date: | 2024–04–25 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10759 |
| By: | Thierry Warin |
| Abstract: | This study examines the intricate trade interdependencies between Canada and the United States, highlighting how aggregate export–import figures can mask deeper economic realities. Approximately three-quarters of Canadian merchandise exports head to the United States each year, contributing to a bilateral merchandise trade surplus for Canada in the range of 100 to 170 billion Canadian dollars. Yet, when energy products are excluded, the United States shows a small surplus with Canada, illustrating how both sides benefit from specialized cross-border value chains. Analyses of selected sectors demonstrate that a hypothetical 25 percent tariff on Canadian goods would translate into lost export revenue for Canada, but it would also raise production costs for many U.S. manufacturers dependent on Canadian imports. Despite Canada’s smaller economy, the potential for economic harm runs in both directions. Automakers in Michigan and Ohio, for instance, rely on numerous Canadian inputs that cross the border multiple times, and integrated refiners on the Gulf Coast often process crude oil from Alberta. Inelastic supply chains amplify these vulnerabilities: short-run elasticity estimates indicate that energy flows might see only a 2 percent immediate reduction under a 10 percent tariff, yet over a longer horizon, both sides risk further setbacks if either country shifts to alternative markets. On both sides, adjustments to cross-border barriers are neither simple nor immediate because specialized capital investments and elaborate production networks cannot be realigned without significant cost. These findings underscore the limitations of viewing trade solely through the lens of net balances. They suggest that resilience policies, dispute-resolution frameworks, and incremental diversification strategies are integral to mitigating risk. In a climate where protectionist rhetoric can swiftly translate into new barriers, maintaining stable, predictable conditions for trade in both Canada and the United States is essential to preserving the mutual gains flowing from decades of close economic integration. Cette étude examine les interdépendances commerciales complexes entre le Canada et les États-Unis, mettant en évidence la manière dont les chiffres globaux des exportations et des importations peuvent masquer des réalités économiques plus profondes. Environ les trois quarts des exportations canadiennes de marchandises sont destinées aux États-Unis chaque année, contribuant à un excédent commercial bilatéral en marchandises pour le Canada, se situant entre 100 et 170 milliards de dollars canadiens. Pourtant, lorsque les produits énergétiques sont exclus, les États-Unis affichent un léger excédent commercial avec le Canada, illustrant comment les deux pays bénéficient de chaînes de valeur transfrontalières spécialisées. L’analyse de certains secteurs démontre qu’un tarif hypothétique de 25 % sur les produits canadiens entraînerait une perte de revenus d’exportation pour le Canada, mais augmenterait également les coûts de production pour de nombreux fabricants américains dépendants des importations canadiennes. Malgré la taille plus modeste de l’économie canadienne, le potentiel de dommages économiques est réciproque. Par exemple, les constructeurs automobiles du Michigan et de l’Ohio dépendent de nombreux intrants canadiens qui traversent la frontière à plusieurs reprises, tandis que les raffineries intégrées de la côte du Golfe transforment souvent du pétrole brut en provenance de l’Alberta. La rigidité des chaînes d’approvisionnement amplifie ces vulnérabilités : les estimations de l’élasticité à court terme indiquent que les flux énergétiques pourraient ne diminuer que de 2 % en cas de tarif de 10 %, mais à plus long terme, les deux pays risquent des pertes supplémentaires si l’un d’eux se tourne vers des marchés alternatifs. Des deux côtés, l’ajustement aux barrières transfrontalières est ni simple ni immédiat, car les investissements en capital spécialisé et les réseaux de production élaborés ne peuvent être réorganisés sans coûts significatifs. Ces résultats soulignent les limites d’une approche du commerce basée uniquement sur les soldes nets. Ils suggèrent que des politiques de résilience, des cadres de règlement des différends et des stratégies de diversification progressive sont essentiels pour atténuer les risques. Dans un contexte où la rhétorique protectionniste peut rapidement se traduire par de nouvelles barrières, le maintien de conditions commerciales stables et prévisibles entre le Canada et les États-Unis est crucial pour préserver les bénéfices mutuels issus de décennies d’intégration économique étroite. |
| Keywords: | Trade interdependencies, Trade balance, Supply chains, Tariffs, Economic integration, Interdépendances commerciales, Balance commerciale, Chaînes d’approvisionnement, Tarifs douaniers, Intégration économique |
| Date: | 2025–02–28 |
| URL: | https://d.repec.org/n?u=RePEc:cir:circah:2025pr-01 |
| By: | Jaccard, Ivan; Kockerols, Thore; Schüler, Yves |
| Abstract: | Does it pay to invest in green companies? In countries where a market for carbon is functioning, such as those within the European Union, our findings suggest that it should be beneficial. Using a sample of green and brown European firms, we initially demonstrate that green companies have outperformed brown ones in recent times. Subsequently, we develop a production economy model in which brown firms acquire permits to emit carbon into the atmosphere. We find that the presence of a well-functioning carbon market could account for the green equity premium observed in our data. Incorporating a preference for green financial assets is also unlikely to overturn our results. JEL Classification: E32, Q51, G18 |
| Keywords: | asset pricing, composite habits, equity premium, general equilibrium, monopolistic competition |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253030 |
| By: | Bastos, Paulo S. R.; Greenspon, Jacob Neil; Stapleton, Katherine Anne; Taglioni, Daria |
| Abstract: | This paper develops measures of the diffusion of a comprehensive range of low-carbon technologies in 35 countries from 2019 to 2022 using text analysis of job postings and earnings calls transcripts. It documents a rapid acceleration in the diffusion of low-carbon technologies in 2022, driven by technologies related to renewable energy, vehicles, thermal performance, and electrical generation and storage. Rapid growth occurred in three quarters of the countries studied and 228 of 300 subnational regions, although was fastest in Europe. Hiring for roles related to low-carbon technologies in these 35 countries doubled between 2019 and the end of 2022, for example. It studies the role of the global energy crisis in triggering this accelerated technology diffusion, focusing on 16 mainly advanced economies. It finds that establishments in countries that had a higher pre-crisis dependence on imports of natural gas, and were thus more exposed to the price shock, differentially increased hiring for low-carbon technology related roles from March 2022 onwards. Within more exposed countries, establishments with a higher pre-crisis energy intensity also saw a differential increase in hiring rela tive to less energy intensive ones. |
| Date: | 2024–05–21 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10777 |
| By: | Johannes Gessner |
| Keywords: | environmental regulation, global value chains, innovation, fuel economy standards, directed technological change Decarbonizing industries to mitigate climate change requires technological change. Innovation by suppliers can play a crucial role in the technological transition, particularly when suppliers have expertise in zero-emission technologies. In this paper, I study the effect of environmental regulation in a downstream industry on the innovation outcomes of suppliers in the context of the European CO2 emission standard for passenger cars. I construct a novel data set that links administrative data on car manufacturer compliance to supplier patent data using information on automotive supply chains. To identify the causal effect of changes in the stringency of the emission standard, I leverage the heterogeneous exposure of automotive suppliers to changes in the composition of the European car market in the aftermath of the 2015 Volkswagen diesel scandal. Exposure to more stringent environmental regulation increases innovation for zero-emission vehicle technologies among existing suppliers. In addition, the likelihood that car manufacturers form new supply chain links to firms with expertise in technologies to reduce vehicle emissions increases in response to more stringent environmental regulation. These results suggest that environmental regulation induces economically significant technology spillovers to the regulated firms. |
| JEL: | O30 Q55 Q58 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_654 |
| By: | Carbone, Sante; Giuzio, Margherita; Kapadia, Sujit; Krämer, Johannes Sebastian; Nyholm, Ken; Vozian, Katia |
| Abstract: | This paper explores how the low-carbon transition affects firms' credit ratings and market-implied distance-to-default. We develop a novel dataset covering firms' greenhouse gas emissions alongside climate disclosure and forward-looking emission reduction targets. Panel regression analysis indicates that high emissions are associated with higher credit risk, but that this relationship can be mitigated by disclosing emissions and committing to reduce emissions. After the Paris agreement, firms most exposed to transition risk saw their ratings deteriorate relative to their peers, with the effect larger for European than US firms, probably reflecting differential climate policy expectations. A dynamic difference-in-differences approach also shows that European firms who make a climate commitment subsequently experience an improvement in their credit rating relative to comparable firms who do not set a target. These results have policy implications for corporate disclosure and pricing of transition risk. |
| Keywords: | climate change, transition risk, climate disclosure, net zero targets, green finance, credit risk |
| JEL: | C58 E58 G11 G32 Q51 Q56 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:safewp:312432 |
| By: | Danopoulos, Evangelos; Shah, Aarushi; Schneider, Claudia R.; Aston, John |
| Abstract: | Scientific studies often put forward policy recommendations (PRs) to bridge the gap between science and policy making. Climate change is one of the areas that PRs can be useful and have major impact, but only if they are based on scientific findings and are communicated trustworthily. The objective of this systematic review is to appraise the quality of PRs in the areas of green energy and transportation. Four databases (Web of Science, Scopus, GeoRef and GreenFile) were searched from 2019. Studies with an environmental focus in the areas of green energy (wind power and hydrogen energy) and transportation that included PRs for tackling climate change or reaching net zero targets were included. The novel Evidence Communication Rules for Policy (ECR-P) critical appraisal tool was used to assess the individual study quality, specifically targeting PRs. The Collaboration for Environmental Evidence Critical Appraisal Tool (CEECAT) was also used. Findings were synthesized narratively based on ECR-P. Twenty-three studies were included, most focusing on wind power, followed by hydrogen energy and transportation. The majority of studies used econometric and empirical modelling. According to CEECAT, study quality was found to be medium to poor. ECR-P was piloted and validated, the rating results indicated poor quality of PRs across all studies. The areas addressing the papers inherent bias towards advocacy against providing information and to disclose uncertainties were found to present most concerns. Communication quality was markedly better regarding study findings and conclusion than PRs. Researchers must use the same scientific rigour and reporting standards in PRs as in any other section of their studies. A reporting guideline for scientific-based PRs could be of great assistance. More research in other disciplines is needed to validate our results and provide further data. |
| Date: | 2024–07–08 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:k4ujg_v1 |
| By: | Kwabena A. Addo (Utrecht University); Shams Pathan (University of Newcastle - Newcastle University Business School); Steven Ongena (University of Zurich - Department Finance; Swiss Finance Institute; KU Leuven; NTNU Business School; Centre for Economic Policy Research (CEPR)) |
| Abstract: | We investigate how CEO overconfidence influences banks' decisions to join the United Nations Environment Programme Finance Initiative. Analyzing 13, 000 bank-year observations, spanning the last quarter century, with a duration model, we find that overconfident CEOs delay participation by reducing the likelihood of joining by 15% annually. This effect is stronger in large, profitable, deposit-funded banks and persists across various CEO demographics. Our findings reveal how behavioral biases shape strategic decisions, highlighting overconfidence as a barrier to timely sustainability commitments. These insights underscore the importance of leadership traits in driving-or hindering-progress in green finance. |
| Keywords: | CEO overconfidence, green bank alliances, green finance, duration model |
| JEL: | G21 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp2520 |