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on Energy Economics |
| By: | Ian Parry; Simon Black; Danielle Minnett; Karlygash Zhunussova |
| Abstract: | This paper discusses the attributes and design of alternative mitigation instruments for the industrial sector, their competitiveness and emissions leakage impacts, and supplementary measures to address these effects. A quantitative analysis indicates, for selective countries, production cost increases under a $50 per tonne unilateral CO2 price in 2030 are 4-8 percent for steel, 20-30 percent for chemicals, and 30-35 percent for cement with leakage rates of 20-50 percent across these industries. Competitiveness and leakage impacts are however much smaller under pricing with border adjustments, other mitigation instruments like feebates and performance standards, or internationally coordinated pricing. |
| Keywords: | climate mitigation, carbon pricing, competitiveness, emission leakage, border carbon adjustment, feebates |
| JEL: | Q31 Q35 Q48 H23 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12272 |
| By: | Ciaran O'Connor; Mohamed Bahloul; Steven Prestwich; Andrea Visentin |
| Abstract: | Electricity price forecasting has become a critical tool for decision-making in energy markets, particularly as the increasing penetration of renewable energy introduces greater volatility and uncertainty. Historically, research in this field has been dominated by point forecasting methods, which provide single-value predictions but fail to quantify uncertainty. However, as power markets evolve due to renewable integration, smart grids, and regulatory changes, the need for probabilistic forecasting has become more pronounced, offering a more comprehensive approach to risk assessment and market participation. This paper presents a review of probabilistic forecasting methods, tracing their evolution from Bayesian and distribution based approaches, through quantile regression techniques, to recent developments in conformal prediction. Particular emphasis is placed on advancements in probabilistic forecasting, including validity-focused methods which address key limitations in uncertainty estimation. Additionally, this review extends beyond the Day-Ahead Market to include the Intra-Day and Balancing Markets, where forecasting challenges are intensified by higher temporal granularity and real-time operational constraints. We examine state of the art methodologies, key evaluation metrics, and ongoing challenges, such as forecast validity, model selection, and the absence of standardised benchmarks, providing researchers and practitioners with a comprehensive and timely resource for navigating the complexities of modern electricity markets. |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.05523 |
| By: | Rubina Ilyas (Pakistan Institute of Development Economics) |
| Abstract: | 1. Introduction Despite expanded generation capacity of over 45, 000 MW by mid-2025, the power sector continues to remain fiscally insolvent. DISCO inefficiencies persisted with the average transmission and distribution (T and D) losses being 16-17 percent and the collection between 95 percent for IESCO and LESCO to 60 percent for PESCO and QESCO, contributing to a vicious circle of arrears and bailouts for all ten state owned DISCOs (Ministry of Power Division, 2024). Circular debt accrues due to a number of reasons including supply cost outweighed by the tariff revenue, delayed subsidy disbursements, high losses, and payments for predetermined capacity. To bridge this deficit, the government has always raised tariffs or imposed surcharges periodically. These periodic tariff increase adds to the burden of inefficiencies especially for the lower-income groups who are least able to absorb it. The result is a power sector that is financially unsustainable, politically indefensible, and socially unacceptable. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pid:kbrief:2025:135 |
| By: | Matteo Bonato (Department of Economics and Econometrics, University of Johannesburg, Auckland Park, South Africa; IPAG Business School, 184 Boulevard Saint-Germain, 75006 Paris, France; B-CCaS, University of Edinburgh Business School); Oguzhan Cepni (Ostim Technical University, Ankara, Turkiye; University of Edinburgh Business School, Centre for Business, Climate Change, and Sustainability; Department of Economics, Copenhagen Business School, Denmark); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Christian Pierdzioch (Department of Economics, Helmut Schmidt University, Holstenhofweg 85, P.O.B. 700822, 22008 Hamburg, Germany) |
| Abstract: | We study the out-of-sample forecasting value of and state-level and market-wideoverall commercial, industrial, and residential electricity sales for monthly state-level (1995--2025) realized stock market volatility (RV) of the United States (U.S.). We control for state-level and market-wide realized moments (leverage, skewness, kurtosis, and tail risks). We estimate our forecasting models using a boosting algorithm, and two alternative statistical learning algorithms (forward best predictor selection and random forests). We find evidence that realized moments have predictive power for subsequent RV at forecast horizons up to one year in some model configurations, while evidence of predictive power of the growth rate of electricity sales, whether measured at state-level or at the market-level, is mixed and mainly concentrated, on average across states, at the short forecast horizon. |
| Keywords: | Stock market, Realized volatility, Electricity sales, Statistical learning, Forecasting |
| JEL: | C22 C53 G10 G17 Q41 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:pre:wpaper:202540 |
| By: | Rohan Best (rohan.best@mq.edu.au); Reinhard Madlener (1- Institute for Future Energy Consumer Needs and Behavior (FCN), School of Business and Economics / E.ON Energy Research Center, RWTH Aachen University, Mathieustrasse 10, 52074 Aachen, Germany; 2- Department of Industrial Economics and Technology Management, Norwegian University of Science and Technology (NTNU), Sentralbygg 1, Gløshaugen, 7491 Trondheim, Norway. November 2023) |
| Abstract: | While developed countries have more advanced energy systems, there is still substantial household-level inequality and persistent energy poverty. Using the UK Understanding Society household survey, we assess waves on either side of energy-price hikes which followed the onset of heightened geopolitical conflict in 2022. Using Locally Weighted Scatterplot Smoothing, we find that distributions of energy expenditure and problems paying bills (including electricity, gas, water, telephone, and other bills) are similar across income, but with a shift up in both outcomes for the 2022-23 wave. This exacerbates policy design challenges for persistent energy poverty problems, motivating specific distributional research. We find that problems paying bills are most pronounced for the bottom income quintile, while energy expenditure rises most from the fourth to the highest quintile. In addition to targeted support for the lowest income quintile, policy changes can be informed by our linear probability and multinomial logit regressions. We find differences in energy outcomes across asset values, such as households with lower vehicle values being less likely to consistently avoid bill-paying problems, justifying consideration of assets for policy eligibility. We also show evidence of fuel switching and energy investments having potential to lower energy bills, and this provides some support for subsidies for upfront costs of energy assets. Further educational assistance could also be useful, as prior problems paying bills are linked to higher current energy expenditure and persistent bill-paying problems. |
| Keywords: | asset; distribution; electricity; gas; income; persistent |
| JEL: | Q41 Q48 I32 D31 H23 C25 |
| Date: | 2025–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:ris:fcnwpa:021757 |
| By: | Klaus Weyerstraß; Michael Reiter; Daniel Schmidtner; Hannes Zenz |
| Abstract: | Abstract:In 2021 and particularly in 2022, gas prices rose sharply in Europe due to Russia’s invasion of Ukraine and the previous throttling of Russian gas supply to Western Europe. Because of the merit-order system, this also led to an increase in electricity prices in Austria and in many other EU countries. Since Russian pipeline gas must be replaced by more expensive liquefied natural gas and by more volatile electricity from renewables, energy prices in Europe will also in the future remain higher than before 2021 and higher than in other regions, particularly in the US and in Asia. In Austria companies and households are also confronted with rising fees for the gas and the electricity grids. The higher energy costs undermine Austria’s international competitiveness. Simulations with a panel econometric model in this Policy Brief underline that exports of the Austrian manufacturing industries are negatively affected by higher energy prices. Economic policy should support structural change towards new industries. Permanent subsidies are, however, not an economically sustainable option. |
| Keywords: | Austrian Foreign Trade, trade |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:wsr:pbrief:y:2025:m:11:i:70 |
| By: | Hizliok, Setenay; Scheer, Antonina; Cristancho Duarte, Camila; Dietz, Simon; Lutz, Sylvan; Monsignori, Giorgia; Nuzzo, Carmen; Goeschl, Johannes; Rose, Adrien |
| Abstract: | The State of the Sovereign Transition 2025 report reviews the climate change performance of 85 high-, middle- and low-income countries assessed against the Assessing Sovereign Climate-related Opportunities and Risks (ASCOR) framework, up from 70 countries last year. The expanded country universe covers around 90% of global greenhouse gas emissions and GDP, as well as 100% of four major government bond indices. Given the political headwinds against sustained climate action in the public and private sectors, this year we dedicate the ‘focus’ section of the report to analysing areas of progress and retreat in assessed countries. The United States stands out among high-income peers, its performance declining in multiple areas. Meanwhile, improved climate policies and disclosures in low- and middle-income countries suggest they are catching up with high-income countries. |
| JEL: | R14 J01 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130116 |
| By: | Jahn, Valentin; Brochard, Algirdas; Diaz Puerto, Nelson; Hajagos Toth, Akos; Dietz, Simon |
| Abstract: | This report assesses the climate ambitions of 26 major international banks, ten US super-regional banks, and two custodian banks The TPI Centre began assessing the banking sector’s progress on the low-carbon transition with a pilot study in 2022. This 2024 assessment includes an evaluation of 26 major international banks, 10 US super-regional banks and two US custodian banks, on two elements: Net Zero Banking Assessment Framework (NZBAF) Carbon Performance The results of our 2024 assessment send a clear message: the overwhelming majority of banks are still in the early stages of their transition to a low-carbon economy. This is despite the fact that most banks we assess are now publicly disclosing some of their financed emissions and half are committing to reducing them to net zero by 2050. Yet, banks score poorly on both the NZBAF and Carbon Performance assessments. |
| JEL: | F3 G3 |
| Date: | 2024–12 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130122 |
| By: | Hastreiter, Nikolaus; Sharp, Jared; Dietz, Simon |
| JEL: | R14 J01 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130120 |
| By: | Dietz, Simon; Modirzadeh, Seyed Alireza; Amin, Ali; Jahn, Valentin |
| Abstract: | This discussion paper proposes a new methodology to assess the Carbon Performance of chemical producers. We are publishing it now to solicit feedback with the aim of improving the methodology. The chemicals methodology adds to the TPI Centre’s bank of methodologies to assess corporate Carbon Performance which it has previously produced for 12 other high-emitting sectors, including electricity utilities, oil and gas producers, and high-carbon industrial and transport sectors. |
| JEL: | R14 J01 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130119 |
| By: | Brochard, Algirdas; Diaz Puerto, Nelson; Hajagos Toth, Akos; Jahn, Valentin; Dietz, Simon |
| Abstract: | The TPI Centre’s State of the Banking Transition 2025 report reviews the progress of 36 large global banks on the low-carbon transition and contains two assessment elements: the Net Zero Banking Assessment Framework and Carbon Performance for Banks. The analysis reveals banks still to be at an early stage of their transition, with decarbonisation targets that cover a limited set of sectors and business activities. |
| JEL: | F3 G3 |
| Date: | 2025–10 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130117 |
| By: | Amin, Ali; Ashraf, Shafaq; Begley, Alfie; Cho, Hayeon; Clinton, Edward; Davies, Ella; Dietz, Simon; Goon, Robin; Modirzadeh, Seyed Alireza; Nuzzo, Carmen; Budnevich Portales, Cristobal; Scheer, Antonina; Da Silva, Filipe; Moo Young, Jess |
| Abstract: | The TPI Centre State of the Corporate Transition 2025 report assesses 2, 000 of the world’s highest-emitting public companies on their climate action. Having doubled the coverage of our company universe since last year’s report, we now assess approximately three-quarters of total publicly listed equities worldwide by market capitalisation (US$87 trillion). The report presents updated data on the TPI Centre’s two core frameworks for companies — Management Quality and Carbon Performance — while introducing new layers of analysis to assess the credibility of corporate transition plans. |
| JEL: | L81 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130118 |
| By: | Dietz, Simon; Amin, Ali; Scheer, Antonina; Begley, Alfie; Cho, Hayeon; Ingham, Robert; Jahn, Valentin; Modirzadeh, Seyed Alireza; Budnevich Portales, Cristobal; Da Silva, Filipe; Nuzzo, Carmen; Bienkowska, Beata |
| Abstract: | The TPI Centre’s State of Transition Report 2024 reviews the progress that more than 1, 000 of the world’s highest-emitting public companies have made on responding to climate change. Collectively worth around US$39 trillion, these are the key public companies for both investors and the climate. The report also shows the extent of the corporate climate action gap, i.e. the distance between where TPI companies are now and where they need to be if the international temperature goals of the 2015 UN Paris Agreement are to be achieved. |
| JEL: | L81 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130123 |
| By: | Samadi, Sascha; Fischer, Andreas; Verpoort, Philipp C.; Müller-Hansen, Finn; Ueckerdt, Falko |
| Abstract: | With the transition to renewable energy, global production cost patterns for industrial materials and products are shifting, potentially creating what has been termed the renewables pull. This paper conducts a systematic review to identify and synthesise the growing body of scientific literature on this emerging topic. Out of 4, 813 studies screened, 81 peer-reviewed journal articles were found to be relevant. Most of these were published after 2020, with the number of publications increasing every year since then – indicating rapidly growing research interest in the field. Most studies originate from countries such as Germany or Australia, which are also identified as a potential major importer or exporter, respectively, within newly emerging renewable-based trade patterns. In contrast, while Japan and South Korea are frequently identified as potential importers, relatively few studies originate from these countries. Most of the identified literature conducts techno-economic analysis assessing the location-specific production costs of hydrogen-based derivatives and materials such as ammonia, methanol or steel produced using solar and wind electricity. Overall, the existing literature regards the renewables pull as potentially significant, although several studies emphasise that its realised impact depends on complementary locational factors, such as financing costs and policy context. Future research should expand the methodological approaches applied to this young and rapidly evolving field to assess the implications of the renewables pull for global production locations and value chain configurations, trade dynamics, and broader macro- and socioeconomic as well as geopolitical developments. |
| Keywords: | renewables pull, green relocation, green leakage, renewable energy, net-zero transition, locational factors, energy-intensive industry, decarbonization |
| JEL: | F18 L61 L65 O14 O33 O57 Q42 Q56 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esconf:331736 |
| By: | Ramaharo, Franck M. |
| Abstract: | In this paper, we investigate the predictive power of petroleum consumption for Malagasy real GDP using the Mixed Data Sampling (MIDAS) framework over the period 2007-2024. While GDP data are available at a quarterly frequency, petroleum consumption is observed monthly and disaggregated by sectoral use and product type. We use this high-frequency disaggregated data to identify which components deliver the strongest nowcasting performance. Our results show that, at the sectoral level, transportation, aviation and bunkers consistently deliver the most accurate GDP nowcasts over the sample period. The best-performing product-level specifications correspond precisely to the fuels predominantly used in these sectors, namely, gas oil, super-unleaded petrol, aviation gasoline, and jet fuel. The aggregate measure of total petroleum consumption also yields competitive forecasting accuracy across specifications. This supports its use as a broad high-frequency indicator of economic activity. Our findings suggest that forecasters of Madagascar’s GDP can significantly improve predictive accuracy by using appropriately disaggregated energy data, particularly from sectoral categories linked to mobility and trade. |
| Keywords: | nowcasting; petroleum consumption; real gross domestic product; MIDAS; Mixed-frequency Data Sampling; Madagascar |
| JEL: | C53 E17 O47 Q43 |
| Date: | 2025–10–27 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126629 |
| By: | Gomes, Alexandra; Al-Ragam, Asseel; AlShalfan, Sharifa |
| Abstract: | Kuwait faces critical environmental challenges driven by high per capita energy consumption, car-dominated urban development, and fossil fuel dependency. Despite national commitments to carbon neutrality by 2060, there remains a significant gap between policy intentions and real-world implementation. This research investigates the intersections of governance, user behaviour, and policy-practice mediation across the housing, energy, and transport sectors. By employing a mixed methods approach that integrates stakeholder engagement, comparative policy analysis, and the proposal of policy-practice mediation tools, the study aims to bridge policy and behavioural gaps. It highlights the role of data in accessing, informing, and monitoring policies and behaviours, and proposes stronger, dedicated institutions, a rethinking of energy subsidies, the adoption of bottom-up and participatory approaches, and the use of social media platforms for advocacy, communication, and the promotion of sustainable lifestyles. These interventions can contribute to advancing Kuwait’s sustainable transition through context-specific, evidence-based, inclusive, and scalable policy measures. |
| JEL: | R14 J01 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130285 |
| By: | Phoebe Koundouri; Anna Philippopoulou; Fivos Papadimitriou |
| Abstract: | This study investigates the characteristics of global public interest in key search terms related to climate and energy, based on data from Google Trends across three thematically distinct but interconnected groups of search phrases for the decade 1/2015-12/2024. Each group was carefully selected to capture different aspects of the environmental discourse. The first group consists of 'Sustainability', 'Climate Change', and 'Global Warming', which serve as umbrella concepts for many subtopics with climate policy and physics. The second group, 'Greenhouse Gases', 'CO2 Emissions' and 'Carbon Emissions' reflects a better understanding of the climate drivers. And the third group consists of 'Renewable Energy', 'Fossil Fuels', and 'Nuclear Energy' addressing the major debate over how societies should power themselves while transitioning to a sustainable future. The analysis of Google Trends time series for these keywords and for "all categories", "science" and "news", i) reveals that public interest follows a strong biannual seasonal cycle for all of these climate-related terms with the peaks taking place in spring and autumn months ii) enables the identification and interpretation of various spikes over time iii) identifies the countries with the highest relative search activity for each keyword iv) examines the correlations in searches between these search terms. The understanding of people's interest and perceptions can be useful for the design, announcement and implementation of environmental policies. |
| Keywords: | Google Trends, Public Interest, Sustainability, Climate Change, Emissions, Energy Sources, Seasonal Variations |
| Date: | 2025–11–15 |
| URL: | https://d.repec.org/n?u=RePEc:aue:wpaper:2560 |
| By: | Chyi Lin Lee; Jian Liang |
| Abstract: | As carbon regulations continue to tighten, a key question emerges: should firms proactively adopt environmental responsibility to effectively manage the risks and opportunities presented by these heightened carbon policies? This study assesses the effect of carbon initiatives (e.g., Emission Trading System and carbon tax) on firms' financial performance, moderated by the environmental responsibility of firms, a crucial aspect that has been largely overlooked in the literature, especially in the context of indirect carbon emission-intensive sectors. By analyzing data from global Real estate Investment Trusts (REITs) spanning from 2003 to 2022, the study reveals that REITs with better environmental performance are more resilient against carbon policy shocks. This reflects the importance of firms' environmental commitment as a protective measure for investors, particularly when confronted with new environmental policies. The findings also align with Porter's (1990) early movers assertion that firms that adopt advanced environmental standards early can gain first-mover advantages, ultimately enhancing their financial performance. This suggests that firms should prioritise sustainability, as those who are better equipped are more likely to succeed in the swiftly transitioning low-carbon economy of the future. This also emphasizes the significance of incorporating firms' environmental commitment into the analysis. The implications of these findings are profound and have been thoroughly discussed. |
| Keywords: | Environmental Responsibility; ETS; Financial Returns; real estate |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_192 |
| By: | Bastien Patras |
| Abstract: | This study investigates the impact of mandatory energy performance certification (EPC) disclosure on housing market dynamics in France. Building on a phased implementation of disclosure policies since 2006, the 2021 regulation introduced legally binding EPC visibility in advertisements alongside significant penalties for non-compliance. Using a (i) difference-in-discontinuity framework that exploits cross-border policy variations between France and Belgium and (ii) an event study design exploiting the heterogeneous effect of the regulation, the study accounts for spatial and temporal variations in policy adoption and identifies the causal effects of this policy on property prices. The analysis reveals three key insights. First, energy-inefficient properties (EPC ratings F or G) faced price declines up to -9 percentage points (pp) under mandatory disclosure, signaling a market penalty for inefficiency. Second, efficient properties experienced modest price gains, with houses showing a +3pp increase. Third, the regulation surprisingly fostered strategic nondisclosure, particularly in apartment market, where missing EPC ratings garnered a +14pp price premium four years after enactment. These findings highlight the heterogeneity of market responses across property types and locations. The study concludes by discussing the social welfare implications of mandatory disclosure, including improved affordability for certain buyers, risks of eviction due to price increases, and potential misreporting behaviors. By advancing the understanding of energy efficiency’s role in housing markets, this research offers actionable insights for policymakers seeking to balance climate goals with equitable market outcomes. |
| Keywords: | Energy Performance Certification (EPC); Housing Market Dynamics; Mandatory Disclosure Policy; Price Effects and Heterogeneity |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_138 |
| By: | Yidan Ma |
| Abstract: | After nearly 50 years of reform, the Chinese economy experienced exponential growth at the expense of the environment. China's air pollution has reached critical levels, necessitating an urgent transformation. The Chinese government has proposed an ambitious goal of carbon neutrality by 2060. Following this ambitious environmental goal, regulators heavily promoted green finance as a key to addressing the funding gap for sustainable infrastructure. The rise of green finance vehicles, with the goal of incentivizing social capital to invest in formally un-attracted sustainable infrastructure and closing the financing gap for green transformation, has gained enormous practical popularity among major sustainable infrastructure developers. While green finance instruments have been extensively studied, the comparative effectiveness of different green finance instruments in attracting social capital remains unknown. This study aims to investigate the relative comparative advantage of the most prominent green finance instrument and the most innovative green finance instrument, namely green bonds and green Real Estate Investment Trust, and to assess their relative effectiveness in increasing social capital's willingness to invest. This study will significantly contribute to our understanding of green finance's effectiveness and inform better policymaking for sustainable urban development and carbon neutrality. |
| Keywords: | Green Finance; Green REITs; Securitization in Chinese Cities; Sustainable Infrastructure Financing |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_244 |
| By: | Rohan Best (rohan.best@mq.edu.au); Reinhard Madlener (1- Institute for Future Energy Consumer Needs and Behavior (FCN), School of Business and Economics / E.ON Energy Research Center, RWTH Aachen University, Mathieustrasse 10, 52074 Aachen, Germany; 2- Department of Industrial Economics and Technology Management, Norwegian University of Science and Technology (NTNU), Sentralbygg 1, Gløshaugen, 7491 Trondheim, Norway. November 2023) |
| Abstract: | We assess influences on electric heat pump adoption with household data from the American Housing Survey covering 2017-2023, with implications for sustainable and affordable energy transitions. Substitutability for heating is important, motivating our comparative and multinomial logit analysis. A key attribute of our analysis is including prior energy contexts at the household level, such as the prior main heating type and whether the household previously used natural gas for any purpose. We find that existing housing contexts are crucial, with lower likelihood of electric heat pump adoption for households with warm air furnaces as their prior primary heat source, those using natural gas for any purpose, apartments, and old dwellings. Economic influences are less obvious for electric heat pumps compared to some other technologies. However, we conduct interaction analysis to show that income likely has an influence on electric heat pump adoption. Policymakers should therefore still consider equity across economic distributions. The more complicated context of heat pump adoption, with existing substitutes already being widely used, implies that policies need to be flexible to support households when they are ready to make heating investments. |
| Keywords: | air conditioning; energy efficiency; heat pump; solar; substitute; warm air furnace |
| JEL: | Q41 Q48 D12 O33 C25 R21 |
| Date: | 2025–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:ris:fcnwpa:021758 |
| By: | Parsons, Noah |
| Abstract: | The United States electrical grid faces unprecedented challenges from surging demand, cybersecurity threats, and climate-related disruptions. This paper presents a comprehensive strategic framework for grid modernization organized around three interdependent pillars: technological innovation and deployment, regulatory reform and workforce development, and strategic public-private partnerships. Drawing on comparative analysis of international approaches and synthesizing current policy gaps, we propose actionable recommendations including accelerated smart grid deployment, streamlined transmission permitting, mandatory cybersecurity standards, and domestic supply chain fortification. Our phased implementation strategy projects that achieving 80% renewable integration, 99.97% grid reliability, and elimination of foreign dependency for critical components is feasible within a ten-year horizon given appropriate policy support and investment frameworks. The framework positions grid modernization not merely as infrastructure renewal but as a strategic imperative for maintaining American industrial competitiveness and national security in the 21st century |
| Keywords: | grid modernization, energy security, renewable integration, cybersecurity, transmission infrastructure, industrial competitiveness |
| JEL: | F52 H54 L33 L51 L94 O33 O38 Q41 Q48 |
| Date: | 2025–10–19 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:126569 |
| By: | Thomas Douenne; Sebastian Dyrda; Albert Jan Hummel; Marcelo Pedroni |
| Abstract: | How should governments design climate policies in the presence of inequality, uninsurable risk, and fiscal constraints? To address this question, we develop a climate--economy model with incomplete markets and idiosyncratic labor-income risk, where Ricardian equivalence fails and optimal long-run capital taxes are positive, leading to important inter-temporal wedges. We analytically show that the optimal carbon tax equals the social cost of carbon (SCC) adjusted for fiscal distortions. Calibrating the model to the U.S., we show that these adjustments are quantitatively negligible: high levels of household inequality, income risk, and fiscal distortions do not, in themselves, justify lowering climate ambitions. Welfare gains under the optimal policy come almost entirely from efficiency and environmental amenities, with almost no effect on redistribution and insurance, and are fairly evenly distributed across households. |
| Keywords: | Climate policy; Carbon taxes; Optimal taxation; Heterogeneous agents; Incomplete markets; Inequality and risk. |
| JEL: | E62 H21 H23 Q5 D52 |
| Date: | 2025–11–10 |
| URL: | https://d.repec.org/n?u=RePEc:tor:tecipa:tecipa-807 |
| By: | Nikolaos Triantafyllopoulos |
| Abstract: | Adaptation to climate change depends mainly on actions undertaken in urban areas, cities being simultaneously part of the problem and its solution. The European Union and states establish ambitious policies and measures to achieve targets for the energy upgrade of buildings. New technologies are developing rapidly, but important barriers prevent their implementation in space. This paper explores the question of whether building upgrades are required to upgrade the real estate market in vulnerable urban areas, or vice versa. A deprived area of central Athens serves as a case study. Based on field research data, cases of energy renovation of buildings through a public-private partnership including state aid scheme are analysed. It is argued that for decisions to be made on the energy upgrading of buildings, both by owners and investors, in addition to the profit from reducing energy costs, there must be tangible benefits from increasing the market value of buildings and generating capital gains. Surplus values can be obtained through urban regeneration interventions. For a building, energy retrofitting is a financial investment in a capital asset and energy policies are most effective when tangible benefits are made significant, using market forces. Higher prices for energy-renovated properties can motivate owners. For a real estate investor, property value appreciation is a significant driver for energy investments and decisions are based primarily on property market fundamentals, the quality of the area in which it is located, as well as their expectations for and secondarily on the energy performance of buildings, the impact of which is incorporated into their market value. This means that the energy market is subordinate to the property market and not the opposite, as it is frequently stated. |
| Keywords: | Energy Efficiency; Real Estate Market; Urban Regeneration; vulnerable urban areas |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_183 |
| By: | Ryan Ent; Golbon Zakeri; Jinye Zhao; Tongxin Zheng |
| Abstract: | Energy imbalance reserve (EIR) product is introduced into the Independent System Operator (ISO) of New England's day-ahead wholesale electricity market to provide a better fuel procurement incentive for generating resources. Different from existing forward reserve products, EIR is a novel real option product, which is settled against real-time energy price rather than reserve prices. This novel product has not been analyzed in the research literature in terms of its effects. In this paper, we develop a stochastic long-run equilibrium model that incorporates the risk preference of generator and demand agents participating in the energy and reserve market in both day-ahead and real-time time frame. In a risk neutral environment, we find that the presence of the EIR product makes little difference on market outcomes. We also conduct a series of numerical simulations with risk-averse generators and demand, and observed increased advanced fuel procurement when the EIR product is present. |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.08736 |
| By: | Edda Donati |
| Abstract: | Over the last twenty years, European policies to reduce emissions in the building sector have encouraged the introduction of sustainable business models, including Energy Performance Contracting (EPC) and its Italian evolution, Servizio Energia Plus (Energy Plus Service). The latter differs from the traditional EPC model in the ESCo's ability not only to carry out efficiency measures but also to supply energy for a period of ten years after the measure, ensuring integrated management and reducing risk for the customer. This study focuses on the Energy Plus Service and analyzes its specific characteristics and economic benefits to highlight its role in promoting sustainability in the Italian building landscape. The research is based on the application of two business models - a traditional and the Energy Plus Service - to a renovation project of an Italian case study. This approach makes it possible to compare a traditional business model with Energy Plus Service, highlighting the differences in terms of energy efficiency, economic sustainability, and risk management. The expected results should show that the Energy Plus Service model offers more effective solutions to climate and energy efficiency challenges than the traditional model and is better adapted to the economic and social specificities of the Italian context. This comparison is intended to show the concrete benefits resulting from the introduction of sustainable business models in the construction sector |
| Keywords: | Energy Plus Service; EPC; Renovation; Sustainable business models |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_28 |
| By: | Gechert, Sebastian (Chemnitz University of Technology); Mey, Bianka; Prante, Franz; Schäfer, Teresa |
| Abstract: | We create a large meta-dataset of price elasticities of energy demand for heating and cooling in buildings, comprising close to 5000 price elasticity estimates including study and observation characteristics from more than 400 primary studies. We find robust and strong signs of p-hacking and publication bias with insignificant or positive elasticities being underrepresented. Correcting for this bias, the price elasticities range from -0.05 to -0.2 for the short run and from -0.1 to -0.3 for the long run. This holds for all relevant fossil fuels and electricity, poor and rich countries, residential and business usage, and aggregate and survey data. |
| Date: | 2025–11–20 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:4sjy5_v2 |
| By: | Scheer, Antonina; Cristancho Duarte, Camila; Dietz, Simon; Hizliok, Setenay; Honneth, Johannes; Lutz, Sylvan; Monsignori, Giorgia; Nuzzo, Carmen; Sullivan, Rory |
| Abstract: | This report reviews the climate change performance of 70 high-, middle- and low-income countries assessed against the ASCOR framework in 2024. Collectively accounting for more than 85% of global greenhouse gas (GHG) emissions and 90% of global GDP, the country universe covers the key national players in the low-carbon transition. They are also the most relevant countries for investors to incorporate climate change considerations into their sovereign bond evaluations, as together they cover 75–100% of the major sovereign bond market indices. |
| JEL: | R14 J01 N0 |
| Date: | 2024–11–26 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130121 |
| By: | Taeger, Matthias; Stenström, Annika; Trapp, Torben; Liu, Felicia; Golka, Philipp |
| Abstract: | This essay argues for an integrative move in the investigation of the politics of ‘green’ finance. We suggest that approaching the politics of ‘green’ finance in the form of knowledge contestations can bring out complementarities and bridge divides between different levels of analysis and theoretical traditions. Our focus is motivated by the pivotal role of knowledge and ignorance in the organisation and governance of financial markets identified in economic sociology, political economy, and neighbouring disciplines. Drawing on this scholarship, we consider knowledge both a forum for and a means of politics. We then illustrate how this conceptualisation provides insights into the politics of ‘green’ finance on different levels of analysis and following different theoretical traditions: in the context of tracing elites in their dissemination of specific ideas shaping governance regimes; when following market devices which produce partial calculative representations of the world; in problematising how financial organisations both produce and accept certain types of knowledge to further their interests; and when examining the role of ideology and imaginative capture in stabilising financial capitalism during climate crisis. We conclude by identifying the connective tissue between these different analytical and theoretical approaches made visible by the integrative concept of politics as knowledge contestations. |
| Keywords: | climate change; elites; green finance; ideology; knowledge; market devices |
| JEL: | F3 G3 |
| Date: | 2025–11–13 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:129797 |
| By: | Akimoto, Kenji |
| Abstract: | This study examines the impact of the nationwide suspension of nuclear power plants following the 2011 Fukushima Daiichi accident, as well as the subsequent restart of the Sendai Nuclear Power Plant in Kagoshima Prefecture, on local socio-economic structures. Using municipal-level statistics for 2010, 2014, and 2020, we applied principal component analysis (PCA) and clustering techniques to extract the underlying patterns of regional socio-economic organization. In addition, difference-in-differences (DID) regression analysis was employed to evaluate the effects of plant proximity on municipal fiscal indicators. The findings reveal that in 2010, urban scale and plant location were the primary axes of differentiation; by 2014, however, the suspension accentuated demographic and fiscal vulnerabilities across municipalities. In 2020, even after the plant restart, the structure of urban dominance and peripheral stagnation persisted, with widening disparities. The DID analysis further suggests that the fiscal benefits of the restart were limited and unevenly distributed. This study contributes to the literature by quantitatively and spatially assessing the dynamic impacts of exogenous shocks on regional societies, while highlighting both the risks of nuclear dependence and the pressing policy challenge of mitigating regional inequality. |
| Date: | 2025–11–18 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:nux27_v1 |
| By: | Julius Kerker; Sven Bienert |
| Abstract: | This study investigates the resilience of green premiums and brown discounts on German residential property markets during the ongoing economic crisis. While previous research extensively examines green premiums and brown discounts in growing markets, little is known about their persistence during economic downturns. We address this gap by exploring how green building characteristics, especially energy efficiency, influence property values in challenging market conditions. The setting of the study is the ongoing German real estate market crisis, marked by soaring energy prices, inflation, rising construction costs and rapid interest hikes. It severly reduced residential property values in Germany, providing a suitable market phase to investigate whether investing in sustainable properties can offer a hedge against negative market developments. The study analyses an extensive dataset, covering detailed hedonic characteristics for German residential property markets spanning from 2017 to 2024. Given the immediate onset of the crisis in February 2022, a Difference-in-Differences analysis is used to examine a potential impact of the economic downturn on green premiums and brown discounts. The research provides policymakers and investors with valuable insights into green premiums and brown discounts by analysing if energy-efficient properties benefit from enhanced economic resilience. The findings indicate whether sustainable investments should be prioritised in residential property markets to support long-term stability and mitigate the impacts of volatility. To the best of the authors’ knowledge, this study is the first to provide empirical insights into the resilience of green premiums and brown discounts to challenging market periods. |
| Keywords: | Energy Efficiency; Green Buildings; Green premium; Residential Buildings |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_83 |
| By: | Whitlock, Zach (Resources for the Future); Gayatri Kannan, Sangita; Toman, Michael A. (Resources for the Future) |
| Abstract: | As trade policies and other US federal actions attempt to reshape global critical mineral markets, concerns about the resilience of supply chains for strategic civilian and military technologies will continue to assume a large role in policymaking. This report addresses the supply chain for lithium-ion batteries and evaluates the limits of resource nationalism, an approach to policymaking that entails greater government intervention in the resource economy, to bolster US mineral production and processing capacity. We first discuss recent executive actions, tariffs, and defense-led partnerships and then assess US lithium, cobalt, and nickel resources, as well as processing costs, considering potential electric vehicle demand through 2050. We conclude that the national interest is best served by structured international cooperation with selective domestic expansion, given fundamental resource availability constraints, long lead times for new mines, and the high costs of geographically diversifying processing capacity. This report presents cost estimations and weighs policy options for decisionmakers seeking to address Chinese market power in the material foundations of battery technology. |
| Date: | 2025–11–10 |
| URL: | https://d.repec.org/n?u=RePEc:rff:report:rp-25-18 |
| By: | Caiza-Guamán, Pamela; García-Suaza, Andrés; Sepúlveda Rico, Carlos |
| Abstract: | The green transition is expected to be one of the most significant forces shaping labor markets in the incoming years. As economies shift toward cleaner technologies, green jobs will expand, while employment in high-emission sectors will either decline or move into other sectors, depending on skill transferability and policy design. In this context, the ability of workers to transition between green and non-green jobs will be crucial to ensure a just labor market adjustment. Labor transitions into and out of green jobs remain understudied, particularly in developing economies where data constraints limit empirical analysis. This paper addresses this gap, using household survey data and a synthetic panel approach to estimate the probability of labor transitions employs a skills-based green index. The results reveal a high degree of labor market persistence, explained by the role of skills in shaping mobility, and show a wage premium of 10.6% for green occupations compared to their non-green counterparts. These findings have important policy implications for ensuring a just energy transition. Given the observed rigidities in green labor mobility, targeted upskilling and reskilling programs are important to enabling non-green workers to acquire the necessary skills for green jobs. |
| Keywords: | Green jobs, labor mobility, wage inequality, just transition, informality |
| JEL: | J21 J24 Q52 J62 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1693 |
| By: | Koetter, Michael; Popov, Alexander |
| Abstract: | Exploiting three decades of detailed regional data for Germany, we find that when the Green Party is successful at the polls, local hazardous emissions decline. The level of political representation matters, too. Green politicians’ gaining influence at county level is followed largely by a decline in air pollutants that have an immediate adverse health effect. In contrast, when the Green party joins the state government, only greenhouse gas emissions that affect the welfare of future generations via climate change decline. The primary mechanism to achieve lower emissions appears to be a reduction in output, rather than more efficient energy use. JEL Classification: D72, Q53 |
| Keywords: | elections, growth, hazardous emissions |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253155 |
| By: | Antoine Godin (AFD - Agence française de développement, ACT - Analyse des Crises et Transitions - LABEX ICCA - UP13 - Université Paris 13 - Université Sorbonne Nouvelle - Paris 3 - CNRS - Centre National de la Recherche Scientifique - UPCité - Université Paris Cité - Université Sorbonne Paris Nord - Université Sorbonne Paris Nord); Sakir Devrim Yilmaz (AFD - Agence française de développement); Annabelle Moreau Santos (AFD - Agence française de développement) |
| Abstract: | With over fifty percent of its total exports consisting of petroleum and coal, Colombia remains highly vulnerable to both global and domestic energy transitions. With the aim of fostering policy dialogue, this book assesses these long-term macro-financial risks, opportunities and vulnerabilities as it contends with the global shift towards a low-carbon economy and the domestic emission reduction initiatives outlined in the latest Nationally Determined Contribution (NDC). To this end, the authors develop an empirical macroeconomic Stock-Flow model of Colombia (GEMMES - General Monetary and Multisectoral Macrodynamics for the Ecological Shift) to analyze the implications of various global and domestic transition scenarios. The model distinguishes itself from existing literature by its strong focus on the financial system and the explicit feedback loops between the real and financial sectors of the economy. The authors present a comprehensive macroeconomic analysis of the complex interplay between the transformation of the real economy and the dynamics of the financial sector and public balances. The effective development and implementation of the GEMMES model for Colombia have been achieved through a strong collaboration between key domestic institutions, such as the National Department of Planning (Departamento Nacional de Planeación), the Ministry of Finance (Ministerio de Hacienda y Crédito Público), the National University of Colombia (Universidad Nacional de Colombia), and the GEMMES modelling team at the French Development Agency (Agence Française de Développement). The findings from this collaborative effort highlight the importance of coherent industrial, monetary, and fiscal policies in managing the transition effectively in Colombia. Both to mitigate adverse effects and to accelerate the country's socioeconomic development path, the transition represents an opportunity to diversify the productive structure, integrate into the value chains of new green industries, strengthen public infrastructure, generate quality jobs and reduce dependence on natural resource-based industries. |
| Keywords: | Energy transition, Carbon neutrality, Social inclusion, Colombia, Climate finance, Sustainable development, Climate resilience, Développement durable, Colombie, Neutralité carbone, Transition énergétique, Inclusion sociale, Financement climatique, Résilience climatique |
| Date: | 2024–09–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05334887 |
| By: | Therese E. Zogo (Yaoundé, Cameroon); Christophe M. Mbassi (Yaoundé, Cameroon); Simplice A. Asongu (Johannesburg, South Africa) |
| Abstract: | This paper assesses the effects of coups on access to electricity in Sub-Saharan Africa (SSA). The study covers a sample of 40 sub-Saharan African countries over the period 1980-2017. The econometric approach employed is the generalized method of moments (GMM). While the extant literature has established that political instability can have both positive and negative effects on access to basic public goods and services, the present study finds that coups significantly reduce access to electricity in SSA. This effect is the same regardless of the type of coup, notably: successful, failed, military or civilian coups. Thus, coups are not conducive for the establishment of real democratic transitions in the region which inter alia, are necessary to promote development outcomes such as access to electricity. |
| Keywords: | Coups d'etat; Access to electricity. |
| JEL: | D74 H41 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:dbm:wpaper:24/025 |
| By: | Alexander Henkel; Daniel Piazolo |
| Abstract: | This paper focuses on the economic and environmental implications of energy-efficient building practices in existing structures. It starting point is the significant impact of the construction sector on global greenhouse gas emissions and energy consumption, emphasizing the urgent need to address climate change mitigation efforts. An important aspect thereby is the lifecycle assessment of buildings, dividing the process into distinct phases such as construction, usage, deconstruction and recycling to analyze environmental impacts, costs, and resource efficiency. By evaluating different aspects like building materials, construction techniques, and energy usage, mainly effected by heating and ventilation systems, the paper aims to provide insights into enhancing energy efficiency and reducing emissions in building practices. The paper incorporates technical and economic perspectives to explore the balance between environmental sustainability and financial considerations in building modernizations. Through empirical analyses using data from the Building Cost Information Center of the German Chamber of Architects (Baukosteninformationszentrum der Deutschen Architektenkammer - BKI), the paper aims to determine the economic value by incorporating both, a brief theoretical overview contrasted by an analysis of measures that have been carried out. The research addresses the challenges associated with retrofitting existing buildings, considering factors like varying structural conditions, historical preservation requirements, and financial incentives for property owners. In conclusion, this paper contributes to advancing knowledge in the field of sustainable construction practices by integrating technical analyses with economic evaluations and by identifying the interplay between energy efficiency, environmental impact, and financial viability. |
| Keywords: | Energy Efficiency; Existing Buildings; Modernization; sustainability |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_98 |
| By: | Kohlscheen, Emanuel; Moessner, Richhild; Takats, Elod |
| Abstract: | In this study, we provide ex post empirical analysis of the effects of climate policies on carbon emissions at the aggregate national level, using a comprehensive database of 121 countries. Carbon taxes and emissions trading systems (ETS), and the overall stringency of climate policies are considered. We use dynamic panel regressions, controlling for macroeconomic factors (economic development, GDP growth, urbanisation and the energy mix). Higher carbon taxes and ETS prices reduce carbon emissions. An increase in carbon taxes by $10 per ton of CO2 reduces CO2 emissions per capita by 1.3% in the short run and by 4.6% in the long run. |
| Keywords: | carbon emission trading system; carbon dioxide emissions; energy; carbon tax; climate policies |
| JEL: | Q00 Q48 Q58 |
| Date: | 2025–11–07 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130125 |
| By: | Kob, Julius; Taeger, Matthias; Dittrich, Katharina |
| Abstract: | The financial industry has become increasingly entangled with environmental matters of concern, constituting the phenomenon of ‘green’ finance. In this Forum, we approach green finance as financial climate governance to highlight its claim on finance’s role as legitimate and capable steward of the planet’s climate. This claim to govern and its promise to achieve desirable environmental conditions have made green finance a crucial object of investigation. However, we observe a growing fragmentation of green finance research along various fault lines, such as levels of analysis, normative positions, or academic structures. Calling for reassembling green finance scholarship, we posit a need for more integrative approaches, motivating this Forum’s central question: what integrative moves across socioeconomic research can enhance our understanding and judgement of green finance? The Forum gathers three contributions focused on: (1) integrating macro- and micro-approaches in green finance studies; (2) examining the politics of green finance as knowledge contestations; and (3) confronting stasis in green finance by exploring researchers’ agencies, emotions, and normativities. By reassembling green finance scholarship through integrative moves, we suggest marking green finance as a shared concern and fostering collective perspectives to bring clarity and constructive critique to what has become a dominant pursuit in facing the socioecological crisis. |
| Keywords: | green finance; nature and climate; transdisciplinary research; financialization; climate governance |
| JEL: | F3 G3 |
| Date: | 2025–11–17 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:130255 |
| By: | Eugenie Dugoua; Jacob Moscona |
| Abstract: | This chapter examines the economics of climate innovation and its role in the clean technology transition. It outlines the incentives, market failures, and policy levers that shape the development and diffusion of clean technologies; traces global patterns in technology development and deployment; and highlights frontier challenges and open questions related to climate adaptation, critical mineral supply chains, artificial intelligence, and geopolitics. The analysis explores the role of effective climate policy, stressing the relevance of coordinated approaches that match instruments to technology maturity and local context. |
| Keywords: | climate change, innovation, R&D, clean energy, energy transition, industrial policy, climate adaptation, critical minerals, AI |
| JEL: | O3 Q5 O13 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12267 |
| By: | Phoebe Koundouri; Georgios Feretzakis; Antonios Papavasiliou; Fivos Papadimitriou |
| Abstract: | The intersection of Sustainability and Digital Transformation exemplifies the role of Artificial Intelligence in leveraging global efforts toward the United Nations' 17 Sustainable Development Goals (SDGs). We provide a systematic review of AI's role-specifically Machine Learning (ML), Deep Learning (DL), Natural Language Processing (NLP), and Computer Vision (CV)-in monitoring, modelling, and achieving targets across all 17 SDGs. The analysis is contextualized by two different approaches: the first relates to AI applications in scientific research, and the second explores how AI can be utilized to achieve the targets of an SDG. Regarding the former, it is demonstrated how AI-powered tools for sustainability tracking, human security analysis, and green workforce skills mapping contribute to the scientific research of the Ae4ria research network, a dynamic international scientific research network that pursues a multitude of environmental research goals and activities (Ae4ria.org). As for the latter, a detailed case study on SDG 7 (Affordable and Clean Energy) illustrates AI's technical capability in managing the complexity of modern power systems, using dynamic reserve dimensioning, optimization of continuous intraday trading strategies, and multi-agent reinforcement learning for computing economic equilibria in balancing markets. Yet, despite the breadth and high potential of AI in monitoring, assessing, and ultimately achieving the SDGs, we need to address the policy paradox presented by AI's rapidly growing environmental footprint, particularly the substantial energy demands and carbon emissions associated with data centers and large model training. This highlights the need for innovative policy instruments, such as "Green AI" incentives and governance frameworks, that can promote circular economies for digital infrastructures underpinning the development of AI. Realizing AI's transformative potential is ultimately contingent upon addressing critical economic, institutional, and ethical dimensions, ensuring that its deployment fosters an equitable and truly sustainable digital transition for all. |
| Keywords: | AI for SDGs, Sustainable Development Goals, SDG, Energy, AI models |
| Date: | 2025–11–18 |
| URL: | https://d.repec.org/n?u=RePEc:aue:wpaper:2563 |
| By: | Dong, Zeyang; Liang, Jing; Linn, Joshua (Resources for the Future); Qiu, Yueming |
| Abstract: | Many jurisdictions encourage households to adopt technologies that reduce greenhouse gas emissions and energy consumption, but there is little evidence on how these technologies affect the welfare of nonadopting households. We show that, in theory, adopting climate-friendly technologies that affect aggregate electricity demand, such as rooftop solar photovoltaics or electric vehicles, can increase or decrease average retail electricity prices in the short run; if the variable cost curve for electricity generation is sufficiently flat, higher demand reduces prices (and vice versa). Analysis of US residential electricity price and consumption data, as well as simulations of a computational electricity generation model, suggests that this variable cost condition holds. Adopting technologies that reduce consumption raises average retail prices, harming nonadopters; adopting technologies that increase electricity demand reduces average electricity prices, benefiting nonadopters. Using household survey data, we find that adopting rooftop solar disproportionately harms low-income nonadopting households, whereas adopting electric vehicles disproportionately benefits them. This progressivity roughly offsets the regressivity of the electric vehicle subsidy transfers. |
| Date: | 2025–11–12 |
| URL: | https://d.repec.org/n?u=RePEc:rff:dpaper:dp-25-28 |
| By: | Boeckelmann, Lukas; Martins, Bernardo De Castro; Meunier, Baptiste; Borin, Alessandro; Conteduca, Francesco Paolo; Mancini, Michele; Attinasi, Maria Grazia |
| Abstract: | This paper introduces a novel methodology to enhance the granularity of Inter-Country Input-Output (ICIO) tables. While our general methodology can be applied to any products of interest, we show that the well-documented distortions caused by sectoral aggregation in ICIO tables are particularly pronounced for products with a low substitutability, such as those essential to the green transition (e.g. electric batteries, rare earths). We therefore apply our framework to construct a disaggregated ICIO table that singles out 129 products essential to the energy transition. We then simulate a hypothetical scenario of an East-West supply chain decoupling in green products through a multi-country multi-sector model calibrated with our tailored disaggregated ICIO table. Results reveal substantial economic costs: welfare losses reach 3% and trade between blocs contracts by 20%, even when accounting for trade diversion through neutral countries. We finally quantify how the green supply chain decoupling increases the intensities of greenhouse gas emissions, highlighting how trade barriers on green sectors affect both economic efficiency and climate objectives. JEL Classification: C67, F13, F18, F51, Q48 |
| Keywords: | decoupling, global trade, global value chains, green transition, sectoral granularity |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20250 |
| By: | Silvia Leoni; Marco Catola |
| Abstract: | The debate on environmental policy increasingly focuses on aligning private incentives with social objectives in imperfectly competitive markets. While traditional literature has centred on public-based mechanisms like taxes and subsidies, a growing strand emphasizes private-based mechanisms, particularly green consumerism, where consumer preferences can drive firms’ adoption of clean technologies. Recent game-theoretic analysis shows that consumers’ willingness-to-pay can lead to various market equilibria, from all-green to all-brown outcomes. This paper complements this analytical approach by developing an agent-based model (ABM) to study the dynamic evolution of a spatial market where firms, based on relative performance, decide whether to supply brown or green products to heterogeneous consumers. Our computational simulations confirm that all three market structures—all-brown, all-green, and mixed—can endogenously emerge depending on average green consumer preferences. Furthermore, we evaluate the effectiveness of three policy instruments: an environmental tax, a subsidy to green firms, and a subsidy to green consumers. We find that supply-side policies are more effective than demand-side subsidies. Specifically, an environmental tax ensures the fastest convergence to an all-green market, while a production subsidy is most effective at reducing the share of brown firms and consumers in mixed-market scenarios. By bridging game-theoretic insights with agent-based computational analysis, this paper provides a dynamic and policy-relevant perspective on the transition to sustainable markets. |
| Keywords: | agent-based modelling, pollution abatement, green technology, environmental policy |
| JEL: | C63 D43 H23 L13 L51 |
| Date: | 2025–11–01 |
| URL: | https://d.repec.org/n?u=RePEc:pie:dsedps:2025/326 |
| By: | Oscar Claveria (AQR-IREA, University of Barcelona); Petar Soric (University of Zagreb) |
| Abstract: | Recent energy tensions caused by conflicts in Ukraine and the Middle East have added to the pressure that global warming exerts for an energy transition towards low-carbon energy sources. This study combines two time series approaches with the aim of delving deeper into the relationship between environmental degradation and economic growth and to test the environmental Kuznets curve (EKC) hypothesis, using information from 20 European countries between 2007 and 2021. Overall, the obtained results suggest the existence of a N-shaped nexus between emissions and income per capita. Additionally, we evaluated stability of this nexus and the potential existence of an asymmetric adjustment. In most countries we find asymmetries in the adjustment of emissions to positive and negative changes in income, but not so much in economic complexity. However, notable differences are observed between countries, which could be indicating their differentiated phase in the EKC curve |
| Keywords: | economic growth; economic complexity; environmental degradation; greenhouse gas emissions; Europe JEL classification: C38; C55; O44; Q20; Q50 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:aqr:wpaper:202509 |
| By: | Dennis Thumm |
| Abstract: | Energy markets exhibit complex causal relationships between weather patterns, generation technologies, and price formation, with regime changes occurring continuously rather than at discrete break points. Current approaches model electricity prices without explicit causal interpretation or counterfactual reasoning capabilities. We introduce Augmented Time Series Causal Models (ATSCM) for energy markets, extending counterfactual reasoning frameworks to multivariate temporal data with learned causal structure. Our approach models energy systems through interpretable factors (weather, generation mix, demand patterns), rich grid dynamics, and observable market variables. We integrate neural causal discovery to learn time-varying causal graphs without requiring ground truth DAGs. Applied to real-world electricity price data, ATSCM enables novel counterfactual queries such as "What would prices be under different renewable generation scenarios?". |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2511.04361 |
| By: | Natalia Fabra; Clément Leblanc; Mateus Souza |
| Abstract: | The 2021‐2023 European energy crisis, triggered by the war in Ukraine, led to broad policy interventions in energy markets. In contrast to the retail‐side measures and public transfers implemented elsewhere, Spain and Portugal targeted the wholesale electricity market through the so‐called Iberian solution. We quantify the distributional implications of the crisis and this market intervention on Spanish electricity firms and across consumer groups. We find that the crisis shifted substantial wealth from consumers to generators, with regressive impacts among consumers. Conversely, the policy’s relief was progressive, delivering larger gains to lower- income groups. |
| Keywords: | energy crisis, electricity markets, distributional implications, machine learning. |
| JEL: | L94 D30 |
| Date: | 2025–11 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2025_716 |
| By: | Frank Heinz (frank.heinz@rwth-aachen.de); Reinhard Madlener (1- Institute for Future Energy Consumer Needs and Behavior (FCN), School of Business and Economics / E.ON Energy Research Center, RWTH Aachen University, Mathieustrasse 10, 52074 Aachen, Germany; 2- Department of Industrial Economics and Technology Management, Norwegian University of Science and Technology (NTNU), Sentralbygg 1, Gløshaugen, 7491 Trondheim, Norway. November 2023) |
| Abstract: | Real options analysis includes research on optimal stopping problems that is focusing largely on one-dimensional problems, or on multidimensional problems with analytically tractable payoff functions. However, many research questions addressing investments relevant to sustainable energy transition require optimal stopping with multiple uncertainties, in high time resolution, with general stochastic dynamics, and a general payoff function. These questions are difficult to answer with current theory. Thus, this work presents a new method for solving optimal stopping problems in this general setting. We adapted the Hamilton–Jacobi–Bellman equation to such problems, and then developed a numerical solution procedure. This approach was tested on the following real-world case: retrofitting an offshore wind farm with an electrolyzer, both operating under market-based electricity pricing. Such assets are challenging to assess because of their simultaneous exposure to a volatile electricity price and a volatile electricity production. In particular, the fluctuating electricity price facilitate profits, while at the same time, it constitutes a potentially investment-deterring uncertainty. Despite the method’s numerical complexity and computational demands, it proves effective and thus, broadens the applicability of real options analysis to this class of problems, providing a new analytical tool for research on the sustainable energy transition. |
| Keywords: | Dynamic programming; Real options; Optimal stopping; Decision making under uncertainty |
| JEL: | C61 D81 G11 |
| Date: | 2025–03–01 |
| URL: | https://d.repec.org/n?u=RePEc:ris:fcnwpa:021756 |
| By: | Michael Peeters; Maria Fernanda Villalba; Jasmine Zhang; Daan Schraven |
| Abstract: | Purpose - Integrating sustainability considerations into valuation practices is essential for promoting sustainable real estate investments. However, a comprehensive understanding of how sustainability factors impact the value of real estate assets is required. This study addresses the growing importance of renewable energy and the underutilized potential of rooftops by proposing an innovative framework for the valuation of roofs when used for renewable energy production.Design/methodology/approach - This study uses the concepts of residual value analysis and Highest and Best Use methodology, adapting them to create a new framework for rooftop valuation.Findings - The value of a roof can be determined based on their energy generation capability, where the conditions for enhanced energy harvesting potential distinct a higher value to the host asset. This removes the hurdle for investors to use rooftops for renewable energy investments.Originality - The novelty of this study lies in using the Highest and Best Use methodology in the valuation of roofs. To the best of our knowledge, no explicit valuation of roofs has been done in the context of renewable energy production.Practical implications- This study contributes to innovative valuation methodologies by incorporating sustainable measures. Social implications - Social implications include the evaluation of third-party investments in renewable energy on rooftops. This could lead to increased investments and higher renewable energy production, thereby lowering energy costs and enhancing the energy supply's reliability. |
| Keywords: | Highest and Best Use; Real Options; Renewable Energy; valuation of roof |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_24 |
| By: | Besala, Theresia Tshimungu; Nondi, Berdi Mola; Ishii, Keiichii |
| Abstract: | The Democratic Republic of the Congo (DRC) faces a severe energy crisis, with over 90% of rural households relying on firewood and charcoal for cooking—fuels that drive deforestation, environmental degradation, and severe health risks. Despite these dangers, economic constraints and supply accessibility dictate household energy choices. This study investigates perceptions of firewood and charcoal quantity and quality among 287 rural households in Bita to assess the potential acceptance of cassava-based ethanol as a future alternative. Findings reveal that households prioritize fuel availability over quality and health considerations, highlighting a major challenge for transitioning to cleaner fuels. Younger households and those with respiratory illnesses are more critical of charcoal, yet economic barriers reinforce dependence on traditional fuels. Using the Multi-Level Perspective (MLP) and Diffusion of Innovation (DOI) theories, the study underscores that any alternative must be widely accessible, cost-competitive, and behaviorally acceptable. While ethanol presents a promising solution, its adoption depends on price competitiveness, awareness campaigns, and infrastructure development. This research provides critical insights for energy policies, emphasizing the need for targeted interventions to break the cycle of fuel poverty and accelerate a sustainable energy transition in rural DRC. |
| Keywords: | Environmental Economics and Policy, Consumer/Household Economics |
| URL: | https://d.repec.org/n?u=RePEc:ags:aes025:356800 |
| By: | Jamiu Ibrahim Aminu (Faculty of Arts &Social Sciences, Gombe State University); Mohammed Shamwil (Department of Economics & Development Studies, Federal University of Kashere, Gombe); Ibrahim Abdullahi (Baze University, Abuja) |
| Abstract: | This study investigates the relationship between energy efficiency and economic growth in Nigeria using time series data from 1980 to 2023 and the Stochastic Frontier Analysis framework. Results reveal that Nigeria?s energy demand is both price-elastic and income-elastic, indicating that changes in energy prices and income significantly influence consumption. Labour and capital act as substitutes for energy, while technological innovation boosts productivity but increases energy demand. The estimated average technical efficiency is relatively high at 95%, though marked by volatility and structural disparities across sectors. These findings highlight the critical role of policy consistency, reliable energy supply, and targeted investment in modern technologies to enhance efficiency and align Nigeria?s growth with sustainable development goals. |
| Keywords: | Energy Efficiency, Economic Growth, Stochastic frontier analysis, Nigeria |
| JEL: | Q40 Q56 C32 |
| URL: | https://d.repec.org/n?u=RePEc:sek:iefpro:15016577 |
| By: | Susanne Geissler; Paraskevas Koukaras; Elena Taxeri; Andreas Androutsopoulos |
| Abstract: | The property sector is faced with numerous regulations, some of which are based on the European Green Deal. At the same time, the data economy is not stopping at the property industry, leading to the adaptation and reorientation of processes and methods. However, this disruptive environment is also creating new opportunities, like for example assessing the 'smart readiness” of buildings. The digital economy is a key enabler of smart-ready buildings, driving energy efficiency, cost savings and sustainability. As smart technologies evolve, buildings will play an increasingly active role in energy optimisation, carbon reduction and the transition to a greener economy. The Smart Readiness Indicator (SRI) assesses a building's potential to contribute to energy efficiency in building operations, while providing a healthy and comfortable indoor environment, as well as potential grid flexibility. This paper explains the SRI, a simplified approach to determine the indicator in a cost-effective manner, and how it can be used to meet requirements in sustainable finance, ESG reporting, and green building certification. It is based on work carried out in the EU-funded easySRI project. The paper is intended for the following Themes: Theme G: Sustainable Real Estate Theme H: New Technology and Data in Real Estate |
| Keywords: | Digitalisation; easySRI; smart readiness indicator; Sustainable Building |
| JEL: | R3 |
| Date: | 2025–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:arz:wpaper:eres2025_224 |
| By: | Tamasiga, Phemelo; Mateane, Lebogang |
| Abstract: | South Africa’s energy transition unfolds within a complex landscape of urgent decarbonization needs, persistent energy insecurity and global competition over renewable value chains. Thus, the central question we ask in this policy brief is: which localization measures could strengthen equity considerations in the energy transition? Based on interviews conducted with stakeholders in South Africa’s energy and industrial policy sectors, and augmented by current academic literature and policy documents, this policy brief finds that policy and incentive gaps undermine domestic manufacturing, job creation and community ownership in the renewable energy sector. Without a stronger localization strategy, the Just Energy Transition Partnership could fail to deliver on its equity promises. Key recommendations include reforming public procurement to reward local content and social impact, leveraging concessional finance to attract private investment in domestic renewable energy industries, establishing bilateral partnerships for technology transfer, facilitating industrial upgrading and promoting community and worker-owned renewable energy initiatives. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esrepo:331329 |