|
on Energy Economics |
| By: | Lisandra Flach; Philip Bodenschatz |
| Abstract: | Key MessagesIn 2024, Iran and neighboring countries relying on the Strait of Hormuz accounted for roughly 0.4 percent of German imports and 1.8 percent of extra-EU importsLess than 1 percent of total German imports and roughly 1.7 percent of extra-EU imports pass directly through the Strait of HormuzFor Germany, a blockade would mainly affect the sourcing of products such as unalloyed aluminum and medium and crude petroleum oilsFor the EU, the impact is more significant: About 6.2 percent of crude oil and 8.7 percent of the LNG imported from non-EU member states pass through the Strait of HormuzA prolonged blockade of the Strait is the primary threat to the EU and Germany, as it would spike energy prices and disrupt supply chains |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:econpb:_81 |
| By: | Bento, Antonio M.; Koch, Nicolas; Marmarelis, Zissis E. |
| Abstract: | Recent natural gas price surges prompted the adoption of various policies, such as a natural gas price cap, aimed at preserving climate goals and preventing increases in wholesale electricity prices. However, it is unclear whether such policies are effective. Here, we take advantage of the unexpected spike in natural gas prices around the time of the Russian invasion into Ukraine to estimate the effects of such a spike on coal generation, carbon emissions, and wholesale electricity prices, highlighting its heterogeneous impacts in 13 EU countries that still rely on both coal and gas for electricity production. We use these estimates to show that the effectiveness of the gas price cap is limited, and instead propose an emergency response mechanism that would simultaneously safeguard the EU's climate policy and protect households from excessive fluctuation in natural gas prices. The proposed mechanism introduces an emergency auction reserve price within the existing EU Emissions Trading System, triggered automatically under predefined rules whenever gas prices reach unusually high levels. Revenues generated by the reserve price would be used to provide relief to consumers. Our results demonstrate that a modest emergency reserve price could serve as an effective response mechanism and that this approach overcomes key shortcomings of the widely used natural gas price cap. |
| Keywords: | European energy crisis, excessive natural gas prices, wholesale electricity prices, emission trading, decarbonization |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:337665 |
| By: | Benjamin Carton; Geoffroy Dolphin; Mr. Romain A Duval; Andrew Hodge; Amit Kara; Simon Voigts; Sebastian Wende |
| Abstract: | The EU has ambitious goals for climate and energy security. Its targets and policies may have large macroeconomic implications, but investment impacts are particularly uncertain. Detailed "bottom-up" approaches based on sectoral calculations point to investment increases of 2 to 3 percent of GDP annually, while “top down” general equilibrium models often yield negligible aggregate investment effects. Further, the investment and broader macroeconomic impacts of the EU’s energy transition will depend on how carbon pricing revenues are recycled. This paper addresses these issues using a modeling technique that bridges bottom-up and top-down approaches. A New Keynesian general equilibrium model (GMMET) is extended to feature a detailed representation of energy use in key emitting sectors, including buildings, transport and energy-intensive manufacturing. Simulations suggest that achieving the EU’s 2035 climate goals implies an increase in aggregate annual investment of just around 1 percent of GDP. More broadly, the EU’s energy transition only has modest macroeconomic impacts if it combines carbon pricing and green subsidies, partly because these are complementary—green subsidies lower energy prices and inflation and raise output, carbon pricing has opposite effects, and therefore combining both yields small effects on all accounts. The fiscal cost of the transition is modest provided decarbonization relies sufficiently on carbon pricing; while revenues from ETS1 and ETS2 could eventually reach about 1 percent of GDP, the public investment cost of the transition is less than 0.5 percent of GDP annually, leaving net fiscal space that could be used for other policy objectives. |
| Keywords: | Climate mitigation policy; policy coordination |
| Date: | 2026–03–09 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2026/046 |
| By: | Julius Berger; Felix Creutzig; Waldemar Marz |
| Abstract: | EV adoption in emerging economies (lower-middle income, fast urbanization and income growth) mitigates emissions of greenhouse gases and local pollutants from gasoline consumption, but at the same time exacerbates urban sprawl. This implies longer driving distances for commuting and non-work trips and higher consumption of floor space per capita and related energy demand for cooling/heating. We model scenarios of full electrification of transport in China, India, Brazil, and Nigeria until 2060, accounting for income growth, population growth, urbanization, public-transport shares, and power-mix scenarios for each country. On average in 2040, 209 percent of the direct carbon emission savings from EV adoption are offset by additional sprawl through increasing VKT (22 percent) and growing energy demand in the building sector (187 percent). Additional urban sprawl from EV adoption leads to the development of 1.2 million square kilometers until 2060. This is equivalent to 32 percent of arable land in 2024. |
| Keywords: | EV adoption, urban sprawl, emerging economies |
| JEL: | Q54 Q48 R14 R41 O18 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12531 |
| By: | Dugoua, Eugenie; Noailly, Joelle |
| Abstract: | This paper examines the patterns and mechanisms of global clean technology diffusion over the last two decades. We document four stylized facts: uneven sectoral progress favoring power and light transport; China’s dominance in innovation and manufacturing; the role of modularity in driving cost declines; and limited adoption in developing economies. Through case studies of solar, electric vehicles, and hydrogen, we analyze how policy and infrastructure enable scale. Finally, we assess emerging challenges for the next phase of diffusion, including critical mineral constraints, artificial intelligence, and geopolitical fragmentation. |
| Keywords: | clean technology diffusion; climate change mitigation; renewable energy; industrial policy; solar photovoltaics; electric vehicles; hydrogen |
| JEL: | O33 Q55 O20 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137498 |
| By: | Larsen, Mathias |
| Abstract: | This policy brief sets out India’s approach to financing green industrial policy, and particularly the expansion of solar power, in the context of limited fiscal resources and India’s 2070 net zero goal. The brief describes the success of state-organised financing policies for solar power and lessons that can be applied to other emerging markets and developing economies (EMDEs). |
| Keywords: | EMDEs; India; industrial policy; solar power; state owned enterprise |
| JEL: | R14 J01 E6 |
| Date: | 2026–01–26 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137528 |
| By: | Larsen, Mathias |
| Abstract: | This policy brief sets out how Vietnam has used the state-owned energy company, Vietnam Electric (EVN), to provide strategic financial support for renewables projects in order to attract overseas capital, and the lessons that other emerging markets and developing economies (EMDEs) can draw from this experience. |
| Keywords: | equity investor; feed-in tariffs; renewables; Vietnam |
| JEL: | R14 J01 L81 N0 |
| Date: | 2026–01–26 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137525 |
| By: | Larsen, Mathias |
| Abstract: | This policy brief describes the key state-led policies China has enacted to steer capital towards a green transition and draws out lessons for other countries, particularly emerging markets and developing economies (EMDEs). |
| Keywords: | battery technology; central banks; China; EMDEs; green transition; renewables; solar; state owned enterprises; state policies; wind |
| JEL: | N0 F3 G3 |
| Date: | 2026–01–26 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137523 |
| By: | Dietz, Simon; Cho, Hayeon; Jahn, Valentin; Scheer, Antonina |
| Abstract: | The TPI Centre’s Carbon Performance assessments to date have been predominantly based on the Sectoral Decarbonisation Approach (SDA).2 The SDA translates greenhouse gas emissions targets made at the international level (e.g. under the 2015 UN Paris Agreement) into appropriate benchmarks, against which the performance of individual companies can be compared. The SDA recognises that different sectors of the economy (e.g. oil and gas production, electricity generation and automobile manufacturing) face different challenges arising from the low-carbon transition, including where emissions are concentrated in the value chain and how costly it is to reduce emissions. Other approaches to translating international emissions targets into company benchmarks have applied the same decarbonisation pathway to all sectors, regardless of these differences [1]. Such approaches may result in suboptimal insights, as not all sectors have the same emissions profiles or face the same challenges: some sectors may be capable of faster decarbonisation, while others require more time and resources. Therefore, the SDA takes a sector-by-sector approach, comparing companies within each sector against each other and against sector-specific benchmarks, which establish the performance of an average company that is aligned with international emissions targets. |
| JEL: | R14 J01 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137420 |
| By: | Dietz, Simon; Hastreiter, Nikolaus; Jahn, Valentin; Modirzadeh, Seyed Alireza |
| Abstract: | The TPI Centre’s Carbon Performance assessments to date have been predominantly based on the Sectoral Decarbonisation Approach (SDA).2 The SDA translates greenhouse gas emission reduction targets made at the international level (e.g. under the 2015 UN Paris Agreement) into benchmarks against which the performance of individual companies can be compared. The SDA recognises that different sectors of the economy (e.g. oil and gas production, electricity generation and automobile manufacturing) face different challenges arising from the low-carbon transition, including where emissions are concentrated in the value chain and how costly they are to reduce. Other approaches to translating international emissions targets into company benchmarks have applied the same decarbonisation pathway to all sectors, regardless of these differences [1]. Such approaches may result in suboptimal insights, as not all sectors have the same emissions profiles or face the same challenges: some sectors may be capable of faster decarbonisation, while others require more time and resources. |
| JEL: | R14 J01 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137410 |
| By: | Dietz, Simon; Amin, Ali; Cho, Hayeon; Scheer, Antonina |
| Abstract: | The TPI Centre’s Carbon Performance assessments to date have been predominantly based on the Sectoral Decarbonisation Approach (SDA). The SDA translates greenhouse gas emissions targets made at the international level (e.g. under the 2015 UN Paris Agreement) into appropriate benchmarks, against which the performance of individual companies can be compared. The SDA recognises that different sectors of the economy (e.g. oil and gas production, electricity generation, and automobile manufacturing) face different challenges arising from the low-carbon transition, including where emissions are concentrated in the value chain and how costly it is to reduce emissions. Other approaches to translating international emissions targets into company benchmarks have applied the same decarbonisation pathway to all sectors, regardless of these differences. Such approaches may result in suboptimal insights, as not all sectors have the same emissions profiles or face the same challenges: some sectors may be capable of faster decarbonisation, while others require more time and resources. Therefore, the SDA takes a sector-by-sector approach, comparing companies within each sector against each other and against sector-specific benchmarks, which establish the performance of an average company that is aligned with international emissions targets. |
| JEL: | R14 J01 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137446 |
| By: | Dietz, Simon; Scheer, Antonina; Begley, Alfie |
| Abstract: | The TPI Centre’s Carbon Performance assessments to date have been predominantly based on the Sectoral Decarbonisation Approach (SDA).2 The SDA translates greenhouse gas emissions targets made at the international level (e.g. under the 2015 UN Paris Agreement) into appropriate benchmarks, against which the performance of individual companies can be compared. The SDA recognises that different sectors of the economy (e.g. oil and gas production, electricity generation and automobile manufacturing) face different challenges arising from the low-carbon transition, including where emissions are concentrated in the value chain and how costly it is to reduce emissions. Other approaches to translating international emissions targets into company benchmarks have applied the same decarbonisation pathway to all sectors, regardless of these differences [1]. Such approaches may result in suboptimal insights, as not all sectors have the same emissions profiles or face the same challenges: some sectors may be capable of faster decarbonisation, while others require more time and resources. |
| JEL: | R14 J01 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137412 |
| By: | Dietz, Simon; Hastreiter, Nikolaus; Jahn, Valentin; Amin, Ali; Modirzadeh, Seyed Alireza |
| Abstract: | The TPI Centre’s Carbon Performance assessments to date have been predominantly based on the Sectoral Decarbonisation Approach (SDA).2 The SDA translates greenhouse gas emissions targets made at the international level (e.g. under the 2015 UN Paris Agreement) into appropriate benchmarks, against which the performance of individual companies can be compared. The SDA recognises that different sectors of the economy (e.g. oil and gas production, electricity generation and automobile manufacturing) face different challenges arising from the low-carbon transition, including where emissions are concentrated in the value chain and how costly it is to reduce emissions. Other approaches to translating international emissions targets into company benchmarks have applied the same decarbonisation pathway to all sectors, regardless of these differences [1]. Such approaches may result in suboptimal insights, as not all sectors have the same emissions profiles or face the same challenges: some sectors may be capable of faster decarbonisation, while others require more time and resources |
| JEL: | R14 J01 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137411 |
| By: | Dongsoo Kim (Korea Institute for Industrial Economics and Trade) |
| Abstract: | During the previous era of rapid globalization and relatively free trade, the primary goal of establishing global supply chains was to minimize costs and leverage comparative advantages. But as global geopolitical competition has intensified, major governments have erected trade barriers to shield their domestic industries. Export controls and other protectionist measures have led private and public actors alike to work to stabilize and de-risk their supply chains. Nowhere is this more evident than in the supply chain for critical mineral resources (CMR), which collectively represent the essential inputs in electric vehicles (EV) and energy storage system (ESS) batteries. The geopolitical climate is one of two major risks in CMR supply chains. The other is the overconcentration of CMR mining and processing in a handful of countries. This risk has led governments to pursue international cooperation with resource-rich developing countries such as Indonesia and Viet Nam. But many resource-rich countries often lack sufficient capacity to explore, mine, and refine enough CMR to meet global demand. With this in mind, this report investigates the current state of the CMR supply chains. Based on the results of the analysis, it proposes a suite of Executive Summary12 Cooperation for Establishing Critical Minerals Industrial Ecology in ASEAN sustainable CMR supply chain and industrial development cooperation measures targeting partnerships between advanced manufacturing countries and resource-rich developing countries. |
| Keywords: | critical minerals; critical minerals resources; CMR; ASEAN; South Korea; supply chains; batteries; battery industry; nickel; rare earth elements; REEs; mining; rare earths; Indonesia; development coop |
| JEL: | L72 L78 L61 L65 L52 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ris:kietop:022363 |
| By: | Francesco Crespi; Nicolò Geri; Dario Guarascio; Enrico Marvasi |
| Abstract: | This paper investigates the relationship between technological capabilities, import dependency, and environmental policies, focusing on the lithium-ion battery supply chain (LBSC) – a critical sector for the net-zero transition. We contribute to the growing literature on the drivers and barriers to accelerating the transition in the following ways. First, we develop an original analytical framework that integrates two recent streams of literature – one focusing on the acceleration of the green transition and the other on structural dependencies and technological sovereignty – to examine potential trade-offs between these objectives. Second, we develop a strategic intelligence analysis of the LBSC allowing to quantify import dependencies and technological capacity gaps at a highly granular product/technology level. This allows to identify critical products and supply chain stages where policy action is needed to avoid the emergence of bottlenecks to the green transition. Third, we examine how technological capabilities influence import dependency, showing under what conditions technological upgrading strengthens competitive positions and mitigates dependency. Finally, we analyse how environmental policy stringency relates to import dependency, assessing whether and in which circumstances environmental goals may conflict with technological sovereignty and strategic autonomy ones. Our findings suggest that technological upgrading can reduce dependencies without compromising environmental goals so that the presumed trade-off between the net-zero transition and structural dependencies does not necessarily hold. In contrast, a welldesigned policy mix, aligning environmental objectives with targeted innovation and industrial policies, can enhance both resilience and the acceleration towards the net-zero transition. |
| Keywords: | Strategic autonomy; Technological capabilities; Net-zero transition; Environmental policy; Lithium-ion batteries; Technological sovereignty |
| JEL: | Q55 O38 Q58 F14 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:sap:wpaper:wp276 |
| By: | Andrea Bastianin (Department of Economics, Management, and Quantitative Methods, University of Milan and Fondazione Eni Enrico Mattei); Paolo Castelnovo (Department of Economics, University of Insubria and Fondazione Eni Enrico Mattei); Federico Fabio Frattini (Fondazione Eni Enrico Mattei); Francesco Vona (Department of Environmental Science and Policy, University of Milan and Fondazione Eni Enrico Mattei) |
| Abstract: | This paper develops a novel text-based approach to identify CRM-saving innovation using patent data and studies how mineral price signals shape the direction of technological change. Using patent data from 1978–2020, we distinguish technologies that rely on CRMs from those that explicitly aim to reduce their use through efficiency improvements, substitution, or recycling. We provide evidence consistent with the induced-innovation hypothesis: higher mineral prices reallocate inventive effort toward CRM-saving technologies, while having little effect on CRM-reliant innovation. The response strengthens over time and is especially pronounced for battery minerals and rare earth elements. These findings are robust to alternative specifications and are reinforced by complementary identification strategies, including a falsification test and the use of plausibly exogenous supply-side price variation. |
| Keywords: | Energy Transition, Critical Raw materials, Patents |
| JEL: | C55 O31 O33 Q55 L72 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:fem:femwpa:2026.05 |
| By: | Inge van den Bijgaart; Jacob Jordaan; Tommaso Felici |
| Abstract: | This paper quantifies the relationship between economic exposure to climate policies and climate policy support. We develop a stylised theoretical model to decompose exposure through income, energy spending and vehicle use, and define consistent measures of these exposure channels. We then combine detailed Dutch household administrative data and survey data on climate policy support and find that higher exposure is robustly associated with lower support for stronger climate policies across all three channels. Further analysis reveals that high electricity rather than high natural gas spending is associated with reduced support, and vehicle fuel efficiency is a more important predictor of support than income-adjusted kilometres driven. Income exposure, proxied by the sectoral carbon-intensity of jobs, is particularly salient among older and lower–to-middle educated respondents. |
| Keywords: | climate policy, public support, economic exposure, distributional effects |
| JEL: | D78 H23 Q52 Q58 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12520 |
| By: | T. Bermpei; A. Triantafyllou (Audencia Business School) |
| Abstract: | We study the effect of supply and demand-induced oil price uncertainty on the cost of debt for a sample of US loans credited during the 1990 to 2019 period. We estimate oil price uncertainty following Jurado et al.'s study, whereby oil price uncertainty is captured by forecasting the unpredictable fluctuations of oil prices. Interestingly, our findings reveal that oil price uncertainty induced by supply shocks increases cost of credit, while oil price uncertainty driven by demand shocks decreases the cost of bank loans. In further analysis, the positive association between supply induced oil price uncertainty and interest loan spread is more pronounced for major users of oil, while the negative effect of demand driven oil price uncertainty on the cost of bank loans is stronger for firms that belong to industries that produce oil. Overall, our findings feed into the emerging discussion of the differentiating effects of oil price uncertainty on micro-level outcomes and provide useful implications for both bankers and borrowing firms. |
| Keywords: | Supply and Demand, Oil price uncertainty, Loan Pricing |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05535567 |
| By: | Dehao Dai; Ding Ma; Dou Liu; Kerui Geng; Yiqing Wang |
| Abstract: | Forecasting crude oil prices remains challenging because market-relevant information is embedded in large volumes of unstructured news and is not fully captured by traditional polarity-based sentiment measures. This paper examines whether multi-dimensional sentiment signals extracted by large language models improve the prediction of weekly WTI crude oil futures returns. Using energy-sector news articles from 2020 to 2025, we construct five sentiment dimensions covering relevance, polarity, intensity, uncertainty, and forwardness based on GPT-4o, Llama 3.2-3b, and two benchmark models, FinBERT and AlphaVantage. We aggregate article-level signals to the weekly level and evaluate their predictive performance in a classification framework. The best results are achieved by combining GPT-4o and FinBERT, suggesting that LLM-based and conventional financial sentiment models provide complementary predictive information. SHAP analysis further shows that intensity- and uncertainty-related features are among the most important predictors, indicating that the predictive value of news sentiment extends beyond simple polarity. Overall, the results suggest that multi-dimensional LLM-based sentiment measures can improve commodity return forecasting and support energy-market risk monitoring. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.11408 |
| By: | Dietz, Simon; Hastreiter, Nikolaus; Scheer, Antonina; Toledo, Felipe Silva |
| Abstract: | The TPI Centre evaluates companies against benchmark pathways, which translate the emission reductions required by the Paris Agreement goals into a measurable trajectory at the sectoral level. For each sector benchmark pathway, the key inputs are: • A timeline or economy-wide carbon emissions, which is consistent with meeting a particular climate target (e.g. limiting global warming to 1.5°C) by keeping cumulative carbon emissions within the associated carbon budget. • A breakdown of this economy-wide emissions pathway into emissions from key sectors (the numerator of sectoral emissions intensity), including the sector in focus. • Consistent estimates of the timeline of physical production from, or economic activity in, the sector in focus (the denominator of sectoral emissions intensity). The focus of the TPI’s Carbon Performance assessment for the shipping sector is international shipping, which is estimated to account for around 90% of total shipping emissions. The remainder of the emissions from the sector come from domestic shipping, which includes coastal shipping between ports in the same country and inland waterway transport. In addition, the TPI Centre’s analysis focuses on freight transport only, as passenger transport (e.g. cruise ships and passenger ferries) represents just a small percentage of international shipping. |
| JEL: | N0 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137452 |
| By: | Amado, Lindorf |
| Abstract: | Standard economic models often treat money as a social construct independent of physical laws. This paper proposes a unified thermodynamic theory of value, positing that monetary systems are information protocols evolved to maximize entropy production in dissipative structures (civilizations). By analyzing 10, 000 years of economic history—from the Neolithic era to the Digital Age—we demonstrate a strict linear relationship (R2 = 0:9934) between the Real Cost of Energy (E) and the Granularity of Money (G). We derive the Equation of Value, G / E, where the value of the accounting unit scales directly with the energy cost of labor. This framework resolves historical anomalies such as the collapse of the Roman Denarius and the failure of the 20th-century Gold Standard, interpreting them not as policy errors, but as thermodynamic phase transitions. The theory predicts that the current decline in the marginal cost of energy (via AI and renewables) necessitates a transition to a monetary substrate with near-infinite divisibility and zero friction. |
| Keywords: | Thermodynamics, Monetary Theory, Entropy, Granularity, Econophysics, AI, Gold Standard, Collapse, Deterministic |
| JEL: | B52 C10 E42 N10 O33 |
| Date: | 2025–12–05 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128172 |
| By: | Yamaguchi, Rintaro; Agarwala, Matthew; Atkinson, Giles |
| Abstract: | Fossil fuels represent a significant portion of the wealth of resource-rich nations. However, their valuation as non-renewable natural capital in inclusive or comprehensive wealth accounting to indicate sustainability does not embody the external costs of climate change damages. This study consistently incorporates the social cost of carbon (SCC) into the value of depletion of non-renewable natural capital for wealth accounting of resource-rich nations. We derive shadow prices of depletion under different resource allocation mechanisms (RAMs) in the presence of externality costs from emissions, allowing for declining extraction and an unburnable natural capital stock constraint. In our application to oil, depletion is valued differently across RAMs, depending on how rent, SCC, and decarbonisation develop in the future. The sustainability implication of the choice of RAM is even more significant in the presence of SCC. |
| Keywords: | genuine savings; natural capital; fossil fuel; inclusive wealth accounting; social cost of carbon; sustainable development |
| JEL: | C43 D63 O47 Q01 Q54 |
| Date: | 2026–05–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137191 |
| By: | Barauskaitė Griškevičienė, Kristina; Brand, Claus; Nguyen, Anh Dinh Minh |
| Abstract: | We analyze the sources of the pandemic-era inflation surge in the euro area using a Bayesian vector autoregression (BVAR) model. By applying narrative, sign, zero, and inequality restrictions, this study is the first that jointly analyzes the inflationary effects of energy and non-energy supply and policy and non-policy demand factors, including fiscal policy, conventional and unconventional monetary policy. Factoring in that energy price dynamics also responded to aggregate demand conditions, we find that the pandemic-era inflation surge in the euro area was driven by a combination of supply and demand factors. Energy-related supply side constraints, even if less important than often estimated, were a key factor in the run up of inflation. Fiscal and monetary policies were accommodative but not the dominant drivers. JEL Classification: C11, C32, E31, E52 |
| Keywords: | energy supply, fiscal policy, inflation, monetary policy, pandemic |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20263201 |
| By: | Erik P. Gilje; Robert C. Ready; Nikolai Roussanov; Jérôme P. Taillard |
| Abstract: | On April 20, 2020, the crude oil benchmark in North America, the West Texas Intermediate (WTI) futures contract for delivery in Cushing, Oklahoma, settled below zero for the first time in history. We combine new empirical evidence with a stylized theoretical model to show that a key catalyst was the accumulation of unusually large long positions in the expiring contract held by uninformed financial traders unable to take physical delivery. These positions distorted the demand signal in the futures market, intensifying pressure on the limited storage capacity and precipitating a sharp price dislocation. We then document that this dislocation significantly influenced oil production decisions through contractual exposure to WTI-based pricing. Even oil producers far from Cushing that were not directly impacted by the storage constraints responded with sharp output curtailments in the face of heightened benchmark risk. Our findings highlight how transitory futures price dislocations due to noise trader demand can have real economic consequences. |
| JEL: | G13 G14 G31 G40 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34905 |
| By: | Ferreira De Almeida Vanessa (European Commission - JRC); Moya Jose (European Commission - JRC) |
| Abstract: | This factsheet provides an overview of sectoral emission sources, emissions breakdowns, decarbonisation trajectories, and estimated technology-specific CO₂ abatement costs. It further examines the evolution of decarbonisation technology maturity (from research and innovation to demonstration and deployment) in the timeline from 2025 to 2050 and evaluates the extent to which this evolution aligns with relevant policy targets and objectives. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc144091 |
| By: | Campos, Nauro (University College London); Ginefra, Flavia (LSE); Martelli, Angelo (LSE); Terzi, Alessio (University of Cambridge) |
| Abstract: | This paper reviews research across economics, political economy, political science, and public policy to investigate how institutions shape the adoption, implementation, and durability of climate policies. We examine how formal institutions (i) coordinate implementation capacity, (ii) anchor long-term commitments, and (iii) mediate distributional conflict. We also discuss how informal institutions, such as social norms and trust, further condition whether formal mechanisms translate into durable action. We distinguish quasi-experimental evidence from correlational and case-based findings, identifying where economic methods could further sharpen evidence, and conclude with a research agenda focused on institutional interdependencies and the conditions under which institutions can facilitate the adoption of effective and irreversible climate policies. |
| Keywords: | climate change, institutions, political economy, climate governance |
| JEL: | D72 H11 P48 O43 O44 Q54 Q58 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18424 |
| By: | Naudé, Wim (RWTH Aachen University) |
| Abstract: | This paper provides an explanation of the theory of innovation and economic growth, in light of the 2025 Bank of Sweden Prize in Memory of Alfred Nobel, awarded to Joel Mokyr, Philippe Aghion, and Peter Howitt. Their scholarship is critically evaluated, and the useful, less useful, and most problematic aspects highlighted. The verdict is that it is largely a collection of anthropocentric stories of innovation and growth. It avoids spelling out why sustained growth is desirable, it reduces innovation’s ultimate goal to the pursuit of economic growth, it is based on a deep seated notion of human exceptionalism, and it promotes directed technical change - based on the assumption that all resources are fungible and can be substituted - as a way to sustain economic growth without causing environmental destruction. Their analysis of growth is useful for highlighting the importance of scientific knowledge, for showing that creative destruction can be more destructive than creative, and that economic growth will only be sustained under very special conditions. However, the failure to address energy remains a glaring gap. For economics to become more useful, it would require becoming an Earth Systems Science based on biocentric holism. |
| Keywords: | innovation, economic growth, technology, sustainability, energy |
| JEL: | O31 O33 J11 J24 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18408 |
| By: | Shoji Haruna; Rajeev K. Goel; Kenta Yoshioka |
| Abstract: | Firms’ efforts to reduce pollution emissions in their production processes are induced by market forces as well as governmental regulatory instruments. The market forces, which might induce firms to increase production to maximize profits, work at cross-purposes. One of the common solutions is that firms resort to R&D investment, which lowers production costs with greater pollution being an unwelcome by-product (the tax burden effect). Pollution abatement (PA) investment, which is another solution, focuses on reducing emissions, with no direct impacts on production costs. We evaluate whether R&D investment effectively plays a role in profit maximization depends on the tax burden effect. Besides, judging from a socio-economic perspective, the PA strategy is significantly superior to the R&D strategy when (pollution) damage cost parameters are medium or high. However, the reverse result holds when they are small. Our findings thus formally flesh out the implications of choosing R&D versus PA strategies in response to pollution control regulations. |
| Keywords: | R&D, cost-reduction, pollution abatement, emissions taxes, Nash equilibrium |
| JEL: | Q58 H23 O33 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12528 |
| By: | César Ducruet; Mariantonia Lo Prete; Magali Dumontet; Barbara Polo Martin; Charbel ALKHOURY; Ling Sun; Sheng Zhang |
| Abstract: | This paper investigates the influence of multiple vessel traffics on air pollution and public health in European port cities. A sample of 120 Functional Urban Areas (FUAs) is analysed over the period 2000-2019, confronting container, cruise, liquid bulk, and solid bulk traffic with environmental (emissions of CO², PM2.5, NO²), public health (life expectancy, mortality rate), and socio-economic features like population density and GDP per inhabitant. Results from the fixed effects model show that population density is the major cause of all pollutions, followed by GDP and solid bulks, while life expectancy and mortality are mainly influenced by the nature of the local socio-economic environment (population density, age, GDP, bed rates, educational level). This is complemented by a factor analysis and a hierarchical clustering, which reveal the existence of three types of port cities: critical, tourism, and metropolitan. The typology of port cities is further discussed based on ground observation in particular sites. |
| Keywords: | Europe; Functional Urban Area; hinterland; port city; sea transport; specialization; supply chains |
| JEL: | R41 R11 Q53 Q56 O18 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:drm:wpaper:2026-5 |
| By: | C\'eline Pagnier; Tord Gunnar Holen; Thomas Haugen de Lange; Patrick Levin; Steffen J. S. Bakker; Peter Sch\"utz |
| Abstract: | Decarbonizing long-haul freight requires large-scale deployment of high-power charging infrastructure. This paper studies a multi-period charging station location problem that determines where and when to deploy charging capacity for battery-electric heavy-duty vehicles under uncertain future demand and local grid capacity availability. The problem is formulated as a two-stage stochastic mixed-integer program that maximizes covered electric freight flow. Feasible truck routes are generated a priori using a resource-constrained label-setting algorithm that enforces range limitations and driving-break regulations. To solve large-scale instances, an integer L-shaped decomposition method embedded in a branch-and-cut framework and accelerated by a deterministic warm start is implemented. Computational experiments are conducted on a nationwide Norwegian case study based on real candidate locations provided by a charging station operator. The approach solves instances intractable for a monolithic formulation and achieves near-optimal solutions within practical runtimes. For larger networks, the value of the stochastic solution is substantial, highlighting the importance of explicitly modeling uncertainty in long-term infrastructure planning. Optimal investments prioritize major freight corridors in early periods and subsequently reinforce and expand the network. Grid capacity constraints discourage large, concentrated stations and shift deployments toward more distributed layouts. Covered demand increases rapidly at low budget levels but exhibits diminishing returns as the network approaches saturation. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.01782 |
| By: | Ignacio Banares-Sanchez; Robin Burgess; Dávid László; Pol Simpson; John Van Reenen; Yifan Wang |
| Abstract: | Do industrial policies that promote clean energy offer a “ray of hope”, increasing a country’s growth and welfare, whilst simultaneously reducing carbon emissions? We study the impact of Chinese solar subsidies whose implementation by city-regions went alongside massive expansion of the sector and a dramatic fall in global solar prices. We construct new city and firm panel data on solar policies, patenting and output. Using synthetic-difference-in-differences 2004-2020, we find production and innovation subsidies were more effective than demand-side (installation) subsidies in generating large and persistent increases in local innovation, net entry, production and exports. Demand policies did, however, reduce local pollution. To examine aggregate effects, we build and structurally estimate a quantitative spatial model with endogenous innovation and heterogeneous productivity across firms and cities, which accounts for business stealing and knowledge spillovers. Counterfactual analysis shows that: (i) local effects remain substantial at the macro level explaining 40%-50% of the aggregate changes in solar innovation, prices and revenues; (ii) social benefits to Chinese citizens exceed subsidy costs by 65% (and double this when environmental benefits are included); and (iii) although all subsidy types increase welfare, innovation subsidies are the most cost-effective. |
| JEL: | H25 L25 L5 L52 N5 O31 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34893 |
| By: | Phoebe Koundouri; Angelos Alamanos; Giannis Arampatzidis; Anna Triantafyllidou; Dimitris Raptis |
| Abstract: | Tourism is the economic backbone of many Mediterranean communities, but its benefits come with a hidden problem: the seasonal surge of visitors concentrates energy and water demand into a few months each year. This report asks a practical question: can national decarbonization plans that succeed on annual targets also ensure reliable service and water security during short, intense tourism peaks? To answer this, we built an integrated modelling framework linking a global economy model (GTAP-E) with a detailed energy model (LEAP) and a water-withdrawal module (WaterReqGCH), and we ran coherent Business-as-Usual and National-Commitment scenarios to 2050 for Greece and Cyprus. Three headline messages emerge: - First, National-Commitment measures deliver major gains on annual metrics: economy-wide technology and efficiency changes cut annual energy-sector emissions dramatically in both countries and reduce long-run final energy needs compared with unchecked growth. - Second, and crucially, annual success does not automatically remove seasonal risk: when we translate economy-wide activity into monthly energy and water profiles using observed post-pandemic tourism seasonality, tourism-linked sectors (air and water transport, accommodation and tourism services) still generate strong summer peaks (often close to or above current peak levels) even under ambitious decarbonization assumptions. So, these countries can be "on track" for net-zero on paper while still being vulnerable to summer outages and water shortages in practice. - Third, the shape of seasonality matters for policy: Greece shows sharper, higher mid-summer peaks concentrated in a few months, while Cyprus shows a longer high-season plateau. This difference implies different operational and investment priorities between the two countries (short, intense surge management in Greece; extended seasonal resilience in Cyprus). These results come from an intentionally conservative, policy-oriented design: GTAP-E produces macro-consistent sectoral activity paths, LEAP converts those into sectoral energy and emissions outcomes under NECP measures, and WaterReqGCH disaggregates annual withdrawals into months using tourism and agricultural seasonality proxies. The chain preserves economy-level consistency while making intra-annual peaks visible-an assessment style that is still rare in national (annual) planning exercises. For policymakers the implications are straightforward and actionable, summarized in our final section: - Add peak-aware diagnostics to energy and water plans: require scenario tests that report peak-month electricity demand in tourism-linked services, peak system adequacy metrics (summer capacity margin, stress hours), and peak-month water-stress indicators. - Target peak drivers, not just annual averages: accelerate efficiency and demand-management in accommodation and tourism services, promote temporal pricing and incentives to shift demand to shoulder months, and prioritize shore-power, electrified services at airports and ports. - Coordinate energy and water operations where peaks co-locate (islands, coastal ports): schedule maintenance outside peak windows, align desalination and pumping plans with expected seasonal electricity supply, and embed contingency rules in water management plans. - Tailor strategies to the national seasonality signature rather than applying a one-size-fits-all approach across the region. This report does not claim to forecast the future; it offers a robust diagnostic: under realistic activity trajectories, tourism seasonality remains a potential operational constraint even when countries are reducing annual emissions. That diagnostic should reshape how we judge decarbonization progress: success must be measured by both annual climate metrics and seasonal operational resilience. The modelling framework and policy steps documented here provide a practical blueprint for other tourism-intensive, water-sensitive regions that face the same trade-offs between greener energy systems and the resilience needed to serve peak-season communities and visitors. |
| Date: | 2026–02–27 |
| URL: | https://d.repec.org/n?u=RePEc:aue:wpaper:2607 |
| By: | Wolfe, Brooke; Hwang, Roland; Lipman, Timothy |
| Abstract: | California utilities and policymakers must ensure that the distribution grid is prepared for this new load, while maintaining reliable electricity service and keeping costs low for ratepayers. As the EV market evolves, the distribution grid must rapidly grow into a smarter, more flexible, and more agile system. With well-designed charging programs and new technologies, additional EV charging capacity holds the promise of creating downward pressure on electricity rates. Advances in technology can support this promise through greater vehicle-to-grid integration (VGI) (i.e., strategies for altering EV charging time, power level, or location of charging (or discharging) to benefit the grid), managed charging programs, and other tools to further merge EVs into California’s grid. VGI turns EVs into interactive grid resources, enabling not only new methods to manage consumer demand but also bi-directional charging (known as vehicle-to-grid (V2G)) that can enhance grid flexibility and reliability. Investing now to modernize the grid and adopting new demand management programs can pay dividends in the future, supporting California’s ambitious EV deployment goals while keeping electricityrates affordable. |
| Keywords: | Engineering |
| Date: | 2026–03–01 |
| URL: | https://d.repec.org/n?u=RePEc:cdl:itsrrp:qt78b122p1 |
| By: | Benk, Szilárd; Gillman, Max |
| Abstract: | This study examines how U.S. monetary policy shocks influence global asset prices by tracing their effects through real oil prices and the excess stock returns of oil-exporting nations. We show that expansionary U.S. monetary policy raises real oil prices, which in turn increase excess stock premiums in countries dependent on oil exports. These resource-driven wealth effects intensify geopolitical dynamics between the United States and major oil-exporting economies. Building on structural VAR frameworks that incorporate global oil market fundamentals, we augment the model with U.S. monetary variables, including money supply, inflation expectations, and measures of monetary policy uncertainty. Our results provide robust evidence that monetary-policy-induced oil price shocks elevate excess stock returns in oil-exporting nations, thereby identifying a new transmission channel through which U.S. policy actions shape international financial and strategic outcomes. |
| Keywords: | US monetary policy shocks; real oil prices; SVAR; oil exporting nations; excess premiums; US money supply and inflation expectations |
| JEL: | E31 E51 Q43 |
| Date: | 2026–01–04 |
| URL: | https://d.repec.org/n?u=RePEc:cvh:coecwp:2026/01 |
| By: | Fukushima, Nanna (Swedish National Road and Transport Research Institute (VTI)); van Dongen, Eef (Swedish Meteorological and Hydrological Institute (SMHI), Norrköping, Sweden); Vierth, Inge (Swedish National Road and Transport Research Institute (VTI)); Windmark, Fredrik (Air Navigation Services of Sweden (LFV), Norrköping, Sweden) |
| Abstract: | Maritime transport generates substantial greenhouse gas emissions and local air pollution, yet policy appraisal commonly relies on aggregated handbook cost factors that insufficiently account for spatial heterogeneity in exposure. This paper develops a bottom-up framework integrating AIS-based ship position data with emission modelling, atmospheric dispersion, and population grids to evaluate health and climate impacts of maritime policies. Applying the method to Stockholm and Gothenburg, we simulate onshore power supply, electrification of public ferries, and full IMO Tier III compliance. Tier III delivers the largest NOₓ exposure reductions, while effects vary across regions. The approach enables consistent, spatially explicit welfare comparisons of maritime interventions. |
| Keywords: | Maritime transport; Air pollution; External costs; Health impacts; Environmental policy; Spatial |
| JEL: | C51 H23 I18 Q53 Q54 R41 |
| Date: | 2026–03–09 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:vtiwps:2026_003 |
| By: | Naeem, Huzefa; Ali, Amjad; Audi, Marc |
| Abstract: | This research investigates the influence of financial development on environmental outcomes, with green investment as a mediating variable and environmental awareness as a moderating factor. To achieve this, the authors employ a mixed-methods approach, analyzing long-term panel data from thirty countries and supplementing quantitative findings with stakeholder interviews conducted in Germany and India, thereby enriching the analysis with diverse perspectives. Financial development is measured by indicators such as gross domestic product growth and banking sector strength, while environmental degradation is proxied by per capita carbon dioxide emissions. Green investment is assessed by comparing renewable energy financing to gross domestic product, and the level of environmental awareness is gauged by the extent to which populations prioritize ecological concerns. The findings reveal that financial stability contributes to reduced environmental harm, with green investment serving as a significant channel for this effect. Moreover, heightened environmental awareness amplifies the positive impact of financial stability on green investment. The analysis indicates that regions characterized by both financial stability and a well-informed public are more successful in transitioning to clean energy, whereas emerging economies encounter greater obstacles due to insufficient support systems and the inherent challenges of simultaneous development. The study concludes that robust financial systems alone are insufficient to deliver ecological benefits; meaningful progress requires a combination of green investment and active public engagement. Policymakers are advised to formulate climate-responsive financial regulations, invest in public awareness campaigns, and devise context-specific strategies tailored to cultural differences to advance both environmental protection and economic development. By elucidating the role of awareness in fostering sustainable transformation, this research contributes to the literature on the Environmental Kuznets Curve and stakeholder theory, offering practical recommendations for aligning global economic activity with ecological boundaries. |
| Keywords: | Financial Stability, Environmental Degradation, Green Investment, Environmental Awareness |
| JEL: | G2 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127490 |
| By: | George, Babu (Alcorn State University) |
| Abstract: | The global expansion of large, energy-intensive data centers, accelerated by cloud computing, cryptocurrency, and artificial intelligence (AI), has created growing concern about implications for human health. Emerging scholarship highlights multiple health-relevant pathways: increased emissions of criteria air pollutants from power plants and onsite diesel backup generators, chronic environmental noise from cooling infrastructure, intensive water withdrawals that strain public supplies, and land-use changes that intersect with social determinants of health. Direct epidemiologic evidence on communities living near data centers remains sparse, with most work to date relying on lifecycle emissions modeling and indirect analogy with established air and noise pollution literatures. Nevertheless, modeling studies consistently project that by the late 2020s, U.S. data centers could be responsible for roughly 1, 300 premature deaths and up to 600, 000 asthma symptom cases annually, with an associated public health burden approaching $20 billion per year. Case studies reviewed document risks related to air pollution, water stress, and noise that fall disproportionately on vulnerable communities, with per-household health cost burdens estimated to reach multiple times the national average in some disadvantaged counties. Drawing on environmental health, noise science, water security, and environmental justice literatures, this article synthesizes current evidence, proposes a conceptual framework organizing four principal exposure pathways, identifies critical research gaps, and outlines policy and planning priorities to ensure that digital infrastructure development is compatible with public health protection and equity. |
| Date: | 2026–03–06 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:cnwyb_v1 |
| By: | Saumitra N Bhaduri (Madras School of Economics, Gandhi Mandapam Road, Behind Government Data Centre, Kotturpuram, Chennai, 600025, India.); Ekta Selarka ((Corresponding author), Madras School of Economics, Gandhi Mandapam Road, Behind Government Data Centre, Kotturpuram, Chennai, 600025); Alankrti Aggrwal (Madras School of Economics, Gandhi Mandapam Road, Behind Government Data Centre, Kotturpuram, Chennai, 600025) |
| Abstract: | The paper examines the market reaction to the climate policy announcement (COP26) for the Indian listed firms using a novel measure of firm-specific exposure to climate-change developed by Sautner et al. (2023). The findings suggest that, while the overall market reaction is negative, firms with higher climate change exposure experience a significantly muted negative response. In contrast to the prevailing assumption that investors in emerging markets predominantly price exposure to risk, the findings indicate that firms engaging in proactive climate risk management receive favorable response. |
| Keywords: | Event study, Stock market, Climate change, Climate exposure, COP26 |
| JEL: | G14 G28 Q58 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:mad:wpaper:2026-294 |
| By: | Shoji Haruna; Rajeev K. Goel |
| Abstract: | The intersection of environmental policies and trade policies on external diseconomies has received considerable attention in recent years. However, the impacts of the timing of pollution taxes versus import tariffs on economic performance have not been formally considered, and this forms the focus of this work. In a political economy context, import tariffs might be imposed first due to protectionist or budgetary considerations, while environmental compulsions might lead to precedence of pollution taxes. Our results show that social welfare is greater when import tariffs precede pollution taxes. Pollution taxes are lower, and domestic production is greater when import tariffs are imposed first. |
| Keywords: | policy timing, environmental policy, tariff policy, performance comparison, production pollution, consumption pollution |
| JEL: | D43 F13 L13 Q56 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12527 |
| By: | Gabriel Santos Carneiro (IUSS - Istituto Universitario di Studi Superiori, AFD - Agence française de développement); Guilherme Magacho (IUSS - Istituto Universitario di Studi Superiori); Etienne Espagne (AFD - Agence française de développement) |
| Keywords: | Planetary boundaries, Global trade, Footprint assessment, Environmental input-output, Multi-regional input-output |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05521266 |
| By: | Andrés Lorente-de-las-Casas (Universidad de La Laguna, CEDESOG e Instituto Universitario de la Empresa); Gustavo A. Marrero-Díaz (Universidad de La Laguna y CEDESOG); Jesús Rodríguez-López (Universidad Pablo de Olavide e Ivie) |
| Abstract: | To meet the target of reducing greenhouse gas (GHG) emissions by 55% by 2030, net emissions in Spain would still need to decrease by an additional 43%. This paper analyzes the evolution of net emissions flow between 1990 and 2023 and the factors that have influenced it: energy intensity, carbon intensity, and economic activity. Eventually, we conclude the following. First, since 2005 there has been a continuous reduction in emissions, as a consequence of (i) the moderation in energy intensity, (ii) the economic slowdown between 2008 and 2014, and (iii) the composition effect, whereby the gross value added (GVA) of the services sector has increased to over 70% of the total, while its emissions account only 3% for total emissions. Second, the transport sector presents a significant obstacle to achieving these objectives: although its energy intensity has decreased, its carbon intensity has remained flat over the three decades analyzed, indicating a lack of alternative energy sources. Energy and environmental policies, as well as fiscal measures aimed at reducing these emissions, should address this issue. |
| Keywords: | CO2 emissions, energy intensity, carbon intensity |
| JEL: | C23 Q2 Q43 Q54 E13 H22 R40 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:pab:wpaper:26.02 |