|
on Energy Economics |
| By: | Jesús Fernández-Villaverde (University of Pennsylvania, CEPR and NBER); Kenneth T. Gillingham (Yale University and NBER); Simon Scheidegger (University of Lausanne and E4S) |
| Abstract: | There is a rapidly advancing literature on the macroeconomics of climate change. This review focuses on developments in the construction and solution of structural integrated assessment models (IAMs), highlighting the marriage of state-of-the-art natural science with general equilibrium theory. We discuss challenges in solving dynamic stochastic IAMs with sharp nonlinearities, multiple regions, and multiple sources of risk. Key innovations in deep learning and other machine learning approaches overcome many computational challenges and enhance the accuracy and relevance of policy findings. We conclude with an overview of recent applications of IAMs and key policy insights. |
| Keywords: | Climate change, integrated assessment model, dynamic stochastic general equilibrium |
| JEL: | C61 E27 Q5 Q51 Q54 Q58 |
| Date: | 2024–09–09 |
| URL: | https://d.repec.org/n?u=RePEc:pen:papers:24-024 |
| By: | Volha Audzei; Ivan Sutoris |
| Abstract: | In this paper, we investigate whether inflation-targeting monetary policy affects households' incentives to build resilience against energy price shocks. We utilize a stylized heterogeneous agent New Keynesian model with search and matching frictions in the labor market and nominal asset holdings. We modify the model to include energy in consumption and production, and energy conservation capital, so that energy price fluctuations affect both the supply and demand side of the economy. In such a framework, we study the responses of energy conservation to monetary policy, rising energy prices, and their interaction. We find that monetary policy influences energy intensity of consumption through both the intertemporal elasticity of substitution and labor market allocations. Our model predicts that a weaker policy response to rising energy prices is beneficial in terms of welfare to firm owners, borrowers and workers despite higher consumer price inflation. Such a policy stimulates energy conservation, and results in lower energy intensity and higher resilience against energy price fluctuations. We further find that a policy of looking through energy prices does not yield welfare benefits as it underreacts to consumer prices initially, but overreacts in later periods. Ramsey optimal policy predicts a strong immediate rise in the policy rate with a decline afterwards. |
| Keywords: | Distributional aspects of monetary policy, energy intensity of consumption, energy prices, heterogeneous agent New Keynesian models |
| JEL: | E12 E24 E52 Q43 Q50 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:cnb:wpaper:2024/4 |
| By: | Känzig, Diego R.; Williamson, Charles |
| Abstract: | We explore the increasing divergence between economic growth and energy consumption through energy-saving technical progress. Proposing a new measure of energy-saving technology, we study the underlying drivers in a semi-structural model of the U.S. economy. Our analysis shows that energy price shocks reduce consumption and stimulate energy-saving innovation, but also cause economic downturns and crowd out other innovations. Only energy-saving technology shocks can explain the negative co-movement between output and energy use. These sudden efficiency gains emerge as the primary driver of energy-saving technical change. Our findings highlight the importance of fostering energy-saving innovations in transitioning to a low-carbon economy. JEL Classification: E0, O30, Q32, Q43, Q55 |
| Keywords: | directed technical change, energy-saving, energy prices, innovation |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20242984 |
| By: | Corey Lang; Kevin Nakolan; David Rapson; Reid Taylor |
| Abstract: | Inattention can lead to suboptimal investment in energy efficiency. We study whether electricity bill shocks draw attention to the benefits of home energy efficiency investments. Our novel identification strategy builds on the fact that prolonged extreme weather events (which raise electricity costs for many customers) fall within a single billing cycle for some customers but are split across cycles for others. We find that households exposed to average sized bill shocks are 22 percent more likely to invest in energy efficiency than households with normal bills. This result suggests that inattention is indeed a factor in residential energy decisions and utilities may be able to leverage bill shocks to promote efficiency investments. |
| JEL: | Q40 Q50 D12 |
| Date: | 2024–09–20 |
| URL: | https://d.repec.org/n?u=RePEc:fip:feddwp:98834 |
| By: | Anjeela Khurram (Pakistan Institute of Development Economics); Uzma Zia (Pakistan Institute of Development Economics) |
| Abstract: | ntroduction:Global energy consumption is on the rise, and Pakistan is no exception. Since 2000, primary energy consumption in Pakistan has increased from 484 terawatt-hours (TWh) in 2000 to 1071 TWh in 2021[2]. The textile industry in Pakistan is one of the largest electricity consumers, making it a promising candidate for energy efficiency measures. The textile sector is a significant contributor to Pakistan’s economy. More than 61% of Pakistan’s total exports are textile and apparel, and the sector directly employs about 40% of the nations industrial labor force.[3] The sectors contribution to GDP is about 8.5%. This knowledge brief discusses a sustainable solution for managing the increasing energy demand in Pakistans industrial sector, notably in the textile industry. The textile industry has undoubtedly made considerable progress in reducing energy consumption by adopting various measures such as installing smart meters[4], optimizing thermal utilization, introducing fuel economy standards, implementing controls to lessen compressed air leaks, and improving electrical motor maintenance. Despite the advancements made, this sector still has a considerable amount of energy-saving potential, which can lead to significant cost savings. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pid:kbrief:2024:127 |
| By: | Riccardo Priore (Patlib Centre - Area Science Park, Trieste (Italy)); Marco Compagnoni (University of Milano-Bicocca, Milan (Italy)); Marinella Favot (Area Science Park, Trieste (Italy)) |
| Abstract: | The rare earth elements (REE) are currently essential enablers of the digital and decarbonization transitions. Nonetheless, their supply chain is highly concentrated and their extraction has high environmental impacts. Circular economy solutions could provide a twofold benefit, reducing the supply risk for import-dependent countries and mitigating REE mining impacts. This article focuses on REE recycling, providing a comprehensive, global overview of innovation dynamics in that sector by means of patent data. We propose a two-steps patent search methodology for the identification of REE recycling patents, based on OECD ENV-TECH classification for green technologies and keywords occurrence. Hence, we develop a series of quantitative and qualitative metrics to explore innovation dynamics at the country, applicant and technology type level. China clearly emerges as the most attractive market for REE recycling patents and Chinese universities as the most active applicants globally. Conversely, patent applications in all other countries registered stagnating trends over the last decade. In Europe, in particular, a lower number of patents are both filed and developed with respect to the US and Japan. However, patent quality indicators present a quite different picture, with US and Japanese applicants that seem to be at the technological forefront, receiving more citations and being more oriented to protect their inventions internationally. Therefore, our analysis underlines the importance of considering both quantitative and qualitative patent metrics when exploring innovation trends in REE recycling. We discuss the determinants of these observed phenomena and provide policy implications, particularly for countries dependent on REE imports. |
| Keywords: | innovation, patents, critical raw materials, rare earths, recycling, circular economy |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:srt:wpaper:0424 |
| By: | Thi Ngoc Nguyen; Felix Muesgens |
| Abstract: | The continued transition towards electric mobility will decrease energy tax revenues worldwide, which has substantial implications for government funds. At the same time, demand for transportation is ever increasing, which in turn increases congestion problems. Combining both challenges, this paper assesses the effectiveness of congestion pricing as a sustainable revenue stream to offset fuel tax loss in 2030 while simultaneously enhancing efficiency in the transport sector. A congestion-based toll that is road-and-time-variant is simulated for the greater Berlin area in Germany using the multi-agent transport simulation (MATSim) software. Through the simulation results, this paper quantifies the impacts of the toll on the governmental revenue, traffic management, environment, social welfare, and the distribution effects. We find that the revenue from congestion tolls in a metropolitan area can compensate the reduction in passenger car fuel tax. Furthermore, a remarkable welfare surplus is observed. The toll also successfully incentivises transport users to adjust their travel behaviour, which reduces traffic delay time by 28%. CO2 emissions as a key metric for decarbonisation of the transport sector decrease by more than 5%. The analysis of the distribution effects suggests that a redistribution plan with a focus on the middle-low-income residents and the outer boroughs could help the policy gain more public acceptance. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.20033 |
| By: | Michael Barnett |
| Abstract: | I study the dynamic, general equilibrium implications of climate-change-linked transition risk on macroeconomic outcomes and asset prices. Climate-change-linked expectations of fossil fuel restrictions can produce a ``run on fossil fuels'' with accelerated production and decreasing spot prices, or a ``reverse run'' with restrained production and increased spot prices. The response depends on the expected economic consequences of the anticipated transition shock, and existing climate policies. Fossil fuel firm prices decrease in each case. I use a novel empirical measure of innovations in climate-related transition risk likelihood to show that dynamic empirical responses are consistent with a ``run on fossil fuel.'' |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2410.00902 |
| By: | Bakalis, Dennis; Lichtenthäler, Sarah |
| Abstract: | Mit dem Ausbau der erneuerbaren Energien steigt die Nachfrage nach Flexibilität im Stromsystem und die Relevanz von Batteriespeichern. Damit die Speicher netzdienlich betrieben werden, sind weitere Preissignale zur lokalen Netzauslastung erforderlich. Ein rein marktgetriebener Ausbau kann die regionalen Flexibilitätsbedarfe kaum erfüllen: Verbindliche Speicherziele können erste Schritte zur optimierten Netzplanung und Deckung der Flexibilitätsbedarfe darstellen. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwkkur:302806 |
| By: | Naomi-Rose Alexander; Mauro Cazzaniga; Ms. Stefania Fabrizio; Ms. Florence Jaumotte; Longji Li; Dr. Jorge Mondragon; Sahar Priano; Ms. Marina Mendes Tavares |
| Abstract: | The transition to a sustainable and green economy requires workers to move out of carbon-intensive jobs and workers to move into green jobs. The pace and effectiveness of the transition hinge not only on climate policies but also on the skills and adaptability of workers. Evidence suggests that economies with a robust supply of STEM-educated workers and a more equal treatment of women are better placed to transition faster and at a lower cost to a green economy, even after controlling for other country characteristics, because these economies generate more green innovation and face lower bottlenecks in expanding the green workforce. Altogether, climate policies, particularly energy taxes, in these economies are associated with emission reductions that are 2 to 4 percentage points larger than in economies with a less inclusive and educated workforce. While green jobs have been growing worldwide, men currently hold close to two-thirds of these positions and women only one-third. Green jobs are associated with a 7 percent premium for men and an even higher premium of 12 percent for women, suggesting that men’s and women’s labor supply may not meet demand. These findings highlight the critical need for educational and labor policies that promote skill enhancement and gender inclusivity, to ensure a sufficient supply of workers for the green economy and that all workers can benefit from the green transition. Finally, AI could be beneficial for workers in green jobs. |
| Keywords: | Labor Market Transition; Climate Change; Employment; Gender Equality; gender green employment gap decomposition; employment share; green wage premium; worker occupation; women employment; green jobs workers' characteristic; Gender inequality; Women; Labor markets; Global |
| Date: | 2024–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfsdn:2024/003 |
| By: | W. Lasarov (Audencia Business School); S. Hoffmann; R. Mai; J. Schleich |
| Abstract: | Innovative information technology such as a Carbon Footprint Tracking App can contribute to achieve global climate targets like the 2°C target of the Paris Agreement. This is particularly relevant for countries with strong socio-economic development, which often have high individual carbon footprints but also possess the technological advancements to help mitigate these emissions. This paper explores how carbon footprint feedback and goal-oriented appeals affect consumers' carbon emissions. Focusing on interventions in the food and mobility domains, this research distinguishes the impact of self-related and society-related goals across these focal domains and examines spillover effects on heating and other household activities. Using a Carbon Footprint Tracking App in a longitudinal experimental study with 210 participants over three waves, the following key findings emerge. First, goal activation affects carbon emissions differently across consumption domains. Second, while the obtained evidence points to spillover across domains, the appeals' effectiveness within the same domain is contingent on individual goal prioritization. In particular, behavioral interventions need to target specific goals within each domain, particularly normative and moral goals in the food domain, and hedonic and cost-related goals in the mobility domain. |
| Abstract: | Innovative information technology such as a Carbon Footprint Tracking App can contribute to achieve global climate targets like the 2 ◦C target of the Paris Agreement. This is particularly relevant for countries with strong socio-economic development, which often have high individual carbon footprints but also possess the technological advancements to help mitigate these emissions. This paper explores how carbon footprint feedback and goal-oriented appeals affect consumers' carbon emissions. Focusing on interventions in the food and mobility domains, this research distinguishes the impact of self-related and society-related goals across these focal domains and examines spillover effects on heating and other household activities. Using a Carbon Footprint Tracking App in a longitudinal experimental study with 210 participants over three waves, the following key findings emerge. First, goal activation affects carbon emissions differently across consumption domains. Second, while the obtained evidence points to spillover across domains, the appeals' effectiveness within the same domain is contingent on individual goal prioritization. In particular, behavioral interventions need to target specific goals within each domain, particularly normative and moral goals in the food domain, and hedonic and cost-related goals in the mobility domain. |
| Keywords: | Sustainable consumption, carbon footprint, self-tracking, goal framing, spillover effects |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04689730 |
| By: | Marwil J. Dávila-Fernández; Christian Proaño; Serena Sordi |
| Abstract: | The ongoing transformation of the social base supporting political choices in highincome countries is happening in the context of raising demand for more significant efforts to reduce carbon emissions. Our research question lies in the intersection between these two major themes. We develop a heterogeneous agents behavioural macro model that differentiates between left- and right-wing voting preferences in two main political dimensions: economic-distributive and socio-cultural. A continuous-time version of the discrete-choice approach describes the composition of the population over time. The model is compatible with the emergence of “left-left”, “left-right”, “rightleft”, and “right-right” coalitions, each associated with a skill premium and carbon taxes or subsidies. Human capital accumulation results in a wage differential that influences production and feedback on inequality. Through induced technical change, taxing emissions influences the development of carbon-neutral production techniques, impacting output and ultimately feeding political attitudes. We numerically study the implications of secularisation and the asymmetric effects of carbon taxes on low/highskilled workers to green transition. It is shown that achieving absolute decoupling is a two-part problem. Reaching a consensus for implementing a carbon tax is only the first step. A sufficiently strong element of induced technical change favouring carbonneutral production techniques is also necessary to avoid reducing living standards |
| Keywords: | Political cleavages; Climate change; Inequality; Human capital; Carbon tax |
| JEL: | C62 D72 Q01 Q54 |
| Date: | 2024–01 |
| URL: | https://d.repec.org/n?u=RePEc:usi:wpaper:909 |
| By: | Sandra Aguilar-Gomez; Nathaly M. Rivera |
| Abstract: | While airpollution is a significant global threat, its impactise specially pronounced in emerging nations.This review explores the recenteconomic literature on the diverse effects of airpollution in the Global South, emphasizing causal evidence. Webegin by examining regional challenges, such as indoor air pollution(IAP) and biomass burning, which are prevalent in Global South countries. Next, we synthesize the broad spectrum of health and non-health impacts associated with exposure to fine particulate matter and other pollutants.Our assessment reveals an increase in research to document these impacts in Global South contexts. Nonetheless, some challenges, such as an incomplete understanding of underlying mechanisms and regional data disparities, remain. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:udc:wpaper:wp561 |
| By: | Viktor Zinchenko (Institute of Higher Education of the National Academy of Educational Sciences of Ukraine, Kyiv-city, Ukraine); Mykhailo Boichenko (Taras Shevchenko National University of Kyiv) |
| Abstract: | Ecological approach gives new meaning to the original concept of economic rationality that was created by representatives of the Ukrainian school of physical economy – Serhii Podolinskyi (1850-1891), Volodymyr Vernadskyi (1863-1945) and Mykola Rudenko (1920-2004). It propose a theory of the sustainable development of mankind, which included an original version of thermodynamics, in which labor energy is the result of the transformation of solar energy. Humanity is gradually taking control of the changes in the balance of energy exchange between humanity and the rest of nature, and physical economics is a tool for discovering the limits of such control. The cycles of global energy transformation include cosmic, biological, social and spiritual stages, and the economy acts as the material basis and the place of concentration of these transformations. The threat of technogenic self-destruction of humanity actualizes the need to establish a dynamic and harmonious self-reproduction by humanity of these cycles. |
| Keywords: | Ukrainian philosophy of physical economy, Ecological approach, Global energy transformation, Energy balance in the economy, Economic rationality |
| Date: | 2024–09–16 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04698733 |
| By: | Flörchinger, Daniela; Perino, Grischa; Frondel, Manuel; Jarke-Neuert, Johannes |
| JEL: | C93 D02 D83 D91 Q54 Q58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc24:302395 |
| By: | Edurne Magro Montero (Orkestra - Basque Institute of Competitiveness); James R. Wilson (Orkestra - Basque Institute of Competitiveness); Mari Jose Aranguren (Orkestra - Basque Institute of Competitiveness) |
| Abstract: | The concept of smart specialisation strategies (S3) has dominated the regional policy panorama in the last decade, which implied a shift from neutral and horizontal regional innovation policies towards priority setting in research and innovation. Despite the focus of S3 on research and innovation, we can find some similarities between these strategies and the literature around new industrial policy. The socioeconomic crisis caused by the COVID-19 pandemic highlights the need to adopt a broader view of innovation and industrial policy in which the intertwined green and digital transitions should play a core role. However, this is not an easy task as it implies changes in policy rationales, new instruments, a more entrepreneurial role for government, and a broader, multi-domain and longer-term consideration of intertwined industrial and innovation strategies, among other issues. The aim of this paper is to reflect on the nexus of industrial policies and S3, and the potential that their combination offers for sustainable transitions in the context of experiences in the Basque Country. |
| Date: | 2022–11–16 |
| URL: | https://d.repec.org/n?u=RePEc:ivc:wpaper:2022r02 |
| By: | Bachmann, Ronald (RWI, Heinrich-Heine-Universität Düsseldorf, IZA); Janser, Markus (Institute for Employment Research (IAB), Nuremberg, Germany); Lehmer, Florian (Institute for Employment Research (IAB), Nuremberg, Germany); Vonnahme, Christina (RWI) |
| Abstract: | "Using a text-mining approach applied to task descriptions of occupations together with worker-level administrative data, we explore the growth in the greenness of employment in Germany between 2012 and 2022. We first demonstrate that the greening of the labour market occurs both through an increase of green tasks and a decrease of brown tasks. Furthermore, the greening of occupations over time (“within-effect”) is at least as important for the overall greening of employment as shifting occupational employment shares (“between-effect”). Second, we show which occupations and which task types (brown or green) contribute most to the within-effect, and which worker flows are mainly responsible for the between-effect. Third, we investigate individual-level consequences of the greening of employment. We find that the employment prospects of foreign and of low-skilled workers are most at risk from the green transition, which may therefore increase existing labour-market inequalities." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | IAB-Beschäftigtenhistorik |
| JEL: | J23 J24 O33 Q55 R23 |
| Date: | 2024–09–17 |
| URL: | https://d.repec.org/n?u=RePEc:iab:iabdpa:202412 |
| By: | George Halkos; Panagiotis Stavros Aslanidis; Conrad Landis; Lydia Papadaki; Phoebe Koundouri |
| Abstract: | The present review examines the primary (heatwaves and air pollution) and cascading (population density, traffic and noise, health issues, and biodiversity loss) hazards in urban settlements. The motivation is to understand the interaction between hazards in urban areas to develop a novel holistic approach that enhances urban sustainability. Three objectives are (i) to monitor valuation studies that reveal willingness to pay (WTP) for major urban-related challenges, (ii) to assess non-marketed valuation studies, and (iii) to examine the interactions between the hazards and their impacts on people and the environment. Based on Environmental Valuation Reference Inventory and Ecosystem Services Valuation Database, from 5329 studies, 80 were retrieved that focus solely on the economic measures of 220 WTP values for different ecological and recreational issues during the period 2000-2023. The findings show that regarding the mean WTP (MWTP) values, the valuation studies reveal a MWTP of 142€ for heatwaves mitigation, whereas for air pollution 76€. Moreover, in terms of cascading hazards, the highest MWTP was for population density (298€), followed by biodiversity loss (96€), health issues (63€), and lastly by traffic and noise with 42€. However, biodiversity loss is the most significant stressor for all target groups (citizens, workers, and flora and fauna), therefore, policymakers should invest in green and blue infrastructure, energy-saving technologies, and transportation alternatives in order to improve urban resilience, safeguarding both human health and the natural environment. |
| Keywords: | climate change, heatwaves, air pollution, biodiversity loss, population density, WTP, valuation studies |
| Date: | 2024–10–03 |
| URL: | https://d.repec.org/n?u=RePEc:aue:wpaper:2415 |
| By: | Lécureur, Clairelou |
| Abstract: | Ce premier numéro des Enseignements du Lab apporte une lecture transversale des résultats de quatre projets collectifs liés à la transition écologique dans les quartiers populaires. Il se concentre sur la dimension sociologique de la crise climatique, et plus particulièrement sur les inégalités environnementales. Le lien entre enjeux environnementaux et inégalités n’est pas nouveau, mais il est de plus en plus étudié, notamment à travers le prisme des quartiers populaires. En effet, on observe une fragilité accrue des habitants des zones de concentration urbaine de populations à bas revenus aux conséquences du dérèglement climatique. Et ce, alors qu’ils y contribuent, par leur consommation, le moins. Après avoir présenté le contexte spécifique et le potentiel des quartiers populaires pour contribuer à la transition sociale et écologique, cette publication répond à la question suivante : quelles actions sont envisageables dans les quartiers populaires pour faire face aux inégalités environnementales et aller vers plus de justice environnementale ? |
| Date: | 2024–09–26 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:4jqy7 |
| By: | Mario W. Dávila-Dávila; Marwil J. Dávila-Fernández |
| Abstract: | Public perceptions of the urgency of fighting climate change differ between countries and have fluctuated over time. Heterogeneity in ecological thinking poses a problem because limiting global warming requires cohesion and coordination among the socioeconomic system’s leading players in developed and developing countries. Most studies in the field have wrongly treated advanced and emerging economies as similar systems in different positions of a linear development path. Developing economies are structurally different as they are populated by a large informal sector that accounts for up to half of economic activity. The role of the informal sector in economic development remains controversial, let alone the implications of its existence to a successful green transition. We present a macrodynamic model to study the interplay between informality and heterogeneity in ecological thinking. The model explains the endogenous emergence of four stable equilibria. Two have minor informality but significant differences in green attitudes. We refer to them as the US vs Europe cases in the Global North. In the other two, informality prevails, while we observe sharp differences in general support for mitigation policies, resembling an Asia vs Latin America scenario. Studying the basins of attraction allows us to provide policymakers with additional insights into the political economy of climate change in the Global South |
| Keywords: | Climate change; Informality; Green attitudes, Global South; Development. |
| JEL: | Q01 Q56 O11 O44 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:usi:wpaper:914 |
| By: | Qu, Chunzi (Dept. of Business and Management Science, Norwegian School of Economics); Bang, Rasmus Noss (SNF - Centre for Applied Research at NHH); Sandal, Leif K. (Dept. of Electrical Engineering, KU Leuven) |
| Abstract: | Europe is currently in the process of executing a strategy to increase the share of renewable energy in its electricity mix. However, concerns about energy system instability, higher transmission costs, and energy security have sparked discussions about the potential integration of alternative technologies, such as small modular nuclear reactors (SMR), which offer stable output and high flexibility. In view of the ongoing debate and the uncertainty surrounding the cost estimations of SMR, this study first attempts to establish a reference range for SMR that would ensure its economic viability for inclusion in the energy system. We then perform a comparison of European energy systems, with and without SMR, to explore how the inclu sion of SMR can impact the energy system. Lastly, we delve into learning effects to assess the potential for increased competitiveness in the future. Our results show that if the construction cost of SMR remains below 7392 euros/kw and operational cost does not exceed 230 euros/kw, SMR could become competitive and reduce overall energy system costs. This potential cost reduction arises from SMR’s ability to replace traditional large-scale nuclear power plants, which have high upfront and operating expenses, and to compete with variable renewable energy sources by lowering transmission cost. Furthermore, learning effects could enhance the competitiveness of SMR in the future, even if they currently lack a cost-related advantage. |
| Keywords: | European energy system; Small modular nuclear reactor (SMR); Optimization model; Generation mix; Transmission grid planning |
| JEL: | Q40 Q50 |
| Date: | 2024–09–24 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:nhhfms:2024_009 |
| By: | Alienor Cameron; Maria Garrone |
| Abstract: | To reach its 2050 objective of carbon neutrality, the European Union (EU) must continue to step up its climate efforts, while ensuring the competitiveness of its industries is not harmed. The EU Emission Trading Scheme (ETS) is at the core of the bloc's industrial decarbonization efforts. This paper explores this topic by digging into whether there is a causal relationship between industrial firms' emission intensity and their economic and financial performance. We construct a dataset covering around 1, 200 industrial firms covered by the EU ETS' third phase and estimate a novel indicator of volume-based emission intensities for these firms. Applying an IV approach to a within-firm panel model, we find that firms' emission intensity is negatively related to their corporate performance, and that this does not depend on the competitive environment they operate in. |
| Keywords: | EU ETS, heavy industry, emission intensity, corporate performance. |
| JEL: | D22 H23 L51 Q58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:drm:wpaper:2024-26 |
| By: | König, Christian (WZB Berlin Social Science Center); Salomo, Katja; Helbig, Marcel |
| Abstract: | Exposure to environmental burdens, such air and noise pollution or the lack of available green spaces, has been linked to a multitude of detrimental outcomes. Previous evidence indicates that poor residents and foreign minorities in European cities are disproportionately exposed to environmental burdens. However, there are substantial but ill-understood differences between European countries and between cities within countries. To address this limitation, we utilise fine-grained 1km-by-1km neighbourhood grid data on objective air and noise pollution as well as green space availability, enriched with administrative data on poverty rates and foreign minority shares from all German cities with at least 100, 000 inhabitants in 2017. We examine whether poor residents and foreign minorities are more often affected by environmental burdens, how their exposure to environmental burdens differs between cities, and what city-specific contextual factors contribute to these between-city differences. We find evidence that foreign minorities are more likely to be exposed to environmental burdens, but poor residents are predominantly not. However, there is considerable variation between cities. The strongest explanatory factor for this variation is the extent to which disadvantaged groups live in central neighbourhoods, less so residential segregation of poor and foreign residents, or the scarcity of ‘clean and healthy’ neighbourhoods in a city. Against these results, we further explore empirically how the current wave of inner-city gentrification might ease environmental inequality in German cities. |
| Date: | 2024–09–30 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:j4tf2 |
| By: | Catherine Leining (Motu Economic and Public Policy Research); Sasha Maher (Motu Economic and Public Policy Research); Hannah Kotula (Motu Economic and Public Policy Research) |
| Abstract: | Cooperation between countries is key to avoiding the most severe impacts of climate change. Under current policies, the world will face temperatures of 3oC above pre-industrial levels by 2100. Developing countries hold three quarters of the cost-effective mitigation needed in 2030 under 1.5oC pathways, but currently lack the capability to make it happen and historically have contributed least to the problem. If higher- and lower-income countries fail to work together to unlock that mitigation, the world will lock in dangerous climate change. Providing conventional climate finance to lower-income countries is crucial but is not the only option – nor has it been sufficient so far. |
| Keywords: | Climate change; emissions trading; carbon markets; Paris Agreement; New Zealand; Article 6; cooperation |
| JEL: | Q54 Q56 Q58 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:mtu:wpaper:24_54 |
| By: | Lorie Logan |
| Abstract: | Dallas Fed President Lorie K. Logan delivered these remarks at the Future of Global Energy Conference hosted by the Greater Houston Partnership. |
| Keywords: | economy; monetary policy |
| Date: | 2024–10–09 |
| URL: | https://d.repec.org/n?u=RePEc:fip:feddsp:98954 |
| By: | Francesca Checchinato (Dept. of Management, Venice School of Management, Università Ca' Foscari Venice); Vladi Finotto (Dept. of Management, Venice School of Management, Università Ca' Foscari Venice); Christine Mauracher (Dept. of Management, Venice School of Management, Università Ca' Foscari Venice); Monica Plechero (Dept. of Management, Venice School of Management, Università Ca' Foscari Venice) |
| Abstract: | Many voices in the policy debate concur on the need to accelerate the green and digital transitions of businesses to build sustainable and competitive regional economies. Academic research on the topic is still in its early stages and the twin transition remains ill-defined. Using novel data on the food sector in an Italian region, the paper provides insights into the barriers that a twin transition perspective may encounter at both the firm and systemic levels to become a means to support new sustainable development trajectories. The analysis highlights that a weak twin transition evolution is due to the peculiarities of how green and digital perspectives are normally addressed and operationalized within Small and Medium-sized Enterprises (SMEs) and along their network of local support. We maintain that triggering an effective and more impactful twin transition regional path requires aligning more strategically the green and digital initiatives within the companies. Moreover, we maintain that surrounding systems of stakeholders and policymakers need to develop supporting strategies and initiatives informed by a thorough understanding of local SMEs characteristics, sectoral specificities, and peculiar problems of misalignment. |
| Keywords: | twin transition; misalignment; Small and Medium-sized Enterprises, food industry; regional development |
| JEL: | R11 |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:vnm:wpdman:213 |
| By: | Laurence Scialom; Gaëtan Le Quang; Thomas Lagoarde Segot |
| Abstract: | This paper explores the implications of ecosystemic macroprudential regulations on sustainability in an ecological PK-SFC framework. We first discuss the link between banks and global warming; and present the case for connecting prudential regulation with planetary boundaries. We then report a set of simulations suggesting that in the short run, such ecosystemic prudential regulations could effectively green banks’ balance sheets, credit flows, and curtail brown investment, at the cost, however, of significant short-run losses. In the longer run, the induced green transition appears to set the economy on a more sustainable pathway, to decrease inflationary pressures, and to maintain real GDP at the baseline level, with distributional effects favourable to wage-earners. These results highlight the relevance of ecosystemic prudential regulation to tackle climate change and call for adopting a holistic approach to sustainability policies. |
| Keywords: | ecological finance, SFC modelling |
| JEL: | G00 G28 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:drm:wpaper:2024-28 |
| By: | Tibi Didier Zoungrana (UTS - Université Thomas Sankara); Aguima Aimé Bernard Lompo (CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne); Daouda Lawa Tan Toé (UTS - Université Thomas Sankara) |
| Abstract: | Climate finance is an increasingly sought-after instrument for reducing greenhouse gas emissions by financing adaptation and mitigation measures. There is a global commitment to achieve the Sustainable Development Goals (SDGs), particularly with regard to tackling climate change. The mobilization and use of climate finance could influence environmental quality. This paper focuses on analyzing the impact of climate finance on environmental quality in 111 countries worldwide over the period 2000-2019. This study uses the generalized method of moments (GMM) in panel data. The main results indicate a positive effect of climate finance on environmental quality, reflecting the theory of financial ecology. More specifically, climate finance targeting climate change mitigation measures has a significant effect on environmental quality. Member countries of the United Nations Framework Convention on Climate Change (UNFCCC) and private sector actors should implement strategies to monetize climate finance and invest heavily in mitigation and adaptation measures to improve environmental quality. |
| Keywords: | Climate finance, CO2 emissions, ecological footprint, GMM, World |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04691240 |
| By: | Rabah Arezki (CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The volume is aimed at fostering our understanding of the shifting environment for resource rich countries impacted by radical transformations linked to climate change, technology and geopolitics. On the climate change front, efforts by the international community to achieve net zero emissions have launched an ambitious but uneven energy transition away from fossil fuels leading to both potential losers and winners. Among the potential winners are the resource rich countries endowed with minerals critical for the energy transition. On the technology front, in addition the decarbonization process, digitalization will also raise the demand for critical minerals and (hopefully cleaner) energy in extraordinary ways. On the geopolitical front, the race between superpowers to access critical materials and energy resources to power the technological transformations is not only driving demand for these resources but also potential (geo-)political realignment of resource rich countries vis-à-vis super-powers. The volume also explores ways in which policies can avoid a repeat of past mistakes in the management of natural resources which contributed to the coining of the phrase "resource curse' to describe the paradox that resource dependent countries were performing poorer than others. The new boom in resources should this time serve to promote both an ethical, sustainable and inclusive development. |
| Keywords: | Climate change, Natural resource, Geopolitics |
| Date: | 2024–09–20 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04703672 |
| By: | Franck Aggeri (CGS i3 - Centre de Gestion Scientifique i3 - Mines Paris - PSL (École nationale supérieure des mines de Paris) - PSL - Université Paris Sciences et Lettres - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Google has seen its CO2 emissions jump by 48% in 5 years with its development of AI. While innovation is constantly celebrated, and the illusion of "green" growth based on high-tech perpetuates economic dogma, how can we innovate differently? Two avenues can be explored: projective responsibility, such as integrating ecological and human capital into financial accounting; and, at the same time, deepening the path of sufficiency. |
| Abstract: | Google a vu ses émissions de CO2 bondir de 48 % en 5 ans avec son développement de l'IA. Alors que l'innovation est constamment célébrée, que l'illusion de croissance « verte » fondée sur le high-tech perpétue le dogme économique, comment innover autrement ? Deux pistes : responsabilisation projective, comme intégrer les capitaux écologiques et humains dans la comptabilité financière ; et parallèlement approfondir la voie de la sobriété. |
| Keywords: | Innovation, Innovation responsable, innovation projective, croissance verte, sobriété |
| Date: | 2024–08–30 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04703009 |
| By: | Carmen Sillero Illanes (European Commission - JRC); Rosa Gallardo Cobos; Pietro Moncada Paterno' Castello (European Commission - JRC); Karel Haegeman (European Commission - JRC) |
| Abstract: | To enhance EU competitiveness and foster the transition to sustainability, the Draghi Report underscores the necessity of enhanced policy coordination across EU Member States and European institutions. This paper advocates a systemic approach that integrates subnational governance to expedite sustainability transitions, applying the concept of climate neutrality to the European aviation system. In 2023, Europe’s top 40 airports handled 10.2 million flights and 1.19 billion passengers, driving mobility, tourism, and economic growth. However, aviation is classified by the IPCC as a ‘hard-to-abate’ sector, contributing 2% of global energy-related CO2 emissions in 2022, with a total warming impact 2.6 times that of CO2 alone. With an expected annual passenger increase of 4.7%, emissions could triple in coming decades, threatening net-zero goals by 2050. Following a systematic literature review on sustainable aviation, policy initiatives at European, national, and regional levels are mapped and classified according to transition intervention points. Gaps and barriers are identified, and a place-based dimension of the sociotechnical transition is introduced using smart specialisation strategies. The paper argues that effective sustainability transition pathways require a deep understanding of problems and solutions from the perspective of those directly affected, suggesting a place-based approach to align territorial policies with European initiatives. The conclusions emphasize the need for systemic, transformative, and place-based policies to achieve aviation climate neutrality. Coordinating efforts across local, regional, national, and European levels is vital. The paper illustrates that considering place-based dimensions early in EU policies can enhance sustainability transitions for competitiveness. |
| Keywords: | aviation, Net Zero Industry Act, sustainability, transition, multilevel perspective, transformative innovation, competitiveness |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:trater:202401 |
| By: | Sandra Eickmeier; Luba Petersen |
| Abstract: | Central banks, including the European Central Bank (ECB), are increasingly involved in climate-related initiatives. This study uses a June 2023 survey of German households to gauge public support for the ECB’s climate engagement. Our findings reveal that 69% of households report increased trust in the ECB due to its climate actions, with most noting a mild boost in trust. These households primarily value the ECB’s broader scope and concern. A minority, comprising 17% and 20% respectively of all households, express concerns about potential compromises to price stability or independence. In contrast, a larger group (23% of all households) believes that the ECB’s climate efforts help the institution better achieve its core objectives. Additionally, our analysis of an information intervention reveals that the ECB’s climate actions have minimal effect on overall household inflation expectations. Finally, an internal survey of central bankers reveals that while they accurately gauge the ECB’s climate activities’ effect on households’ trust, they tend to overestimate their impact on inflation expectations. In sum, our results indicate public endorsement of the ECB’s climate-related endeavors. |
| Keywords: | central bank trust, central bank credibility, inflation expectations, cli-mate change, green policies, survey, central bank communication, uncertainty |
| JEL: | E7 E59 C93 D84 |
| Date: | 2024–10 |
| URL: | https://d.repec.org/n?u=RePEc:een:camaaa:2024-62 |
| By: | Roberto Fuentes M.; Irene Crimaldi; Armando Rungi |
| Abstract: | Inspired by Jang et al. (2022), we propose a Granger causality-in-the-mean test for bivariate $k-$Markov stationary processes based on a recently introduced class of non-linear models, i.e., vine copula models. By means of a simulation study, we show that the proposed test improves on the statistical properties of the original test in Jang et al. (2022), constituting an excellent tool for testing Granger causality in the presence of non-linear dependence structures. Finally, we apply our test to study the pairwise relationships between energy consumption, GDP and investment in the U.S. and, notably, we find that Granger-causality runs two ways between GDP and energy consumption. |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2409.15070 |
| By: | Mtshweni, Harry; Costa, King (Global Centre for Academic Research) |
| Abstract: | The downstream petroleum sector plays a critical role in the economic development of emerging economies by providing energy, employment, and opportunities for small and medium-sized enterprises (SMEs). However, various external factors, including regulatory frameworks, market volatility, and technological advancements, significantly impact the operational efficiency of SMEs in this sector. This paper explores how these external challenges affect SMEs, particularly those owned by Historically Disadvantaged Individuals (HDIs), in the petroleum industries of emerging markets. Focusing on the South African context, the paper examines global and African perspectives on operational efficiency, with case studies from Ghana, Nigeria, and Kenya. It highlights the importance of infrastructure development, local capacity building, and regulatory reforms in enhancing operational efficiency. Additionally, technological advancements such as automation and data analytics are explored as potential tools for improving SMEs’ performance. The paper concludes by offering practical recommendations for overcoming these challenges, including streamlining regulatory processes, promoting technological adoption, and fostering inclusive business models. By addressing these external factors, SMEs in the downstream petroleum sector can improve their competitiveness, contribute to economic transformation, and meet the growing energy demands of emerging economies. |
| Date: | 2024–09–21 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:rp3k4 |