nep-env New Economics Papers
on Environmental Economics
Issue of 2024‒03‒18
fifty-nine papers chosen by
Francisco S. Ramos, Universidade Federal de Pernambuco

  1. A first analysis on the Green Securitizations in Italy By Francesco Cusano; Danilo Liberati; Stefano Piermattei; Lorenzo Rubeo
  2. The Green Transition and the Italian labour market By Gaetano Basso; Fabrizio Colonna; Domenico Depalo; Graziella Mendicino
  3. Governance issues for sustainable management of village irrigation in the Dry Zone of Sri Lanka By Imbulana, Upali; Aheeyar, Mohamed; Amarasinghe, Upali A.; Amarnath, Giriraj
  4. Local Solutions: Financing Climate Action through Land Value Capture By Patrick Welch; Enrique Silva; Martim Smolka; Amy Cotter
  5. Environmental policies with green network effect and price discrimination By Burani, Nadia; Mantovani, Andrea
  6. Economic Impact of Natural Disasters Under the New Normal of Climate Change: The Role of Green Technologies By Fatouros, Nikos
  7. Green Energy Finance in Sri Lanka: A review By Jayasooriya, Sujith
  8. L’impact des émissions de CO2 des pays industrialisés sur le changement climatique en Afrique subsaharienne: Études de cas d’Afrique du Sud, du Nigeria et de la RD Congo By Kohnert, Dirk
  9. The impact of the industrialized nation’s CO2 emissions on climate change in Sub-Saharan Africa: Case studies from South Africa, Nigeria and the DR Congo By Kohnert, Dirk
  10. Agriculture, Trade, Migration, and Climate Change By Shin, Hyeseon
  11. Effects of carbon pricing and other climate policies on CO2 emissions By Emanuel Kohlscheen; Richhild Moessner; Elod Takats
  12. Trade and climate change: How to design better climate-related provisions in Preferential Trade Agreements By Brandi, Clara; Holzer, Kateryna; Morin, Jean-Frédéric; van Asselt, Harro; Weber, Katharina
  13. Environmental Justice Beyond Race: Skin Tone and Exposure to Air Pollution By Aguilar-Gómez , Sandra; Cárdenas, Juan Camilo; Salas Díaz, Ricardo
  14. Flight to climatic safety: local natural disasters and global portfolio flows By Fabrizio Ferriani; Andrea Gazzani; Filippo Natoli
  15. Extreme Weather and Inter-State Migration in India By Richa Richa; Ilan Noy; Subir Sen
  16. Carbon Prices and Inflation in the Euro Area By Maximilian Konradt; Thomas McGregor; Mr. Frederik G Toscani
  17. Climate Change, Population Growth, and Population Pressure By J. Vernon Henderson; Bo Yeon Jang; Adam Storeygard; David N. Weil
  18. On the GDP Effects of Severe Physical Hazards By Martin Bodenstein; Mikaël Scaramucci
  19. Supporting Environmental Sustainability: Perspectives from the U.S. By Sydow, Sharon
  20. Novel carbon dioxide removals techniques must be integrated into the European Union’s climate policies By Fridahl, Mathias; Schenuit, Felix; Lundberg, Liv; Möllersten, Kenneth; Böttcher, Miranda; Rickels, Wilfried; Hansson, Anders
  21. Urban stakeholder analysis for food waste prevention and reduction in Sri Lanka By Aheeyar, Mohamed; Jayathilake, Nilanthi; Bucatariu, C.; Reitemeier, Maren; Drechsel, Pay
  22. A Cross-Country Stock-Taking of GHG Emission Footprints in Major Agricultural Crops By Shin, Kiseok
  23. Phasing out palm and soy oil biodiesel in the EU: What is the benefit? By Heimann, Tobias; Argueyrolles, Robin; Reinhardt, Manuel; Schuenemann, Franziska; Söder, Mareike; Delzeit, Ruth
  24. The role of central bank in greening the Nigerian financial system By Ozili, Peterson K
  25. The capitalization of energy labels into house prices. Evidence from Italy By Michele Loberto; Alessandro Mistretta; Matteo Spuri
  26. Land for fish: Quantifying the connection between the aquaculture sector and agricultural markets By Heimann, Tobias; Delzeit, Ruth
  27. The macroeconomic determinants of renewable energy consumption in Madagascar: Evidence from an Autoregressive Distributed Lag modeling approach By Ramaharo, Franck Maminirina; Razanajatovo, Yves Heritiana Mihaja
  28. Decentralized vs. Centralized Water Pollution Cleanup in the Ganges in a Model with Three Cities By Batabyal, Amitrajeet; Beladi, Hamid
  29. Climate Disasters and Exchange Rates: Are Beliefs Keeping up with Climate Change? By Hale, Galina
  30. Temperatures and search: evidence from the housing market By Michele Cascarano; Filippo Natoli
  31. Is the share of renewable electricity in vehicle charging still above the grid mix in Europe? By Preuß, Sabine; Kunze, Robert; Scherrer, Aline; Zwirnmann, Jakob; Rummel, Alexandra
  32. Fukushima Nuclear Wastewater Discharge: An Evolutionary Game Theory Approach to International and Domestic Interaction and Strategic Decision-Making By Mingyang Li; Han Pengsihua; Songqing Zhao; Zejun Wang; Limin Yang; Weian Liu
  33. Modeling the Presidential Approval Ratings of the United States using Machine-Learning: Does Climate Policy Uncertainty Matter? By Elie Bouri; Rangan Gupta; Christian Pierdzioch
  34. Climate transition risk in the banking sector: what can prudential regulation do? By Grill, Michael; Popescu, Alexandra; Rancoita, Elena
  35. Understanding the Relationship Between Natural Habitat Loss and Urban Development in Irbid Governorate By Anne A. Gharaibeh; Tareq N. Aldela’a
  36. County Wildfire Risk Ratings in Northern California: FAIR Plan Insurance Policies and Simulation Models vs. Red Flag Warnings and Diablo Winds By Schmidt, James
  37. Disposition à payer pour l’assurance contre les risques naturels: une étude de terrain au Burkina Faso By Guibril Zerbo
  38. Measuring the Dunkelflaute: How (not) to analyze variable renewable energy shortage By Martin Kittel; Wolf-Peter Schill
  39. Entry, exit, and market structure in a changing climate By Michele Cascarano; Filippo Natoli; Andrea Petrella
  40. Développement durable, durabilité faible/forte By Bruno Boidin
  41. On the impact of decision rule assumptions in experimental designs on preference recovery: An application to climate change adaptation measures By van Cranenburgh, Sander; Meyerhoff, Jürgen; Rehdanz, Katrin; Wunsch, Andrea
  42. Disaster Aid and Support for Mandatory Insurance: Evidence from a Survey Experiment By Nicola Garbarino; Sascha Möhrle; Florian Neumeier; Marie-Theres von Schickfus
  43. Benefits of Battery Electric Heavy-Duty Trucks Increase Rapidly over Time By Dessouky, Maged; Yao, Siyuan
  44. What drives the European carbon market? Macroeconomic factors and forecasts By Andrea Bastianin; Elisabetta Mirto; Yan Qin; Luca Rossini
  45. Green nudging - A key against littering? Behavioral economic measures for cleaner cities By Potthoff, Jennifer
  46. Gesellschaftliche Akzeptanz von Klimaschutzmaßnahmen By Eckert, Linus; Schemel, Benjamin; Stagl, Sigrid
  47. Impacts of the Federal Tax Credit on the Decision to Lease or Purchase a Plug-in Electric Vehicle By Hoogland, Kelly; Hardman, Scott; Chakraborty, Debapriya; Bunch, David S
  48. To eat or to heat: are energy bills squeezing people's spending? By Andrea Colabella; Luciano Lavecchia; Valentina Michelangeli; Raffaella Pico
  49. The Dollar's International Role: A speech at Climate, Currency, and Central Banking, " a conference sponsored by the Global Interdependence Center and the University of the Bahamas, Nassau, Bahamas., February 15, 2024 By Christopher J. Waller
  50. Rückverteilung der Einnahmen aus der CO2-Bepreisung: Das Versprechen der Politik endlich einlösen, aber nicht in Form des Klimageldes! By Frondel, Manuel; Schmidt, Christoph M.
  51. Innovation, information, lobby and tort law under uncertainty. By Julien Jacob; Caroline Orset
  52. Behavioral intelligence in plant breeding: A framework for qualitative research By Cavicchioli, Martina; Kramer, Berber; Trachtman, Carly
  53. Cross-border investment into low-carbon infrastructure: An empirical glance By OECD
  54. Is Carbon Tax Truly More Salient? Evidence from Fuel Tourism at the France-Germany Border By Odran Bonnet; Étienne Fize; Tristan Loisel; Lionel Wilner
  55. Conditional Payments for Democracy to Local Leaders Managing Natural Resources in Rural Namibia By Ivo Steimanis; Esther Blanco; Björn Vollan
  56. Are Mini-Grid Projects in Tanzania Financially Sustainable? By E. Zigah; M. Barry; Anna Creti
  57. Hydrogen Storage and Transport: Technologies and Costs By Burke, Andrew; Ogden, Joan; Fulton, Lewis; Cerniauskas, Simonas
  58. Fifty years of mathematical growth theory - Classical topics and new trends By Emmanuelle Augeraud-Veron; Raouf Boucekkine; Fausto Gozzi; Alain Vendetti; Benteng Zou
  59. The European energy crisis and the consequences for the global natural gas market By Simone Emiliozzi; Fabrizio Ferriani; Andrea Gazzani

  1. By: Francesco Cusano (Bank of Italy); Danilo Liberati (Bank of Italy); Stefano Piermattei (Bank of Italy); Lorenzo Rubeo (Bank of Italy)
    Abstract: The work deals with the market of green securitizations in Italy. Green securitizations are financial instruments for which there are not yet accepted definitions or common methodologies to identify them. Firstly, we discuss on the possible definitions and the way to identify these instruments. Secondly, we describe the main characteristics of the market of green securitizations originated by banks in Italy during the ten years 2010 – 2019. We find that banks’ securitized loans to “brown†economic activities grew much more rapidly than “green†activities suggesting that banks preferred to keep loans to “green†activities in their balance sheet and to derecognize loans to the less sustainable ones. Finally, we show how the usual indexes of carbon content of Italian banks’ loans at carbon-critical sectors level can overestimate the amount of financed emissions if they do not consider the banks’ securitization activity.
    Keywords: green securitizations, carbon emissions
    JEL: G21 G23 Q56
    Date: 2023–10
  2. By: Gaetano Basso (Bank of Italy); Fabrizio Colonna (Bank of Italy); Domenico Depalo (Bank of Italy); Graziella Mendicino (Bank of Italy)
    Abstract: The paper discusses the role of labour in the transition to a net zero economy and provides an analysis for Italy over the period 2011-2021. First, we observe that the emissions generated from production activities declined over this period. We estimate that the contribution of employment reallocation across sectors was modest, while that of sectoral efficiency – particularly the shift in the energy mix towards cleaner sources – was decisive. Second, we show that the share of employment in the environmental goods and services sector was small in 2020 and has remained broadly stable since 2014. Our results suggest that, so far, labour has not played a prominent role in the green transition. However, this trend could change in the near future, as CO2 emission reduction targets take on an increasingly key role in production activities.
    Keywords: labour demand, green economy, ecological transition, public investments
    JEL: J23 Q52 Q56 H54
    Date: 2023–10
  3. By: Imbulana, Upali (International Water Management Institute); Aheeyar, Mohamed (International Water Management Institute); Amarasinghe, Upali A. (International Water Management Institute); Amarnath, Giriraj (International Water Management Institute)
    Keywords: Irrigation systems; Villages; Irrigation management; Water governance; Arid zones; Sustainability; Water resources; Water management; Water security; Tanks; Drainage canals; River basins; Climate change
    Date: 2023
  4. By: Patrick Welch (Lincoln Institute of Land Policy); Enrique Silva (Lincoln Institute of Land Policy); Martim Smolka (Lincoln Institute of Land Policy); Amy Cotter (Lincoln Institute of Land Policy)
    Abstract: The urgent need to address climate change has prompted subnational governments worldwide to explore innovative financing mechanisms to fund climate investments. This paper examines land value capture (LVC) as a potential source of financing for local climate action, reviewing instruments and implications associated with their implementation. It demonstrates how public climate interventions, including low-carbon transportation and green infrastructure, can positively impact land values and how subnational governments can recover those increments through LVC for additional public benefit. The paper examines common LVC instruments and their rationale, exploring how these mechanisms have been employed in different jurisdictions to fund climate mitigation and adaptation efforts. The paper underscores the potential of LVC as a viable financing mechanism for subnational climate action, offering insights into its practical implementation.
    Date: 2024–02
  5. By: Burani, Nadia; Mantovani, Andrea
    Abstract: We consider a duopolistic market in which a green firm competes with a brown rival, and both firms offer vertically differentiated products. Consumers are heterogeneous in both their willingness to pay for intrinsic quality and environmental concern. The latter is positively related to the green firm's market share, giving rise to a green network e¤ect. We characterize how price and quality schedules are set and how consumers sort between the two firms at the market equilibrium. When considering pollution both from consumption and production, we compute total welfare and evaluate the impact of an emission tax and a subsidy for the consumption of the green good. Our analysis demonstrates that efficiency can be achieved through an emission tax, which restores the optimal differential between firms' intrinsic qualities, combined with a discriminatory subsidy, which restores the optimal sorting of consumers.
    Keywords: bidimensional product differentiation; environmental concern; green network effect; pollution emissions; price discrimination; subsidy
    JEL: D21 L13 H21 Q58 Q51
    Date: 2024–02–26
  6. By: Fatouros, Nikos
    Abstract: We examine the effect that higher natural disaster frequency has on economic outcomes. Even if there is clear evidence that natural disaster incidents are not only going to be more frequent but will also start affecting a wider pool of countries, research has not yet analyzed the economic impact of the interaction between climate change and more frequent extreme rare events. With this study, we try to unveil the mechanisms through which natural disasters and climate change are interconnected, as well as provide policy insights regarding the adoption of greener inputs, in the form of green capital. Our findings suggest that raising temperatures are expected to negatively affect consumption as well as increase debt. We also show that under “green” technology adaptation, countries are projected to achieve higher levels of consumption and welfare.
    Keywords: Green Technologies, Natural Disasters, Climate Change, Sustainable Growth
    JEL: E60 O11 Q51 Q52 Q56
    Date: 2024–02–01
  7. By: Jayasooriya, Sujith
    Abstract: Renewable energy is a key concern for the sustainable future of any economy. This review explains the green energy finance landscape of Sri Lanka with the motive of green energy financing framework for solving the issues.
    Keywords: green energy, finance, Sri Lanka
    JEL: Q21 Q40
    Date: 2024–02–20
  8. By: Kohnert, Dirk
    Abstract: Human activity has transformed the planet at a pace and scale unprecedented in recorded history, causing irreversible damage to communities and ecosystems. Countries have focused their capacities on economic growth, with too little attention to externalities in terms of environmental quality. The world will not avoid catastrophic warming unless wealthy nations accelerate their reduction of own emissions and help poorer countries to do the same. North America and Europe have contributed 62 % of carbon dioxide emissions since the industrial revolution, while Africa has contributed only 3%. However, it is in sub-Saharan Africa (SSA) that the impacts are most severe and the people most vulnerable. Developed countries, in their own interests, should focus on ways to help developing countries phase out fossil fuels and transition to renewable energy. However, there are tensions between richer and poorer nations over who should pay the costs of global warming. Rich countries have a responsibility to act more quickly than their low-income counterparts. Yet governments continue to subsidise the use of fossil fuels, and banks and companies still invest more in polluting industries than in climate solutions. The consumption habits of the richest 10 % of people generate three times more pollution than those of the poorest 50 %. Emerging economies such as China and India, which plan to achieve net-zero emissions by 2060 and 2070 respectively, should join the developed world in accelerating emissions reductions. It is not just the way we produce and use energy that needs to change quickly. It's the way we consume food, the way we protect nature. It's everything, everywhere, all at once. The agricultural sector is particularly vulnerable, especially in SSA countries where agriculture is central to the economy. Among the top eight countries with the highest cumulative net emissions from agriculture, forestry and other land use are two SSA countries, Nigeria and DR Congo. Most of these emissions are embodied in trade and are caused by consumption in regions such as Europe, the United States and China. The establishment of the Loss and Damage Fund agreed at COP27 will not be enough to turn the tide, nor will it necessarily translate into climate finance commitments, given the lack of progress in delivering the promised US$100 billion in annual climate finance from rich countries. African countries themselves need to reflect on their own strengths and step up their efforts in a timely and substantial way.
    Keywords: changement climatique; neutralité carbone; dioxyde de carbone; pollution; combustibles fossiles; énergies renouvelables; gouvernance; Union européenne; pays industrialisés; économies émergentes; BRICS; Afrique subsaharienne; Afrique du Sud; Nigeria; RD Congo;
    JEL: E26 F16 F18 F54 F64 G38 H23 H84 H87 I15 I31 K32 N17 N37 N57 O13 O44 O55 Q54 Z13
    Date: 2024–02–21
  9. By: Kohnert, Dirk
    Abstract: Human activity has transformed the planet at a pace and scale unprecedented in recorded history, causing irreversible damage to communities and ecosystems. Countries have focused their capacities on economic growth, with too little attention to externalities in terms of environmental quality. The world will not avoid catastrophic warming unless wealthy nations accelerate their reduction of own emissions and help poorer countries to do the same. North America and Europe have contributed 62 % of carbon dioxide emissions since the industrial revolution, while Africa has contributed only 3%. However, it is in sub-Saharan Africa (SSA) that the impacts are most severe and the people most vulnerable. Developed countries, in their own interests, should focus on ways to help developing countries phase out fossil fuels and transition to renewable energy. However, there are tensions between richer and poorer nations over who should pay the costs of global warming. Rich countries have a responsibility to act more quickly than their low-income counterparts. Yet governments continue to subsidise the use of fossil fuels, and banks and companies still invest more in polluting industries than in climate solutions. The consumption habits of the richest 10 % of people generate three times more pollution than those of the poorest 50 %. Emerging economies such as China and India, which plan to achieve net-zero emissions by 2060 and 2070 respectively, should join the developed world in accelerating emissions reductions. It is not just the way we produce and use energy that needs to change quickly. It's the way we consume food, the way we protect nature. It's everything, everywhere, all at once. The agricultural sector is particularly vulnerable, especially in SSA countries where agriculture is central to the economy. Among the top eight countries with the highest cumulative net emissions from agriculture, forestry and other land use are two SSA countries, Nigeria and DR Congo. Most of these emissions are embodied in trade and are caused by consumption in regions such as Europe, the United States and China. The establishment of the Loss and Damage Fund agreed at COP27 will not be enough to turn the tide, nor will it necessarily translate into climate finance commitments, given the lack of progress in delivering the promised US$100 billion in annual climate finance from rich countries. African countries themselves need to reflect on their own strengths and step up their efforts in a timely and substantial way.
    Keywords: Environmental sustainability; Carbon neutrality; climate change; Carbon dioxide; environmental pollution; greenhouse gas; fossil fuel; renewable energy; Governance; European Union; highly industrialized countries; emerging economies; BRICS; Sub-Saharan Africa; South Africa; Nigeria; DR Congo;
    JEL: E21 E22 E23 E26 F18 F54 F64 G38 H23 H84 H87 I15 I31 K32 N17 N37 N57 O13 O44 O55 Q54 Z13
    Date: 2024–02–18
  10. By: Shin, Hyeseon
    Keywords: Agribusiness, Agricultural and Food Policy, Environmental Economics and Policy, International Relations/Trade
    Date: 2023–12
  11. By: Emanuel Kohlscheen; Richhild Moessner; Elod Takats
    Abstract: We provide ex-post empirical analysis of the effects of climate policies on carbon dioxide emissions at the aggregate national level. Our results are based on a comprehensive database of 121 countries. As climate policies we examine carbon taxes and emissions trading systems (ETS), as well as the overall stringency of climate policies. We use dynamic panel regressions, controlling for macroeconomic factors such as economic development, GDP growth, urbanisation, as well as the energy mix. We find that higher carbon taxes and prices of permits in ETS reduce carbon emissions. An increase in carbon taxes by $10 per ton of CO2 reduces CO2 emissions per capita by 1.3% in the short run and by 4.6% in the long run.
    Date: 2024–02
  12. By: Brandi, Clara; Holzer, Kateryna; Morin, Jean-Frédéric; van Asselt, Harro; Weber, Katharina
    Abstract: Linking trade to environmental goals is gaining momentum. Ever more discussion about trade and climate interlinkages are prevalent in both the trade and climate policy communities. The dedicated Trade Day at the 28th Conference to the Parties (COP28) of the United Nations Framework Convention on Climate Change (UNFCCC) underlines the growing interest in trade and climate interlinkages. Given the urgency of the climate crisis, using the toolbox of trade policies to help tackle climate change should be a priority. Preferential Trade Agreements (PTAs) are a promising trade policy tool to accelerate the transition toward greener economies and help address the climate crisis. PTAs - agreements that reduce trade barriers among their parties - are mushrooming around the world and they include an increasing number of environmental provisions. These provisions in PTAs can help reduce environmentally harmful subsidies, incentivise the green transition, and favour the diffusion of environmental technologies. But so far, climate-related environmental provisions in PTAs have not been designed in ways that enable them to live up to this potential. Many such climate provisions in PTAs remain vague, weak, and not very innovative. This policy brief outlines why we should use PTAs as a policy tool; discusses pitfalls of their current design; and shows how negotiators should improve the design of climate-related provisions to unlock their full potential. We discuss three types of provisions that have the potential to strengthen climate protection through PTAs: ossil fuel subsidies: Climate provisions in PTAs should seek to eliminate or phase down fossil fuel subsidies, provide for Special and Differential Treatment (SDT) for developing countries, and increase transparency on fossil fuel subsidies. Environmental goods and services (EGS): Climate provisions in PTAs should eliminate tariffs and non-tariff trade barriers for EGS, offer SDT for developing countries in the context of EGS, and should incentivise limate-friendly production through preferential tariffs. Investment: Climate provisions in PTAs should be designed so as to shield climate policy measures from legal challenges by providing a treaty-wide exception specifically for climate policy measures, reaffirming the right to regulate explicitly in relation to climate policy measures or carving out measures taken to address climate change from the application of Investor State Dispute Settlement (ISDS). We also outline five general policy recommendations for promoting the effectiveness of climate provisions in PTAs: 1) Prioritise win-win solutions; 2) facilitate the participation of non-state actors; 3) strengthen capacity-building and assistance; 4) enhance impact assessment, and knowledge diffusion; and 5) promote compliance and enforcement.
    Keywords: trade & investment, climate change
    Date: 2023
  13. By: Aguilar-Gómez , Sandra (Universidad de los Andes); Cárdenas, Juan Camilo (Universidad de los Andes); Salas Díaz, Ricardo (Universidad de Massachusetts)
    Abstract: Driven by environmental justice activism and policy reforms, recent social science research conducted mostly in the US has documented the greater environmental degradation faced by marginalized communities. Yet, the ethnoracial categories used in these studies may not fully capture environmental inequality in the Global South. This study presents novel findings that quantify and decompose the link between skin tone and ambient air pollution exposure in Colombia, moving beyond conventional race and ethnicity variables. By matching household geolocations with satellite-based pollution measures, we find that skin tone —even more than predetermined ethnoracial categories— predicts both initial pollution levels and their changes over time. Darker-skinned individuals encounter more significant pollution increases, even after controlling for ethnoracial self-identification. These patterns hold among migrants and non-migrants, indicating that sorting and siting contribute to these disparities. Our results underline the importance of considering skin tone in environmental justice discussions, particularly in contexts where traditional race and ethnicity classifications fall short.
    Keywords: Environmental justice; air pollution; skin tone; Colombia
    JEL: I31 J15 Q53 Q56 R23
    Date: 2024–02–28
  14. By: Fabrizio Ferriani (Bank of Italy); Andrea Gazzani (Bank of Italy); Filippo Natoli (Bank of Italy)
    Abstract: Using data from a broad panel of countries at a weekly frequency, we find that local natural disasters have significant effects on global portfolio flows. First, when disasters strike, international investors reduce their net flows to equity mutual funds exposed to affected countries. This only happens when disasters occur in the emerging economies that are more exposed to climate risk. Second, natural disasters lead investors to reduce their portfolio flows into unaffected, high-climate-risk countries in the same region as well. Third, disasters in high-climate-risk emerging economies spur investment flows into advanced countries that are relatively safer from a climate risk standpoint. Overall, this suggests that natural disasters trigger an updating of beliefs about global climate threats that are propagated via a new channel: international investors search for climatic safety.
    Keywords: climate change, natural disasters, capital flows, flight-to-safety, emerging markets
    JEL: C32 C33 E44 F3 Q54
    Date: 2023–07
  15. By: Richa Richa; Ilan Noy; Subir Sen
    Abstract: Extreme weather induced migration is a growing concern for low and middle income countries due to the increased variability in the weather and the increase in the number of extreme weather disasters associated with climate change. The objective of this paper is to examine the inter-linkages between weather, disasters, and migration, in India. To examine the bidirectional flow of migrants across Indian states, we estimate gravity models with Poisson Pseudo Maximum Likelihood (PPML), in line with previous studies’ methodology. We find that agriculture-dependent states and states with low level of human development are more likely to face out-migration driven by weather variations and disasters. Internal migration is seasonal, temporary and often short-distance in nature. We find statistical evidence that repeated exposure of vulnerable populations to extreme weather and disasters may ultimately lead to more permanent migration. This raises urgent questions concerning the efficacy of disaster risk management and climate change adaptation policies at the sub-national level.
    Keywords: climate, disasters, bilateral migration, NELM, gravity model
    JEL: O15 Q54
    Date: 2024
  16. By: Maximilian Konradt; Thomas McGregor; Mr. Frederik G Toscani
    Abstract: What is the effect of carbon pricing on inflation? This paper shows empirically that the consequences of the European Union’s Emission Trading System (ETS) and national carbon taxation on inflation have been limited in the euro area, so far. This result is supported by analysis based on a panel local projections approach, as well as event studies based on individual countries. Our estimates suggest that carbon taxes raised the price of energy but had limited effects on overall consumer prices. Since future climate policy will need to be much more ambitious compared to what has been observed so far, including the need for larger increases in carbon prices, possible non-linearities might make extrapolating from historical results difficult. We thus also use input-output tables to simulate the mechanical effect of a carbon tax consistent with the EU’s ‘Fit-for-55’ commitments on inflation. The required increase of effective carbon prices from around 40 Euro per ton of CO2 in 2021 to around 150 Euro by 2030 could raise annual euro area inflation by between 0.2 and 0.4 percentage points. It is worth noting that the energy price increases caused by the rise in the effective carbon price to 150 Euro is substantially smaller than the energy price spike seen in 2022 following the invasion of Ukraine.
    Keywords: Green transition; carbon taxes; climate policy; inflation
    Date: 2024–02–16
  17. By: J. Vernon Henderson; Bo Yeon Jang; Adam Storeygard; David N. Weil
    Abstract: We develop a novel method for assessing the effect of constraints imposed by spatially-fixed natural resources on aggregate economic output. We apply it to estimate and compare the projected effects of climate change and population growth over the course of the 21st century, by country and globally. We find that standard population growth projections imply larger reductions in income than even the most extreme widely-adopted climate change scenario (RCP8.5). Climate and population impacts are correlated across countries: climate change and population growth will have their most damaging effects in similar places. Relative to previous work on macro climate impacts, our approach has the advantages of being disciplined by a simple macro growth model that allows for adaptation and of assessing impacts via a large set of climate moments, not just annual average temperature and precipitation. Further, our estimated effects of climate are by construction independent of country-level factors such as institutions.
    JEL: J11 O44 Q54
    Date: 2024–02
  18. By: Martin Bodenstein; Mikaël Scaramucci
    Abstract: We assess the impacts from physical hazards (or severe weather events) on economic activity in a panel of 98 countries using local projection methods. Proxying the strength of an event by the monetary damages it caused, we find severe weather events to reduce the level of GDP. For most events in the EM-DAT data set the effects are small. The largest events in our sample (above the 90th percentile of damages) bring down the level of GDP by 0.5 percent for several years without recovery to trend. Smaller events (below the 90th percentile) see a less immediate decrease in initial years (0.1 percent) that progressively widens to become similar to the effect of larger disasters after 10 years. Climatological hazards (droughts and forest fires) appear to have the largest effects. These findings are robust across country groupings by development and alternative measures of the strength of the physical hazard.
    Keywords: Climate-related risk; GDP growth; Natural hazards and disasters; Rare disasters; Vulnerability to climate impacts
    JEL: Q54 O50
    Date: 2024–02–13
  19. By: Sydow, Sharon
    Keywords: Agribusiness, Agricultural and Food Policy, Agricultural Finance, Environmental Economics and Policy
    Date: 2023–12
  20. By: Fridahl, Mathias; Schenuit, Felix; Lundberg, Liv; Möllersten, Kenneth; Böttcher, Miranda; Rickels, Wilfried; Hansson, Anders
    Abstract: Given the escalating climate crisis, the task of integrating novel carbon dioxide removals into the European Union’s climate policy is urgent and long overdue. Here, we argue that there is a window of opportunity for responding now, and put forward a solution.
    Date: 2023
  21. By: Aheeyar, Mohamed (International Water Management Institute); Jayathilake, Nilanthi (International Water Management Institute); Bucatariu, C.; Reitemeier, Maren (International Water Management Institute); Drechsel, Pay (International Water Management Institute)
    Keywords: Food waste; Waste reduction; Stakeholder analysis; Food production; Governance; Waste management; Municipal authorities; Sustainable Development Goals; Goal 12 Responsible production and consumption
    Date: 2023
  22. By: Shin, Kiseok
    Keywords: Agribusiness, Agricultural and Food Policy, Environmental Economics and Policy
    Date: 2023–12
  23. By: Heimann, Tobias; Argueyrolles, Robin; Reinhardt, Manuel; Schuenemann, Franziska; Söder, Mareike; Delzeit, Ruth
    Abstract: The Renewable Energy Directive (RED II) by the European Union (EU) provides an updated framework for the use of renewable energy in the EU transport sector until 2030, and bans the use of biofuels with a high risk of causing indirect land‐use change in high carbon stock areas (high ILUC‐risk criteria). The only biofuel feedstock affected by this criterion is palm oil. We employ the computable general equilibrium (CGE) model DART‐BIO for a scenario‐based policy analysis and evaluate a phase‐out of palm oil‐based biodiesel, and an additional phase‐out of soy oil‐based biodiesel in the EU. Our results show that the palm phase‐out has only a relatively small impact on global palm fruit production and total crop land use in tropical and subtropical regions, while the soy phase‐out leads to a comparable stronger decrease in global soy production, and a reduction in total cropland use in soy‐producing regions. Both policies lead to increased oilseed production in the EU. Therefore, farmer in Malaysia and Indonesia face a significantly reduced income. While European farmers profit the most, EU firms and households are confronted with higher expenditures. Finally, this study indicates that unilateral demand‐side regulations for a single good in a single sector is not sufficient for effective environmental protection. Enhanced binding sustainability criteria and certification schemes for the use of all vegetable oils in every sector and industry as well as improved protection schemes for sensible forest areas are necessary.
    Keywords: Biofuels, Computable General Equilibrium (CGE), Land Use, Palm Oil, Renewable Energy Directive (RED II), Soy Oil
    Date: 2024
  24. By: Ozili, Peterson K
    Abstract: The chapter explores the role of the central bank of Nigeria (CBN) in greening the financial system. I explore the ways in which the central bank could green the financial system. Some of the offered suggestions include disclosure requirements, establishing green finance labs, creating a green bank, and the use of differentiated cash reserve requirement based on environmental impact. The insights offered in this chapter are useful to bank supervisors and the monetary authority in understanding how financial and monetary decisions affect the environment.
    Keywords: Central bank, green finance, financial institutions, financial system, green bonds.
    JEL: E51 Q54 Q58
    Date: 2024
  25. By: Michele Loberto (Bank of Italy); Alessandro Mistretta (Bank of Italy); Matteo Spuri (Bank of Italy)
    Abstract: Mitigating the negative impact of climate change implies a drastic reduction in greenhouse gas emissions: moving towards the net-zero target requires, among other things, a dramatic improvement in the energy efficiency of residential buildings, which account for 12.5 per cent of greenhouse gas emissions in Italy. This paper estimates the extent to which energy efficiency labels are capitalized into house prices. We find that the most energy-efficient houses sell at a 25 per cent premium over the least efficient ones. Our contribution is relevant for two reasons. First, we provide granular estimates of the impact of energy labels on house prices in Italy and show that the energy efficiency premium is significantly heterogeneous across provinces due to differences in climate conditions and regulatory frameworks. Second, energy labels play a key role and are used as a benchmark for several policies, and the heterogeneity in the energy efficiency premium may call for more targeted public policies that promote investment in energy efficiency.
    Keywords: housing, energy efficiency
    JEL: O1 Q5 R3
    Date: 2023–11
  26. By: Heimann, Tobias; Delzeit, Ruth
    Abstract: This study employs a global Computable General Equilibrium (CGE) model to quantify the effects of aquaculture production on agricultural markets, food prices and land use. We conduct a scenario analysis simulating, first, the fish sector developments expected by FAO; second, a rebuilding of sustainable wild fish stocks to achieve SDG 14; and third, a stronger expansion in aquaculture production with varying fishmeal supply. The results show direct effects of aquaculture production and limited fishmeal supply on agricultural production, land use, and food prices. Substituting fishmeal with plant-based feed when rebuilding sustainable fish stocks has lower effects on agricultural markets than growth in aquaculture production comparable to the first decade of this century. In addition, expanding aquaculture production increases prices for capture fish via fishmeal demand, instead of reducing capture fish prices by substituting consumer demand. Finally, rebuilding sustainable fish stocks has significant adverse effects on food prices in marine fish dependent regions in the southern hemisphere, and these regions need support in the transition period until sustainable fish stocks are achieved. The results of this study illustrate the interconnectedness of SDG 14 (life below water), SDG 15 (life on land) and SDG 2 (zero hunger).
    Keywords: Computable general equilibrium (CGE), Aquaculture, Land use, Agricultural markets, Agricultural commodity trade, SDGs, Fishmeal, Soymeal
    Date: 2024
  27. By: Ramaharo, Franck Maminirina (Ministry of Economy and Finance (Ministère de l'Economie et des Finances)); Razanajatovo, Yves Heritiana Mihaja (Ministry of Economy and Finance (Ministère de l'Economie et des Finances))
    Abstract: We investigate the macroeconomic determinants of renewable energy consumption in Madagascar, using annual data from 1990 to 2021 and the ARDL bounds testing approach. Our results reveal that, in the long run, domestic investment, financial development, trade openness and foreign direct investment have a significant and positive impact on renewable energy consumption. Conversely, increased economic growth, industrial development, income distribution, and carbon emissions lead to a reduction in renewable energy consumption. Therefore, to achieve its ambitious goal of generating 85% of its energy from renewable sources by 2030, the government must carefully monitor and continually analyze these interconnected macroeconomic factors. This will enable effective tailoring of policies and interventions, paving the way for a successful transition to clean and renewable energy.
    Date: 2024–02–20
  28. By: Batabyal, Amitrajeet; Beladi, Hamid
    Abstract: We think of the cleanup of water pollution in the Ganges river in India as a local public good and ask whether this cleanup ought to be decentralized or centralized. We depart from the existing literature on this subject in two important ways. First, we allow the heterogeneous spillovers from cleaning up water pollution to be positive or negative. Second, we focus on water pollution cleanup in three cities---Kanpur, Prayagraj, Varanasi---through which the Ganges flows. Our model sheds light on two broad issues. First, we characterize efficient water pollution cleanup in the three cities, we describe how much water pollution is cleaned up under decentralization, we describe the set of cleanup amounts under decentralization, and we discuss why pollution cleanup under decentralization is unlikely to be efficient. Second, we focus on centralization. We derive the tax paid by the inhabitants of the three cities for pollution cleanup, the benefit to a city inhabitant from water pollution cleanup, how majority voting determines how much pollution is cleaned up when the spillovers from cleanup are uniform, and finally, we compare the amounts of pollution cleaned up with majority voting with the efficient pollution cleanup amounts.
    Keywords: Centralization, Cost Sharing, Decentralization, Ganges River, Water Pollution
    JEL: O13 Q53
    Date: 2024–01–05
  29. By: Hale, Galina
    Keywords: Economics, Applied Economics, Basic Behavioral and Social Science, Behavioral and Social Science, Climate Action, F21, F23, F64, Banking, Finance and Investment, Banking, finance and investment, Applied economics
    Date: 2024–01–01
  30. By: Michele Cascarano (Bank of Italy); Filippo Natoli (Bank of Italy)
    Abstract: Climate and weather variations affect search and matching processes. We provide evidence for the housing market by combining daily temperatures in Italian cities with online search for 2 million ads and in-person appointments with real estate agents. Two results stand out. First, extremely hot temperatures reduce search, both online and physical, increasing time to sale and delaying housing transactions. Second, they induce a preference shift away from properties that are not climate-safe, leading to persistently lower prices. Extreme temperature effects are asymmetric as colder months induce an increase in online (but not physical) search.
    Keywords: climate change, temperatures, housing search, house prices
    JEL: C78 G1 Q54 R21 R31
    Date: 2023–07
  31. By: Preuß, Sabine; Kunze, Robert; Scherrer, Aline; Zwirnmann, Jakob; Rummel, Alexandra
    Abstract: Plug-in electric vehicles (PEV) are widely considered a promising option to reduce greenhouse gas (GHG) emissions in transport. The electricity used for charging is decisive for the environmental assessment of PEV. Most studies assume the average grid mix for charging. A study in 2021 showed that the share of renewables in charging electricity of PEV in Europe was above the grid mix. The present study provides an update of this study to further refine the database and to compare the results from 2021 and 2023. In addition, small methodological adjustments were implemented to improve the estimate of renewable electricity in PEV charging across Europe. Therefore, this article presents results of an extensive survey with over 3, 400 PEV users in 13 countries across the EU. Results reveal that PEV users still charge their PEV mostly at home. However, the share of renewable charging tariffs for home charging decreased compared to the results from 2021. When considering all charging locations (home, work and public charging), the respective share of renewable contracted electricity, and the number of PEV per EU country, the share of renewables in the charging electricity of PEV has further increased and is still above the European grid mix (i.e., balanced total supplier mix). We discuss reasons for this finding by outlining differences between the results of the study from 2021 and the present one.
    Date: 2024
  32. By: Mingyang Li; Han Pengsihua; Songqing Zhao; Zejun Wang; Limin Yang; Weian Liu
    Abstract: On August 24, 2023, Japan controversially decided to discharge nuclear wastewater from the Fukushima Daiichi Nuclear Power Plant into the ocean, sparking intense domestic and global debates. This study uses evolutionary game theory to analyze the strategic dynamics between Japan, other countries, and the Japan Fisheries Association. By incorporating economic, legal, international aid, and environmental factors, the research identifies three evolutionarily stable strategies, analyzing them via numerical simulations. The focus is on Japan's shift from wastewater release to its cessation, exploring the myriad factors influencing this transition and their effects on stakeholders' decisions. Key insights highlight the need for international cooperation, rigorous scientific research, public education, and effective wastewater treatment methods. Offering both a fresh theoretical perspective and practical guidance, this study aims to foster global consensus on nuclear wastewater management, crucial for marine conservation and sustainable development.
    Date: 2024–02
  33. By: Elie Bouri (School of Business, Lebanese American University, Lebanon); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Christian Pierdzioch (Department of Economics, Helmut Schmidt University, Holstenhofweg 85, P.O.B. 700822, 22008 Hamburg, Germany)
    Abstract: In the wake of a massive thrust on designing policies to tackle climate change, we study the role of climate policy uncertainty in impacting the presidential approval ratings of the United States (US). We control for other policy related uncertainties and geopolitical risks, over and above macroeconomic and financial predictors used in earlier literature on drivers of approval ratings of the US president. Because we study as many as 19 determinants, and nonlinearity is a well-established observation in this area of research, we utilize random forests, a machine-learning approach, to derive our results over the monthly period of 1987:04 to 2023:12. We find that, though the association of the presidential approval ratings with climate policy uncertainty is moderately negative and nonlinear, this type of uncertainty is in fact relatively more important than other measures of policy-related uncertainties, as well as many of the widely-used macroeconomic and financial indicators associated with presidential approval. In addition, and more importantly, we also detect that the importance of climate policy uncertainty has grown in recent years in terms of its impact on the approval ratings of the US president.
    Keywords: Presidential approval ratings, Climate policy uncertainty, Random forests
    JEL: C22 Q54
    Date: 2024–02
  34. By: Grill, Michael; Popescu, Alexandra; Rancoita, Elena
    Abstract: Climate-related risks are due to increase in coming years and can pose serious threats to financial stability. This paper, by means of a DSGE model including heterogeneous firms and banks, financial frictions and prudential regulation, first shows the need of climate-related capital requirements in the existing prudential framework. Indeed, we find that without specific climate prudential policies, transition risk can generate excessive risk-taking by banks, which in turn increases the volatility of lending and output. We further show that relying on microprudential regulation alone would not be enough to account for the systemic dimension of transition risk. Implementing macroprudential policies in addition to microprudential regulation, leads to a Pareto improvement. JEL Classification: D58, E58, E61, Q54
    Keywords: prudential regulation, transition risk, financial frictions
    Date: 2024–02
  35. By: Anne A. Gharaibeh (Jordan University of Science and Technology, Irbid, Jordan); Tareq N. Aldela’a (Jordan University of Science and Technology, Irbid, Jordan)
    Abstract: The global population has grown rapidly, causing urbanization and rural habitat loss. Current research investigates the causes for habitat loss and fragmentation in the Bani-Kinanah County, Irbid, Jordan. It defines loss and fragmentation as natural or anthropogenic separation of green land. It also examines decision-makers' challenges and proposes greenways to reduce habitat loss and fragmentation. The study utilized snowball sampling to interview decision-makers and ArcGIS software to digitize aerial photographs. A literature review and criteria analysis determined greenway and green corridor locations. The study compared digitized aerial photos from 2005 and 2021 for several villages to assess built-up areas, street construction, and ecological natural corridors. Agricultural footprints were also examined. Interviewing the decision-makers revealed that habitat loss and fragmentation are attributed to physical and non-physical factors. they suggested modifications to natural habitat regulations and laws, public awareness of their importance and the causes of fragmentation, and physical interventions to minimize negative effects to prevent habitat fragmentation and loss. This study provides a foundation for understanding habitat fragmentation and loss and proposing solutions. The study recommends community involvement and collaboration with nature/environmental associations to monitor and prevent changes. It also proposes greenways and green corridors to sustain natural habitats.
    Keywords: Habitat loss and Fragmentation, greenway planning, rural development, Jordan
    Date: 2023–08
  36. By: Schmidt, James
    Abstract: Because of increasing wildfire risk and associated losses, fire insurance has become more difficult to obtain in Northern California. The only insurance alternative for homeowners who are unable to find conventional home insurance is limited and costly coverage available through the California FAIR Plan. Counties located in the Central Sierras have been particularly hard hit with insurance cancellations. FAIR Plan policies in several of those counties exceeded 20% of all policies in 2021. Results from three recent assessments, based on wildfire simulation models, agree that counties in the Central Sierras are among the most at-risk for wildfire-caused structure loss. Most housing losses in the 2013-2022 decade, however, were the result of wind-driven fires in the Northern Sierras and in the Northern San Francisco Bay Area. 85% of all losses occurred in fires where a Red Flag Warning (RFW) for high winds had been issued by the National Weather Service. The Northern Sierras and the North Bay Area averaged 60% more RFW days during the fall fire season compared to the Central Sierras. Strong downslope “Diablo” winds from the Great Basin deserts were involved in seven of the most destructive fires, accounting for 65% of the total housing losses. Based on records from 109 weather stations throughout the Sierras and the Bay Area, these wind events occur primarily in the Northern Sierras and the Bay Area. Climate models have predicted that Diablo-type winds should decrease as the interior deserts warm, but weather stations in both the Bay Area and the Sierras recorded a large increase in the number of strong DiabIo wind days in the 2017 through 2021 years. All seven of the Diablo wind fires occurred during that time span. Fires driven by strong Diablo winds fit into a category of disasters referred to as “black swan” events – rare occurrences that have very large effects. Because these fires occur so infrequently, they have minimal effect on risk estimates produced by averaging together the outcomes of thousands of simulations. Exceedance probability analysis (Ager et al., 2021) can help to identify the communities most at risk from such high-loss, low-probability events. Combining exceedance probability analysis with simulation models that capture the frequency and location of extreme wind events should cause county risk rankings to more closely match actual losses. As a result, the relative risk ratings (and FAIR Plan policies) assigned to the Central Sierras should be reduced.
    Keywords: Wildfire; Fire Insurance; FAIR Plan; Diablo Wind; Red Flag Warnings; Exceedance Probability; Black Swan; Simulation; FSIM; ELMFIRE; Exposure; Ignition Density; Risk; California; Downslope Winds; Climate models; RAWS; weather stations; Wildland Urban Interface; WUI; Camp Fire; Tubbs Fire; Central Sierras; San Francisco Bay Area; Northern Sierras;
    JEL: G22 Q0 Q54 Y1 Y91
    Date: 2024–02–15
  37. By: Guibril Zerbo
    Abstract: This article examines the determinants of willingness to pay (WTP) for flood insurance, focusing on the role of information and information sources. We use data from a September 2022 field survey of 593 individuals in urban Burkina Faso. We find that 71.3% of individuals are willing to spend money on insurance. But many individuals have a lower willingness to pay than the expected loss. This suggests that individuals would appreciate insurance cover, but do not have sufficient income to pay the insurance premium. We also find that being well informed about flood risk increases the likelihood of paying the expected loss for insurance. However, obtaining flood information from television increases WTP whereas radio does not. These results suggest the need to take information sources into account when developing effective communication policies against these risks. Another result is that recourse to the family and risk aversion reduce PAD. Finally, trust in insurers and ambiguity aversion increase individuals' chances of paying the expected loss for insurance.
    Keywords: Natural disasters, Flood risk; Insurance, Willingness to pay; Information
    JEL: D81 D83 G22 Q54
    Date: 2024
  38. By: Martin Kittel; Wolf-Peter Schill
    Abstract: As variable renewable energy sources increasingly gain importance in global energy systems, there is a growing interest in understanding periods of variable renewable energy shortage (``Dunkelflauten''). Defining, quantifying, and comparing such shortage events across different renewable generation technologies and locations presents a surprisingly intricate challenge. Various approaches exist in different bodies of literature, such as hydrology, wind and solar energy analysis, or energy system modeling. The subject of interest in previous analyses ranges from single technologies in specific locations to diverse technology portfolios across multiple regions, focusing either on supply from variable renewables or its mismatch with electricity demand. We provide an overview of methods for quantifying variable renewable energy shortage. We explain and critically discuss the merits and challenges of different approaches for defining and identifying shortage events and propose further methodological improvements for more accurate shortage determination. Additionally, we elaborate on comparability requirements for multi-technological and multi-regional energy shortage analysis. In doing so, we aim to contribute to unifying disparate methodologies, harmonizing terminologies, and providing guidance for future research.
    Date: 2024–02
  39. By: Michele Cascarano (Bank of Italy); Filippo Natoli (Bank of Italy); Andrea Petrella (Bank of Italy)
    Abstract: Climate change has long-term effects on the size and composition of a country's business sector. Using administrative data on the universe of Italian firms, we find that an increase in the number of very hot days per year persistently reduces the growth rate of active firms in the market in the medium run. This is due to a drop in firm entry and an increase in firm exit, with relocation playing a minor role. A firm-level investigation reveals a dichotomy between firms that persistently suffer as a result of higher temperatures and those that improve their profitability by adapting to a hotter climate: a combination of size and age best identifies the two groups, where older, smaller-sized firms lie at one extreme and younger, larger firms at the other. According to an average climate scenario, the projected evolution of local temperatures will impact firm demography further, also exacerbating the divergent effects across warmer and colder areas over the current decade.
    Keywords: climate change, temperatures, firm dynamics
    JEL: D22 R12 Q54
    Date: 2023–07
  40. By: Bruno Boidin (CLERSÉ - Centre Lillois d’Études et de Recherches Sociologiques et Économiques - UMR 8019 - Université de Lille - CNRS - Centre National de la Recherche Scientifique)
    Date: 2022–12–16
  41. By: van Cranenburgh, Sander; Meyerhoff, Jürgen; Rehdanz, Katrin; Wunsch, Andrea
    Abstract: Efficient experimental designs aim to maximise the information obtained from stated choice data to estimate discrete choice models' parameters statistically efficiently. Almost without exception efficient experimental designs assume that decision-makers use a Random Utility Maximisation (RUM) decision rule. When using such designs, researchers (implicitly) assume that the decision rule used to generate the design has no impact on respondents' choice behaviour. This study investigates whether the decision rule assumption underlying an experimental design affects respondents' choice behaviour. We use four stated choice experiments on coastal adaptation to climate change: Two are based on experimental designs optimised for utility maximisation and two are based on experimental designs optimised for a mixture of RUM and Random Regret Minimisation (RRM). Generally, we find that respondents place value on adaptation measures (e.g., dykes and beach nourishments). We evaluate the models' fits and investigate whether some choice tasks particularly invoke RUM or RRM decision rules. For the latter, we develop a new sampling-based approach that avoids the confounding between preference and decision rule heterogeneity. We find no evidence that RUM-optimised designs invoke RUM-consistent choice behaviour. However, we find a relationship between some of the attributes and decision rules, and compelling evidence that some choice tasks invoke RUM consistent behaviour while others invoke RRM consistent behaviour. This implies that respondents’ choice behaviour and choice modelling outcomes are not exogenous to the choice tasks, which can be particularly critical when information on preferences is used to inform actual decision-making on a sensitive issue of common interest as climate change.
    Keywords: Coastal adaptation, Climate change, Experimental design theory, Decision rules, Random regret minimisation
    Date: 2024
  42. By: Nicola Garbarino; Sascha Möhrle; Florian Neumeier; Marie-Theres von Schickfus
    Abstract: Dealing with the consequences of climate change will put an increasing burden on public and private fnances. We use the example of floods in a survey experiment among 8, 000 German households to elicit households’ preferences for climate adaptation policies. In Germany, as in many countries, we observe low insurance penetration in combination with high ex-post state aid in case of large events. We fnd that prior expectations of flood aid, conditional on severe flooding, are low. Providing information about high ex-post aid increases support for a mandatory flood insurance scheme, which is seen as fairer compared to public aid. We also show that this result is driven by respondents updating their expectations, and reactions are stronger among uninsured households in low-risk areas. In contrast, information about announcements to cut flood aid does not signifcantly alter expectations and views. We conclude that fairness concerns are relevant in the discussion of public and private responsibilities in dealing with climate change.
    Keywords: Climate change, public aid, mandatory insurance, survey experiment
    JEL: G52 H23 H84 Q54
    Date: 2024
  43. By: Dessouky, Maged; Yao, Siyuan
    Abstract: In the United States, the transportation sector is the largest single source of greenhouse gas (GHG) and nitrogen oxide (NOx) emissions, and heavy-duty trucks contribute a disproportionately large share. Therefore, the trucking industry has been seeking ways to minimize emissions, such as adopting zero-emission vehicles and improving truck operating strategies to reduce truck miles. Battery-powered vehicles have different limitations than those with internal combustion engines. In this study, researchers from the University of Southern California investigated the adoption of battery electric heavy-duty trucks (BEHDTs) in the short-haul freight movement sector and the drayage industry. Drayage is a short-haul pickup and delivery service for transporting freight among ports, warehouses, and other facilities. With drayage routing, vehicles have limited weight and volume capacities and often make many stops. Routing involves optimizing for multiple factors, like fuel, distance traveled, and timeliness. This brief summarizes the findings from that research and provides implications for the field. View the NCST Project Webpage
    Keywords: Engineering, Diesel trucks, Drayage, Electric trucks, Electric vehicle charging, Routes and routing, Vehicle mix
    Date: 2024–02–01
  44. By: Andrea Bastianin; Elisabetta Mirto; Yan Qin; Luca Rossini
    Abstract: Putting a price on carbon -- with taxes or developing carbon markets -- is a widely used policy measure to achieve the target of net-zero emissions by 2050. This paper tackles the issue of producing point, direction-of-change, and density forecasts for the monthly real price of carbon within the EU Emissions Trading Scheme (EU ETS). We aim to uncover supply- and demand-side forces that can contribute to improving the prediction accuracy of models at short- and medium-term horizons. We show that a simple Bayesian Vector Autoregressive (BVAR) model, augmented with either one or two factors capturing a set of predictors affecting the price of carbon, provides substantial accuracy gains over a wide set of benchmark forecasts, including survey expectations and forecasts made available by data providers. We extend the study to verified emissions and demonstrate that, in this case, adding stochastic volatility can further improve the forecasting performance of a single-factor BVAR model. We rely on emissions and price forecasts to build market monitoring tools that track demand and price pressure in the EU ETS market. Our results are relevant for policymakers and market practitioners interested in quantifying the desired and unintended macroeconomic effects of monitoring the carbon market dynamics.
    Date: 2024–02
  45. By: Potthoff, Jennifer
    Abstract: The demand for cleanliness in cities is increasing: "Littering" - the illegal littering of public spaces - does not only cause costs for the environment and society, but also has significant financial consequences through increased cleaning costs. Much of the littering consists of "to-go" packaging, plastic bottles, and cigarette butts. Currently, the problem is predominantly addressed with laws, fines, and education campaigns. Politicians and the media are also putting the appearance of cities on the agenda, but classic instruments such as controls by municipal law enforcement officers and harsh sanctions against "litterers" are reaching their limits in solving the problem. In addition to classic environmental policy instruments, the tools of behavioral economics can make a complementary contribution in solving the problem: by influencing people's daily habits, green nudges can encourage people to reduce littering, thereby improving urban cleanliness.
    Abstract: Die Nachfrage nach Sauberkeit in den deutschen Städten steigt: "Littering" - die illegale Vermüllung des öffentlichen Raums - verursacht nicht nur Kosten für die Umwelt und Gesellschaft, sondern hat auch erhebliche finanzielle Konsequenzen durch steigende Reinigungskosten. Ein Großteil des Litterings besteht aus 'To-Go'- Verpackungen, Plastikflaschen und Zigarettenstümmeln. Derzeit wird das Problem vor allem mit Gesetzen, Bußgeldern und Aufklärungskampagnen angegangen. Politiker und Medien setzen das Erscheinungsbild der Städte auf die Tagesordnung, klassische Instrumente wie Kontrollen durch kommunale Ordnungshüter und harte Sanktionen gegen 'Litterer' stoßen bei der Lösung des Problems jedoch an ihre Grenzen. Neben den klassischen umweltpolitischen Instrumenten können die Tools der Verhaltensökonomie einen ergänzenden Beitrag bei der Problemlösung leisten: Durch die gezielte Beeinflussung der täglichen Gewohnheiten können auf den Umweltschutz ausgerichtete 'Green Nudges' die Menschen dazu bewegen, Littering zu reduzieren, wodurch die Sauberkeit in den Städten verbessert werden kann.
    JEL: D91 H23
    Date: 2023
  46. By: Eckert, Linus; Schemel, Benjamin; Stagl, Sigrid
    Abstract: In diesem Working Paper werden die Ergebnisse einer in Österreich bundesweit durchgeführten Studie zur gesellschaftlichen Akzeptanz von Klimaschutzmaßnahmen vorgestellt. Die Ergebnisse zeigen, dass die österreichische Bevölkerung generell sehr positiv zu Klimaschutzmaßnahmen eingestellt ist. 24 der 27 abgefragten Klimaschutzmaßnahmen zeigen im Ergebnis in der bundesweiten Bevölkerung mehr Unterstützung als Widerstand. Die befragten Klimaschutzmaßnahmen wurden in einem vorigen Projektschritt im Auftrag des Bundesministeriums für Klimaschutz im Rahmen des Nationalen Energie und Klimaplans identifiziert.
    Keywords: Energy transition; Public acceptance; Climate change
    Date: 2024
  47. By: Hoogland, Kelly; Hardman, Scott; Chakraborty, Debapriya; Bunch, David S
    Abstract: To mitigate climate change and air pollution, multiple US states and other countries have beensetting and adjusting goals and policies aimed at shifting sales from conventional, fossil-fuel–powered vehicles to plug-in electric vehicles (PEVs), defined as plug-in hybrid and battery electric (all-electric) vehicles. For example, US policies have offered federal tax credits for the purchase of PEVs, with limits set on how many PEVs from a single manufacturer, which PEVs, and which consumers qualify. A key to developing or adjusting these policies is understanding how financial incentives affect consumers’ decisions to purchase or lease PEVs. To better understand the impact of financial incentives on PEV leasing and purchasing, researchers at the University of California, Davis, analyzed survey responses from approximately 2, 800 California PEV owners. The survey asked: If the federal tax credit were not available would you: purchase or lease the same PEV, switch to a different PEV, switch to a conventional or hybrid (non-plug in) vehicle, or not acquire a vehicle at all? This policy brief discusses findings from those survey responses and provides policy implications. View the NCST Project Webpage
    Keywords: Social and Behavioral Sciences, Automobile ownership, Consumer preferences, Decision making, Electric vehicles, Incentives, Leasing, Taxation
    Date: 2024–02–01
  48. By: Andrea Colabella (Bank of Italy); Luciano Lavecchia (Bank of Italy); Valentina Michelangeli (Bank of Italy); Raffaella Pico (Bank of Italy)
    Abstract: This paper presents an assessment of the energy price shocks that hit Italian households starting in mid-2021 and their impact on households' financial vulnerability. First, we estimate the price elasticity of electricity and heating demand and compute the variation between 2020 and 2022 within the framework presented in Faiella and Lavecchia (2021b). Second, we study how those variations affected households' financial vulnerability, based on an extension of the modelling strategy proposed by Faiella et al. (2022). Our results indicate that, if energy price elasticity is not duly accounted for, financial vulnerability rises excessively on the heels of an energy price upsurge. In contrast, when consumption rebalancing within a dynamic microsimulation model is taken into account, financial vulnerability remains rather low and in line with supervisory data. While the risks for financial stability associated with energy shocks are therefore limited, this occurs at the of expense of household consumption and welfare.
    Keywords: climate stress test, financial vulnerability, inflation, demand elasticity
    JEL: C1 G5 Q41 Q54 Q58
    Date: 2023–10
  49. By: Christopher J. Waller
    Date: 2024–02–15
  50. By: Frondel, Manuel; Schmidt, Christoph M.
    Abstract: Die CO2-Bepreisung für fossile Kraft- und Brennstoffe wurde 2021 eingeführt, um deren Verbrauch zum Zwecke des Klimaschutzes zu reduzieren. Um bei steigenden CO2-Preisen eine breite Akzeptanz zu sichern, sollte die Politik diese Einnahmen wieder komplett an die Verbraucher zurückgeben. Bislang soll dies in Form jährlicher Pauschalbeträge geschehen. Um die Bevölkerung und die Unternehmen schneller und unkompliziert zu entlasten, sollte die Bundesregierung die Einnahmen aus der CO2-Bepreisung, die dem Klima- und Transformationsfonds (KTF) zufließen, besser dafür verwenden, Komponenten des Strompreises zu senken, vor allem die Netzentgelte. Durch die Absenkung der Strompreise würden sowohl die privaten Haushalte als auch Unternehmen, besonders kleine und mittlere Unternehmen (KMU), deutlich entlastet - für Unternehmen entstünden neue Investitionsanreize und die Wirtschaft könnte stärker wachsen. In Zeiten massiver finanzieller Engpässe beim Klima und Transformationsfonds wäre es klug, die knappen Mittel so zu verwenden, dass damit zugleich die Energiewende vorangebracht und die Unternehmen sowie die Bevölkerung entlastet werden. Das würde durch eine Verwendung der KTF-Mittel zur Senkung der Netzentgelte und der zahlreichen Umlagen auf den Strompreis der Fall sein, nicht aber bei Auszahlung eines Klimageldes.
    Date: 2024
  51. By: Julien Jacob; Caroline Orset
    Abstract: Innovative firms have developed strategies to protect their business interests, such as concealing unfavourable results to avoid product withdrawal from the market (e.g. Monsanto, Servier). This behaviour poses a social challenge, as marketing hazardous products can have costly effects on Society (e.g. health and environment). This paper presents a model where a firm markets a product with unknown dangerousness. However, research investment may furnish valuable insights. A regulatory agency can grant or revoke marketing authorisation for the product based on its determination of the product’s safety. The firm is liable for civil and penal penalties if it causes harm. According to our study, deploying a combination of market authorisation and civil and penal liabilities can effectively disincentive the firm’s advocacy strategy. There is an emphasis on the need to impose penal liability if such lobbying conduct by the firm is uncovered. We examine the effects of these measures on firms’ motivations to invest in research to mitigate scientific uncertainty and the relationship between public and private research.
    Keywords: health and environmental risks, information acquisition, innovation, civil liability, penal liability, market authorisation, lobby.
    JEL: D01 D72 K32 Q57
    Date: 2024
  52. By: Cavicchioli, Martina; Kramer, Berber; Trachtman, Carly
    Abstract: This issue brief introduces a conceptual framework to describe the factors that inform farmers’ varietal uptake choices, by integrating choice behavior alongside more contextual and technical aspects of seed uptake. The framework was developed to support qualitative data analysis for generating behavioral intelligence about farmers’ decision-making about crop varieties, which may be of use to government agencies, nongovernmental organizations, and companies that operate in the seed sector.
    Keywords: plant breeding; smallholders; climate change adaptation; food security
    Date: 2023
  53. By: OECD
    Abstract: This working paper provides a granular overview of investments into low-carbon infrastructure, both in the real economy and financial market. The descriptive analysis shows that there is room to scale up cross-border infrastructure investment and to shift investment into low-carbon assets. Specifically, low-carbon cross-border investment can be increased by shifting infrastructure investments, that currently flow into the financial economy, to the real economy and by incentivising the use of financing instruments, i.e., securitised products, that bundle projects and meet different liquidity tastes of investors. The analysis also highlights the important role of foreign direct investment (FDI) into infrastructure from foreign real economy companies.
    Keywords: Infrastructure, investment
    JEL: F21 Q56 H54
    Date: 2024–03–04
  54. By: Odran Bonnet; Étienne Fize; Tristan Loisel; Lionel Wilner
    Abstract: This paper exploits the introduction of the German carbon tax in 2021 as well as excise tax rebates on fuel in both France and Germany, consecutive to the 2022 oil crisis, to infer how fuel tourism responds to changes in relative prices. Based on French high-frequency transaction-level data issued from individual banking accounts, we find substantial displacement between foreign and domestic consumption. When relative prices increase by 1%, the relative cross-border demand decreases by 7.7%. In border areas, the elasticity of tax revenue with respect to foreign prices is as high as 0.5. Moreover, there is no substantial difference in demand response to either carbon or excise tax. Such empirical evidence illustrates the importance of coordinating tax policy within EU.
    Keywords: commodity taxation, tax coordination, carbon pricing, fuel tourism, transaction-level data
    JEL: H20 H23 H77 R48
    Date: 2024
  55. By: Ivo Steimanis; Esther Blanco; Björn Vollan
    Abstract: In this study, we provide causal evidence on the capacity of monetary incentives to encourage real-life local leaders managing water and land to improve their procedural fairness. We report results from incentivized decisions and surveys conducted with local leaders in rural Namibia (n=64) and their constituents (n=384). Conditional payments are introduced in a setting where leaders can select among different rules that vary in their perceived procedural fairness in distributing a monetary allocation. In a within-subject design we randomly introduce a small or large conditional payment for allowing for a vote. The majority of leaders (64%) embrace democratic decision-making initially. With payments there is a significant reduction in autocratic leadership, by switching mainly to appearing democratic while keeping control, but with no significant increase in truly democratic leadership. Explorative analyses reveal that the effects are mainly driven by extrinsically motivated leaders to govern, who are less democratic initially and who reap the conditional payments without effectively including constituents in the decision process. Our findings suggest that simply introducing conditional payments for democratic choices may not be sufficient to promote democratization of local governance for the management of natural resources, and caution against their blueprint use in pluralistic governance settings.
    Keywords: local governance of common pool resources, social norms, conditional payments, economic experiment
    JEL: D7 Q2 Q5 C9
    Date: 2024–03
  56. By: E. Zigah; M. Barry (Service de dermatologie [Bordeaux] - Université Bordeaux Segalen - Bordeaux 2 - CHU Bordeaux - Hôpital Haut-Lévêque [CHU Bordeaux] - CHU Bordeaux, Histologie et Pathologie Moléculaire - Université Bordeaux Segalen - Bordeaux 2, Department of Mathematics and Statistics [Boston] - BU - Boston University [Boston], Service de dermatologie Hôpital Saint-André Bordeaux - CHU Bordeaux, Inserm U1312 - BRIC - BoRdeaux Institute in onCology - UB - Université de Bordeaux - INSERM - Institut National de la Santé et de la Recherche Médicale); Anna Creti (EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique, LEDa - Laboratoire d'Economie de Dauphine - IRD - Institut de Recherche pour le Développement - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - CNRS - Centre National de la Recherche Scientifique)
    Abstract: While it is commonly acknowledged that mini-grids are the new pathway to bridging the high electricity access deficit in Sub-Saharan Africa (SSA), comparably few studies have assessed how existing regulations and tariff policies in SSA affect their potentials to attract the number of private investments required to scale-up deployments. Private investors' participation is particularly crucial to meet the annual electrification investment needs of $120 billons in SSA. We study the regulatory framework, the tariff structure, and the subsidy schemes for mini-grids in Tanzania. Additionally, using an optimization technique, we assess the profitability of a mini-grid electrification project in Tanzania from a private investment perspective. We find that the approved standardized small power producers' tariffs and subsidy scheme in Tanzania still do not allow mini-grid for rural electrification projects to be profitable. A further study is required to identify successful business models and strategies to improve mini-grids profitability.
    Keywords: Electricity access, Mini-grids, Africa, Clean energy policy, Energy regulation, Pricing
    Date: 2023
  57. By: Burke, Andrew; Ogden, Joan; Fulton, Lewis; Cerniauskas, Simonas
    Keywords: Engineering, Social and Behavioral Sciences
    Date: 2024–02–27
  58. By: Emmanuelle Augeraud-Veron (GRETHA, University of Bordeaux, FR); Raouf Boucekkine (CUT, Rennes School of Business, FR); Fausto Gozzi (LUISS Guido Carli, Rome, IT); Alain Vendetti (Aix-Marseille University, CNRS, AMSE, Marseille, FR); Benteng Zou (DEM, Université du Luxembourg)
    Abstract: We present an overview of selected contributions of the Journal of Mathematical Economics' authors to growth theory in the last half century. We start with the classical optimal growth theory within a benchmark multisector model and outline the successive developments in the analysis of this model, including the turnpike theory. Different refinements of the benchmark are considered along the way. We then survey the abundant literature on endogenous uctuations in two sector models. We conclude with two strong trends in the recent growth literature: green growth and infinite-dimensional growth models.
    Keywords: Growth theory, multisector models, turnpike theory, green growth, infinite-dimensional growth models, optimization.
    JEL: C60 C61 O41
    Date: 2024
  59. By: Simone Emiliozzi (Bank of Italy); Fabrizio Ferriani (Bank of Italy); Andrea Gazzani (Bank of Italy)
    Abstract: The Russian invasion of Ukraine in February 2022 led to severe disruptions in the European gas market, with significant repercussions on a global scale. The conflict caused a surge in energy prices, a major reshuffling of global natural gas flows, and a shift in the policy-makers' agendas towards energy supply security. This paper describes the global gas market and analyses the consequences of the war, focusing in particular on the European gas market and on global LNG trade flows. We first review the characteristics of the gas market in terms of both pricing benchmarks and contractual terms. Next, we analyse the changes to LNG and natural gas production, consumption, and trade flows throughout the 2022-23 energy crisis. Finally, we review the main policy response to the energy crisis and present some considerations on the gas market outlook.
    Keywords: natural gas, energy crisis, LNG, fragmentation
    JEL: L95 P28 Q35
    Date: 2023–12

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