I study climate policy choices for a 'policy bloc' of fuel-importers, when a 'fringe' of other fuel importers have no climate policy, fuel exporters consume no fossil fuels, and importers produce no such fuels. The policy bloc and exporter blocs act strategically in fossil fuel markets. When the...

Policies aimed at reducing emissions from fossil fuels may increase climate damages. This Green Paradox emerges if resource owners increase near-term extraction in fear of stricter future policy measures. Hans-Werner Sinn (2008) showed that the paradox occurs when increasing resource taxes are...

Drastic emission reductions are necessary to combat climate change. However, despite several climate policies, carbon emissions from German manufacturing have actually increased between 2005 and 2017. In this paper, we provide evidence of how the policy mix overall has affected the German...

As an example of supranational climate policy coordination for sectors not covered by carbon trading, the European Effort Sharing Decision set national targets for emission reductions for the time period 2013-2020. Member States were free to decide the national policies to implement to achieve...

Relative prices determine competitiveness of different locations. In this paper, we focus on the role of regulatory differences between Germany and other EU countries which affect the shadow price of carbon emissions. We calibrate a Melitz-type model, extended by firms' emissions and abatement...

Countries have pledged to stabilize global warming at a 1.5 to 2êC increase. Either target requires reaching net zero emissions before the end of the century, which implies a major transformation of the economic system. This paper reviews the literature on how policymakers can design climate...

AbstractEmissions of local pollutants from industry have declined across many developed countries over the last decades. For carbon emissions such reductions have yet to materialize. Using German administrative micro-data at the product level, we apply the workhorse model for decomposing...

Biased beliefs affect real-world decisions, including political solutions to societal challenges. One crucial example is environmental policy: people tend to underestimate the incentive effect of Pigouvian policies. Addressing biased beliefs at scale is then paramount. In the days leading up to...

Climate policies vary widely across countries, with some countries imposing stringent emissions policies and others doing very little. When climate policies vary across countries, energy-intensive industries have an incentive to relocate to places with few or no emissions restrictions, an effect...