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Are economists getting climate dynamics right and does it matter?

Dietz, Simon; Ploeg, Frederick van der; Rezai, Armon; … - 2020

We show that several of the most important economic models of climate change produce climate dynamics inconsistent with the current crop of models in climate science. First, most economic models exhibit far too long a delay between an impulse of CO2 emissions and warming. Second, few economic...

Persistent link: https://www.econbiz.de/10012171780

The use of revenues from carbon pricing

Marten, Melanie; Van Dender, Kurt - 2019

The paper collects comprehensive and detailed data on what 40 OECD and G20 economies do with the revenues from carbon taxes, emissions trading systems, and excise taxes on energy use. It notes that constraints – which can take the form of political commitments or legal earmarks – on revenue...

Persistent link: https://www.econbiz.de/10012135991

Optimal climate policy as if the transition matters

Campiglio, Emanuele; Dietz, Simon; Venmans, Frank - 2022

The optimal transition to a low-carbon economy must account for adjustment costs in switching from dirty to clean capital, technological progress, and economic and climatic shocks. We study the low-carbon transition using a dynamic stochastic general equilibrium model with emissions abatement...

Persistent link: https://www.econbiz.de/10013472310

The Economic Cost of Carbon Abatement with Renewable Energy Policies

Abrell, Jan - 2017

This paper exploits the randomness and exogeneity of weather conditions to identify the economic cost of decarbonization through renewable energy (RE) support policies. We find that both the aggregate cost and the distribution of cost between energy producers and consumers vary significantly...

Persistent link: https://www.econbiz.de/10012954170

When starting with the most expensive option makes sense : optimal timing, cost and sectoral allocation of abatement investment

Vogt-Schilb, Adrien; Meunier, Guy; Hallegatte, Stéphane - 2018

This paper finds that it is optimal to start a long-term emission-reduction strategy with significant short-term abatement investment, even if the optimal carbon price starts low and grows progressively over time. Moreover, optimal marginal abatement investment costs differ across sectors of the...

Persistent link: https://www.econbiz.de/10011882054

The Social Cost of Carbon and Inequality : When Local Redistribution Shapes Global Carbon Prices

Kornek, Ulrike - 2019

The social cost of carbon is the central economic measure for aggregate climate change damages and functions as a metric for optimal carbon prices. Previous literature shows that inequality significantly influences the level of the social cost of carbon, but mostly neglects a major source of...

Persistent link: https://www.econbiz.de/10012870643

The 2018 reform of EU ETS : consequences for Project Appraisal

Johansson, Per-Olov - 2020

The European Union's Emissions Trading System is the largest system in the world for trade in greenhouse gases. It used to be a cap-and-trade scheme with a fixed supply of permits. However, a recent reform of the system "punctures the waterbed" by making the supply of permits endogenous. The...

Persistent link: https://www.econbiz.de/10012289359

Pigou's advice and Sisyphus' warning : carbon pricing with non-permanent carbon-dioxide removal

Kalkuhl, Matthias; Franks, Max; Gruner, Friedemann; … - 2022

Carbon dioxide removal from the atmosphere is becoming an important option to achieve net zero climate targets. This paper develops a welfare and public economics perspective on optimal policies for carbon removal and storage in non-permanent sinks like forests, soil, oceans, wood products or...

Persistent link: https://www.econbiz.de/10013473710

Carbon default swap : disentangling the exposure to carbon risk through CDS

Blasberg, Alexander; Kiesel, Rüdiger; Taschini, Luca - 2022

Using Credit Default Swap spreads, we construct a forward-looking, market-implied carbon risk factor and show that … carbon risk affects firms' credit spread. The effect is larger for European than North American firms and varies … to carbon risk when market-wide concern about climate change risk is elevated. Finally, lenders expect that adjustments …

Persistent link: https://www.econbiz.de/10013417581

On current and future carbon prices in a risky world

Olijslagers, Stan; Ploeg, Frederick van der; … - 2021

the risk-adjusted interest rate. Adding damages leads to a higher carbon price that grows more slowly. But as temperature …

Persistent link: https://www.econbiz.de/10013226501