Emission leakage could potentially undermine the effectiveness of unilateral climate policies. Significant emission transfers from developing countries to developed countries in the form of emissions embodied in trade have been interpreted as an indication of such leakage. To reduce leakage and...

The economics of electricity is shaped by its physics. A well known example is the non-storability of electricity that causes its price to fluctuate widely. More generally, physical constraints cause electricity to be a heterogeneous good along three dimensions - time, space, and lead-time....

It is a well-known result in economics that land value taxation is efficient since it does not distort the supply of the tax base. Considering only efficiency, land value should thus be fully taxed. Using optimal taxation theory with heterogeneous households, we show that it may be optimal not...

Novel Carbon Dioxide Removal (CDR) technologies have seen a first wave of deployment, driven by investments through voluntary carbon markets and by specific support policies. To sustain the momentum, a credible long-term policy path is urgently needed to lead removal technologies through the...

The European Union's plan for climate neutrality by 2050 reopens the question of the role carbon pricing can and should play. Carbon pricing should not - and ultimately cannot - only be an enforcement tool or backstop that ensures targets are met, while the heavy-lifting of decarbonisation comes...

Novel Carbon Dioxide Removal (CDR) technologies have seen a first wave of deployment, driven by investments through voluntary carbon markets and by specific support policies. To sustain the momentum, a credible long-term policy path is urgently needed to lead removal technologies through the...

Carbon pricing regulates emission flows and collects rents from underlying fossil resource stocks. The resulting investment shift implies lower climate policy costs and improved welfare if capital is underaccumulated. We prove that under emission trading, such a beneficial macroeconomic...