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This paper uses data on heating bills to study the distribution of energy efficiency outcomes in the German multi-apartment residential building stock. To uncover the underlying energy efficiency of buildings, we estimate the causal response of heat energy demand to variability in heating degree days. We examine the heterogeneity in temperature response using both fixed effects regressions and causal forests, and pay close attention to the regional socioeconomic distribution. Our results suggest that the distribution of energy efficiency is not equitable in the West of Germany. We show that although the newer and more energy-efficient buildings are located in the South of Germany, the older building stock in less prosperous East regions of Germany are surprisingly energy efficient, likely as a result of large investments in renovations post-reunification. Finally, we show that the regional distribution of energy efficiency reflects, in part, differences in heating needs - thus, the poorer energy standards of buildings in the North-West should be weighed against the warmer climatic zone. [ABSTRACT FROM AUTHOR]

This paper contributes to the debate surrounding the impact of adaptation to climate change on the incentives to abate greenhouse gases emissions. Using data from the World Development Indicators and various adaptation funds under the UNFCCC framework, this paper provides an empirical analysis of the relation between adaptation and emissions. We specifically test whether adaptation measures to climate change affect emissions of greenhouse gases in a world where adaptation funds are available. Using a staggered difference-in-differences approach and an event study analysis, we find that receiving adaptation funding significantly and negatively affects several CO2 emissions measures, providing preliminary evidence of the presence of a halo effect of adaptation funding. We do not find evidence of a significant change in the emissions of methane, nitrous dioxide and other greenhouse gases. [ABSTRACT FROM AUTHOR]

The study of the financial repercussions of low-carbon policy has focused mainly on stocks, leaving bonds out of the picture. The objective of this paper is to assess the impact of low-carbon policy upon European bond returns. This is done by extending the Fama and French two factor model for bonds with an EU-ETS participation factor: GMC (Green minus Carbon). This paper makes four contributions. Firstly, it provides a statistically highly significant measure of the sensitivity of bond portfolio returns to the GMC factor. Secondly, it shows the presence of a green premium in the European bond market in between 2008 and 2018. Thirdly, evidence is found that the addition of an environmental factor improves the performance of the original model. Fourthly, the carbon stress test put forward is able to indicate the effects of a plausible but more severe average EU-ETS carbon price on bond returns. [ABSTRACT FROM AUTHOR]

Global climate change has caused governments worldwide to take actions to improve their energy efficiency. This paper investigates how China's Top-1000 program, a command-and-control type of energy-saving mandate, has affected the operational choices of firms, and in turn, their profitability. We apply the propensity score matching method to find "identical twins" for the participants in the Top- 1000 program, then conduct a difference-in-differences analysis on the matched sample. Our findings suggest that the profitability of the enterprises targeted for energy savings decreased by one-third, mainly due to increased production costs. The targeted enterprises tended to increase their fixed assets per capita, which was associated with improvements in energy efficiency. Furthermore, compared to similar untargeted enterprises, there was a significant slowdown in the production growths of the targeted enterprises, raising concerns about carbon leakage due to increased production by less efficient producers. [ABSTRACT FROM AUTHOR]

Human consumption of scarce ecological resources is at the heart of the climate change crisis. Mitigating climate change will require changes in consumer behavior. Further, to respond effectively, policymakers need information on the environmental impact of individuals' behaviors. In this paper, we study the effect of socio-demographic characteristics and personality traits on individuals' environmental impact measured by their ecological footprint. We also investigate consumers' willingness to pay for "green" goods. Using survey data from the Netherlands, first, we construct individuals' ecological footprint. The survey also uses a 50-item personality scale developed by Goldberg (1992) to construct five personality traits. We find that individuals with higher personal income, less than a high school education, males, the employed, and people living in rural areas are associated with a higher EF. We also find that consumers' WTP and demand are responsive to price increases in high-emitting goods and personality traits. We contribute to our understanding of the influence of socio-demographic and personality characteristics on the actual ecological footprint at the individual level. Further, we contribute to the economic literature on consumers' WTP for "green" products as well as the ongoing discussion on using market-based solutions to tackle climate change. [ABSTRACT FROM AUTHOR]

Power generation under the Renewable Portfolio Standard (RPS) can reduce greenhouse gas emissions below the baseline level, so entities may argue to use this attribute to meet the goal of Emission Trading Scheme (ETS). Although these two quantity-based regulation systems have different policy objectives, both mechanisms are implicitly linked by credit conversions depending on credit prices. This paper builds an analytic partial equilibrium model and derives market equilibria in a closed form to demonstrate how each mechanism influences the other by policy instruments such as a renewable requirement, a reduction target in greenhouse gas emission, levels of penalties, or marginal costs. We can compare "direct vs indirect" effectiveness of a regulatory changes across both markets with the case where converting renewable offsets are completed prohibited. [ABSTRACT FROM AUTHOR]

The assessment of industrial-level energy efficiency's (EE) development is a critical research topic that has entrenched in the global battle against climate change. Under the Energy Efficiency Directives 2012/27/EU and 2018/2002/EU, European Commission sets specific industrial energy efficiency targets, rules and obligations for the 2020-2030 period aiming, among others, at specific energy intensity reduction and energy efficiency improvements. In this paper we use a balanced panel of fourteen European industries from twenty-seven countries for the period 1995-2011 under a metatechnology framework. The aim of this study is to evaluate, at a first stage, the industrial total factor energy efficiency (TFEE) at a national and European level by incorporating technological heterogeneity through a nonparametric approach. Reflecting the divergent views on the importance of desirable and undesirable outcomes in the pursuit of TFEE, we additionally estimate industrial performance by prioritizing either economic or environmental aspects. At the second stage of our analysis, econometric models are applied to investigate the main factors of industrial TFEE using sector specific and country characteristics while we further proceed with a ß and s-convergence analysis for our TFEE measures. The results of this study reveal that small-scale economies exhibit persistent high TFEE scores. At the same time, TFEE determinants suggest that path dependence phenomena have a strong presence, climatic characteristics occur while energy mix displays both linear and non-linear relationship. Either considering one desirable output or consolidating the undesirable output in the production function our results indicate a strong evidence of conditional and unconditional convergence in TFEE scores. [ABSTRACT FROM AUTHOR]

This paper examines how rising temperatures due to climate change will affect electricity consumption patterns through mid- and end-century. We extend recent literature in two important ways. First, we directly incorporate adaptation in the form of increased air conditioner penetration, resulting in heightened responsiveness to hot temperatures. Second, we go beyond average effects to consider how higher temperatures will change the intraday and seasonal shape of consumption. This is found to be of greater importance in colder countries, where the average effect is dampened by reductions in heating demand from warmer winters. Seasonal peaks are projected to shift from winter to summer and the diurnal range of hourly consumption expands, exacerbating an increasing need for flexibility coming from the supply side due to a growing share of renewable energy. [ABSTRACT FROM AUTHOR]

Since the 1990s, electricity distribution networks in many countries have been subject to incentive regulation. The sector regulators aim to identify the best performing utilities as frontier firms to determine the relative efficiency of firms. This paper develops a nested latent class (NLC) model approach where unobserved differences in firm performance are modelled using two 'zero inefficiency stochastic frontier' (ZISF) models nested in a 'latent class stochastic frontier' (LCSF) model. This captures the unobserved differences due to technology or environmental conditions. A Monte Carlo simulation suggests that the proposed model does not suffer from identification problems. We illustrate the proposed model with an application to Norwegian distribution network utilities for the period 2004-2011. We find that the efficiency scores in both LCSF and ZISF models are biased, and some firms in the ZISF model are wrongly labelled as inefficient. Conversely, inefficient firms may be wrongly labelled as being fully efficient by the ZISF model. [ABSTRACT FROM AUTHOR]

Central to global agreement on carbon emissions are strategic interactions amongst regions over abatement policy and the benefits to be shared. These are re-examined in this paper, in which benefits from mitigation stem from a meta-analysis that links carbon concentration with region-specific measures of economic welfare. Implementation costs are then drawn from a highly disaggregated model of global economic performance. Multiplayer games are then constructed, the results from which are sensitive to embodied temperature scenarios and discount rates but robustly reveal that the U.S. and China would be net gainers from unilateral implementation in net present value terms. The dominant strategy for all other countries is to free ride. Net gains to the three large economies are bolstered by universal adoption, which could be induced by affordable side payments. Yet the downside is that net gains to all regions are negative over two decades, rendering commitment to abatement politically difficult. [ABSTRACT FROM AUTHOR]

Smoky cookfires contribute to global climate change and kill approximately four million people annually. While many studies have examined the effects of fuel-efficient cookstoves, this study does so while selling stoves at market prices. After introducing a fuel-efficient cookstove, fuelwood use and household air particu-lates declined by 12% and by smaller percentages after adjusting for observer-induced bias, or the Hawthorne effect. These reductions were less than laboratory predictions and fell well short of World Health Organization pollution targets. Even when introducing a second stove, most households continued to use their traditional stoves for most cooking. Future research should focus on improving the usability of fuel-efficient cookstoves and/or policies that assist consumers to shift to safer fuels like gas or electricity coupled with mechanisms to disable the existing smoky cookfire. [ABSTRACT FROM AUTHOR]

Internal migration between Chinese provinces has increased substantially since the mid-1980s. Though it is generally agreed that this has been driven by eco nomic factors, climatic factors might also have had a part to play. The challenge is to evaluate the impact of climatic factors on migration in the simultaneous presence of changing socio-economic infuences. We resolve this challenge by carrying out a statistical multivariate regression analysis on bilateral migration rates between Chinese provinces. The analysis simultaneously includes climate change in the form of climate anomalies (temperature, precipitation, sunshine) and various socio-economic factors including energy consumption. To this end we have constructed a unique three-dimensional panel dataset (time, sending province, receiving province) with bilateral migration rates between 30 provinces for the period 1987-2015. Due to the distributional properties of the data and underlying theory we use a Poisson Pseudo Maximum Likelihood (PPML) estimator but include OLS estimates for comparison. The results suggest that increases in temperature and precipitation are signifcant migration push factors while increased sunshine discourages push migration. Provincial diferentials in per capita energy consumption and Gross Regional Product (GRP) are also signifcant drivers of migration. [ABSTRACT FROM AUTHOR]

In the 2009 Copenhagen Accord, China agreed to slash its carbon intensity (carbon dioxide emissions/GDP) by 40% to 45% from the 2005 level by 2020. We assess whether China can achieve the target under the business-as-usual scenario by forecasting its emissions from energy consumption. Our preferred model shows that China's carbon intensity is projected to decline by only 33%. The results imply that China needs additional mitigation effort to comply with the Copenhagen commitment. The emission growth is more than triple the emission reductions that the European Union and the United States have committed to in the same period. [ABSTRACT FROM AUTHOR]

Game-theoretic models of international cooperation on climate change come to very different results regarding the stability of the grand coalition of all countries, depending on the stability concept used. In particular, the core-stability concept produces an encouraging result that does not seem to be supported by reality. We extend the game-theoretic model based on this concept by introducing macroeconomic effects of emission reduction measures in multiple countries. The computable general equilibrium model DART and damage functions from the RICE model are used to quantify the theoretical model. Contrary to the classical model, we find that, under damages in the IPCC range, the core of the resulting cooperative game is empty and no stable global agreement exists. This is mainly due to fossil fuel exporting countries, which are negatively affected by lower fossil fuel prices resulting from emission reduction measures. [ABSTRACT FROM AUTHOR]

Energy codes set efficiency standards for buildings in the majority of U.S. states. Under most energy codes, builders can comply by demonstrating that the projected private expenditures on energy bills for a proposed building are less than a certain threshold. Using theory and evidence, I show that energy codes would be improved if compliance was instead determined by the projected social damages. Relative to current practice, damage-based codes would likely provide stronger incentives for electricity than natural gas conservation, in most states. Implementation of damage-based codes would lead to substantial welfare gains. [ABSTRACT FROM AUTHOR]

The effects of extreme weather events and the resilience of the energy sector have become the subject of regulatory initiatives and ongoing research. We demonstrate the vulnerability of the German power sector to climate change and provide a qualitative and quantitative analysis of emerging risks from two types of extreme weather events: droughts and high temperatures. Our analysis is based on datasets covering temperature and drought data for the last 40 years. We present evidence of a higher frequency of power plant outages as a consequence of droughts and high temperatures. To characterize the vulnerability of the power sector we develop a capacity-adjusted drought index. The results are used to assess the monetary loss of power plant outages due to heatwaves and droughts and losses to consumers due to higher wholesale electricity prices and price volatility. An increasing frequency of such extreme weather events will aggravate the observed problem. [ABSTRACT FROM AUTHOR]

We study the effect of human capital on CO2 emissions using the Chinese provincial panel over the period 1997-2016. Allowing for cross-sectional dependence and structural breaks, we find a negative association between human capital and CO2 emissions in the long run and attribute it to the influences from younger workers and workers with advanced human capital. In particular, our results suggest that a one-year increase in average schooling reduces CO2 emissions by 12 per cent. Using disaggregated emission dataset by energy sources and end emitters, we demonstrate this negative association is likely to manifest through technology effect and the improvement in energy efficiency. These manifestations are limited to production sector. Our finding suggests a promising avenue for abating greenhouse gases without impeding economic growth. [ABSTRACT FROM AUTHOR]

The study examines the interactions of the energy R&D investments and the CO2 abatement policy using an endogenous energy R&D climate-economy model. Energy R&D investments affect the carbon emissions directly through efficiency improvements and indirectly by changing the comparative advantages of resources. This study considers the R&D investments in energy efficiency and low-carbon technology and explores how energy R&D investments accelerate the energy transition from fossil fuels to low-carbon technology. Three policies of carbon abatements are considered, namely, the optimal policy, the 2 °C policy, and the 1.5 °C policy. From the perspectives of benefits and costs, the optimal policy leads to the least abatement costs compared to the other two abatement policies. This study indicates that the more restrictive the abatement policy is, the more severe economic damage is caused in the short run, but more economic welfare is gained in the long run. [ABSTRACT FROM AUTHOR]

The development of sustainable energy systems is pivotal in addressing climate change, but is also a complex and multifaceted task that should take into consideration a wide range of technological and socio-economic issues. The energy trilemma concept acknowledges this complexity and emphasizes the need to achieve a balance among three main dimensions: energy security, energy equity, and environmental sustainability. This study provides a systematic treatment of the energy trilemma at the country level. A novel multicriteria assessment framework is employed to evaluate the related performance of countries. Such an evaluation provides useful results for policy making, as it enables the examination of the status of each country and the challenges that it faces in achieving energy sustainability. The obtained empirical results are analyzed over time as well as considering the characteristics of the countries. [ABSTRACT FROM AUTHOR]

Climate change is one of the greatest environmental challenges facing our planet in the foreseeable future, yet, despite international environmental agreements, global GHG emissions are still increasing. In this context, adaptation measures can play an important role in reducing climate impacts. These measures involve adjustments to economic or social structures to limit the impact of climate change without limiting climate change itself. To assess the interplay of adaptation and mitigation, we develop AD-MERGE, an integrated assessment model that includes both reactive ('flow') and proactive ('stock') adaptation strategies as well as a range of mitigation (energy) technologies. We find that applying adaptation optimally delays but does not prevent the transition to clean energy systems (carbon capture and sequestration systems, nuclear, and renewables). Moreover, applying both adaptation and mitigation is more effective than using just one. [ABSTRACT FROM AUTHOR]

The original rationale for adopting daylight saving time (DST) was energy savings. Modern research studies, however, question the magnitude and even direction of the effect of DST on electricity consumption. Representing the first meta-analysis in this literature, we collect 162 estimates from 44 studies and find that the mean reported estimate indicates slight electricity savings: 0.34% during the days when DST applies. The literature is not affected by publication bias, but the results vary systematically depending on the exact data and methodology applied. Using Bayesian model averaging we identify the most important factors driving the heterogeneity of the reported effects: data frequency, estimation technique (simulation vs. regression), and, importantly, the latitude of the country considered. Electricity savings are larger for countries farther away from the equator, while subtropical regions consume more electricity because of DST. [ABSTRACT FROM AUTHOR]

We analyze the potential of different knowledge stocks to decrease the technological gap between the leader in green technology inventions and its followers in order to identify if wait-and-see is a reasonable option to benefit from knowledge. Our econometric results indicate that it is difficult to decrease the technological gap and remain competitive in the generation of green technologies without timely accumulating green knowledge. Although effects from external green knowledge stocks also contribute to decrease the technological gap, the effects are moderate and they cannot compensate the lack of internal green competences. Non-green knowledge stocks even tend to increase the technological gap. [ABSTRACT FROM AUTHOR]

China has become the largest emitter of carbon dioxide in the world. However, the Chinese public's willingness to pay (WTP) for climate change mitigation is, at best, under-researched. This study draws upon a large national survey of Chinese public cognition and attitude towards climate change and analyzes the determinants of consumers' WTP for energy-efficient and environment-friendly products. Eighty-five percent of respondents indicate that they are willing to pay at least 10 percent more than the market price for these products. The econometric analysis indicates that income, education, age and gender, as well as public awareness and concerns about climate change are significant factors influencing WTP. Respondents who are more knowledgeable and more concerned about the adverse effect of climate change show higher WTP. In comparison, income elasticity is small. The results are robust to different model specifications and estimation techniques. [ABSTRACT FROM AUTHOR]

We analyze the effect of various combinations of state and national emissions policies on national emissions of a global pollutant, specifically, greenhouse gas emissions. We highlight the effect of unintended increases in out-of-state emissions on the efficacy of overlapping state policies. We show that emission taxes do not necessarily prevent a completely offsetting increase in out-of-state emissions when states add a state-level emissions tax to the national emissions tax. In particular, states small relative to their market will be unable to reduce national emissions with a state-level CO2 tax or a system of tradable permits. However, under a national cap-and-trade regime that allows states to be carved out, a state of any size can reduce national emissions by setting a tighter state cap. This combination yields a lower total cost than the equivalent combination of national and state CO2 taxes (if one exists) but increases the cost to consumers outside the market. [ABSTRACT FROM AUTHOR]

New research using data spanning centuries reveals the presence of very large energy efficiency rebound magnitudes, calling into question the energy use forecasts relied on by international bodies investigating climate change mitigation policy. This article uses those recent results to highlight and explain the key drivers that future energy modelers need to incorporate. [ABSTRACT FROM AUTHOR]