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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]

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]

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]

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]

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]

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]

In the context of sub-global participation in greenhouse gas mitigation efforts, this paper investigates the effectiveness of a Canada-U.S. emissions bubble under their existing regional trade agreement. It also explores the potential economic impact of carbon tariff harmonization through the implementation of a common Canada-U.S. external border tariff adjustment as a mean to address competitiveness issues. Using a multi-region, multi-sector computable general equilibrium model the paper finds that the creation of an emission bubble between the two countries could improve efficiency. The findings also suggest that a carbon tariff harmonization policy could give rise to distributional issues among Annex I regions and could fail to mitigate the negative competitiveness impacts of carbon abatement policies. [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]

Buildings are the dominant driver of daily and seasonal electric load cycles, and account for 40 percent of U.S. final energy use. They account for roughly 10 percent of direct U.S. CO2 emissions and roughly 40 percent once indirect emissions from electricity generation are included. This paper explores possible evolution of this sector over the coming century, its potential role climate action and response to climate policies, and the potential benefits advances in building technologies for addressing climate change. The paper presents a set of scenarios based on a detailed, service-based model of the buildings sector that is embedded within a long-term, global, integrated assessment model, MiniCAM. Eight scenarios are created in total, combining sets of assumptions regarding U.S. building service demand growth, two assumptions regarding the improvements in building energy technologies, two assumptions regarding long-term U.S. climate action --- a no-climate-action assumption and an assumption of market-based policies to reduce U.S. emissions consistent with a 450 ppmv global target. Through these eight scenarios, the paper comments on the implications of continued growth in building service demands, the ability of efficiency measures to reduce emissions, the strong link between decarbonization of electricity generation and building sector emissions. [ABSTRACT FROM AUTHOR]

This paper discusses whether a new paradigm is necessary for independent economic regulation of electricity land closely associated natural gas) systems. We begin by summarizing the nature of the traditional model of electricity reform and the place of economic regulation within it. Next we outline the drivers for changing the current model of electricity regulation, namely, the maturity of the existing model, the reality of changing circumstances, and the coming of age of climate change concern. We go on to discuss the premises on which a new model of regulation should be based. These are: remembering the successes of the current system of regulation; a new focus on processes not just outcomes; a recognition of the economics of climate change; and the appropriate management of uncertainty. We then highlight the key elements of a new model for regulation: new processes of regulation; new models of competition and the issues raised by focus on climate change. The paper draws heavily on the experience of the UK, but has direct implications for the rest of the European Union countries and for other countries whose regulatory systems mirror them. [ABSTRACT FROM AUTHOR]

This paper introduces a novel approach to the hybrid modelling of technological change climate stabilisation cost literature. We describe how a post-Keynesian macroeconomic model of sectoral demand, E3MG, has been combined with investments in 26 energy technologies from a submodel, ETM. E3MG is a 20-region global energy-environment-economy (E3) econometric, dynamic simulation model. It is a component of the UK Tyndall Center's Community Integrated Assessment System. Technological change is endogenous, through its effects on general energy use and sectoral demand, and on energy technologies through the cost-reducing effects o f learning by doing and economies of scale. This approach directly challenges the notion that historically estimated models cannot be use for long-term analysis. The paper concludes with an account of how technological progress is induced in this hybrid system by high relative prices of carbon designed to achieve climate stabilization at 450ppmv. [ABSTRACT FROM AUTHOR]

Scientific evidence indicates that greenhouse gases emissions related to human activity are a significant contributor to global climate change. This paper investigates the impact of policy prescriptions and technologies for reducing U.S. greenhouse gas emissions. The analysis uses NERA's NewERA integrated model, which combines a top-down general equilibrium macro model of the U.S. economy with a detailed bottom-up model of the North American electricity sector. It examines the cost of cutting emissions by 0% to 80% of 2005 levels by 2050 under several scenarios, which consider different assumptions about policy choices ranging from purely market-based policy such as a cap-and-trade program to purely command-and-control policies and technology involving availability and efficacy of nuclear, Carbon Capture and Storage, renewables, and end-use efficiency technology. Our analysis shows a distinct efficiency advantage for market-based mechanisms and interaction of command-and-control mandates with market-based policies increase market distortions leading to higher welfare loss. We show that under such a mixed policy regime, carbon price is an unsuitable indicator of economic costs. [ABSTRACT FROM AUTHOR]

This paper examines a range of technological and regulatory approaches to reducing greenhouse gas (GHG) emissions. Availability of new technologies will control how the economy and energy infrastructure respond to any future climate policies. How such policies interact with other types of environmental regulations will also influence the best options for meeting emissions goals. To investigate these effects, the ADAGE model is used to examine policy impacts for several climate and technology scenarios, focusing on key factors such as emissions, technology deployment, energy prices and macroeconomic indicators. In general, the simulations indicate that reductions in GHG emissions can be accomplished with limited economic adjustments, although the impacts depend on both the regulatory approaches used and the future availability of new low-carbon technologies. [ABSTRACT FROM AUTHOR]

This paper presents an overview of the study design and the results of the EMF 24 U.S. Technology Scenarios. The EMF 24 U.S. Technology Scenarios engaged nine top energy-environment-economy models to examine the implications of technological improvements and technological availability for reducing U.S. greenhouse gas emissions by 50% and 80% by 2050. The study confirms that mitigation at the 50% or 80% level will require a dramatic transformation of the energy system over the next 40 years. The study also corroborates the result of previous studies that there is a large variation among models in terms of which energy strategy is considered most cost-effective. Technology assumptions are found to have a large influence on carbon prices and economic costs of mitigation. [ABSTRACT FROM AUTHOR]

This paper evaluates with numerical computations the respective merits of two competing notions of coalition stability in the standard global public goods model of climate change. To this effect it uses the CWS integrated assessment model. After a reminder of the two game theoretical stability notions involved--core-stability and internal-external stability--and of the CWS model, the former property is shown to hold for the grand coalition if resource transfers of a specific form between countries are introduced. The latter property appears to hold neither for the grand coalition nor for most large coalitions whereas it is verified for most small coalitions in a weak sense that involves transfers. Finally, coalitions, stable in either sense, that perform best in terms of carbon concentration and global welfare are always heterogeneous ones. Therefore, if coalitional stability is taken as an objective, promoting small or homogeneous coalitions is not to be recommended. [ABSTRACT FROM AUTHOR]

Climate policy measures aimed at power markets influence the cost structure of producers and price patterns, and are therefore likely to influence the production decision of power plants, even in the short run. When power plants have costs related to starting and stopping, decisions on short-term production are intertemporal, and the conventional 'price vs. marginal cost' rule is not sufficient to predict production in thermal power plants. This paper analyzes how the optimal production decision is influenced by climate policies: namely, CO2 trading mechanisms, the expansion of renewables and the interaction between these policies. The main result is that higher power price variation (as a result of increased wind power production) makes the thermal power producer less flexible, but the effect on emissions is ambiguous. A CO2 cost (as a result of an emission trading system) increases the flexibility of the producer and the operation decision resembles the conventional 'price vs. marginal cost' rule more. This implies lower emissions. However, when the CO2 price is coupled with higher power price variation, the positive effects may be reversed since the two policies have opposing effects. [ABSTRACT FROM AUTHOR]

Concerns about the cost of CO2 capture and sequestration, and the effectiveness of carbon abatement policies loom large in discussions on climate change mitigation. Several writers address the issue from various perspectives. This paper attempts to add relative realism to discussions on CO2 capture costs, and, the deployment of carbon capture technology in the UK by using publicly available company data on the long term capacity expansion and CO2 capture investment programmes of selected power plants in the UK. With an estimated £8 billion plan to install a generation capacity of 11 GW and capture capability of 44 MtCO2/year, it is imperative to optimise this huge potential investment. A least-cost optimisation model was formulated and solved with the LP algorithm available in GAMS. The model was then applied to address a number of issues, including the choice of an optimal carbon abatement policy within the EU-ETS framework. The major findings of the study include (a) the long term total cost curve of CO2 capture has three phases -- rising, plateau, rising; (b) alternative capture technologies do not have permanent relative cost advantages or disadvantages; (c) Government incentives encourage carbon capture and the avoidance of emission penalty charges; and (d) the goals of EU-ETS are more effectively realised with deeper cuts in the EUA ratios titan merely hiking the emission penalty, as proposed in EU-ETS Phase II. [ABSTRACT FROM AUTHOR]

Why do countries' greenhouse gas (GHG) intensities differ? How much of a country's GHG intensity is set by inflexible national circumstances, and how much may be altered by policy? These questions are common in climate change policy discourse and may influence emission reduction allocations. Despite the policy relevance of the discussion, little quantitative analysis has been done. In this paper we address these questions in the context of the G7 by applying a pair of simple quantitative methodologies: decomposition analysis and allocation of fossil fuel production emissions to end-users instead of producers. According to our analysis and available data, climate and geographic size--both inflexible national characteristics--can have a significant effect on a country's GHG intensity. A country's methods for producing electricity and net trade in fossil fuels are also significant, while industrial structure has little effect at the available level of data disaggregation. [ABSTRACT FROM AUTHOR]

Technology is a central issue for the global climate change problem, requiring analysis tools that can examine the impact of specific technologies within a long-term, global context. This paper describes the architecture of the ObjECTS-MiniCAM integrated assessment model, which implements a long-term, global model of energy, economy, agriculture, land-use, atmosphere, and climate change in a framework that allows the flexible incorporation of explicit technology detail. We describe the implementation of a "bottom-up" representation of the transportation sector as an illustration of this approach, in which the resulting hybrid model is fully integrated, internally consistent and theoretically compatible with the regional and global modeling framework. The analysis of the transportation sector presented here supports and clarifies the need for a comprehensive strategy promoting advanced vehicle technologies and an economy-wide carbon policy to cost-effectively reduce carbon emissions from the transportation sector in the long-term. [ABSTRACT FROM AUTHOR]

Climate change is a long-term issue due to the long lifespan of greenhouse gases (GHG) and the delayed response of the climate system. This paper investigates the long-term economic consequences of both climate change impacts and mitigation efforts by applying the multi-regional, multi-sectoral integrated assessment model WIAGEM based on GTAP-EL coupled with the reduced-form multi-gas climate model ICM. We investigate emissions reduction paths to reach a radiative forcing target of 4.5 W/m². Economic impacts are studied and compared with and without the inclusion of all GHG gases. We find that multi-gas emissions reduction causes less economic losses compared with a case where only CO2 emissions reductions would be considered. [ABSTRACT FROM AUTHOR]

The non-CO2 greenhouse gases have so far jointly contributed around 40 percent to overall global warming. In this paper we examine the role of non-CO2 greenhouse gases in meeting long-term climate change targets. For this purpose, we develop climate mitigation scenarios aimed at achieving long-term stabilization of global radiative forcing. We use the MESSAGE model for a thorough bottom-up representation of the six Kyoto greenhouse gases and corresponding mitigation technologies. This approach endogenizes energy feedback effects from mitigation of non-CO2 gases and takes into account the interplay and side benefits that exist across GHGs. We analyze two mitigation scenarios that stabilize global radiative forcing at 4.5 W/m² as compared to pre-industrial times-one allowing only for CO2 mitigation and another with multigas mitigation. In addition, we also investigate a lower stabilization level of 3 W/m² and look into the implications this has for abatement strategies. Our approach helps us to identify a portfolio of measures in the energy, industry and agricultural sectors for achieving a proposed climate target. We find that considering the full basket of GHGs improves the effectiveness of the mitigation portfolio resulting in significantly lower costs, especially in the short term. In the long run, the bulk of the emissions reductions are still found to come from CO2 and this effect becomes more pronounced under the more stringent climate target. This emphasizes the importance of a diverse mitigation portfolio that includes both CO2 and non-CO2 related abatement options in meeting long-term climate targets. [ABSTRACT FROM AUTHOR]

Economic analyses of climate change policies frequently focus on reductions of energy-related carbon dioxide emissions via market-based, economy-wide policies. The current course of environment and energy policy debate in the United States, however, suggests an alternative outcome: sector-based and/or inefficiently designed policies. This paper uses a collection of specialized, sector-based models in conjunction with a computable general equilibrium model of the economy to examine and compare these policies at an aggregate level. We examine the relative cost of different policies designed to achieve the same quantity of emission reductions. We find that excluding a limited number of sectors from an economy-wide policy does not significantly raise costs. Focusing policy solely on the electricity and transportation sectors doubles costs, however, and using non-market policies can raise cost by a factor often. These results are driven in part by, and are sensitive to, our modeling of pre-existing tax distortions. [ABSTRACT FROM AUTHOR]

This paper uses the ENTICE-BR model to study the effects of various climate stabilization policies. Because the ENTICE-BR model includes benefits from reduced climate damages, it is possible to calculate the net economic impact of each policy. In general, only the least restrictive concentration limit is welfare enhancing. While the policies are welfare enhancing in simulations using optimistic assumptions about the potential of the backstop energy technology, such assumptions mean that the backstop is also used in the no-policy base case, so that climate change itself is less of a problem. Finally, assumptions about the nature of R&D markets are important. Removing the assumption of partial crowding out from energy R&D nearly doubles the gains from policy-induced energy R&D. [ABSTRACT FROM AUTHOR]

This paper assesses endogenous technical change (ETC) in climate-economy models, using the models in the Innovation Modeling Comparison Project (IMCP) as a representative cross-section. ETC is now a feature of most leading models. Following the new endogenous growth literature and the application of learning curves to the energy sector, there are two main concepts employed: knowledge capital and learning curves. The common insight is that technical change is driven by the development of knowledge capital and its characteristics of being partly non-rival and partly non-excludable. There are various different implementations of ETC. Recursive CGE models face particular difficulties in incorporating ETC and increasing returns. The main limitations of current models are: the lack of uncertainty analysis; the limited representation of the diffusion of technology; and the homogeneous nature of agents in the models including the lack of representation of institutional structures in the innovation process. [ABSTRACT FROM AUTHOR]

The high costs for the US economy of mitigating climate change have been cited by the Bush administration as one of the reasons for rejecting US ratification of the Kyoto Protocol. A range of cost estimates are assessed in the IPCC's third report (2001), but they are hedged with so many qualifications that it is not easy to reach useful conclusions. This paper organises, some of the quantitative information on costs of greenhouse gas mitigation for the US published before the US rejection of Kyoto. The aim is to put them in a wider context, e.g., allowing for non-climate benefits, and to draw conclusions that are robust in the face of the uncertainties. Important lessons can be drawn for how costs can be reduced in any future international commitment by the US to reduce emissions. Provided policies are expected, gradual and well designed (e.g., through auctioned Annex I tradable permits with revenues used to reduce burdensome tax rates) the net costs for the US of mitigation are likely to be insignificant, that is within the range ±1% of GDP. [ABSTRACT FROM AUTHOR]

The paper presents a simplified model of the form often used to project long-term emissions of carbon dioxide from energy production and use. It then considers three uncertainties in parameters of the model concerning (a) the rate of improvement in energy efficiency, (b) the costs of environmental damage, and (c) the rate of technical progress in the development and use of technologies for abating CO[sub 2] emissions. Monte Carlo analysis is used to estimate the frequency distributions of costs and benefits under different policy assumptions. The results suggest that the possibilities of an economic surprise cannot be ruled out and that 'technology policies' to support the development of non-carbon technologies directly are robust under uncertainty. Such policies can also be defended by reference to their option value, to their environmental benefits, and to the positive externalities of innovation. [ABSTRACT FROM AUTHOR]