Publications

Words & Thoughts

Publications

Here you can find our most important output about our latest work. We have published 20 articles in Nature Publishing Group journals since 2018

Kim Y.J, Sarmiento L.

The Air Quality Effects of Uber

RFF Working Papers Series , Working Paper (21-34) - 2021

This study identifies the effect of Uber on the air quality of urban agglomerations in the United States. For this, we infer its causal impact on the Environmental Protection Agency’s air quality index with state-of-the-art difference-in-difference estimators accounting for Uber’s staggered implementation and dynamic treatment effects. Results show that Uber improves air quality. The value of the air quality index and the number of unhealthy air quality episodes decrease after its introduction. We provide evidence that the bulk of the improvement comes from declining ozone levels during the summer. Notably, results hold for a plethora of different specifications, samples, and robustness exercises. To the best of our knowledge, this article is the first to estimate the air quality effects of ride-hailing technologies empirically in the United States. However, further research is required to identify the exact mechanisms through which Uber’s impact on the transportation system affects air quality.

Kim Y.J., Cho S-H., Sharma B.

Constructing efficient portfolios of low-carbon technologies

Renewable and Sustainable Energy Reviews , - 2021

To foster the development, multiple sources of uncertainty associated with benefits and costs of innovation portfolios from low carbon investment need to be considered. We apply Modern Portfolio Theory to construct efficient portfolios of different low-carbon technology fields. The empirical framework is applied to four countries (i.e., Germany, the United Kingdom, Italy, and France) for six low-carbon technology fields (i.e., renewable energy, smart grid, energy efficiency, sustainable transport, carbon capture and storage, and nuclear power) categorized based on priority areas of the EU's 2008 Strategic Energy Technology Plan. The four main findings are: (1) the highest priority technology fields with the minimum risk portfolio are nuclear power in Germany, renewable energy in the United Kingdom, and energy efficiency in Italy and France, (2) the highest priority technology field with the maximum risk portfolio is sustainable transport in Germany, the United Kingdom, and France, and smart grid in Italy, (3) sustainable transport declines in priority as risk decreases in the portfolios of Germany, the United Kingdom, and France, while smart grid declines in priority as risk decreases in the portfolio in Italy, and (4) the presence of negative correlations over time among expected Return on Investments across energy technology fields improves using the Modern Portfolio Theory framework as risk diversification strategy. Our analysis provides efficient portfolios of low-carbon technologies, which can help shape the overall strategy and coordinate each country's comparative advantage by proposing new laws and policies, monitoring existing ones, and managing budget.

Cattaneo C., Grieco D.

Turning opposition into support to immigration: The role of narratives

Journal of Economic Behavior & Organization , Volume 190, October 2021, Pages 785-801 - 2021

The way we collectively discuss migration shapes citizens perceptions of migrants and their influence on our society. This paper investigates whether a narrative about the positive impact of immigrants on the hosting economy affects natives’ behaviour towards migrants. To shed light on the underlying mechanism, we present a simple theoretical framework that models the relationship between beliefs, attitude and behaviour and identifies the sequential channels through which a narrative might be useful in changing behaviour. We test its predictions through an online survey experiment, where we deliver UK natives a favourable narrative about migrants. Treated subjects revise their beliefs about migrants and exhibit significantly more positive self-reported attitudes and more pro-migrant behaviour. Moreover, they update beliefs in a way that gives support to the existence of confirmation bias.

Gutiérrez-Meave R., Rosellón J., Sarmiento L.

The effect of changing marginal-cost to physical-order dispatch in the power sector

RFF Working Papers Series , Working Paper (21-19) - 2021

The analysis of local environmental policies is essential when evaluating the consistency of national public policies vis-à-vis the compliance of global agreements to reduce climate change. This study explores one of these policies; the 2021 Mexican reform to change electric power dispatch from a marginal-cost-based to a command and control physical system prioritizing power generation from the state power company. The new law forces the dispatch of the state company power facilities before private power producers. We use the GENeSYS-MOD techno-economic model to determine the reform’s effect on the power system’s generation mix, cost structure, and anthropogenic emissions. For this, we optimize the model under three distinct scenarios; a business-as-usual scenario with no changes to the merit order, a model with the new physical order dispatch, and an additional case where in addition to the shift to the physical dispatch, we reduce the price of fuel oil below natural gas prices to simulate the current behavior of the power company. It is relevant to note that we optimize the energy system without any assumption regarding renewable targets or climate goals because of political uncertainty and the need of pinpoint the effect of the merit order change while avoiding possible variations in the state-space arising from other constraints. Our results show that by 2050, the new dispatch rule increases the market power of the state company to 99% of total generation and decreases the share of renewable technologies in the generation mix from 72%to 51%. Additionally, cumulative power sector emissions increase by 563 Mega-tons of CO2, which with the current cost of carbon in the European Emissions Trading System translates to around 36 billion Euros.

Sarmiento L.

Air pollution and the productivity of high-skill labor: Evidence from court hearings

The Scandinavian Journal of Economics , - 2021

Air pollution’s influence on cognitive productivity is a highly relevant and not fully understood economic issue. This study provides evidence of an adverse effect of exposure on the productivity of Mexican judicial workers. The empirical strategy approximates productivity with the length of the hearing and infers causality through instrumental variable panel models. Results show that nitrogen dioxides and particulate matter decrease judicial workers’ productivity; increasing particulate matter by ten units raises hearings length by 6.7%. Back-of-the-envelope calculations suggest that if particulate matter had been ten units lower, the sample’s judicial system would have gained 81,712 minutes or roughly 56 workdays between 2015 and 2017.

Bertram C. et al. (Bosetti V., Drouet L., Emmerling J.)

Energy system developments and investments in the decisive decade for the Paris Agreement goals

Environmental Research Letters , Volume 16, Number 7 - 2021

The Paris Agreement does not only stipulate to limit the global average temperature increase to well below 2 °C, it also calls for 'making finance flows consistent with a pathway towards low greenhouse gas emissions'. Consequently, there is an urgent need to understand the implications of climate targets for energy systems and quantify the associated investment requirements in the coming decade. A meaningful analysis must however consider the near-term mitigation requirements to avoid the overshoot of a temperature goal. It must also include the recently observed fast technological progress in key mitigation options. Here, we use a new and unique scenario ensemble that limit peak warming by construction and that stems from seven up-to-date integrated assessment models. This allows us to study the near-term implications of different limits to peak temperature increase under a consistent and up-to-date set of assumptions. We find that ambitious immediate action allows for limiting median warming outcomes to well below 2 °C in all models. By contrast, current nationally determined contributions for 2030 would add around 0.2 °C of peak warming, leading to an unavoidable transgression of 1.5 °C in all models, and 2 °C in some. In contrast to the incremental changes as foreseen by current plans, ambitious peak warming targets require decisive emission cuts until 2030, with the most substantial contribution to decarbonization coming from the power sector. Therefore, investments into low-carbon power generation need to increase beyond current levels to meet the Paris goals, especially for solar and wind technologies and related system enhancements for electricity transmission, distribution and storage. Estimates on absolute investment levels, up-scaling of other low-carbon power generation technologies and investment shares in less ambitious scenarios vary considerably across models. In scenarios limiting peak warming to below 2 °C, while coal is phased out quickly, oil and gas are still being used significantly until 2030, albeit at lower than current levels. This requires continued investments into existing oil and gas infrastructure, but investments into new fields in such scenarios might not be needed. The results show that credible and effective policy action is essential for ensuring efficient allocation of investments aligned with medium-term climate targets.

Piontek F., Drouet L., Emmerling J., Kompas T., Méjean A., Otto C., Rising J., Soergel B., Taconet N., Tavoni M.

Integrated perspective on translating biophysical to economic impacts of climate change

Nature Climate Change , Volume 11, pages 563–572 - 2021

Estimates of climate change’s economic impacts vary widely, depending on the applied methodology. This uncertainty is a barrier for policymakers seeking to quantify the benefits of mitigation. In this Perspective, we provide a comprehensive overview and categorization of the pathways and methods translating biophysical impacts into economic damages. We highlight the open question of the persistence of impacts as well as key methodological gaps, in particular the effect of including inequality and adaptation in the assessments. We discuss the need for intensifying interdisciplinary research, focusing on the uncertainty of econometric estimates of damages as well as identification of the most socioeconomically relevant types of impact. A structured model intercomparison related to economic impacts is noted as a crucial next step.

Pai S., Emmerling J., Drouet L., Zerriffi H., Jewell J.

Meeting well-below 2°C target would increase energy sector jobs globally

One Earth , 4 (7), 1026--1036, July 2021 - 2021

To keep global warming well-below 2°C, fossil fuels need to dramatically decline and be replaced by low-carbon energy sources. While the technologies to replace fossil fuels are widely available, support for their expansion is often linked to the impact they have on fossil fuel jobs. Here, we analyze this question quantitatively by creating a novel dataset of job footprints in over 50 countries. These job intensities are applied to output from an integrated assessment model. We find that, by 2050, jobs in the energy sector would grow from today's 18 million to 21 million in the reference scenario and even more, to 26 million, under our well-below 2°C scenario. Overall, in 2050, under well-below 2°C scenario, of the total jobs, 84% would be renewable jobs, 11% fossil fuels, and 5% nuclear jobs. While fossil fuel extraction jobs rapidly decline, these losses are compensated by gains in solar and wind jobs, particularly in the solar and wind manufacturing sector.

Steg L., Perlaviciute G., Sovacool B.K., Bonaiuto M., Diekmann A., Filippini M., HindriksF., Jacobbson Bergstad C., Matthies E., Matti S., Mulder M., Nilsson A., Pahl S., Roggenkamp M., Schuitema G., Stern P.C., Tavoni M., Thøgersen J., Woerdman E.

A Research Agenda to Better Understand the Human Dimensions of Energy Transitions

Frontiers in Psycology , 25 June 2021 - 2021

The Social Sciences and Humanities (SSH) have a key role to play in understanding which factors and policies would motivate, encourage and enable different actors to adopt a wide range of sustainable energy behaviours and support the required system changes and policies. The SSH can provide critical insights into how consumers could be empowered to consistently engage in sustainable energy behaviour, support and adopt new technologies, and support policies and changes in energy systems. Furthermore, they can increase our understanding of how organisations such as private and public institutions, and groups and associations of people can play a key role in the sustainable energy transition. We identify key questions to be addressed that have been identified by the Platform for Energy Research in the Socio-economic Nexus (PERSON, see person.eu), including SSH scholars who have been studying energy issues for many years. We identify three main research themes. The first research theme involves understanding which factors encourage different actors to engage in sustainable energy behaviour. The second research theme focuses on understanding which interventions can be effective in encouraging sustainable energy behaviour of different actors, and which factors enhance their effects. The third research theme concerns understanding which factors affect public and policy support for energy policy and changes in energy systems, and how important public concerns can best be addressed as to reduce or prevent resistance.

Peng W., Iyer G., Bosetti V., Chaturvedi V., Edmonds J., Fawcett A.A., Hallegatte S., Victor D.G., van Vuuren D., Weyant J.

Climate policy models need to get real about people — here’s how

Nature , 594, 174-176 - 2021

To predict how society and political systems might actually respond to warming, upgrade integrated assessment models. Political support for decarbonizing the global economy is at an all-time high. The good news is that about two-thirds of carbon emissions come from countries that have committed to reach ‘net zero’ by mid-century — they aim to cut their greenhouse-gas outputs and capture as much as they emit1. The bad news? The computer models that analysts use to assess routes to achieve such goals are missing a crucial factor: politics. These ‘integrated assessment models’ (IAMs) combine insights from climate science and economics to estimate how industrial and agricultural processes might be transformed to tackle global warming. They’re encoded with knowledge about technologies, such as pollution-free power plants and the cost of electric vehicles. Thus IAMs enable researchers to probe, for example, how a carbon tax might induce big cuts in emissions2, or how a drive to decarbonize the transport sector could shift investments towards greener fuels and electricity.[...] As a first step, we — a group of political economists and IAM specialists — identified eight key areas in which insights from our disciplines can improve models’ relevance for real-world policy and investment choices (see ‘Eight political economy insights’). We also assessed numerous potential reforms (see ‘How to improve models’ and Supplementary information for a full list of 11 reforms), so that researchers can examine the trade-offs between making models tractable and making them more useful for real-world decisions.

Marangoni G., Lamontagne J.R., Quinn J.D., Reed P.M., Keller K.

Adaptive mitigation strategies hedge against extreme climate futures

Climatic Change , 166, Article number: 37 - 2021

The United Nations Framework Convention on Climate Change agreed to “strengthen the global response to the threat of climate change, in the context of sustainable development and efforts to eradicate poverty” (UNFCCC 2015). Designing a global mitigation strategy to support this goal poses formidable challenges. For one, there are trade-offs between the economic costs and the environmental benefits of averting climate impacts. Furthermore, the coupled human-Earth systems are subject to deep and dynamic uncertainties. Previous economic analyses typically addressed either the former, introducing multiple objectives, or the latter, making mitigation actions responsive to new information. This paper aims at bridging these two separate strands of literature. We demonstrate how information feedback from observed global temperature changes can jointly improve the economic and environmental performance of mitigation strategies. We focus on strategies that maximize discounted expected utility while also minimizing warming above 2 °C, damage costs, and mitigation costs. Expanding on the Dynamic Integrated Climate-Economy (DICE) model and previous multi-objective efforts, we implement closed-loop control strategies, map the emerging trade-offs and quantify the value of the temperature information feedback under both well-characterized and deep climate uncertainties. Adaptive strategies strongly reduce high regrets, guarding against mitigation overspending for less sensitive climate futures, and excessive warming for more sensitive ones.

Lamperti F. , Bosetti V., Roventini A., Tavoni M., Treibich T.

Three green financial policies to address climate risks

Journal of Financial Stability , Volume 54, June 2021, 100875 - 2021

Which policies can increase the resilience of the financial system to climate risks? Recent evidence on the significant impacts of climate change and natural disasters on firms, banks and other financial institutions call for a prompt policy response. In this paper, we employ a macro-financial agent-based model to study the interaction between climate change, credit and economic dynamics and test a mix of policy interventions. We first show that financial constraints exacerbate the impact of climate shocks on the economy while, at the same time, climate damages to firms make the banking sector more prone to crises. We find that credit provision can both increase firms’ productivity and their financial fragility, with such a trade-off being exacerbated by the effects of climate change. We then test a set of “green” finance policies addressing these risks, while fostering climate change mitigation: i) green Basel-type capital requirements, ii) green public guarantees to credit, and iii) carbon-risk adjustment in credit ratings. All the policies reduce carbon emissions and the resulting climate impacts, though moderately. However, their effects on financial and real dynamics is not straightforwardly positive. Some combinations of policies fuel credit booms, exacerbating financial instability and increasing public debt. We show that the combination of the three policies leads to a virtuous cycle of (mild) emission reductions, stable financial sector and high economic growth. Additional tools would be needed to fully adapt to climate change. Hence, our results point to the need to complement financial policies cooling down climate-related risks with mitigation policies curbing emissions from real economic activities.

Giarola S., Molar-Cruz A., Vaillancourt K., Bahn O., Sarmiento L., Hawkes A., Brown M.

The role of energy storage on the uptake of renewable energy: A model comparison approach

Energy Policy , - 2021

The power sector needs to ensure a rapid transition towards a low-carbon energy system to avoid the dangerous consequences of greenhouse gas emissions. Storage technologies are a promising option to provide the power system with the flexibility required when intermittent renewables are present in the electricity generation mix. This paper focuses on the role of electricity storage in energy systems with high shares of renewable sources. The study encompasses a model comparison approach where four models (GENeSYS-MODE, MUSE, NATEM, and urb-MX) are used to analyse the storage uptake in North America. The analysis addresses the conditions affecting storage uptake in each country and its dependence on resource availability, technology costs, and public policies. Results show that storage may promote emissions reduction at lower costs when renewable mandates are in place whereas in presence of carbon taxes, renewables may compete with other low-carbon options. The study also highlights the main modelling approach shortcomings in the modelling of electricity storage in integrated assessment models.

Vesco P., Kovacic M., Mistry M. N., Croicu M.

Climate variability, crop and conflict: Exploring the impacts of spatial concentration in agricultural production

Journal of Peace Research , - 2021

Although substantive agreement exists on the role of climate variability and food scarcity in increasing violence, a limited number of studies have investigated how food resources affect violent conflict. This article explores the complex linkages between climate variability, agricultural production and conflict onset, by focusing on the spatial distribution of crop production in a cross-country setting. We hypothesize that spatial differences in crop production within countries are a relevant factor in shaping the impact of climate variability on conflict in agriculturally -dependent countries. To test this hypothesis, we rely on high-resolution global gridded data on the local yield of four main crops for the period 1982–2015 and aggregate the grid-cell information on crop production to compute an empirical indicator of the spatial concentration of agricultural production within countries. Our results show that the negative impacts of climate variability lead to an increase in the spatial concentration of agricultural production within countries. In turn, the combined effect of climate extremes and crop production concentration increases the predicted probability of conflict onset by up to 14% in agriculturally dependent countries.

Bezerra P., Ferreira da Silva F.T., Cruz T., Mistry M.N., Arroyo E.V., Magalar L., De Cian E., Lucena A, Schaeffer R.

Impacts of a warmer world on space cooling demand in Brazilian households

Energy and Buildings , Volume 234, 1 March 2021, 110696 - 2021

Air Conditioning (AC) appliances are a highly effective adaptation strategy to rising temperatures, thus making future climate conditions an important driver of space cooling energy demand. The main goal of this study is to assess the impacts of climate change on Cooling Degree Days computed with wet-bulb temperature (CDDwb) and household space cooling demand in Brazil. We compare the needs under three specific warming levels (SWLs) scenarios (1.5 °C, 2 °C and 4 °C) to a baseline with historically observed meteorological parameters by combining CDDwb projections with an end-use model to evaluate the energy requirements of air conditioning. The effects of the climate change were isolated, and no future expansion in AC ownership considered. Carbon dioxide (CO2) emissions associated with AC energy demand are also calculated. Results show an increase in both average CDDwb and AC electricity consumption for the global warming scenarios in all Brazilian regions. The Northern region shows the highest increase in CDDwb (187% in CDDwb for SWL 4 °C), while the Southeast presents the highest AC energy consumption response (326% in the AC energy consumption for SWL 4 °C) compared to the baseline. At the national level, CDDwb and the AC energy consumption in all SWLs scenarios grow by 70%, 99% and 190%, respectively.

García-León D., Standardi G., Staccione A.

An integrated approach for the estimation of agricultural drought costs

Land Use Policy , Volume 100, January 2021, 104923 - 2021

This study proposes a novel method to assess the overall economic effects of agricultural droughts using a coupled agronomic-economic approach that accounts for the direct and indirect impacts of this hazard in the economy. The proposed methodology is applied to Italy, where years showing different drought severity levels were analysed. Agricultural drought stress was measured using the fraction of Absorbed Photosynthetically Active Radiation (fAPAR). Using a comprehensive, field-level dataset on agricultural yields, fAPAR-based statistical models were applied to major Italian crops and direct crop productivity impacts were estimated. Local-level, crop-dependent productivity shocks were fed into a regionalised Computable General Equilibrium model specifically calibrated for the Italian economy. Direct and indirect aggregate impacts after allowing for inter-regional trade and input reallocation were obtained. Total estimated damages ranged from 0.55 to 1.75 billion euro, depending on the overall drought severity experienced, while regional losses showed large spatial variability. Although most of the losses were concentrated on agriculture, other related sectors, such as food industry manufacturing and wholesale services, were also substantially affected. Moreover, our simulations suggested the presence of a land-use substitution effect from less to more drought-resistant crops following a drought. This study sheds light on the characterisation of the total damages caused by droughts while provides a tool with applicability in the implementation of drought risk management plans and the evaluation of drought management policies.

Angelova D., Göser M., Wimmer S., Sauer J.

How efficient are German life sciences? Econometric evidence from a latent class stochastic output distance model

PLOS ONE , 16(3): e0247437 - 2021

This article investigates the technical efficiency in German higher education while accounting for possible heterogeneity in the production technology. We investigate whether a latent class model would identify the different sub-disciplines of life sciences in a sample of biology and agricultural units based on technological differences. We fit a latent class stochastic frontier model to estimate the parameters of an output distance function formulation of the production technology to investigate if a technological separation is meaningful along sub-disciplinary lines. We apply bootstrapping techniques for model validation. Our analysis relies on evaluating a unique dataset that matches information on higher educational institutions provided by the Federal Statistical Office of Germany with the bibliometric information extracted from the ISI Web of Science Database. The estimates indicate that neglecting to account for the possible existence of latent classes leads to a biased perception of efficiency. A classification into a research-focused and teaching-focused decision-making unit improves model fit compared to the pooled stochastic frontier model. Additionally, research-focused units have a higher median technical efficiency than teaching-focused units. As the research focus is more prevalent in the biology subsample an analysis not considering the potential existence of latent classes might misleadingly give the appearance of a higher mean efficiency of biology. In fact, we find no evidence of a difference in the mean technical efficiencies for German agricultural sciences and biology using the latent class model.

Chemura A., Tawona Mudereri B., Yalew A.W., Gornott C.

Climate change and specialty coffee potential in Ethiopia

Nature , Sci Rep 11, 8097 (2021) - 2021

Current climate change impact studies on coffee have not considered impact on coffee typicities that depend on local microclimatic, topographic and soil characteristics. Thus, this study aims to provide a quantitative risk assessment of the impact of climate change on suitability of five premium specialty coffees in Ethiopia. We implement an ensemble model of three machine learning algorithms to predict current and future (2030s, 2050s, 2070s, and 2090s) suitability for each specialty coffee under four Shared Socio-economic Pathways (SSPs). Results show that the importance of variables determining coffee suitability in the combined model is different from those for specialty coffees despite the climatic factors remaining more important in determining suitability than topographic and soil variables. Our model predicts that 27% of the country is generally suitable for coffee, and of this area, only up to 30% is suitable for specialty coffees. The impact modelling showed that the combined model projects a net gain in coffee production suitability under climate change in general but losses in five out of the six modelled specialty coffee growing areas. We conclude that depending on drivers of suitability and projected impacts, climate change will significantly affect the Ethiopian speciality coffee sector and area-specific adaptation measures are required to build resilience.

Giarola S., Mittal S., Vielle M., Perdana S., Campagnolo L., Delpiazzo E., Bui H., Kraavi A.A., Kolpakov A., Sognnaes I., et Al.

Challenges in the harmonisation of global integrated assessment models: A comprehensive methodology to reduce model response heterogeneity

Science of The Total Environment , Volume 783, 20 August 2021, 146861 - 2021

Harmonisation sets the ground to a solid inter-comparison of integrated assessment models. A clear and transparent harmonisation process promotes a consistent interpretation of the modelling outcomes divergences and, reducing the model variance, is instrumental to the use of integrated assessment models to support policy decision-making. Despite its crucial role for climate economic policies, the definition of a comprehensive harmonisation methodology for integrated assessment modelling remains an open challenge for the scientific community. This paper proposes a framework for a harmonisation methodology with the definition of indispensable steps and recommendations to overcome stumbling blocks in order to reduce the variance of the outcomes which depends on controllable modelling assumptions. The harmonisation approach of the PARIS REINFORCE project is presented here to layout such a framework. A decomposition analysis of the harmonisation process is shown through 6 integrated assessment models (GCAM, ICES-XPS, MUSE, E3ME, GEMINI-E3, and TIAM). Results prove the potentials of the proposed framework to reduce the model variance and present a powerful diagnostic tool to feedback on the quality of the harmonisation itself.

Schleypen J.R., Mistry M.N., Saeed F., Dasgupta S.

Sharing the burden: quantifying climate change spillovers in the European Union under the Paris Agreement

Spatial Economic Analysis , 16 April 2021 - 2021

Climate change has emerged as a growing threat to the European economy, whose economic losses are relevant for global growth. Rising temperatures and worsening extreme events are expected to affect climate-vulnerable sectors. Due to the economic integration within the European Union (EU), these impacts will likely have spillover effects and feedback loops to and from other regions. This study uses spatial econometrics to account for the interdependencies between the subnational EU regions to estimate the future impacts of changes in temperature on sectoral labour productivity under the Paris Agreement. The study confirms the presence of spatial spillover effects of climate change, and finds that observations at the economy-wide level of a non-linear, concave and single-peaked relationship between temperature and productivity do not always hold true at the sectoral level.

Fanghella V., Ploner M., Tavoni M.

Energy saving in a simulated environment: An online experiment of the interplay between nudges and financial incentives

Journal of Behavioral and Experimental Economics , Volume 93, August 2021, 101709 - 2021

Though nudges are gaining attention as complements to financial incentives, evidence of the interplay between these two policy instruments is lacking. Here, we discuss and evaluate how combinations of financial policies and nudges affect behaviors. Through a framed online experiment, we assess the effect of combining financial incentives (monetary reward) with nudges (goal setting and feedback). We introduce an innovative incentive-compatible energy-saving task: participants optimize their virtual energy consumption on a simulated washing machine. Our findings do not show evidence of synergies between traditional and behavioral interventions. On the contrary, the nudge seems to divert participants’ attention from the financial incentive.

Abatayo A.L., Bosetti V., Casari M., Tavoni M., Ghidoni R.

Governing Climate Geoengineering: Side-Payments Are Not Enough

RFF Working Papers Series , 21-06, March 2021 - 2021

Climate geoengineering strategies can help reduce the economic and ecological impacts of global warming. However, governing geoengineering is challenging: since climate preferences vary across countries, excessive deployment relative to the socially optimal level is likely. Through a laboratory experiment on a public good-or-bad game, we study whether side-payments can address this governance problem. While theoretically effective, our experimental results show only a modest impact of side-payments on outcomes, especially in a multilateral setup. Replacing unstructured bilateral exchanges with a treaty framework simplifies the action space and performs moderately better.

Harmsen M., Kriegler E., van Vuuren D., van der Wijst K.-I., Luderer G., Cui R., Dessens O., Drouet L., Emmerling J., et al.

Integrated assessment model diagnostics: key indicators and model evolution

Environmental Research Letters , April 2021 - 2021

Integrated assessment models (IAMs) form a prime tool in informing about climate mitigation strategies. Diagnostic indicators that allow comparison across these models can help describe and explain differences in model projections. This increases transparency and comparability. Earlier, the IAM community has developed an approach to diagnose models (Kriegler (2015 Technol. Forecast. Soc. Change 90 45–61)). Here we build on this, by proposing a selected set of well-defined indicators as a community standard, to systematically and routinely assess IAM behaviour, similar to metrics used for other modeling communities such as climate models. These indicators are the relative abatement index, emission reduction type index, inertia timescale, fossil fuel reduction, transformation index and cost per abatement value. We apply the approach to 17 IAMs, assessing both older as well as their latest versions, as applied in the IPCC 6th Assessment Report. The study shows that the approach can be easily applied and used to indentify key differences between models and model versions. Moreover, we demonstrate that this comparison helps to link model behavior to model characteristics and assumptions. We show that together, the set of six indicators can provide useful indication of the main traits of the model and can roughly indicate the general model behavior. The results also show that there is often a considerable spread across the models. Interestingly, the diagnostic values often change for different model versions, but there does not seem to be a distinct trend.

Bonan J., Cattaneo C., d'Adda G., Tavoni M.

Can social information programs be more effective? The role of environmental identity for energy conservation

Journal of Environmental Economics and Management , Available online 27 April 2021, 102467 - 2021

Social information programs are widely used to nudge behavioural change. Their effec-tiveness strongly depends on household and individual traits. The existing evidence in economics and psychology points to the role of environmental values and identity in de-termining pro-environmental behavior and the impact of social information. In a large field experiment on household energy conservation, we combine electricity metering and survey data to test whether the impact of a social information program can be strengthened by leveraging environmental values and identity. We experimentally augment social infor-mation messages with an environmental self-identity prime. The self-identity prime does not strengthen the effectiveness of a social information program on average. Nonetheless, we find suggestive evidence that priming environmental self-identity can be effective if targeted to specific sub-groups.

Shayegh S., Bosetti V., Tavoni M.

Future Prospects of Direct Air Capture Technologies: Insights From an Expert Elicitation Survey

Frontiers in Climate , - 2021

Direct air capture (DAC) technologies are promising but speculative. Their prospect as an affordable negative emissions option that can be deployed in large scale is particularly uncertain. Here, we report the results of an expert elicitation about the evolution of techno-economic factors characterizing DAC over time and across climate scenarios. This is the first study reporting technical experts' judgments on future costs under different scenarios, for two time periods, for two policy options, and for two different DAC technologies. Experts project CO2 removal costs to decline significantly over time but to remain expensive (median by mid-century: around 200 USD/tCO2). Nonetheless, the role of direct air capture in a 2°C policy scenario is expected to be significant (by 2050: 1.7 [0.2, 5.9] GtCO2)1. Projections align with scenarios from integrated assessment model (IAM) studies. Agreement across experts regarding which type of DAC technology might prevail is low. Energy usage and policy support are considered the most critical factors driving these technologies' future growth.

Sarmiento L., Wägner N., Zaklan A.

Effectiveness, Spillovers, and Well-Being Effects of Driving Restriction Policies

RFF Working Papers Series , 21-13, May 2021 - 2021

TBD

Colelli F.P., Witkop D., De Cian E., Tavoni M.

Power systems' performance under high renewables' penetration rates: a natural experiment due to the COVID-19 demand shock

Environmental Research Letters , Volume 16, Number 6 - 2021

COVID-19 lockdowns make it possible to investigate the extent to which an unprecedented increase in renewables' penetration may have brought unexpected limitations and vulnerabilities of current power systems to the surface. We empirically investigate how power systems in five European countries have dealt with this unexpected shock, drastically changing electricity load, the scheduling of dispatchable generation technologies, electricity day-ahead wholesale prices, and balancing costs. We find that low-cost dispatchable generation from hydro and nuclear sources has fulfilled most of the net-load even during peak hours, replacing more costly fossil-based generation. In Germany, the UK, and Spain coal power plants stood idle, while gas-fired generation has responded in heterogeneous ways across power systems. Falling operational costs of generators producing at the margin and lower demand, both induced by COVID-19 lockdowns, have significantly decreased wholesale prices. Balancing and other ancillary services' markets have provided the flexibility required to respond to the exceptional market conditions faced by the grid. Balancing costs for flexibility services have increased heterogeneously across countries, while ancillary markets' costs, measured only in the case of Italy, have increased substantially. Results provide valuable evidence on current systems' dynamics during high renewables' shares and increased demand volatility. New insights into the market changes countries will be facing in the transition towards a clean, secure, and affordable power system are offered.

Gazzotti P., Emmerling J., Marangoni G., Castelletti A., van der Wijst K., Hof A., Tavoni M.

Persistent inequality in economically optimal climate policies

Nature Communications , 12, 3421 (2021) - 2021

Benefit-cost analyses of climate policies by integrated assessment models have generated conflicting assessments. Two critical issues affecting social welfare are regional heterogeneity and inequality. These have only partly been accounted for in existing frameworks. Here, we present a benefit-cost model with more than 50 regions, calibrated upon emissions and mitigation cost data from detailed-process IAMs, and featuring country-level economic damages. We compare countries’ self-interested and cooperative behaviour under a range of assumptions about socioeconomic development, climate impacts, and preferences over time and inequality. Results indicate that without international cooperation, global temperature rises, though less than in commonly-used reference scenarios. Cooperation stabilizes temperature within the Paris goals (1.80∘C [1.53∘C–2.31∘C] in 2100). Nevertheless, economic inequality persists: the ratio between top and bottom income deciles is 117% higher than without climate change impacts, even for economically optimal pathways.

Sarmiento L., Molar-Cruz A., Avraam C., Brown M., Rosellón J., Siddiqui S., Solano Rodríguez B.

Mexico and U.S. Power Systems Under Variations in Natural Gas Prices

Energy Policy , Volume 156, September 2021, 112378 - 2021

This study examines the impact of natural gas prices on the power systems of Mexico and the United States. For this, we develop an integrated modeling framework by soft linking three different techno-economic bottom-up models of the power and energy systems, one partial equilibrium model of the natural gas sector, and a partial equilibrium model of the Mexican energy sector. Our results show several interesting results: high natural gas prices raise the use of carbon-intensive technologies in the short-term and boost renewable investments at longer time intervals, increasing emissions in earlier periods and reducing them thereafter. Regarding system costs, because of more capital-intensive green power and lower expenditures in raw energy carriers, capital costs rise and operating costs decrease in the long haul. Furthermore, we see an increase in natural gas demand when its price is low, reducing long-term capital and operating costs through cheaper energy inputs in natural gas facilities and a lower share of capital-intensive renewable facilities in the power system. Concerning emissions, low natural-gas prices decrease coal use in the United States, reducing anthropogenic emissions until the last stages of the optimization period. For Mexico, they show heterogeneous results across models. Policymakers can use this study's results to understand the influence of natural gas prices in the Mexican and United States energy sectors.

Wing I.S., De Cian E., Mistry M.N.

Global Vulnerability of Crop Yields to Climate Change

Journal of Environmental Economics and Management , Volume 109, September 2021, 102462 - 2021

Using a newly-available panel dataset of gridded annual crop yields in conjunction with a dynamic econometric model that distinguishes between farmers' short-run and long-run responses to weather shocks and accounts for adaptation, we investigate the risk to global crop yields from climate warming. Over broad spatial domains we observe only slight moderation of short-run impacts by farmers' long-run adjustments. In the absence of additional margins of adaptation beyond those pursued historically, projections constructed using an ensemble of 21 climate model simulations suggest that the climate change could reduce global crop yields by 3–12% by mid-century and 11–25% by century's end, under a vigorous warming scenario.

Brutschin E., Pianta S., Tavoni M., Riahi K., Bosetti V., Marangoni G., van Ruijven B.

A multidimensional feasibility evaluation of low-carbon scenarios

Environmental Research Letters , Volume 16, Number 6 - 2021

Long-term mitigation scenarios developed by integrated assessment models underpin major aspects of recent IPCC reports and have been critical to identify the system transformations that are required to meet stringent climate goals. However, they have been criticized for proposing pathways that may prove challenging to implement in the real world and for failing to capture the social and institutional challenges of the transition. There is a growing interest to assess the feasibility of these scenarios, but past research has mostly focused on theoretical considerations. This paper proposes a novel and versatile multidimensional framework that allows evaluating and comparing decarbonization pathways by systematically quantifying feasibility concerns across geophysical, technological, economic, socio-cultural and institutional dimensions. This framework enables to assess the timing, disruptiveness and scale of feasibility concerns, and to identify trade-offs across different feasibility dimensions. As a first implementation of the proposed framework, we map the feasibility concerns of the IPCC 1.5 °C Special Report scenarios. We select 24 quantitative indicators and propose feasibility thresholds based on insights from an extensive analysis of the literature and empirical data. Our framework is, however, flexible and allows evaluations based on different thresholds or aggregation rules. Our analyses show that institutional constraints, which are often not accounted for in scenarios, are key drivers of feasibility concerns. Moreover, we identify a clear intertemporal trade-off, with early mitigation being more disruptive but preventing higher and persistent feasibility concerns produced by postponed mitigation action later in the century.

Campiglio E., van der Ploeg F.

Macro-Financial Transition Risks in the Fight Against Global Warming

RFF Working Papers Series , Working Paper (21-15) - 2021

The macro-financial transition risks that result from disorderly transitions to a carbon-free or low-carbon economy may entail significant costs due to the risk of stranded assets, defaults, collapse in stock market value, both for financial firms and non-financial firms. The effects of networks, contagion, and higher-round effects of stranding may exacerbate the problem. But green monetary and prudential policy and governance reforms may mitigate the problem. The qualitative, empirical, modelling, policy and institutional research on this topic is surveyed and various avenues for future research are identified.

Meng J., Way R., Verdolini E., Diaz Anadon L.

Comparing expert elicitation and model-based probabilistic technology cost forecasts for the energy transition

Proceedings of the National Academy of Sciences , July 6, 2021 118 (27) e1917165118 - 2021

We conduct a systematic comparison of technology cost forecasts produced by expert elicitation methods and model-based methods. Our focus is on energy technologies due to their importance for energy and climate policy. We assess the performance of several forecasting methods by generating probabilistic technology cost forecasts rooted at various years in the past and then comparing these with observed costs in 2019. We do this for six technologies for which both observed and elicited data are available. The model-based methods use either deployment (Wright’s law) or time (Moore’s law) to forecast costs. We show that, overall, model-based forecasting methods outperformed elicitation methods. Their 2019 cost forecast ranges contained the observed values much more often than elicitations, and their forecast medians were closer to observed costs. However, all methods underestimated technological progress in almost all technologies, likely as a result of structural change across the energy sector due to widespread policies and social and market forces. We also produce forecasts of 2030 costs using the two types of methods for 10 energy technologies. We find that elicitations generally yield narrower uncertainty ranges than model-based methods. Model-based 2030 forecasts are lower for more modular technologies and higher for less modular ones. Future research should focus on further method development and validation to better reflect structural changes in the market and correlations across technologies.

Marangoni G., Lamontagne J.R., Quinn J.D., Reed P.M., Keller K.

Adaptive mitigation strategies hedge against extreme climate futures

Climatic Change , 166, Article number: 37 (2021) - 2021

The United Nations Framework Convention on Climate Change agreed to “strengthen the global response to the threat of climate change, in the context of sustainable development and efforts to eradicate poverty” (UNFCCC 2015). Designing a global mitigation strategy to support this goal poses formidable challenges. For one, there are trade-offs between the economic costs and the environmental benefits of averting climate impacts. Furthermore, the coupled human-Earth systems are subject to deep and dynamic uncertainties. Previous economic analyses typically addressed either the former, introducing multiple objectives, or the latter, making mitigation actions responsive to new information. This paper aims at bridging these two separate strands of literature. We demonstrate how information feedback from observed global temperature changes can jointly improve the economic and environmental performance of mitigation strategies. We focus on strategies that maximize discounted expected utility while also minimizing warming above 2 °C, damage costs, and mitigation costs. Expanding on the Dynamic Integrated Climate-Economy (DICE) model and previous multi-objective efforts, we implement closed-loop control strategies, map the emerging trade-offs and quantify the value of the temperature information feedback under both well-characterized and deep climate uncertainties. Adaptive strategies strongly reduce high regrets, guarding against mitigation overspending for less sensitive climate futures, and excessive warming for more sensitive ones.

Peng W., Iyer G., Bosetti V., Chaturvedi V., Edmonds J., Fawcett A.A., Hallegatte S., Victor D.G., van Vuuren D., Weyant J.

Climate policy models need to get real about people — here’s how

Nature , 594, 174-176 (2021) - 2021

To predict how society and political systems might actually respond to warming, upgrade integrated assessment models. Political support for decarbonizing the global economy is at an all-time high. The good news is that about two-thirds of carbon emissions come from countries that have committed to reach ‘net zero’ by mid-century — they aim to cut their greenhouse-gas outputs and capture as much as they emit1. The bad news? The computer models that analysts use to assess routes to achieve such goals are missing a crucial factor: politics. These ‘integrated assessment models’ (IAMs) combine insights from climate science and economics to estimate how industrial and agricultural processes might be transformed to tackle global warming. They’re encoded with knowledge about technologies, such as pollution-free power plants and the cost of electric vehicles. Thus IAMs enable researchers to probe, for example, how a carbon tax might induce big cuts in emissions2, or how a drive to decarbonize the transport sector could shift investments towards greener fuels and electricity.[...] As a first step, we — a group of political economists and IAM specialists — identified eight key areas in which insights from our disciplines can improve models’ relevance for real-world policy and investment choices (see ‘Eight political economy insights’). We also assessed numerous potential reforms (see ‘How to improve models’ and Supplementary information for a full list of 11 reforms), so that researchers can examine the trade-offs between making models tractable and making them more useful for real-world decisions.

Steg L., Perlaviciute G., Sovacool B.K., Bonaiuto M., Diekmann A., Filippini M., HindriksF., Jacobbson Bergstad C., Matthies E., Matti S., Mulder M., Nilsson A., Pahl S., Roggenkamp M., Schuitema G., Stern P.C., Tavoni M., Thøgersen J., Woerdman E.

A Research Agenda to Better Understand the Human Dimensions of Energy Transitions

Frontiers in Psycology , 25 June 2021 - 2021

The Social Sciences and Humanities (SSH) have a key role to play in understanding which factors and policies would motivate, encourage and enable different actors to adopt a wide range of sustainable energy behaviours and support the required system changes and policies. The SSH can provide critical insights into how consumers could be empowered to consistently engage in sustainable energy behaviour, support and adopt new technologies, and support policies and changes in energy systems. Furthermore, they can increase our understanding of how organisations such as private and public institutions, and groups and associations of people can play a key role in the sustainable energy transition. We identify key questions to be addressed that have been identified by the Platform for Energy Research in the Socio-economic Nexus (PERSON, see person.eu), including SSH scholars who have been studying energy issues for many years. We identify three main research themes. The first research theme involves understanding which factors encourage different actors to engage in sustainable energy behaviour. The second research theme focuses on understanding which interventions can be effective in encouraging sustainable energy behaviour of different actors, and which factors enhance their effects. The third research theme concerns understanding which factors affect public and policy support for energy policy and changes in energy systems, and how important public concerns can best be addressed as to reduce or prevent resistance.

d'Adda G., Galliera A., Tavoni M.

Urgency and engagement: Empirical evidence from a large-scale intervention on energy use awareness

Journal of Economic Psychology , Volume 81, December 2020, 102275 - 2020

We study how to foster engagement in the energy sector, where signals about consumption are opaque and infrequent. We evaluate an energy company's large-scale communication campaign for promoting natural gas self-reading. Self-readings allow utilities to bill customers on the basis of real - as opposed to estimated - consumption. Exploiting variation in campaign messages, we test the impact of imposing a sense of urgency on customers through a deadline for submitting a meter reading. We find that messages that induce a sense of urgency are twice as effective than generic messages in encouraging self-readings, consistent with recent research on the urgency effect. The increased sense of urgency moves to action customers with both high and low levels of baseline engagement; the effect is stronger on the former.

Falchetta G., Hammad A. T., Shayegh S.

Planning universal accessibility to public health care in sub-Saharan Africa

Proceedings of the National Academy of Sciences (PNAS) , 30 November 2020 - 2020

Achieving universal health care coverage—a key target of the United Nations Sustainable Development Goal number 3—requires accessibility to health care services for all. Currently, in sub-Saharan Africa, at least one-sixth of the population lives more than 2 h away from a public hospital, and one in eight people is no less than 1 h away from the nearest health center. We combine high-resolution data on the location of different typologies of public health care facilities [J. Maina et al., Sci. Data 6, 134 (2019)] with population distribution maps and terrain-specific accessibility algorithms to develop a multiobjective geographic information system framework for assessing the optimal allocation of new health care facilities and assessing hospitals expansion requirements. The proposed methodology ensures universal accessibility to public health care services within prespecified travel times while guaranteeing sufficient available hospital beds. Our analysis suggests that to meet commonly accepted universal health care accessibility targets, sub-Saharan African countries will need to build ∼6,200 new facilities by 2030. We also estimate that about 2.5 million new hospital beds need to be allocated between new facilities and ∼1,100 existing structures that require expansion or densification. Optimized location, type, and capacity of each facility can be explored in an interactive dashboard. Our methodology and the results of our analysis can inform local policy makers in their assessment and prioritization of health care infrastructure. This is particularly relevant to tackle health care accessibility inequality, which is not only prominent within and between countries of sub-Saharan Africa but also, relative to the level of service provided by health care facilities.

Pianta S., Sisco M. R.

A hot topic in hot times: how media coverage of climate change is affected by temperature abnormalities

Environmental Research Letters , Volume 15, Number 11 - 2020

Media coverage of climate change is arguably a fundamental factor shaping climate change attitudes and possibly behaviors, but its trends and determinants are still underinvestigated. In this paper, we analyze a comprehensive dataset representing more than 1.7 million online news articles covering climate change in the 28 countries of the European Union in 22 different languages for the period 2014–2019. We combine our news dataset with observed temperature data to investigate whether and how temperature abnormalities influence media coverage of climate change. We find that the strongest determinants of media coverage are positive deviations from short-term average temperatures. Abnormalities with respect to average temperatures in recent years have stronger effects than abnormalities with respect to temperatures in baseline periods that climatologists use to identify changes in climate. This suggests that the media are less influenced by scientific accounts of climatic changes than by shorter-term changes in weather patterns.

Granella F., Aleluia Reis L., Bosetti V., Tavoni M.

COVID-19 lockdown only partially alleviates health impacts of air pollution in Northern Italy

Environmental Research Letters , - 2020

Evaluating the reduction in pollution caused by a sudden change in emission is complicated by the confounding effect of weather variations. We propose an approach based on machine learning to build counterfactual scenarios that address the effect of weather and apply it to the COVID-19 lockdown of Lombardy, Italy. We show that the lockdown reduced background concentrations of PM2.5 by 3.84 µg/m3 (16%) and NO2 by 10.85 µg/m3 (33%). Improvement in air quality saved at least 11% of the years of life lost and 19% of the premature deaths attributable to COVID-19 in the region during the same period. The analysis highlights the benefits of improving air quality and the need for an integrated policy response addressing the full diversity of emission sources.

Shayegh S., Manoussi, V., Dasgupta, S

Climate change and development in South Africa: the impact of rising temperatures on economic productivity and labour availability

Climate and Development Journal , - 2020

Climate change has a major impact on productivity of different economic sectors as well as different labour groups. Here we study the crucial linkage between gradual climate change and availability of low-skilled labour in rural areas of South Africa. Using a nationally representative panel of micro-survey data, we derive marginal impacts of rising temperatures on labour availability. Our econometric findings suggest that optimal conditions maximizing weekly labour supply are heterogeneous across sectors. We develop an analytical model of overlapping generations to study the long-term impacts of future climate and socioeconomic changes on labour supply and welfare. Overall, high exposure of low-skilled labour to climate change and rising temperatures reduces the supply of low-skilled labour which in turn, reduces the wage gap between high-skilled and low-skilled labour. However, the overall impact of climate change on economy remains negative and the welfare in terms of output per adult drops by 20% compared to the baseline case with no climate change.

Peñasco C., Díaz Anadón L., Verdolini E.

Systematic review of the outcomes and trade-offs of ten types of decarbonization policy instruments

Nature Climate Change , Published 18 January 2021 - 2021

The literature evaluating the technical and socioeconomic outcomes of policy instruments used to support the transition to low-carbon economies is neither easily accessible nor comparable and often provides conflicting results. We develop and implement a framework to systematically review and synthesize the impact of ten types of decarbonization policy instruments on seven technical and socioeconomic outcomes. Our systematic review shows that the selected types of regulatory and economic and financial instruments are generally associated with positive impacts on environmental, technological and innovation outcomes. Several instruments are often associated with short-term negative impacts on competitiveness and distributional outcomes. We discuss how these trade-offs can be reduced or transformed into co-benefits by designing research and development and government procurement, deployment policies, carbon pricing and trading. We show how specific design features can promote competitiveness and reduce negative distributional impacts, particularly for small firms. An online interactive Decarbonisation Policy Evaluation Tool allows further analysis of the evidence.

Smith S.J., Klimont Z., Drouet L., Harmsen M., Luderer G., Riahi K., van Vuuren D.P.

The Energy Modeling Forum (EMF)-30 study on short-lived climate forcers: introduction and overview

Climatic Change , 163, pages1399-1408 - 2021

The Energy Modeling Forum inter-comparison study on short-lived climate forcers (EMF-30) focuses on black carbon (BC) and methane (CH4), two of the most important warming SLCFs. The study is aimed at quantifying the potential impact of methane and BC-focused reductions on climate change and at comparing the impact of idealized SLCF reductions as compared to idealized GHG reduction policies of the type long-analyzed by the modeling community.The EMF-30 study takes a multi-model approach that includes nine integrated assessment models. Analysis of the interaction between dedicated SLCF and GHG reduction policies and the systematic implementation of stylized scenarios allows an assessment of the role of forcers individually and as they interact with different policy options. The multi-model analysis allows an assessment of how robust results are across different models and background scenario assumptions.

Rafaj P., Kiesewetter G., Krey V., Schöpp W., Bertram C., Drouet L., Fricko O., Shinichiro F., Harmsen M., Hilaire J., Huppmann D., Klimont Z., Kolp P., Aleluia Reis L., van Vuuren D.P.

Air quality and health implications of 1.5–2°C climate pathways under considerations of ageing population: A multi-model scenario analysis

Environmental Research Letters , - 2021

Low-carbon pathways consistent with the 2°C and 1.5°C long-term climate goals defined in the Paris Agreement are likely to induce substantial co-benefits for air pollution and associated health impacts. In this analysis, using five global integrated assessment models, we quantify the emission reductions in key air pollutants resulting from the decarbonization of energy systems and the resulting changes in premature mortality attributed to the exposure to ambient concentrations of fine particulate matter. The emission reductions differ by sectors. Sulfur emissions are mainly reduced from power plants and industry, cuts in nitrogen oxides are dominated by the transport sector, and the largest abatement of primary fine particles is achieved in the residential sector. The analysis also shows that health benefits are the largest when policies addressing climate change mitigation and stringent air pollution controls are coordinated. We decompose the key factors that determine the extent of health co-benefits, focusing on Asia: changes in emissions, urbanization rates, population growth and ageing. Demographic processes, particularly due to ageing population, counteract in many regions the mortality reductions realized through lower emissions.

Campagnolo L., De Cian E.

Distributional consequences of climate change impacts on energy demand across Italian households

RFF Working Papers Series , 21-04, February 2021 - 2021

The paper evaluates the distributional implications of climate-induced temperature changes on energy demand and energy poverty in Italy. We use two different simulation approaches that make it possible to analyze to what extent general equilibrium substitution and income effects moderate or amplify the first-order changes induced by climate change. Climate change impacts are regressive. While rich households reduce expenditure on heating fuels more than the poor, less affluent households increase electricity expenditure relatively more. For a given income level, whether households increase or decrease energy expenditure depends on the size of the shock, the existing climate conditions, and the energy sources used. The increase in electricity poor households highlights a new emerging risk related to those households who will be exposed to higher temperatures and will not being able to purchase the cooling services needed to protect themselves because of credit, institutional, infrastructural constraints. We shed new light on the importance of accounting for the distributional consequences of climate change impacts when designing climate policies.

Emmerling J., Tavoni M.

Representing inequalities in integrated assessment modeling of climate change

One Earth , Volume 4, Issue 2, 19 February 2021, Pages 177-180 - 2021

Climate change affects human and natural systems unevenly. Solving it, by reducing greenhouse gases and adapting to climate impacts, will also be felt differently depending on levels of income and other dimensions of inequality. This leads us to ask: have the widely used integrated assessment models accommodated inequality considerations sufficiently?

Ilkka K., Butnar I., Bauer N., Caspani M, Edelenbosch O., Emmerling J., Fragkos P., et al.

Exploring the Possibility Space: Taking Stock of the Diverse Capabilities and Gaps in Integrated Assessment Models

Environmental Research Letters , - 2021

Integrated Assessment Models (IAMs) have emerged as key tools for building and assessing long term climate mitigation scenarios. Due to their central role in the recent IPCC assessments, and international climate policy analyses more generally, and the high uncertainties related to future projections, IAMs have been critically assessed by scholars from different fields receiving various critiques ranging from adequacy of their methods to how their results are used and communicated. Although IAMs are conceptually diverse and evolved in very different directions, they tend to be criticized under the umbrella of "IAMs". Here we first briefly summarise the IAM landscape and how models differ from each other. We then proceed to discuss six prominent critiques emerging from the recent literature, reflect and respond to them in the light of IAM diversity and ongoing work and suggest ways forward. The six critiques relate to (1) representation of heterogeneous actors in the models, (2) modelling of technology diffusion and dynamics, (3) representation of capital markets, (4) energy-economy feedbacks, (5) policy scenarios, and (6) interpretation and use of model results.

Bosetti V.

Integrated Assessment Models for Climate Change

Oxford Research Encyclopedia of Economics and Finance , - 2021

To guide climate change policymaking, we need to understand how technologies and behaviors should be transformed to avoid dangerous levels of global warming and what the implications of failing to bring forward such transformation might be. Integrated assessment models (IAMs) are computational tools developed by engineers, earth and natural scientists, and economists to provide projections of interconnected human and natural systems under various conditions. These models help researchers to understand possible implications of climate inaction. They evaluate the effects of national and international policies on global emissions and devise optimal emissions trajectories in line with long-term temperature targets and their implications for infrastructure, investment, and behavior. This research highlights the deep interconnection between climate policies and other sustainable development objectives. Evolving and focusing on one or more of these key policy questions, the large family of IAMs includes a wide array of tools that incorporate multiple dimensions and advances from a range of scientific fields.

Athanasoglou S., Bosetti V., Drouet L.

A Satisficing Framework for Environmental Policy Under Model Uncertainty

Environmental Modeling & Assessment (2021) , - 2021

We propose a novel framework for the economic assessment of environmental policy. Our main point of departure from existing work is the adoption of a satisficing, as opposed to optimizing, modeling approach. Along these lines, we place primary emphasis on the extent to which different policies meet a set of goals at a specific future date instead of their performance vis-a-vis some intertemporal objective function. Consistent to the nature of environmental policymaking, our model takes explicit account of model uncertainty. To this end, the decision criterion we propose is an analog of the well-known success-probability criterion adapted to settings characterized by model uncertainty. We apply our criterion to the climate-change context and the probability distributions constructed by Drouet et al. (2015) linking carbon budgets to future consumption. Insights from computational geometry facilitate computations considerably and allow for the efficient application of the model in high-dimensional settings.

Berger L., Berger N., Bosetti V., Gilboa I., Hansen L.P., Jarvis C., Marinacci M., Smith R. D.

Rational policymaking during a pandemic

Proceedings of the National Academy of Sciences , Jan 2021, 118 (4) e2012704118 - 2021

Policymaking during a pandemic can be extremely challenging. As COVID-19 is a new disease and its global impacts are unprecedented, decisions are taken in a highly uncertain, complex, and rapidly changing environment. In such a context, in which human lives and the economy are at stake, we argue that using ideas and constructs from modern decision theory, even informally, will make policymaking a more responsible and transparent process.

Bonan J., Battiston P., Bleck J., LeMay-Boucher P., Pareglio S., Sarr B., Tavoni M.

Social interaction and technology adoption: Experimental evidence from improved cookstoves in Mali

World Development , Volume 144, August 2021, 105467 - 2021

Easy-to-use and low-risk technologies, which require little investment and potentially provide health and environmental benefits, often have low adoption rates. Using a randomized experiment in urban Mali, we assess the impact of a training session in which information on an improved cookstove (ICS) is provided along with the opportunity to purchase the product at the market price. We find strong effects from our invitation to the session on ICS ownership and usage while no discernible effects on product knowledge or household welfare. We find that some diffusion occurs beyond the intervention and provide evidence on the role of social interaction, mostly through imitation.

Emmerling J., Navarro P., Sisco M.R.

Subjective Well-Being at the Macro Level—Empirics and Future Scenarios

Social Indicators Research , 13 April 2021 - 2021

We estimate the impact of a large number of determinants of subjective well-being (SWB) across 143 countries, and project SWB across macro-regions for different socio-economic scenarios. We focus on the 23% of the variance in SWB that is explained by cross-country differences, as the remaining 77% is due to individual-specific factors. We estimate a mixed-effects model to quantify the contributions of various socio-demographic, environmental, energy-related, economic, and institutional factors in explaining SWB. We find that the contribution of institutions to SWB is as large as that of economic factors. We then generate projections on the evolution of SWB until 2100 based on the five Shared Socioeconomic Pathways (SSPs), a framework that facilitates the integrated analysis of future climate impacts, vulnerabilities, adaptation, and mitigation. Holding constant some institutional and economic factors for which SSP projections are not available, the results show significant differences in SWB across SSPs, of up to two points on the standard 0–10 scale of life satisfaction. The highest levels of projected material SWB are likely to occur in the Sustainable Development scenario (SSP1) and the conventional development scenario (SSP5) which lead to very similar SWB levels in material factors. Differences across regions are large. The OECD region and Latin America show the highest levels of SWB historically. The current projections reveal that Latin America could overtake the OECD countries in terms of subjective well-being. Overall, our results can provide valuable insights to policy evaluation in the context of climate change. Future work could expand these scenarios to include also further social and societal variables.

Boogen N., Cattaneo C., Filippini M., Obrist A.

Energy efficiency and the role of energy-related financial literacy: evidence from the European residential sector

Energy Efficiency , 14(4), 2021 - 2021

In this paper, we analyze the level of efficiency in the use of electricity in the European residential sector relying on a cross-sectional data set comprised of 1375 households located in Italy, the Netherlands, and Switzerland and observed in 2016. To do this, we estimate an electricity demand frontier function using a stochastic frontier approach. The empirical results show that the residential sector in these three European countries could save approximately 20% of its total electricity consumption on average if it improves the level of efficiency in the use of electricity. These figures are in line with recent studies for Switzerland and for the US residential sector. Moreover, we link energy efficiency to energy-related financial literacy. We find that while energy-relevant knowledge per se does not play a significant role, stronger cognitive abilities are associated with higher levels of energy efficiency.

Khavari, B., Korkovelos, A., Sahlberg, A., Howells M., Fuso Nerini F.

Population cluster data to assess the urban-rural split and electrification in Sub-Saharan Africa

Nature , Sci Data 8, 117 (2021) - 2021

Human settlements are usually nucleated around manmade central points or distinctive natural features, forming clusters that vary in shape and size. However, population distribution in geo-sciences is often represented in the form of pixelated rasters. Rasters indicate population density at predefined spatial resolutions, but are unable to capture the actual shape or size of settlements. Here we suggest a methodology that translates high-resolution raster population data into vector-based population clusters. We use open-source data and develop an open-access algorithm tailored for low and middle-income countries with data scarcity issues. Each cluster includes unique characteristics indicating population, electrification rate and urban-rural categorization. Results are validated against national electrification rates provided by the World Bank and data from selected Demographic and Health Surveys (DHS). We find that our modeled national electrification rates are consistent with the rates reported by the World Bank, while the modeled urban/rural classification has 88% accuracy. By delineating settlements, this dataset can complement existing raster population data in studies such as energy planning, urban planning and disease response.

Pianta S., Rinscheid A., Weber E.U.

Carbon Capture and Storage in the United States: Perceptions, Preferences, and Lessons for Policy

Energy Policy , Volume 151, April 2021, 112149 - 2021

Although Carbon Capture and Storage (CCS) technologies can potentially play an important role in climate change mitigation efforts, commercial CCS projects are still rare. Knowledge about the technical challenges of these technologies is rapidly advancing, but the challenges related to their public acceptance are still underinvestigated. Here we try to close this research gap by investigating public perceptions of CCS and public attitudes towards policies to scale up these technologies in the United States, where most existing industrial-scale CCS projects are operating. Based on a demographically representative sample of US residents, we find that awareness of CCS is very low. Using a conjoint experiment, we show that policies that outlaw the construction of new coal- and gas-fired power plants without CCS find higher public support than CCS subsidies and increases in taxes on unabated fossil fuel power generation. Public support decreases with rising costs of CCS deployment and decreasing minimal distance requirements of CCS plants from residential areas. Our results provide insights into the political feasibility of a large-scale deployment of CCS and show that specific policy design choices play an important role in influencing public support for policies to scale up these technologies.

Sisco M.R., Pianta S., Weber E.U., Bosetti V.

Global climate marches sharply raise attention to climate change: Analysis of climate search behavior in 46 countries

Journal of Environmental Psychology , Volume 75, June 2021, 101596 - 2021

We examine attention to climate change in 46 countries across six continents from 2015 through 2019 by analyzing internet search activity in ten languages. We find that information seeking about climate change, measured by internet searches, notably increased in 2019 relative to prior years. Next, we analyze the impact of global climate marches on internet search activity and find that climate activist events are powerful drivers of attention compared to political events (United Nations Climate Change Conferences) and temperature abnormalities. To explore the role of media coverage, we estimate the effects of climate marches while controlling for weekly news coverage of climate change and find evidence supporting the notion of media attention mediating the effects of climate protests. Lastly, we quantify the duration of the increases in information seeking produced by these events. We find the durations are short-lived, with attention only staying above pre-event levels for several days. As the literature to date has paid scarce attention to public demonstrations as sources of influence on the public's attention to climate change, we suggest these results implore the field to focus more research on the impacts of climate activist events.

Pianta S., Brutschin E. van Ruijven B., Bosetti V.

Faster or slower decarbonization? Policymaker and stakeholder expectations on the effect of the COVID-19 pandemic on the global energy transition.

Energy Research & Social Science , Volume 76, June 2021, 102025 - 2021

The COVID-19 pandemic might have tremendous consequences on decarbonization efforts across the globe. Understanding governments’ policy action in the short and medium term is key to assess whether the response to the crisis will crowd out or fast-track decarbonization efforts. We surveyed over 200 policymakers and stakeholders from 55 different countries to collect climate policy expectations in various sectors and regions in the next five years. While support for high-emitting sectors is not expected to dissolve completely, commitment to policies supporting the transition to low-carbon energy and transport sectors is expected to increase substantially. This is true for OECD and Asian countries, representing approximately 90% of global emissions. Our results suggest that expectations that the COVID-19 pandemic will accelerate decarbonization efforts are widely shared.

Berger L., Eeckhoudt L.

Risk, Ambiguity, and the Value of Diversification

Management Science , - 2021

Diversification is a basic economic principle that helps to hedge against uncertainty. It is, therefore, intuitive that both risk aversion and ambiguity aversion should positively affect the value of diversification. In this paper, we show that this intuition (1) is true for risk aversion but (2) is not necessarily true for ambiguity aversion. We derive sufficient conditions, showing that, contrary to the economic intuition, ambiguity and ambiguity aversion may actually reduce the diversification value.

Emmerling J., Furceri D., Libano Monteiro F., Loungani P., Ostry J.D., Pizzuto P., Tavoni M.

Will the Economic Impact of COVID-19 Persist? Prognosis from 21st Century Pandemics

IMF Working Papers , No. 2021/119 - 2021

COVID-19 has had a disruptive economic impact in 2020, but how long its impact will persist remains unclear. We offer a prognosis based on an analysis of the effects of five previous major epidemics in this century. We find that these pandemics led to significant and persistent reductions in disposable income, along with increases in unemployment, income inequality and public debt-to-GDP ratios. Energy use and CO2 emissions dropped, but mostly because of the persistent decline in the level of economic activity rather than structural changes in the energy sector. Applying our empirical estimates to project the impact of COVID-19, we foresee significant scarring in economic performance and income distribution through 2025, which be associated with an increase in poverty of about 75 million people. Policy responses more effective than those in the past would be required to forestall these outcomes.

Roelfsema M., Van Soest H., Harmsen M., van Vuuren D., Bertram C., Elzen M., Höhne N., Iacobuta G., Krey V., Kriegler E., Luderer G., Riahi K., Ueckerdt F., Després J., Drouet L., Emmerling J., Frank S., Fricko O., Gidden M., Humpenöder F., Huppmann D., Fujimori S., Fragkiadakis K., Gi K., Keramidas K., Köberle A., Aleluia Reis L., Rochedo P., Schaeffer R., Oshiro K., Vrontisi Z., Chen W., Iyer G., Edmonds J., Kannavou M., Jiang K., Mathur R., Safonov G., Vishwanathan S.S.

Taking stock of national climate policies to evaluate implementation of the Paris Agreement

Nature Communications , Volume 11, Article number: 2096 (2020) - 2020

Many countries have implemented national climate policies to accomplish pledged Nationally Determined Contributions and to contribute to the temperature objectives of the Paris Agreement on climate change. In 2023, the global stocktake will assess the combined effort of countries. Here, based on a public policy database and a multi-model scenario analysis, we show that implementation of current policies leaves a median emission gap of 22.4 to 28.2 GtCO2eq by 2030 with the optimal pathways to implement the well below 2 °C and 1.5 °C Paris goals. If Nationally Determined Contributions would be fully implemented, this gap would be reduced by a third. Interestingly, the countries evaluated were found to not achieve their pledged contributions with implemented policies (implementation gap), or to have an ambition gap with optimal pathways towards well below 2 °C. This shows that all countries would need to accelerate the implementation of policies for renewable technologies, while efficiency improvements are especially important in emerging countries and fossil-fuel-dependent countries.

Zheng Y., Gohin A.

Reforming the European Common Agricultural Policy: from price & income support to risk management

Journal of Policy Modeling , March 19, 2020 - 2020

Over the last 30 years, the European Union has significantly reformed its Common Agricultural Policy by introducing direct payments to farmers and reducing price support levels. While the European agricultural prices become more volatile, all economic models assessing these reforms remain static and ignore the risk dimensions. This paper develops an original stochastic computable general equilibrium model capturing the different sources of risk, farmers’ risk attitude and risk contingent markets. We find that the reduction of price support levels has modest market impacts but negative global welfare effects by exposing risk-averse European farmers to the world price volatility. This issue is not solved by the direct payments, which have negligible market and global welfare impacts through their wealth effects. On the other hand, we find that unbiased futures markets can solve this global welfare issue by allowing European farmers to transfer their price risks. Therefore, European policymakers should ensure well-functioning risk contingent markets rather than maintaining rigid intervention price levels.

Dasgupta S., Emmerling J., Shayegh S.

Inequality and growth impacts from climate change - insights from South Africa

RFF Working Papers Series , May 2020 - 2020

The impact of climate change on economic growth has received considerable attention in recent years. We build on this literature, but instead of per-capita GDP, we consider inequality and poverty at the country and sub-national panel level with a focus on South Africa. Our analysis on both scales suggest a significant [-shaped relationship between inequality/poverty indices and local mean temperature. Inequality, hence tends to be lowest at moderate temperatures (11°C-17°C).

Fofrich R. A., Tong D., Calvin K.V., Sytze de Boer H., Emmerling J., Fricko O., Fujimori S., Luderer G., Rogelj J., Davis S.J.

Early Retirement of Power Plants in Climate Mitigation Scenarios

Environmental Research Letters , - 2020

International efforts to avoid dangerous climate change aim for large and rapid reductions of fossil fuel CO2 emissions worldwide, including nearly complete decarbonization of the electric power sector. However, achieving such rapid reductions may depend on early retirement of coal- and natural gas-fired power plants. Here, we analyze future fossil fuel electricity demand in 171 energy-emissions scenarios from Integrated Assessment Models (IAMs), evaluating the implicit retirements and/or reduced operation of generating infrastructure. Although IAMs calculate retirements endogenously, the structure and methods of each model differ; we use a standard approach to infer retirements in outputs from all six major IAMs and—unlike the IAMs themselves—we begin with the age distribution and region-specific operating capacities of the existing power fleet. We find that coal-fired power plants in scenarios consistent with international climate targets (i.e., keeping global warming well-below 2°C or 1.5°C) retire one to three decades earlier than historically has been the case. If plants are built to meet projected fossil electricity demand and instead allowed to operate at the level and over the lifetimes they have historically, the roughly 200 Gt CO2 of additional emissions this century would be incompatible with keeping global warming well-below 2°C. Thus, ambitious climate mitigation scenarios entail drastic, and perhaps un-appreciated, changes in the operating and/or retirement schedules of power infrastructure.

Abatayo A.L., Bosetti V., Casari M., Ghidoni R., Tavoni M.

Solar geoengineering may lead to excessive cooling and high strategic uncertainty

Proceedings of the National Academy of Sciences (PNAS) , June 1, 2020 - 2020

Climate engineering—the deliberate large-scale manipulation of the Earth’s climate system—is a set of technologies for reducing climate-change impacts and risks. It is controversial and raises novel governance challenges [T. C. Schelling, Climatic Change, 33, 303–307 (1996); J. Virgoe, Climatic Change, 95, 103–119 (2008)]. We focus on the strategic implications of solar geoengineering. When countries engineer the climate, conflict can arise because different countries might prefer different temperatures. This would result in too much geoengineering: the country with the highest preference for geoengineering cools the planet beyond what is socially optimal at the expense of the others—a theoretical possibility termed “free-driving” [M. L. Weitzman, Scand. J. Econ., 117, 1049–1068 (2015)]. This study is an empirical test of this hypothesis. We carry out an economic laboratory experiment based on a public “good or bad” game. We find compelling evidence of free-driving: global geoengineering exceeds the socially efficient level and leads to welfare losses. We also evaluate the possibility of counteracting the geoengineering efforts of others. Results show that countergeoengineering generates high payoff inequality as well as heavy welfare losses, resulting from both strategic and behavioral factors. Finally, we compare strategic behavior in bilateral and multilateral settings. We find that welfare deteriorates even more under multilateralism when countergeoengineering is a possibility. These results have general implications for governing global good or bad commons.

Berger L., Emmerling J.

Welfare as equity equivalents

Journal of Economic Surveys , June 13, 2020 - 2020

Equity (or, its counterpart, inequity) plays a fundamental role in the evaluation of social welfare in different dimensions. In this paper, we revisit the concept of inequity – in the sense of unequal distributions – across individuals, time, and states of the world using a unified framework that generalizes the standard expected discounted utilitarianism approach. We propose a general measure of welfare as equity equivalents and a corresponding inequity index. We show that allowing for different attitudes toward inequity across different dimensions covers a scope of possible inequity preferences with different interpretations. We then prove that the order of aggregation across the different dimensions matters for welfare evaluations. Finally, we show that many of the welfare‐theoretical approaches recently developed in the literature can be interpreted as special cases of this general framework.

Bosetti V., Cattaneo C., Peri G.

Should they stay or should they go? Climate migrants and local conflicts

Journal of Economic Geography , - 2020

There is extensive evidence that higher temperatures increase the probability of local conflict. There is also evidence that emigration represents an important margin of adaptation to a warming climate. In this article, we analyse whether migration influences the link between warming and conflicts by either attenuating this connection in countries of origin and/or by exacerbating it in countries of destination. We find that in countries where the propensity to emigrate—as measured by past diaspora—is higher, increases in temperature have smaller effects on the probability of armed conflict, compared to countries with lower migration propensity. This is consistent with emigration functioning as ‘escape valve’ for local tensions. We find no evidence that climate-induced migration increased the probability of conflict in receiving countries.

Realmonte G., Drouet L., Gambhir A., Glynn J., Hawkes A., Köberle A.C., Tavoni M.

Reply to “High energy and materials requirement for direct air capture calls for further analysis and R&D”

Nature Communications , Volume 11, Article number: 3286 (2020) - 2020

We are writing in response to Chatterjee and Huang’s analysis on the material and energy requirements of Direct Air Carbon Capture and Sequestration (DACCS) plants, which cites our recently published paper on the potential role of such technologies in deep mitigation pathways. We agree with the authors that not only a thorough technoeconomic analysis but also a material and energy-needs assessment should be undertaken before any realistic role for DACCS can be finalized. This requires including life-cycle assessment (LCA) in the technoeconomic analysis provided by integrated assessment model (IAM) scenarios, going significantly beyond what is done in our analysis, and requiring major modeling innovation1, specifically to link chemical manufacturing sectors to energy and mitigation technology sectors, to a degree not done in IAMs so far.

Bonan J., d’Adda G., Mahmud M., Said F.

The Role of Flexibility and Planning in Repayment Discipline: Evidence from a Field Experiment on Pay-as-You-Go Off-Grid Electricity

RFF Working Papers Series , Working Paper 20-14 - 2020

Flexibility can help households with irregular income flows meet their payment obligations. On the other hand, the rigidity of payment schedules is believed to foster discipline and reduce defaults. We test the impact of a novel form of flexibility, the ability to set one’s own payment schedule within a month, on payment performance through a field experiment with customers of a prepaid solar systems provider in rural southern Pakistan. We combine contract flexibility with planning prompts, to mitigate its potentially negative effects on repayment. We find that flexibility in isolation negatively affects payment quality, but that combining it with planning prompts offsets this negative effect, producing behavioral outcomes that are indistinguishable from those associated with a rigid payment schedule. While treatment impacts are short-lived, they result in significant effects on contract cancellation in the long term. Our findings have implications for the applicability of planning interventions to behavioral outcomes requiring sustained effort, and for the design of contract flexibility when technological developments make frequent payments possible.

Smith S.J., Chateau J., Dorheim K., Drouet L., Durand-Lasserve O., Fricko O., Fujimori S., Hanaoka T., Harmsen M., Hilaire J., Keramidas K., Klimont Z., Luderer G., Moura M.C.P., Riahi K., Rogelj J., Sano F., van Vuuren D.P., Wada K.

Impact of methane and black carbon mitigation on forcing and temperature: a multi-model scenario analysis

Climatic Change , (2020) - 2020

The relatively short atmospheric lifetimes of methane (CH4) and black carbon (BC) have focused attention on the potential for reducing anthropogenic climate change by reducing Short-Lived Climate Forcer (SLCF) emissions. This paper examines radiative forcing and global mean temperature results from the Energy Modeling Forum (EMF)-30 multi-model suite of scenarios addressing CH4 and BC mitigation, the two major short-lived climate forcers. Central estimates of temperature reductions in 2040 from an idealized scenario focused on reductions in methane and black carbon emissions ranged from 0.18–0.26 °C across the nine participating models. Reductions in methane emissions drive 60% or more of these temperature reductions by 2040, although the methane impact also depends on auxiliary reductions that depend on the economic structure of the model. Climate model parameter uncertainty has a large impact on results, with SLCF reductions resulting in as much as 0.3–0.7 °C by 2040. We find that the substantial overlap between a SLCF-focused policy and a stringent and comprehensive climate policy that reduces greenhouse gas emissions means that additional SLCF emission reductions result in, at most, a small additional benefit of ~ 0.1 °C in the 2030–2040 time frame.

McMichael C., Dasgupta S., Ayeb-Karlsson S., and Kelman I.

A review of estimating population exposure to sea-level rise and the relevance for migration

Environmental Research Letters , August 2020 - 2020

This review analyses global or near-global estimates of population exposure to sea-level rise (SLR) and related hazards, followed by critically examining subsequent estimates of population migration due to this exposure. Our review identified 33 publications that provide global or near-global estimates of population exposure to SLR and associated hazards. They fall into three main categories of exposure, based on definitions in the publications: (i) the population impacted by specified levels of SLR; (ii) the number of people living in floodplains that are subject to coastal flood events with a specific return period; and (iii) the population living in low-elevation coastal zones (LECZs). Twenty of these 33 publications discuss connections between population migration and SLR. In our analysis of the exposure and migration data, we consider datasets, analytical methods, and the challenges of estimating exposure to SLR followed by potential human migration. We underscore the complex connections among SLR, exposure to its impacts, and migration. Human mobility to and from coastal areas is shaped by diverse socioeconomic, demographic, institutional, and political factors; there may be 'trapped' populations as well as those who prefer not to move for social, cultural, and political reasons; and migration can be delayed or forestalled through other adaptive measures. While global estimates of exposed and potentially migrating populations highlight the significant threats of SLR for populations living in low-lying areas at or near coastlines, further research is needed to understand the interactions among localised SLR and related hazards, social and political contexts, adaptation possibilities, and potential migration and (im)mobility decision-making.

Mistry M.N.

A High Spatiotemporal Resolution Global Gridded Dataset of Historical Human Discomfort Indices

Atmosphere , 2020, 11(8), 835 - 2020

Meteorological human discomfort indices or bioclimatic indices are important metrics to gauge potential risks to human health under varying environmental thermal exposures. Derived using sub-daily meteorological variables from a quality-controlled reanalysis data product (Global Land Data Assimilation System—GLDAS), a new high-resolution global dataset referred to as “HDI_0p25_1970_2018” is presented in this study. The dataset includes the following daily indices at 0.25° × 0.25° gridded resolution: (i) Apparent Temperature indoors (ATind); (ii) two variants of Apparent Temperature outdoors in shade (ATot); (iii) Heat Index (HI); (iv) Humidex (HDEX); (v) Wet Bulb Temperature (WBT); (vi) two variants of Wet Bulb Globe Temperature (WBGT); (vii) Thom Discomfort Index (DI); and (viii) Windchill Temperature (WCT). Spanning 49 years over the period 1970–2018, HDI_0p25_1970_2018 fills gaps in existing climate indices datasets by being the only high-resolution historical global-gridded daily time-series of multiple human discomfort indices based on different meteorological parameters, thus offering applications in wide-ranging climate zones and thermal-comfort environments.

Yalew S.G., van Vliet M.T.H., Gernaat D.E.H.J., De Cian E., Dasgupta S.

Impacts of climate change on energy systems in global and regional scenarios

Nature Energy , Volume 5, pages794–802(2020) - 2020

Although our knowledge of climate change impacts on energy systems has increased substantially over the past few decades, there remains a lack of comprehensive overview of impacts across spatial scales. Here, we analyse results of 220 studies projecting climate impacts on energy systems globally and at the regional scale. Globally, a potential increase in cooling demand and decrease in heating demand can be anticipated, in contrast to slight decreases in hydropower and thermal energy capacity. Impacts at the regional scale are more mixed and relatively uncertain across regions, but strongest impacts are reported for South Asia and Latin America. Our assessment shows that climate impacts on energy systems at regional and global scales are uncertain due partly to the wide range of methods and non-harmonized datasets used. For a comprehensive assessment of climate impacts on energy, we propose a consistent multi-model assessment framework to support regional-to-global-scale energy planning.

Hyun M., Kim Y.J., Eom J.

Assessing the Impact of a Demand-Resource Bidding Market on an Electricity Generation Portfolio and the Environment

Energy Policy , Volume 147, December 2020, 111918 - 2020

Although numerous studies have examined the economic benefits of demand response programs, the environmental impacts of such programs have been relatively underexplored. This study assesses the impact of demand resource bidding on the wholesale energy market and the environment, based on three years of high temporal-resolution data from Korea. In this demand resource bidding program, successful bidders were paid the system marginal price for reducing their electrical load at a given hour, which in turn reduced the generation of power from various technologies. This investigation of how carbon dioxide and particulate matter emissions from existing power systems changed with the introduction of the demand bidding program finds that the program altered the system operator's electricity generation portfolio and marginally abated carbon dioxide and particulate matter emissions from the power sector. It also shows that the environmental impact of the program varied over the course of the day and the year. The modest but statistically significant environmental impact of the demand resource bidding program points to the importance of including electricity demand resources in the discussion and development of energy and environmental policies for the power sector.

García-León D., Standardi G. and Staccione A.

An integrated approach for the estimation of agricultural drought costs

Land Use Policy , Volume 100, January 2021, 104923 - 2020

This study proposes a novel method to assess the overall economic effects of agricultural droughts using a coupled agronomic-economic approach that accounts for the direct and indirect impacts of this hazard in the economy. The proposed methodology is applied to Italy, where years showing different drought severity levels were analysed. Agricultural drought stress was measured using the fraction of Absorbed Photosynthetically Active Radiation (fAPAR). Using a comprehensive, field-level dataset on agricultural yields, fAPAR-based statistical models were applied to major Italian crops and direct crop productivity impacts were estimated. Local-level, crop-dependent productivity shocks were fed into a regionalised Computable General Equilibrium model specifically calibrated for the Italian economy. Direct and indirect aggregate impacts after allowing for inter-regional trade and input reallocation were obtained. Total estimated damages ranged from 0.55 to 1.75 billion euro, depending on the overall drought severity experienced, while regional losses showed large spatial variability. Although most of the losses were concentrated on agriculture, other related sectors, such as food industry manufacturing and wholesale services, were also substantially affected. Moreover, our simulations suggested the presence of a land-use substitution effect from less to more drought-resistant crops following a drought. This study sheds light on the characterisation of the total damages caused by droughts while provides a tool with applicability in the implementation of drought risk management plans and the evaluation of drought management policies.

Shayegh S., Sanchez D.L.

Impact of market design on cost-effectiveness of renewable portfolio standards

Renewable and Sustainable Energy Reviews , Volume 136, February 2021, 110397 - 2020

A renewable portfolio standard (RPS) is a policy instrument designed to increase production of clean energy technologies by mandating a minimum market share for these technologies. However, the cost-effectiveness of RPS in achieving its goal depends on the market structure, which impacts the level of competition in the market. Here, we analyze the impact of market structure on RPS effectiveness by calculating the amount of subsidies needed to achieve RPS mandates. We identify a critical market share of renewable energy that can be achieved by providing an equal amount of subsidy in both regulated and deregulated markets. We find wide variation in the preferred market structure for state-level RPS policies across the United States. Overall, deregulated markets minimize subsidy requirements for clean energy technologies with lower penetration rates. In contrast, regulated markets minimize subsidy requirements for higher market share mandates. The critical market share can help policymakers design more cost-effective RPS mandates in both regulated and deregulated markets.

Bonan J., Cattaneo C., D’Adda G., Tavoni M.

The interaction of descriptive and injunctive social norms in promoting energy conservation

Nature Energy , Volume 5, pages 900–909 - 2020

Behavioural interventions that leverage social norms are widely used to foster energy conservation. For instance, home energy reports combine information on others’ behaviour (descriptive feedback) and approval for norm compliant behaviour (injunctive feedback). In a randomized controlled trial, we investigated how descriptive and injunctive feedbacks interact to affect electricity use, and evaluate the effects of additional normative feedback presented in the form of descriptive or injunctive energy conservation norm primes. We found that consistent descriptive and injunctive feedback boosts the effectiveness of social information in inducing energy conservation. When descriptive and injunctive feedback are in conflict, conservation behaviour is a function of the relative strength of the two types of feedback. Additional normative feedback produces smaller gains when it reinforces existing information of the same type. These results suggest complementarities between different types of normative messages rather than superiority of any one kind of feedback.

Bonan J., Cattaneo C., D’Adda G., Tavoni M.

Combining information on others’ energy usage and their approval of energy conservation promotes energy saving behaviour

Nature Energy , Volume 5, pages 832–833 - 2020

Households reduced their electricity use the most when they learnt both that they were using more energy than their neighbours and that energy conservation was socially approved. This suggests that efforts to use social information to nudge conservation should combine different types of social feedback to maximize impact. Messages for policy The content of social information messages determines their impact on energy conservation. Combining descriptive information on neighbours’ efficient energy usage and injunctive social approval for energy efficiency maximizes the effectiveness of social information. Delivering inconsistent descriptive and injunctive information reduces the impact of each piece of feedback. Simply adding more pieces of feedback of the same type has a limited effect.

Lamperti F., Napoletano M., Roventini A.

Green Transitions and the Prevention of Environmental Disasters: market-based vs. command-and-control policies

Macroeconomic Dynamics , Volume 24, Issue 7, Pages: 1861-1880 - 2019

The paper compares the effects of market-based (M-B) and command-and-control (C&C) climate policies on the direction of technical change and the prevention of environmental disasters. Drawing on a model of endogenous growth and directed technical change, we show that M-B policies (carbon taxes and subsidies toward clean sectors) suffer from path dependence and exhibit bounded window of opportunities: delays in their implementation make them ineffective both in redirecting technical change, (i.e. triggering a transition toward clean energy) and in avoiding environmental catastrophes. On the contrary, we find that C&C interventions are favored by path dependence and guarantee policy effectiveness irrespectively of the timing of their introduction. As the hypothesis of path dependence in technological change has received vast empirical support and it is a key feature of many models of growth, we argue that C&C policies should be seen as a valuable and non-equivalent alternative to M-B interventions.

Baker E., Bosetti V., Salo A.

Robust portfolio decision analysis: An application to the energy research and development portfolio problem

European Journal of Operational Research , Volume 284, Issue 3, 1 August 2020, Pages 1107-1120 - 2020

Inspired by challenges in designing energy technology policy in the face of climate change, we address the problem of decision making under "deep uncertainty." We introduce an approach we call Robust Portfolio Decision Analysis, building on Belief Dominance as a prescriptive operationalization of a concept that has appeared in the literature under a number of names. The Belief Dominance concept synthesizes multiple conflicting sources of information to uncover alternatives that are intelligent responses in the presence of many beliefs. We use this concept to determine the set of non-dominated portfolios and to identify corresponding robust individual alternatives, thereby uncovering viable alternatives that may not be revealed otherwise. Our approach is particularly appropriate with multiple stakeholders, as it helps identify common ground while leaving flexibility for negotiation. We develop a proof-of-concept application aimed at informing decisions over investments into clean energy technology R&D portfolios in the context of climate change and illustrate how Robust Portfolio Decision Analysis helps identify robust individual investments.

Goglio P., Williams A.G., Balta-Ozkan N., Harris N.R.P., Williamson P., Huisingh D., Zhang Z., Tavoni M.

Advances and challenges of life cycle assessment (LCA) of greenhouse gas removal technologies to fight climate changes

Journal of Cleaner Production , Volume 244, 20 January 2020, 118896 - 2020

Several greenhouse gas removal technologies (GGRTs), also called negative emissions technologies (NET) have been proposed to help meet the Paris Climate Agreement targets. However, there are many uncertainties in the estimation of their effective greenhouse gas (GHG) removal potentials, caused by their different levels of technological development. Life Cycle Assessment (LCA) has been proposed as one effective methodology to holistically assess the potential of different GGRT removal approaches but no common framework is currently available for benchmarking and policy development. In this article, challenges for LCA are reviewed and discussed together with some alternative approaches for assessment of GGRTs. In particular, GGRTs pose challenges with regards to the functional unit, the system boundary of the LCA assessment, and the timing of emissions. The need to account within LCA of GGRTs for broader implications which involve environmental impacts, economic, social and political drivers is highlighted. A set of recommendations for LCA of GGRTs are proposed for a better assessment of the GGRTs and better accounting of their carbon removal potentials to meet the targets established within the Paris Agreement.

Rinscheid A., Pianta S., Weber E.U.

Fast track or Slo-Mo? Public support and temporal preferences for phasing out fossil fuel cars in the United States

Climate Policy , Volume 20, 2020 - Issue 1 - 2020

Policies to phase out fossil fuel cars are key to averting dangerous and irreversible changes to the earth’s climate. Given the potential impacts of such policies on every-day routines and behaviours, the factors that might increase or decrease their public acceptance require investigation. Here we study the role of specific policy design features in shaping Americans’ preferences for policy proposals to phase out fossil fuel cars. In light of the urgency of action against climate change, we are specifically interested in citizens’ preferences with respect to the timing of phase-out policies. Based on a demographically representative sample of 1,520 American residents rating 24,320 hypothetical policy scenarios in a conjoint experiment, we find that Americans prefer phase-out policies to be implemented no later than 2030. Policy features other than timing are also important: higher policy costs significantly reduce public support; subsidies for alternative technologies are preferred over taxes and bans; and policy co-benefits in terms of pollution reduction increase public support only when they are substantial. The study also investigates the role of individual characteristics in shaping policy preferences, finding that perceived psychological distance of climate change and party identification influence policy preferences. The results of this study have important implications for the political feasibility of rapid decarbonization initiatives like the ‘Green New Deal’ that are now being discussed in the US and beyond. Among these is the insight that smart sequencing of policies (early implementation of subsidies for low-emission technologies, followed by tax increases and/or bans) might help ensure majority support for a fossil fuel car phase-out.

Grané A., Salini S., Verdolini E.

Robust multivariate analysis for mixed-type data: Novel algorithm and its practical application in socio-economic research

Socio-Economic Planning Sciences , 23 June 2020, 100907 - 2020

We propose a novel method and algorithm for the analysis and clustering of mixed-type data using a hierarchical approach based on Forward Search. In our procedure, the identification of groups is based on the identification of similar trajectories and then linked to very intuitive two-dimensional maps. The proposed algorithm can use different measures for the calculation of distance in the case of mixed-type data, such as Gower’s metric and Related metric scaling. A key feature of our algorithm is its ability to discard redundant information from a given set of variables. The practical usefulness of the algorithm is illustrated through two applications of high relevance for empirical economic research. The first one focuses on comparing different indicators of environmental policy stringency in different countries. The second one applies our procedure to identify clusters of countries based on information regarding their institutional characteristics.

Schaeffer R., Bosetti V., Kriegler E., Riahi K., van Vuuren D.

Climatic change: CD-Links special issue on national low-carbon development pathways

Climatic Change , volume 162, pages 1779–1785(2020) - 2020

Schaeffer et al. (2020, this issue) explore the consequences of different policy assumptions and the derivation of globally consistent, national low-carbon development pathways for the seven largest GHG-emitting countries (EU28 as a bloc) in the world. They introduce the overall methodology for developing pathways used throughout papers included in the special issue, discussing the process by which global integrated assessment model (IAM) teams in the CD-Links project interacted and derived boundary conditions in the form of carbon budgets for the different countries. Carbon budgets derived for the different countries as a result of global IAM runs for the 2011–2050 period were then used in eleven different national energy-economy models and IAM for deriving low-carbon pathways for the seven countries in line with a well below 2 °C world up to 2050. The paper concludes by presenting a comparative assessment of the resulting pathways and of the challenges and opportunities associated with them, with results indicating quite different mitigation pathways for the different countries in terms of emissions reductions split by sectors and technological alternatives.

Skoczkowski T., Verdolini E., Bielecki S., Kochański M., Korczak K., Węglarz A.

Technology innovation system analysis of decarbonisation options in the EU steel industry

Energy , Volume 212, 1 December 2020, 118688 - 2020

Decarbonisation of the iron and steel (I&S) industry is crucial in the efforts to meet the EU GHG emission reduction objectives in 2030 … 2050. Promoting decarbonisation in this sector will necessarily require the identification, development, and diffusion of breakthrough technologies for I&S production.This paper uses an approach inspired by the Technology Innovation System (TIS) to analyse the development of technology in the EU I&S industry and identify potential avenues of its decarbonisation. We have described key elements of the TIS, analyse the functioning of these elements and their interactions in a more general context of innovation dynamics and policy design; The focus has been put on the role of actors and the identification of the main specific blocking and inducement mechanism in the TIS to better explain its functioning. Risks and uncertainties have also been discussed.We argue that deep decarbonisation in the I&S industry is feasible but its TIS requires firm support, mostly political, to finance intensive R&D and reduce the business risk. To this end, all actors shall support more effectively the invention and implementation of new radical production technologies. The recommendations are mostly addressed to politicians although stressing the importance of collaboration of all actors.

Berger L., Marinacci M.

Model Uncertainty in Climate Change Economics: A Review and Proposed Framework for Future Research

Environmental and Resource Economics , 77, pages475–501(2020) - 2020

We review recent models of choices under uncertainty that have been proposed in the economic literature. In particular, we show how different concepts and methods of economic decision theory can be directly useful for problems in environmental economics. The framework we propose is general and can be applied in many different fields of environmental economics. To illustrate, we provide a simple application in the context of an optimal mitigation policy under climate change.

Cattaneo C., Beine M., Fröhlich C.J., Kniveton D., Martinez-Zarzoso I., Mastrorillo M., Millock K., Piguet E., Schraven B.

Human Migration in the Era of Climate Change

Review of Environmental Economics and Policy , Volume 13, Issue 2, Summer 2019, Pages 189–206 - 2019

This paper reviews the recent literature across various disciplines in order to improve our understanding of the complex relationship between climate change and migration. To this end, the article discusses some consistent factors in the relationship between climate change and migration, identifies gaps in the literature, and recommends priorities for policy and future research in this area. More specifically, we will discuss the empirical evidence on the effects of different types of climatic events on different types of migration, examine the causes of heterogeneity in migratory responses to climate events, and highlight the interactions between different types of climate-induced adaptation and the mechanisms underlying the relationship

Fuso Nerini F., Sovacool B., Hughes N., Cozzi L., Cosgrave E., Howells M., Tavoni M., Tomei J., Zerriffi H., Milligan B.

Connecting climate action with other Sustainable Development Goals

Nature Sustainability , Volume 2, pages 674–680 - 2019

The international community has committed to combat climate change and achieve 17 Sustainable Development Goals (SDGs). Here we explore (dis)connections in evidence and governance between these commitments. Our structured evidence review suggests that climate change can undermine 16 SDGs, while combatting climate change can reinforce all 17 SDGs but undermine efforts to achieve 12. Understanding these relationships requires wider and deeper interdisciplinary collaboration. Climate change and sustainable development governance should be better connected to maximize the effectiveness of action in both domains. The emergence around the world of new coordinating institutions and sustainable development planning represents promising progress.

Kim Y.J., Wilson C.

Analysing Energy Innovation Portfolios from a Systemic Perspective

Energy Policy , 134, 110942 - 2019

A systemic perspective on energy innovation is required to design effective portfolios of energy innovation activities!

Emmerling J., Drouet L., van der Wijst K-I., Van Vuuren D., Bosetti V., Tavoni M.

The role of the discount rate for emission pathways and negative emissions

Environmental Research Letters , - 2019

The importance of the discount rate in cost-benefit analysis of long term problems, such as climate change, has been widely acknowledged. However, the choice of the discount rate is hardly discussed when translating policy targets –such as 1.5 and 2°C– into emission reduction strategies with the possibility of overshoot. Integrated assessment models (IAMs) have quantified the sensitivity of low carbon pathways to a series of factors, including economic and population growth, national and international climate policies, and the availability of low carbon technologies, including negative emissions. In this paper we show how and to what extent emission pathways are also influenced by the discount rate. Using both an analytical and a numerical IAM, we demonstrate how discounting affects key mitigation indicators, such as the time when net global emissions reach zero, the amount of carbon budget overshoot, and the carbon price profile. To ensure inter-generational equity and be coherent with cost-benefit analysis normative choices, we suggest that IAMs should use lower discount rates than the ones currently adopted. For a 1000 GtCO2 carbon budget, reducing the discount rate from 5% to 2% would more than double today's carbon price (from 21 to 55 $/tCO2) and more than halve the carbon budget overshoot (from 46% to 16%), corresponding to a reduction of about 300 GtCO2 of net negative emissions over the century.

Roe S., Streck C., Obersteiner M., Frank S., Griscom B., Drouet L., Fricko O., Gusti M., Harris N., Hasegawa T., Hausfather Z., Havlík P., House J., Nabuurs G-J., Popp A., Sánchez M.J.S., Sanderman J., Smith P., Stehfest E., Lawrence D.

Contribution of the land sector to a 1.5°C World

Nature Climate Change , Volume 9, pages 817–828 - 2019

The Paris Agreement introduced an ambitious goal to limit warming to 1.5°C above pre-industrial levels. Here, we combine modelling and a meta-analysis of mitigation strategies to develop a land sector roadmap of priority measures and regions that can help to achieve the 1.5°C temperature goal. Transforming the land sector (agriculture, forestry, wetlands, bioenergy) towards more sustainable practices could contribute ~30% (15 GtCO2e/yr) of the global mitigation needed in 2050 to deliver on the 1.5°C target, however it will require substantially more ambitious effort than the 2˚C target. Addressing risks, barriers and incentives are necessary to scale up mitigation while maximizing sustainable development, food security, and environmental co-benefits.

Coronese M., Lamperti F., Keller K., Chiaromonte F., Roventini A.

Evidence for sharp increase in the economic damages of extreme natural disasters

Proceedings of the National Academy of Sciences (PNAS) , - 2019

Climate change has increased the frequency and intensity of natural disasters. Does this translate into increased economic damages? To date, empirical assessments of damage trends have been inconclusive. Our study demonstrates a temporal increase in extreme damages, after controlling for a number of factors. We analyze event-level data using quantile regressions to capture patterns in the damage distribution (not just its mean) and find strong evidence of progressive rightward skewing and tail-fattening over time. While the effect of time on averages is hard to detect, effects on extreme damages are large, statistically significant, and growing with increasing percentiles. Our results are consistent with an upwardly curved, convex damage function, which is commonly assumed in climate-economics models. They are also robust to different specifications of control variables and time range considered and indicate that the risk of extreme damages has increased more in temperate areas than in tropical ones. We use simulations to show that underreporting bias in the data does not weaken our inferences; in fact, it may make them overly conservative.

Lamperti F., Bosetti V., Riventini A., Tavoni M.

The public costs of climate-induced financial instability

Nature Climate Change , Volume 9, pages 829–833 - 2019

Recent evidence suggests that climate change will significantly affect economic growth and several productive elements of modern economies, such as workers and land1,2,3,4. Although historical records indicate that economic shocks might lead to financial instability, few studies have focused on the impact of climate change on the financial actors5,6. This paper examines how climate-related damages impact the stability of the global banking system. We use an agent-based climate–macroeconomic model calibrated on stylized facts, future scenarios and climate impact functions7 affecting labour and capital. Our results indicate that climate change will increase the frequency of banking crises (26–248%). Rescuing insolvent banks will cause an additional fiscal burden of approximately 5–15% of gross domestic product per year and increase the ratio of public debt to gross domestic product by a factor of 2. We estimate that around 20% of such effects are caused by the deterioration of banks’ balance sheets induced by climate change. Macroprudential regulation attenuates bailout costs, but only moderately. Our results show that leaving the financial system out of climate–economy integrated assessment may lead to an underestimation of climate impacts and that financial regulation can play a role in mitigating them.

Markandya A., De Cian E., Drouet L., Polanco-Martínez J.M., Bosello F.

Building Risk into the Mitigation/Adaptation Decisions simulated by Integrated Assessment Models

Environmental and Resource Economics , 74(4), 1687-1721, December 2019 - 2019

This paper proposes an operationally simple and easily generalizable methodology to incorporate climate change damage uncertainty into Integrated Assessment Models (IAMs). First uncertainty is transformed into a risk measure by extracting damage distribution means and variances from an ensemble of socio economic and climate change scenarios. Then a risk premium is computed under different degrees of risk aversion, quantifying what society would be willing to pay to insure against the uncertainty of the damages. Our estimates show that the premium for the risk is a potentially significant addition to the “standard average damage”, but highly sensitive to the attitudes toward risk. In the last research phase, the risk premium is incorporated into the climate change damage function of a widely used IAM which shows, consequently, a substantial increase in both mitigation and adaptation efforts, reflecting a more precautionary attitude by the social planner. Interestingly, adaptation is stimulated more than mitigation in the first half of this century, while the situation reverses afterwards.

Berger L., Bosetti V.

Are policymakers ambiguity averse?

The Economic Journal , September 2019 - 2019

We investigate the ambiguity preferences of a unique sample of real-life policymakers at the Paris UN climate conference (COP21). We find that policymakers are generally ambiguity averse. Using a simple design, we are moreover able to show that these preferences are not necessarily due to an irrational behavior, but rather to intrinsic preferences over unknown probabilities. Exploring the heterogeneity within our sample, we also show that the country of origin and the degree of quantitative sophistication affect policymakers’ attitudes towards compound risk, but not towards ambiguity. Robustness results are obtained in a lab experiment with a sample of university students.

Bonan J., Cattaneo C., D’Adda G., Tavoni M.

Can we make social information programs more effective? The role of identity and values

RFF Working Papers Series , - 2019

Social information programs are increasingly used to nudge behavioural change, and the literature documents strong heterogeneity in their impact along household and individual traits. Using data from a large field experiment on household energy conservation, we combine electricity metering and survey data to study how environmental values affect the impact of the program. We then leverage the role of values by augmenting social information messages with an environmental self-identity prime. We find that social information is more effective when environmental self-identity is made more salient, but only among individuals who acted pro-environmentally in the past.

Cattaneo C., Massetti E.

Does harmful climate increase or decrease migration? Evidence from Rural Households in Nigeria

Climate Change Economics , volume 10(4), pp 1950013-1 - 1950013-36 - 2019

This paper analyzes whether migration is an adaptation strategy that households employ to cope with climate in Nigeria. We estimate our model using the cross-sectional variation in climate and long-term migration decisions because we are interested in the average response to longterm climatic conditions. For households that operate farms, we find that the relationship between climate and migration is nonlinear. In particular, climates closer to ideal farming conditions are associated with a higher propensity to migrate, whereas in the least favorable climatic conditions, the propensity to migrate declines. The marginal effect of rainfall and temperature changes on migration varies by season. We estimate the impact of climate change on the number of migrant households in 2031–2060 and 2071–2100, ceteris paribus. With current population levels, climate change generates between 3.6 and 6.3 million additional migrants, most of them being internal. However, these estimates are not statistically significant.

Cattaneo C.

Migrant networks and adaptation

Nature Climate Change , volume 9, pp 907-908 - 2019

This paper tries to shed light on the importance of migrants’ networks aid in faciliating climate-induced migration. The point point raised by the article is that the ability to use migration as an ex-post strategy to cope with the impacts of a climate related shock relies heavily on the presence of a large established network of migrants. The finding that an existing migrant network potentially increases the chance of leaving a community after an extreme weather event is important because it gives some indication of where vulnerable populations might become locked into their geography, and where they might not.

Emmerling J., Kornek U., Bosetti V., Lessmann K.

Climate thresholds and heterogeneous regions: implications for coalition formation

The Review of International Organizations , pp 1–24 - 2019

The threat of climate catastrophes has been shown to radically change optimal climate policy and prospects for international climate agreements. We characterize the strategic behavior in emissions mitigation and agreement participation with a potential climate catastrophe happening at a temperature threshold. Players are heterogeneous in a conceptual and two numerical models. We confirm that thresholds can induce large, stable coalitions. The relationship between the location of the threshold and the potential for cooperation is non-linear, with the highest potential for cooperation at intermediate temperature thresholds located between 2.5 and 3 degrees of global warming. We find that some regions such as Europe, the USA and China are often pivotal to keeping the threshold because the rest of the world abandons ambitious mitigation and the threshold is crossed without their participation. As a result, their incentives to cooperate can be amplified at the threshold. This behavior critically depends on the characteristics of the threshold as well as the numerical model structure. Conversely, non-pivotal regions are more likely to free-ride as the threshold inverts the strategic response of the remaining coalition. Moreover, we find that our results depend on which equilibrium concepts is applied to analyze coalition formation as well as the introduction of uncertainty about the threshold.

Marzi S., Farnia L., Dasgupta S., Mysiak J., Lorenzoni A.

Competence analysis for promoting energy efficiency projects in developing countries: The case of OPEC

Energy , Volume 189, 15 December 2019, 115996 - 2019

Enhancing energy efficiency is an important goal of climate change mitigation policies. Promoting energy efficiency projects in developing countries has faced several barriers, preventing optimal investments. One of the main barriers has been the lack of internationally recognized indices to compare projects across countries. In this era of global political turbulence and a looming trade-war that will likely lead to unjustified tariffs, it is critical to provide publicly available robust indices for investors. We construct the Energy Efficiency Country Attractiveness Index to evaluate countries' competitiveness in terms of energy efficiency potentials and related investment risks to aid investment decision-making in the oil and gas sector. Our index includes 30 indicators congregated in four pillars covering political, economic, social and technological factors, combined by means of Fuzzy measures and Choquet integral according to the preferences of a panel of experts. Although experts consider the economic and technological factors as the most important elements affecting investment in the energy related projects and they are moderately tolerant following disjunctive behaviour in dealing with the political, economic, social, and technological criteria, squared correlation analysis shows that, at least for OPEC countries, the political pillar is the crucial one in shaping the composite index.

Schinko, T., Drouet, L., Vrontisi, Z., Hof, A. F., Hinkel, J., Mochizuki, J., Bosetti. V., Fragkiadakis. P., van Vuuren. D. P. & Lincke, D.

Economy-wide effects of coastal flooding due to sea level rise: A multi-model simultaneous treatment of mitigation, adaptation, and residual impacts

Environmental Research Communications , Volume 2, Number 1 - 2020

This article presents a multi-model assessment of the macroeconomic impacts of coastal flooding due to sea level rise and the respective economy-wide implications of adaptation measures for two greenhouse gas (GHG) concentration targets, namely the Representative Concentration Pathways (RCP)2.6 and RCP4.5, and subsequent temperature increases. We combine our analysis, focusing on the global level, as well as on individual G20 countries, with the corresponding stylized RCP mitigation efforts in order to understand the implications of interactions across mitigation, adaptation and sea level rise on a macroeconomic level. Our global results indicate that until the middle of this century, differences in macroeconomic impacts between the two climatic scenarios are small, but increase substantially towards the end of the century. Moreover, direct economic impacts can be partially absorbed by substitution effects in production processes and via international trade effects until 2050. By 2100 however, we find that this dynamic no longer holds and economy-wide effects become even larger than direct impacts. The disturbances of mitigation efforts to the overall economy may in some regions and for some scenarios lead to a counterintuitive result, namely to GDP losses that are higher in RCP26 than in RCP45, despite higher direct coastal damages in the latter scenario. Within the G20, our results indicate that China, India and Canada will experience the highest macroeconomic impacts, in line with the respective direct climatic impacts, with the two first large economies undertaking the highest mitigation efforts in a cost-efficient global climate action. A sensitivity analysis of varying socioeconomic assumptions highlights the role of climate-resilient development as a crucial complement to mitigation and adaptation efforts.

Galeotti M., Salini S., Verdolini E.

Measuring Environmental Policy Stringency: Approaches, Validity, and Impact on Environmental Innovation and Energy Efficiency

Energy Policy , Volume 136, 111052 - 2020

Solid tests of the impact of environmental and energy policy on important economic outcomes, such as innovation, productivity, competitiveness and energy and carbon efficiency are impaired by the lack of appropriate empirical proxies for the commitment to, and stringency of, environmental policy. We contribute to the literature by: (1) computing different indicators of environmental policy stringency, (2) testing to what extent they convey similar insights through a statistical comparison exercise, and (3) showing the implications of using one or the other indicator in two illustrative empirical applications focused on environmental innovation and energy efficiency. We conclude by highlighting the implications of our analysis for empirical research focusing on the evaluation of policy impacts, and highlight fruitful future research avenues.

Jewell, J., Emmerling, J., Vinichenko, V., Bertram C., Berger L., Daly H. E., Keppo I., Krey V., Gernaat D. E. H. J., Fragkiadakis K., McCollum D., Paroussas L., Riahi K., Tavoni M., van Vuuren D.

Reply to: Why fossil fuel producer subsidies matter

Nature , Volume 578, pages E5–E7(2020) - 2020

Replying to: P. Erickson et al. Nature https://doi.org/10.1038/s41586-019-1920-x (2020)

Lamperti F., Dosi G., Napoletano M., Roventini A., Sapio A.

Climate change and green transitions in an agent-based integrated assessment model

Technological Forecasting and Social Change , Volume 153, April 2020, 119806 - 2020

In this paper we employ an agent-based integrated assessment model to study the likelihood of transition to green, sustainable growth in presence of climate damages. The model comprises heterogeneous fossil-fuel and renewable plants, capital- and consumption-good firms and a climate box linking greenhouse gasses emission to temperature dynamics and microeconomic climate shocks affecting labour productivity and energy demand of firms. Simulation results show that the economy possesses two statistical equilibria: a carbon-intensive lock-in and a sustainable growth path characterized by better macroeconomic performances. Once climate damages are accounted for, the likelihood of a green transition depends on the damage function employed. While energy efficiency shocks (which raise the demand of energy) exert little effects on the macroeconomic performance compared to labour productivity impacts, they disproportionally harm the chances of an energy transition by exacerbating path-dependence in the process of technical change in favour of fossil-fuel technologies. Finally, we run a series of policy experiments on carbon (fossil fuel) taxes and green subsidies. We find that the effectiveness of such market-based instruments is limited, though it also depends upon the different channels climate change affects the economy through. Complementary policies might be required to avoid carbon-intensive lock-ins.

Lamperti F., Mazzucato M., Roventini A., Semieniuk G.

The green transition: public policy, finance, and the role of the State

Vierteljahrshefte zur Wirtschaftsforschung , Vol. 88 (2019), Iss. 2: pp. 73–88 - 2020

While investments into renewable energy technologies are growing almost everywhere, the chances to meet ambitious emission and climate targets, as those envisaged in the Paris Agreement, are scant. To speed up the transition, policy makers need to design and implement a policy mix that could affect not just the quantity of green finance, but its quality as well. In this paper, we argue that a mission-oriented approach to the transition from an economy with high, to one with low greenhouse gas emissions, coupled with the state taking on the role of an entrepreneurial state, could provide an effective win-win strategy to address climate change concerns (embodied in emissions reduction and adaptation boosting) and build the basis for the next phase of growth and technological progress. In practice, this amounts to (i) abandoning the view that cost-internalization of environmental externalities would suffice to induce an effective transition (ii) developing a multi-level and cross-sectoral governance of the transition, with a clear direction in terms of the technological trajectory to favour, and (iii) designing a policy mix encompassing: fiscal instruments, targets and standards; public-private co-funding schemes; financial regulation; and disclosure practices. Social scientists should support such ambitious policy-design processes through adequate model development, where a combination of policies, and a directive role of the state, can be accommodated and examined in detail.

Antonelli C., Coromaldi M., Dasgupta S., Emmerling J., Shayegh S.

Climate Impacts on Nutrition and Labor Supply Disentangled – an Analysis for Rural Areas of Uganda.

Environment and Development Economics , March 2020, 1–26 - 2020

The entire agricultural supply chain, from crop production to food consumption, is expected to suffer significant damages from climate change. This paper empirically investigates the effects of warming on agricultural labor supply through variation in dietary intake in rural Uganda. We examine labor supply, food consumption, and overall social welfare under various climate change scenarios. First, we combine nationally representative longitudinal survey data with high-resolution climatic data using an instrumental variable approach. Controlling for calorie intake, our study shows that warming has a non-linear impact on agricultural labor supply, with the number of hours worked being optimized at an optimal temperature of 21.3°C. Using these econometric estimates to parametrize an overlapping generations model, we find that under RCP8.5, output per adult decreases by 20 per cent by the end of the century due to the combined effect of climate change on food consumption and labor supply.

Parrado, R., Bosello, F., Delpiazzo, E., Hinkel, J., Lincke, D., and S. Brown

Fiscal effects and the potential implications on economic growth of sea-level rise impacts and coastal zone protection

Climatic Change , 160, pages283–302(2020) - 2020

Climate change impacts on coastal zones could be significant unless adaptation is undertaken. One particular macroeconomic dimension of sea level rise (SLR) impacts that has received no attention so far is the potential stress of SLR impacts on public budgets. Adaptation will require increased public expenditure to protect assets at risk and could put additional stress on public budgets. We analyse the macroeconomic effects of SLR adaptation and impacts on public budgets. We include fiscal indicators in a climate change impact assessment focusing on SLR impacts and adaptation costs using a computable general equilibrium model extended with a detailed description of the public sector. Coastal protection expenditure is financed issuing government bonds, meaning that coastal adaptation places an additional burden on public budgets. SLR impacts are examined using several scenarios linked to three different Representative Concentration Pathways: 2.6, 4.5, and 8.5, and two Shared Socioeconomic Pathways: SSP2 and SSP5. Future projections of direct damages of mean and extreme SLR and adaptation costs are generated by the Dynamic Interactive Vulnerability Assessment framework. Without adaptation, all regions of the world will suffer a loss and public deficits increase respect to the reference scenario. Higher deficits imply higher government borrowing from household savings reducing available resources for private investments therefore decreasing capital accumulation and growth. Adaptation benefits result from two mechanisms: (i) the avoided direct impacts, and (ii) a reduced public deficit effect. This allows for an increased capital accumulation, suggesting that support to adaptation in deficit spending might trigger positive effects on public finance sustainability.

van Ginkel, K., Botzen, W., Haasnoot, M., Bachner, G., Steininger, K., Hinkel, J., Watkiss, P., Boere, E., Jeuken, A., Sainz de Murieta, E, Bosello, F.

Climate change induced socio-economic tipping points: review and stakeholder consultation for policy relevant research

Environmental Research Letters , Volume 15, Number 2 - 2020

Tipping points have become a key concept in research on climate change, indicating points of abrupt transition in biophysical systems as well as transformative changes in adaptation and mitigation strategies. However, the potential existence of tipping points in socio-economic systems has remained underexplored, whereas they might be highly policy relevant. This paper describes characteristics of climate change induced socio-economic tipping points (SETPs) to guide future research on SETPS to inform climate policy. We review existing literature to create a tipping point typology and to derive the following SETP definition: a climate change induced, abrupt change of a socio-economic system, into a new, fundamentally different state. Through stakeholder consultation, we identify 22 candidate SETP examples with policy relevance for Europe. Three of these are described in higher detail to identify their tipping point characteristics (stable states, mechanisms and abrupt change): the collapse of winter sports tourism, farmland abandonment and sea-level rise-induced migration. We find that stakeholder perceptions play an important role in describing SETPs. The role of climate drivers is difficult to isolate from other drivers because of complex interplays with socio-economic factors. In some cases, the rate of change rather than the magnitude of change causes a tipping point. The clearest SETPs are found on small system scales. On a national to continental scale, SETPs are less obvious because they are difficult to separate from their associated economic substitution effects and policy response. Some proposed adaptation measures are so transformative that their implementations can be considered an SETP in terms of 'response to climate change'. Future research can focus on identification and impact analysis of tipping points using stylized models, on the exceedance of stakeholder-defined critical thresholds in the RCP/SSP space and on the macro-economic impacts of new system states.

Berger L., Bréchete Th., Pestiaux J., van Steenberghe V.

Case-study - The transition of Belgium towards a low carbon society: A macroeconomic analysis fed by a participative approach

Energy Strategy Reviews , Volume 29, May 2020, 100463 - 2020

We describe a new approach for analyzing the socio-economic impacts of a low carbon transition. It consists in feeding a traditional macroeconomic model of a national economy, namely Belgium, with the results of a participative modelling exercise based on a prospective energy accounting model, the so-called Calculator. While contributing to overcoming important economic modelling barriers, this approach fosters stakeholders engagement and allows for extending the scope of the energy transition impact analysis.

Berger L., Bosetti V.

Characterizing ambiguity attitudes using model uncertainty

Journal of Economic Behavior & Organization , March 19, 2020 - 2020

We report the results of an experiment eliciting individuals’ attitudes toward risk and model uncertainty. Using a joint elicitation procedure, we then precisely quantify the strength of individuals’ attitude toward ambiguity in the context of the smooth model and characterize its main properties. Our results provide empirical evidence of decreasing absolute ambiguity aversion (DAAA) and constant relative ambiguity aversion (CRAA). These results shed new light on the way ambiguity attitudes may affect important decisions, such as the choice of health insurance policies or the optimal investment strategy in the face of climate change.

Malik A., Bertram C., Després J., Emmerling J., Fujimori S., Garg A., Kriegler E., et al.

Reducing stranded assets through early action in the Indian power sector

Environmental Research Letters , April 2020 - 2020

Cost-effective achievement of the Paris Agreement's long-term goals requires the unanimous phase-out of coal power generation by mid-century. However, continued investments in coal power plants will make this transition difficult. India is one of the major countries with significant under construction and planned increase in coal power capacity. To ascertain the likelihood and consequences of the continued expansion of coal power for India's future mitigation options, we use harmonised scenario results from national and global models along with projections from various government reports. Both these approaches estimate that coal capacity is expected to increase until 2030, along with rapid developments in wind and solar power. However, coal capacity stranding of the order of 133-237 GW needs to occur after 2030 if India were to pursue an ambitious climate policy in line with a well-below 2°C target. Earlier policy strengthening starting after 2020 can reduce stranded assets (14-159 GW) but brings with it political economy and renewable expansion challenges. We conclude that a policy limiting coal plants to those under construction combined with higher solar targets could be politically feasible, prevent significant stranded capacity, and allow higher mitigation ambition in the future.

Ricke K., Drouet L., Tavoni M., Caldeira K.

Country-level social cost of carbon

Nature Climate Change , Volume 8, pages 895–900 - 2018

The social cost of carbon (SCC) is a commonly employed metric of the expected economic damages from carbon dioxide (CO2) emissions. Although useful in an optimal policy context, a world-level approach obscures the heterogeneous geography of climate damage and vast differences in country-level contributions to the global SCC, as well as climate and socio-economic uncertainties, which are larger at the regional level. Here we estimate country-level contributions to the SCC using recent climate model projections, empirical climate-driven economic damage estimations and socio-economic projections. Central specifications show high global SCC values (median, US$417 per tonne of CO2 (tCO2); 66% confidence intervals, US$177–805 per tCO2) and a country-level SCC that is unequally distributed. However, the relative ranking of countries is robust to different specifications: countries that incur large fractions of the global cost consistently include India, China, Saudi Arabia and the United States.

van Sluisveld M.A.E., Harmsen M.J.H.M., van Vuuren D.P., Bosetti V., Wilson C., van der Zwaan B.

Comparing future patterns of energy system change in 2°C scenarios to expert projections

Global Environmental Change , Volume 50, 201–211 - 2018

Integrated assessment models (IAMs) are computer-based instruments used to assess the implications of human activity on the human and earth system. They are simultaneously also used to explore possible response strategies to climate change. As IAMs operate simplified representations of real-world processes within their model structures, they have been frequently criticised to insufficiently represent the opportunities and challenges in future energy systems over time. To test whether projections by IAMs diverge in systematic ways from projections made by technology experts we elicited expert opinion on prospective change for two indicators and compared these with the outcomes of IAM studies. We specifically focused on five (energy) technology families (solar, wind, biomass, nuclear, and carbon capture and storage or CCS) and compared the considered implications of the presence or absence of climate policy on the growth and diffusion of these technologies over the short (2030) to medium (2050) term. IAMs and experts were found to be in relatively high agreement on system change in a business-as-usual scenario, albeit with significant differences in the estimated magnitude of technology deployment over time. Under stringent climate policy assumptions, such as the internationally agreed upon objective to limit global mean temperature increase to no more than 2 °C, we found that the differences in estimated magnitudes became smaller for some technologies and larger for others. Compared to experts, IAM simulations projected a greater reliance on nuclear power and CCS to meet a 2 °C climate target. In contrast, experts projected a stronger growth in renewable energy technologies, particularly solar power. We close by discussing several factors that are considered influential to the alignment of the IAM and expert perspectives in this study

Gillingham K., Nordhaus W., Anthoff D., Bosetti V., Blanford G., Christensen P., McJeon H., Reilly J., Sztorc P.

Modeling Uncertainty in the Integrated Assessment of Climate Change: A Multi-Model Comparison

Journal of the Association of Environmental and Resource Economists , Volume 5, Number 4, pp 791-826 - 2018

The economics of climate change involves a vast array of uncertainties, complicating our understanding of climate change. This study explores uncertainty in baseline trajectories using multiple integrated assessment models commonly used in climate policy development. The study examines model and parametric uncertainties for population, total factor productivity, and climate sensitivity. It estimates the probability distributions of key output variables, including CO2 concentrations, temperature, damages, and social cost of carbon (SCC). One key finding is that parametric uncertainty is more important than uncertainty in model structure. Our resulting distributions provide a useful input into climate policy discussions.

Verdolini E., Anadón L.D., Baker E., Bosetti V., Aleluia Reis L.

The Future Prospects of Energy Technologies: Insights from Expert Elicitations

Review of Environmental Economics and Policy , Volume 12, Issue 1, 1 February 2018, Pages 133–153 - 2018

Expert elicitation is a structured approach for obtaining judgments from experts about items of interest to decision makers. This method has been increasingly applied in the energy domain to collect information on the future cost, technical performance, and associated uncertainty of specific energy technologies. This article has two main objectives: (1) to introduce the basics of expert elicitations, including their design and implementation, highlighting their advantages and disadvantages and their potential to inform policymaking and energy system decisions; and (2) to discuss and compare the results of a subset of the most recent expert elicitations on energy technologies, with a focus on future cost trajectories and implied cost reduction rates. We argue that the data on future energy costs provided by expert elicitations allows for more transparent and robust analyses that incorporate technical uncertainty, which can then be used to support the design and assessment of energy and climate change mitigation policies.

Rogelj J., Popp A., Calvin K., Luderer G., Emmerling J., Gernaat D., Fujimori S., Strefler J., Hasegawa T., Marangoni G., Krey V., Kriegler E., Riahi K., van Vuuren D., Doelman J., Drouet L., Edmonds J., Fricko O., Harmsen M., Havlík P., Humpenöder F., Stehfest E., Tavoni M.

Scenarios towards limiting global-mean temperature increase below 1.5°C

Nature Climate Change , Volume 8, 8, pages 325–332(2018) - 2018

The 2015 Paris Agreement calls for countries to pursue efforts to limit global-mean temperature rise to 1.5 °C. The transition pathways that can meet such a target have not, however, been extensively explored. Here we describe scenarios that limit end-of-century radiative forcing to 1.9 W m−2, and consequently restrict median warming in the year 2100 to below 1.5 °C. We use six integrated assessment models and a simple climate model, under different socio-economic, technological and resource assumptions from five Shared Socio-economic Pathways (SSPs). Some, but not all, SSPs are amenable to pathways to 1.5 °C. Successful 1.9 W m−2 scenarios are characterized by a rapid shift away from traditional fossil-fuel use towards large-scale low-carbon energy supplies, reduced energy use, and carbon-dioxide removal. However, 1.9 W m−2 scenarios could not be achieved in several models under SSPs with strong inequalities, high baseline fossil-fuel use, or scattered short-term climate policy. Further research can help policy-makers to understand the real-world implications of these scenarios.

McCollum D., Zhou W., Bertram C., Sytze de Boer H., Bosetti V., et al.

Energy investment needs for fulfilling the Paris Agreement and achieving the Sustainable Development Goals

Nature Energy , volume 3, pages 589–599 - 2018

Low-carbon investments are necessary for driving the energy system transformation that is called for by both the Paris Agreement and Sustainable Development Goals. Improving understanding of the scale and nature of these investments under diverging technology and policy futures is therefore of great importance to decision makers. Here, using six global modelling frameworks, we show that the pronounced reallocation of the investment portfolio required to transform the energy system will not be initiated by the current suite of countries’ Nationally Determined Contributions. Charting a course toward ‘well below 2 °C’ instead sees low-carbon investments overtaking fossil investments globally by around 2025 or before and growing thereafter. Pursuing the 1.5 °C target demands a marked upscaling in low-carbon capital beyond that of a 2 °C-consistent future. Actions consistent with an energy transformation would increase the costs of achieving the goals of energy access and food security, but reduce the costs of achieving air-quality goals.

McCollum, D., Wilson C., Bevione M., Carrara S., Edelenbosch O.Y., Emmerling J., Guivarch C., Karkatsoulis P., Keppo I., Krey V., Lin Z., Ó Broin E., Paroussos L., Pettifor H., Ramea K., Riahi K., Sano F., Rodriguez B.S., van Vuuren D.

Interaction of consumer preferences and climate policies in the global transition to low-carbon vehicles

Nature Energy , Volume 3, pages 664–673 - 2018

Burgeoning demands for mobility and private vehicle ownership undermine global efforts to reduce energy-related greenhouse gas emissions. Advanced vehicles powered by low-carbon sources of electricity or hydrogen offer an alternative to conventional fossil-fuelled technologies. Yet, despite ambitious pledges and investments by governments and automakers, it is by no means clear that these vehicles will ultimately reach mass-market consumers. Here, we develop state-of-the-art representations of consumer preferences in multiple global energy-economy models, specifically focusing on the non-financial preferences of individuals. We employ these enhanced model formulations to analyse the potential for a low-carbon vehicle revolution up to 2050. Our analysis shows that a diverse set of measures targeting vehicle buyers is necessary to drive widespread adoption of clean technologies. Carbon pricing alone is insufficient to bring low-carbon vehicles to the mass market, though it may have a supporting role in ensuring a decarbonized energy supply.

Dasgupta S., De Cian E.

The influence of institutions, governance, and public opinion on the environment: Synthesized findings from applied econometrics studies

Energy Research & Social Science , Volume 43, September 2018, Pages 77-95 - 2018

We synthesize the empirical contributions from the existing applied economics literature examining the influence of institutions and governance on environmental policy, environmental performance, and green investment. The literature on the influence of populism and public opinion on environmental policy adoption is also reviewed in line with the special issue. First, the paper describes how the relationship between institutions, environmental performance and environmental policy have been conceptualized and operationalized in the literature and summarizes the main findings. The second part of the paper outlines avenues for future research with specific attention to the energy transition and climate change literature. With respect to the positivist worldview adopted by this paper, we highlight various opportunities for empirical work that have recently emerged with the growing availability of data in the field of green investments, climate, and energy policy. Expanding the current empirical literature towards these research topics is of both scientific and policy relevance and can provide important insights on the broader field of sustainability transition and sustainable development. Regarding the alternative, non-positivist worldviews, future research could explore ways to connect the richer approaches such as complex adaptive systems and socio-technical transition studies with applied econometric methods, as well as future-oriented studies.

Dasgupta S.

Burden of climate change on malaria mortality

International Journal of Hygiene and Environmental Health , Volume 221, Issue 5, June 2018, Pages 782-791 - 2018

In 2016, an estimated 445,000 deaths and 216 million cases of malaria occurred worldwide, while 70% of the deaths occurred in children under five years old. Changes in climatic exposures such as temperature and precipitation make malaria one of the most climate sensitive outcomes. Using a global malaria mortality dataset for 105 countries between 1980 and 2010, we find a non-linear relationship between temperature and malaria mortality and estimate that the global optimal temperature threshold beyond which all-age malaria mortality increases is 20.8 °C, while in the case of child mortality; a significantly lower optimum temperature of 19.3° is estimated. Our results also suggest that this optimal temperature is 28.4 °C and 26.3 °C in Africa and Asia, respectively – the continents where malaria is most prevalent. Furthermore, we estimate that child mortality (ages 0–4) is likely to increase by up to 20% in some areas due to climate change by the end of the 21st century.

Campagnolo L., Eboli F., Farnia L., Carraro C.

Supporting the UN SDGs transition: methodology for sustainability assessment and current worldwide ranking.

Economics: The Open-Access, Open-Assessment E-Journal , 12 (2018-10): 1–31 - 2018

This analysis lies in the stream of research related to the quantitative assessment of the Sustainable Development Goals (SDGs), adopted by the United Nations at the end of September 2015. We assemble a composite multi-dimensional index and a worldwide ranking of current sustainability. This makes it possible to assess the strengths and weaknesses of today’s socio-economic development, as well as environmental criticalities worldwide. The methodology goes through the following steps: screening of indicators capable of addressing the UN’s SDGs; data collection from relevant sources; organization into three pillars of sustainability (economy, society, and environment); normalization to a common metrics; aggregation of the 26 indicators into composite indices by pillars as well as in a multi-dimensional index. The final ranking includes 139 countries. Sweden, Norway and Switzerland are at the top of the ranking.

Verdolini E., Vona F., Popp D.

Bridging the gap: do fast reacting fossil technologies facilitate renewable energy diffusion?

Energy Policy , Volume 116, May 2018, Pages 242-256 - 2018

The diffusion of renewable energy in the power system implies high supply variability. Lacking economically viable storage options, renewable energy integration is possible thanks to the presence of modern mid-merit fossil-based technologies, which act as back-up capacity. This paper discusses the role of modern fossil-based power generation technologies in supporting renewable energy investments. We study the deployment of these two technologies conditional on all other drivers in 26 OECD countries between 1990 and 2013. We show that moving from the first to the third quartile of the distribution of modern fossil technologies is associated with an increase in yearly renewable energy investment of between 6 and 14 kW per thousand people, on average and ceteris paribus. This is a sizeable effect, considering that average yearly renewable capacity addition in our sample are around 12 kW per thousand people. These findings are robust to different econometric specifications, various definitions of modern fossil technologies and are stronger for wind, which is more intermittent and for which the mismatch between supply and demand is more marked. Our analysis points to the substantial indirect costs of renewable energy integration and highlights the complementarity of investments in different generation technologies for a successful decarbonization process.

van den Berg N.J., Hof A.F., den Elzen M.G.J., van Vuuren D. P., Chen W., Drouet L., Emmerling J., Fujimori S., Höhne N., Köberle A., McCollum D., Schaeffer R., Shekhar S., Vishwanathan S. S.; Vrontisi Z., Blok K.

Implications of various effort-sharing approaches for national carbon budgets and emission pathways

Climatic Change , February 2019, pp. 1-18 - 2019

The paper explores the national implications of different allocation rules to divide the remaining "carbon cake" for a climate-safe world. These rules, which share the effort to reduce emissions, require more effort from developed countries. CMCC develops the interactive tool to explore the paper results at https://www.cdlinks.org/effort-sharing-vis

Cattaneo C.

Internal and external barriers to energy efficiency: which role for policy interventions?

Energy Efficiency , June 2019, Volume 12, Issue 5, pp 1293–1311 - 2019

This paper reviews the empirical literature that describes the different barriers to pro-environmental consumer behavior. The paper considers behavior in two domains: energy curtailment, which represents routine, repetitive effort to decrease consumption on a day-to-day basis and investments, which are one time actions such as purchasing new energy efficiency technologies. The paper also reviews the existing literature on policies on energy use and investment in energy efficiency technologies to assess their effectiveness in achieving the desired objectives.

Krey V., Guo F., Kolp P., Zhou W., Schaeffer R., Awasthy A., Bertram C., De Boer H.S., Fragkos P., Fujimori S., He C., Iyer G., Keramidas K., Koberle A., Oshiro K., Aleluia Reis L., Shoai-Tehrani B., Vishwanathan S., Capros P., Drouet L., Edmonds J.E., Garg A., Gernaat D., Jiang K., Kannavou M., Kitous A., Kriegler E., Luderer G., Mathur R., Muratori M., Sano F., van Vuuren D.

Looking under the hood: A comparison of techno-economic assumptions across national and global integrated assessment models

Energy , Volume 172, pages 1254-1267 - 2019

This paper compares technology representation and techno-economic parameters of 15 integrated assessment models. It highlights the structural differences in the representation of technologies and in the projection of the parameters, making them difficult to harmonize across models. This work contribute in making more transparent the use of models for policymaking.

Waisman H., Bataille C., Winkler H., Jotzo F., Shukla P., Colombier M., Buira D., Criqui P., Fischedick M., Kainuma M., La Rovere E., Pye S., Safonov G., Siagian U., Teng F., Virdis M., Williams J., Young S., Anandarajah G., Boer R., Cho Y., Denis-Ryan A., Dhar S., Gaeta M., Gesteira C., Haley B., Hourcade J., Liu Q., Lugovoy O., Masui T., Mathy S., Oshiro K., Parrado R., Pathak M., Potashnikov V., Samadi S., Sawyer D., Spencer T., Tovilla J., Trollip H.

A pathway design framework for national low greenhouse gas emission development strategies

Nature Climate Change , Volume 9, pages 261–268 - 2019

The Paris Agreement introduces long-term strategies as an instrument to inform progressively more ambitious emission reduction objectives, while holding development goals paramount in the context of national circumstances. In the lead up to the twenty-first Conference of the Parties, the Deep Decarbonization Pathways Project developed mid-century low-emission pathways for 16 countries, based on an innovative pathway design framework. In this Perspective, we describe this framework and show how it can support the development of sectorally and technologically detailed, policy-relevant and country-driven strategies consistent with the Paris Agreement climate goal. We also discuss how this framework can be used to engage stakeholder input and buy-in; design implementation policy packages; reveal necessary technological, financial and institutional enabling conditions; and support global stocktaking and increasing of ambition.

Kim Y.J, Wilson C.

Analysing Future Change in the EU's Energy Innovation System

Energy Strategy Reviews , Volume 24, April 2019, Pages 279-299 - 2019

We develop a novel approach for analysing future storylines of EU`s energy innovation system change, suggesting that adaptive policy responding to rapidly changing innovation environments should play an important part of the EU's energy future.

Anthoff D., Emmerling J.

Inequality and the Social Cost of Carbon

Journal of the Association of Environmental and Resource Economists , Vol. 6, No. 2: 29-59 - 2019

We present a novel way to disentangle inequality aversion over time from inequality aversion between regions in the computation of the social cost of carbon. Our approach nests a standard efficiency based estimate and an equity weighted estimate as special cases. We use two integrated assessment models (FUND and RICE) to present quantitative estimates of the social cost of carbon. Our results suggest that inequality considerations lead to higher (lower) social cost of carbon values in high (low) income regions relative to an efficiency based approach, but that the effect is less strong than found in previous studies that used equity weighting. Our central estimate is that the social cost of carbon increases roughly by a factor of two to three, and even more for higher degrees of inequality aversion, when our disentangled equity weighting approach is used.

Fujimori, S., Hasegawa T., Krey V., Riahi K., Bertram C., Bodirsky B.L., Bosetti V., Callen J., Després J., Doelman J., Drouet L., Emmerling J., Frank S., Fricko O., Havlik P., Humpenöder F., Koopman J., van Meijl H., Ochi Y., Popp A., Schmitz A., Takahashi K., and D. van Vuuren

A Multi-Model Assessment of Food Security Implications of Climate Change Mitigation

Nature Sustainability , Volume 2, No. 5 (May 13, 2019): 386–96 - 2019

Holding the global increase in temperature caused by climate change well below 2 °C above pre-industrial levels, the goal affirmed by the Paris Agreement, is a major societal challenge. Meanwhile, food security is a high-priority area in the UN Sustainable Development Goals, which could potentially be adversely affected by stringent climate mitigation. Here we show the potential negative trade-offs between food security and climate mitigation using a multi-model comparison exercise. We find that carelessly designed climate mitigation policies could increase the number of people at risk of hunger by 160 million in 2050. Avoiding these adverse side effects would entail a cost of about 0.18% of global gross domestic product in 2050. It should be noted that direct impacts of climate change on yields were not assessed and that the direct benefits from mitigation in terms of avoided yield losses could be substantial, further reducing the above cost. Although results vary across models and model implementations, the qualitative implications are robust and call for careful design of climate mitigation policies taking into account agriculture and land prices.

Harmsen M., van Vuuren D.P., Bodirsky B.L., Chateau J., Durand-Lasserve O., Drouet L., Fricko O., Fujimori S., Gernaat D.E.H.J., Hanaoka T., Hilaire J., Keramidas K., Luderer G., Moura M.C.P., Sano F., Smith S. J., Wada K.

The role of methane in future climate strategies: Mitigation potentials and climate impacts

Climatic Change , May 2019, pp. 1-17 - 2019

Future CH4 emissions are expected to rise despite significant cost-effective emission reductions are projected at sources. Both, ambitious CO2 reduction measures and direct CH4 measures should happen to reduce emissions up to 74% in 2100. Agriculture CH4 emission, especially ruminant enteric fermentation, still have limited reduction potentials. Results have been produced by nine integrated assessment models within the 30th Energy Modeling Forum led by the Standford University.

Babonneau F., Corcos G., Drouet L., Vial, J.P.

NeatWork: A Tool for the Design of Gravity-Driven Water Distribution Systems for Poor Rural Communities

INFORMS Journal on Applied Analytics , Vol. 49, No. 2: 129–136 - 2019

Neatwork is a software to design water distribution network only driven by gravity. This is essential for poor communities living in remote rural areas. The design of the network is based on advanced optimization techniques in order to provide the best waster service with the minimum cost and the network usage can be tested through Mont-Carlo simulations. The approach has been applied successfully for more than 100 projects in Nicaragua led by the NGO Agua Para la Vida.

Harmsen M., Fricko O., Hilaire J., van Vuuren D.P., Drouet L., Durand-Lasserve O., Fujimori S., Keramidas K., Klimont Z., Luderer G., Aleluia Reis L., Riahi K., Sano F., Smith S. J.

Taking some heat off the NDCs? The limited potential of additional short-lived climate forcers’ mitigation

Climatic Change , June 2019, pp 1–19 - 2019

Short-lived climate forcer cannot be use to reduce the risk to overshoot the 2C target from the Paris Agreement. Short-lived climate forcers have a significant effect on short term temperature and the rate of change but not on the maximum temperature change during the 21st century. These results have been produced by 8 integrated assessment models (including the WITCH model) within the 30th Energy Modeling Forum led by the Standford University.

van Ruijven B.J., De Cian E., Wing I.S.

Amplification of future energy demand growth due to climate change

Nature Communications , Volume 10, Article number: 2762 - 2019

Future energy demand is likely to increase due to climate change, but the magnitude depends on many interacting sources of uncertainty. We combine econometrically estimated responses of energy use to income, hot and cold days with future projections of spatial population and national income under five socioeconomic scenarios and temperature increases around 2050 for two emission scenarios simulated by 21 Earth System Models (ESMs). Here we show that, across 210 realizations of socioeconomic and climate scenarios, vigorous (moderate) warming increases global climate-exposed energy demand before adaptation around 2050 by 25–58% (11–27%), on top of a factor 1.7–2.8 increase above present-day due to socioeconomic developments. We find broad agreement among ESMs that energy demand rises by more than 25% in the tropics and southern regions of the USA, Europe and China. Socioeconomic scenarios vary widely in the number of people in low-income countries exposed to increases in energy demand.

Cattaneo C., Beine M., Fröhlich C.J., Kniveton D., Martinez-Zarzoso I., Mastrorillo M., Millock K., Piguet E.

Human Migration in the Era of Climate Change

RFF Working Papers Series , Working Paper 19-13 - 2019

Human mobility is one response to climatic stress and shocks. In this synthesis article, we review the recent literature on the effects of climate change on human mobility within various disciplines. We explore key features of the interplay between climate change and migration, distinguishing between fast onset and slow onset climatic events, while taking into consideration causes of heterogeneity in migratory responses. Moreover, we shed light on the underlying mechanisms behind the nexus as well as the interplay between different means of adaptation. Based on our review, we identify gaps in the literature and present some general policy recommendations and priorities for research on climate-induced migration.

Realmonte G., Drouet L., Gambhir A., Glynn J., Hawkes A., Köberle A.C., Tavoni M.

An inter-model assessment of the role of direct air capture in deep mitigation pathways

Nature Communications , Volume 10, Article number: 3277 - 2019

This study shows the potential of Direct Air Carbon Capture and Storage (DACCS), a new technology for removing CO2 directly from the atmosphere, in helping to limit global temperature rise and lowering the costs of achieving the Paris objectives. However, the authors note that these technologies should be used as part of a portfolio of other mitigation solutions and would require major innovation to be feasible at scale. The paper has been co-authored by an international team of researchers from the Euro-Mediterranean Centre on Climate Change, RFF-CMCC European Institute on Economics and the Environment and Politecnico di Milano (Italy), Grantham Institute – Climate Change and the Environment at Imperial College London (United Kingdom) and the MaREI Centre at University College Cork (Ireland).

Marangoni G., Tavoni M., Bosetti V., Borgonovo E., Capros P., Fricko O., Gernaat D. E. H. J., Guivarch C., Havlik P., Huppmann D., Johnson N., Karkatsoulis P., Keppo I., Krey V., Ó Broin E., Price J., van Vuuren D. P.

Sensitivity of projected long-term CO2 emissions across the Shared Socioeconomic Pathways

Nature Climate Change , Volume 7, pages113–117(2017) - 2017

Scenarios showing future greenhouse gas emissions are needed to estimate climate impacts and the mitigation efforts required for climate stabilization. Recently, the Shared Socioeconomic Pathways (SSPs) have been introduced to describe alternative social, economic and technical narratives, spanning a wide range of plausible futures in terms of challenges to mitigation and adaptation1. Thus far the key drivers of the uncertainty in emissions projections have not been robustly disentangled. Here we assess the sensitivities of future CO2 emissions to key drivers characterizing the SSPs. We use six state-of-the-art integrated assessment models with different structural characteristics, and study the impact of five families of parameters, related to population, income, energy efficiency, fossil fuel availability, and low-carbon energy technology development. A recently developed sensitivity analysis algorithm2 allows us to parsimoniously compute both the direct and interaction effects of each of these drivers on cumulative emissions. The study reveals that the SSP assumptions about energy intensity and economic growth are the most important determinants of future CO2 emissions from energy combustion, both with and without a climate policy. Interaction terms between parameters are shown to be important determinants of the total sensitivities.

Jewell J., McCollum D., Emmerling J., Bertram C., Gernaat D. E. H. J., Krey V., Paroussos L., Berger L., Fragkiadakis K., Keppo I., Saadi N., Tavoni M., van Vuuren D., Vinichenko V., Riahi K.

Limited Emission Reductions from Fuel Subsidy Removal except in Energy-Exporting Regions

Nature , 554, 229–233 (2018) - 2018

Hopes are high that removing fossil fuel subsidies could help to mitigate climate change by discouraging inefficient energy consumption and levelling the playing field for renewable energy. In September 2016, the G20 countries re-affirmed their 2009 commitment (at the G20 Leaders’ Summit) to phase out fossil fuel subsidies4,5 and many national governments are using today’s low oil prices as an opportunity to do so. In practical terms, this means abandoning policies that decrease the price of fossil fuels and electricity generated from fossil fuels to below normal market prices10,11. However, whether the removal of subsidies, even if implemented worldwide, would have a large impact on climate change mitigation has not been systematically explored. Here we show that removing fossil fuel subsidies would have an unexpectedly small impact on global energy demand and carbon dioxide emissions and would not increase renewable energy use by 2030. Subsidy removal would reduce the carbon price necessary to stabilize greenhouse gas concentration at 550 parts per million by only 2–12 per cent under low oil prices. Removing subsidies in most regions would deliver smaller emission reductions than the Paris Agreement (2015) climate pledges and in some regions global subsidy removal may actually lead to an increase in emissions, owing to either coal replacing subsidized oil and natural gas or natural-gas use shifting from subsidizing, energy-exporting regions to non-subsidizing, importing regions. Our results show that subsidy removal would result in the largest CO2 emission reductions in high-income oil- and gas-exporting regions, where the reductions would exceed the climate pledges of these regions and where subsidy removal would affect fewer people living below the poverty line than in lower-income regions.

Gunnar L., Vrontisi Z., Bertram C., Edelenbosch O. Y., Pietzcker R. C., Rogelj J., De Boer H. S., Drouet L., Emmerling J., Fricko O., Fujimori S., Havlík P., Iyer G., Keramidas K., Kitous A., Pehl M., Krey V., Riahi K., Saveyn B., Tavoni M., Van Vuuren D.P., Kriegler E.

Residual fossil CO2 emissions in 1.5-2°C pathways

Nature Climate Change , Volume 8, pages 626–633 - 2018

The Paris Agreement—which is aimed at holding global warming well below 2 °C while pursuing efforts to limit it below 1.5 °C—has initiated a bottom-up process of iteratively updating nationally determined contributions to reach these long-term goals. Achieving these goals implies a tight limit on cumulative net CO2 emissions, of which residual CO2 emissions from fossil fuels are the greatest impediment. Here, using an ensemble of seven integrated assessment models (IAMs), we explore the determinants of these residual emissions, focusing on sector-level contributions. Even when strengthened pre-2030 mitigation action is combined with very stringent long-term policies, cumulative residual CO2 emissions from fossil fuels remain at 850–1,150 GtCO2 during 2016–2100, despite carbon prices of US$130–420 per tCO2 by 2030. Thus, 640–950 GtCO2 removal is required for a likely chance of limiting end-of-century warming to 1.5 °C. In the absence of strengthened pre-2030 pledges, long-term CO2 commitments are increased by 160–330 GtCO2, further jeopardizing achievement of the 1.5 °C goal and increasing dependence on CO2 removal.