@article{DiluisoWalkManychetal.2021, author = {Diluiso, Francesca and Walk, Paula and Manych, Niccolo and Cerutti, Nicola and Chipiga, Vladislav and Workman, Annabelle and Ayas, Ceren and Cui, Ryna Yiyun and Cui, Diyang and Song, Kaihui and Banisch, Lucy A. and Moretti, Nikolaj and Callaghan, Max W. and Clarke, Leon and Creutzig, Felix and Hilaire, Jerome and Jotzo, Frank and Kalkuhl, Matthias and Lamb, William F. and L{\"o}schel, Andreas and M{\"u}ller-Hansen, Finn and Nemet, Gregory F. and Oei, Pao-Yu and Sovacool, Benjamin K. and Steckel, Jan Christoph and Thomas, Sebastian and Wiseman, John and Minx, Jan C.}, title = {Coal transitions - part 1}, series = {Environmental research letters}, volume = {16}, journal = {Environmental research letters}, number = {11}, publisher = {Institute of Physics Publishing (IOP)}, address = {Bristol}, issn = {1748-9326}, doi = {10.1088/1748-9326/ac1b58}, pages = {40}, year = {2021}, abstract = {A rapid coal phase-out is needed to meet the goals of the Paris Agreement, but is hindered by serious challenges ranging from vested interests to the risks of social disruption. To understand how to organize a global coal phase-out, it is crucial to go beyond cost-effective climate mitigation scenarios and learn from the experience of previous coal transitions. Despite the relevance of the topic, evidence remains fragmented throughout different research fields, and not easily accessible. To address this gap, this paper provides a systematic map and comprehensive review of the literature on historical coal transitions. We use computer-assisted systematic mapping and review methods to chart and evaluate the available evidence on historical declines in coal production and consumption. We extracted a dataset of 278 case studies from 194 publications, covering coal transitions in 44 countries and ranging from the end of the 19th century until 2021. We find a relatively recent and rapidly expanding body of literature reflecting the growing importance of an early coal phase-out in scientific and political debates. Previous evidence has primarily focused on the United Kingdom, the United States, and Germany, while other countries that experienced large coal declines, like those in Eastern Europe, are strongly underrepresented. An increasing number of studies, mostly published in the last 5 years, has been focusing on China. Most of the countries successfully reducing coal dependency have undergone both demand-side and supply-side transitions. This supports the use of policy approaches targeting both demand and supply to achieve a complete coal phase-out. From a political economy perspective, our dataset highlights that most transitions are driven by rising production costs for coal, falling prices for alternative energies, or local environmental concerns, especially regarding air pollution. The main challenges for coal-dependent regions are structural change transformations, in particular for industry and labor. Rising unemployment is the most largely documented outcome in the sample. Policymakers at multiple levels are instrumental in facilitating coal transitions. They rely mainly on regulatory instruments to foster the transitions and compensation schemes or investment plans to deal with their transformative processes. Even though many models suggest that coal phase-outs are among the low-hanging fruits on the way to climate neutrality and meeting the international climate goals, our case studies analysis highlights the intricate political economy at work that needs to be addressed through well-designed and just policies.}, language = {en} } @article{DiluisoAnnicchiaricoKalkuhletal.2021, author = {Diluiso, Francesca and Annicchiarico, Barbara and Kalkuhl, Matthias and Minx, Jan Christoph}, title = {Climate actions and macro-financial stability}, series = {Journal of environmental economics and management}, volume = {110}, journal = {Journal of environmental economics and management}, publisher = {Elsevier}, address = {Amsterdam}, issn = {0095-0696}, doi = {10.1016/j.jeem.2021.102548}, pages = {22}, year = {2021}, abstract = {Limiting global warming to well below 2 degrees C may pose threats to macroeconomic and financial stability. In an estimated Euro Area New Keynesian model with financial frictions and climate policy, we study the possible perils of a low-carbon transition and evaluate the role of monetary policy and financial regulation. We show that, even for very ambitious climate targets, transition costs are moderate along a timely and gradual mitigation pathway. Inflation volatility strongly increases for disorderly climate policy, demanding a strong monetary response by central banks. In reaction to an adverse financial shock originating in the fossil sector, a green quantitative easing policy can provide an effective stimulus to the economy, but its stabilizing properties do not significantly differ from those of market neutral asset purchase programs. A financial regulation, encouraging the decarbonization of the banks' balance sheets via ad hoc capital requirements, can significantly reduce the severity of a financial crisis, but prolongs the recovery phase. Our results suggest that the involvement of central banks in climate actions must be carefully designed to be in compliance with their mandate and to avoid unintended trade-offs.}, language = {en} } @techreport{EydamDiluiso2022, type = {Working Paper}, author = {Eydam, Ulrich and Diluiso, Francesca}, title = {How to Redistribute the Revenues from Climate Policy?}, series = {CEPA Discussion Papers}, journal = {CEPA Discussion Papers}, number = {45}, issn = {2628-653X}, doi = {10.25932/publishup-54896}, url = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-548960}, pages = {32}, year = {2022}, abstract = {In light of climate change mitigation efforts, revenues from climate policies are growing, with no consensus yet on how they should be used. Potential efficiency gains from reducing distortionary taxes and the distributional implications of different revenue recycling schemes are currently debated. To account for households heterogeneity and dynamic trade-offs, we study the macroeconomic and welfare performance of different revenue recycling schemes using an Environmental Two-Agent New-Keynesian model, calibrated on the German economy. We find that, in the long run, welfare gains are higher when revenues are used to reduce distortionary taxes on capital, but this comes at the cost of higher inequality: while all households prefer labor income tax reductions to lump-sum transfers, only financially unconstrained households are better off when reducing taxes on capital income. Interestingly, we find that over the transition period relevant to meet short-medium run climate targets, labor income tax cuts are the most efficient and equitable instrument.}, language = {en} }