@article{FranksKalkuhlLessmann2023, author = {Franks, Max and Kalkuhl, Matthias and Lessmann, Kai}, title = {Optimal pricing for carbon dioxide removal under inter-regional leakage}, series = {Journal of environmental economics and management}, volume = {117}, journal = {Journal of environmental economics and management}, publisher = {Elsevier}, address = {Amsterdam}, issn = {1096-0449}, doi = {10.1016/j.jeem.2022.102769}, year = {2023}, abstract = {Carbon dioxide removal (CDR) moves atmospheric carbon to geological or land-based sinks. In a first-best setting, the optimal use of CDR is achieved by a removal subsidy that equals the optimal carbon tax and marginal damages. We derive second-best policy rules for CDR subsidies and carbon taxes when no global carbon price exists but a national government implements a unilateral climate policy. We find that the optimal carbon tax differs from an optimal CDR subsidy because of carbon leakage and a balance of resource trade effect. First, the optimal removal subsidy tends to be larger than the carbon tax because of lower supply-side leakage on fossil resource markets. Second, net carbon exporters exacerbate this wedge to increase producer surplus of their carbon resource producers, implying even larger removal subsidies. Third, net carbon importers may set their removal subsidy even below their carbon tax when marginal environmental damages are small, to appropriate producer surplus from carbon exporters.}, language = {en} } @article{EdenhoferKalkuhlRoolfs2021, author = {Edenhofer, Ottmar and Kalkuhl, Matthias and Roolfs, Christina}, title = {Carbon pricing and revenue recycling}, series = {CESifo forum}, volume = {22}, journal = {CESifo forum}, number = {5}, publisher = {Ifo}, address = {Munich}, issn = {2190-717X}, pages = {10 -- 14}, year = {2021}, language = {en} } @article{EdenhoferKalkuhlRequateetal.2020, author = {Edenhofer, Ottmar and Kalkuhl, Matthias and Requate, Tilman and Steckel, Jan Christoph}, title = {How assets get stranded}, series = {Journal of environmental economics and management}, volume = {100}, journal = {Journal of environmental economics and management}, publisher = {Elsevier}, address = {Amsterdam}, issn = {0095-0696}, doi = {10.1016/j.jeem.2020.102300}, pages = {4}, year = {2020}, abstract = {Internalizing external costs of carbon is a fundamental goal of climate policy. Since the seminal work of Arthur Pigou in 1920, economic theory has analyzed the efficiency gains arising from various instruments that internalize externalities and lead to Pareto-improvements. It is widely recognized in environmental economics that a carbon price would effectively reflect the scarcity of the atmospheric disposal space for carbon depending on the temperature target that is to be achieved. The question of how to organize the transition process, i.e. moving from inefficient to efficient allocations, and implementing the necessary policies, has gained increasing attention in recent years. Arguably, the transition process is tightly interwoven with political processes that include complex interactions between societal stakeholders, such as households and firms, on the one hand, and political decision makers, on the other. Accordingly, understanding political-economy aspects of the transition process, including distributional outcomes, is becoming increasingly relevant. While a growing literature discusses the distributional implications of climate policy on households, it is less well understood how asset owners might be affected by climate policy and how these potential impacts would interact with the transition process. This Special Section focuses on public policy challenges related to this transition problem, with special emphasis on asset owners. A core theme is the special role of stranded assets, i.e. a devaluation of capital stocks or financial assets either by introducing a stringent carbon price or by omitting a pre-announced policy of this kind.}, language = {en} } @article{EdenhoferKalkuhlOckenfels2020, author = {Edenhofer, Ottmar and Kalkuhl, Matthias and Ockenfels, Axel}, title = {Das Klimaschutzprogramm der Bundesregierung}, series = {Perspektiven der Wirtschaftspolitik}, volume = {21}, journal = {Perspektiven der Wirtschaftspolitik}, number = {1}, publisher = {De Gruyter}, address = {Berlin}, issn = {1465-6493}, doi = {10.1515/pwp-2020-0001}, pages = {4 -- 18}, year = {2020}, abstract = {Das Klimaschutzgesetz hat einen Paradigmenwechsel eingeleitet: den Einstieg in eine CO2-Bepreisung als k{\"u}nftiges Leitinstrument der Klimapolitik. Auf den ersten Blick ist der CO2-Preis unter einer F{\"u}lle von F{\"o}rdermaßnahmen und ordnungsrechtlichen Regelungen versch{\"u}ttet, deren Wirksamkeit und Kosten h{\"o}chst unsicher sind. Der CO2-Preis ist aber so angelegt, dass er langfristig das dominante Instrument einer europ{\"a}isch harmonisierten Klimapolitik werden kann. Der angedeutete Paradigmenwechsel der deutschen Klimapolitik {\"o}ffnet damit die T{\"u}r, die europ{\"a}ische und internationale Kooperation zu st{\"a}rken. Dazu ist es aber notwendig, neben der europ{\"a}ischen auch die globale Klimapolitik neu auszurichten. Auch dort sollten sich die Verhandlungen statt auf nationale Mengenziele auf CO2-Preise konzentrieren. Die erforderliche Kooperation wird m{\"o}glich, wenn die Regierungen Transferzahlungen strategisch und reziprok nutzen. So k{\"o}nnte die Effektivit{\"a}t der Klimapolitik erh{\"o}ht werden und es ließen sich die entstehenden Verteilungskonflikte entsch{\"a}rfen.}, language = {de} } @article{EdenhoferFranksKalkuhl2021, author = {Edenhofer, Ottmar and Franks, Max and Kalkuhl, Matthias}, title = {Pigou in the 21st century}, series = {International tax and public finance}, volume = {28}, journal = {International tax and public finance}, number = {5}, publisher = {Springer}, address = {Dordrecht}, issn = {0927-5940}, doi = {10.1007/s10797-020-09653-y}, pages = {1090 -- 1121}, year = {2021}, abstract = {The year 2020 marks the centennial of the publication of Arthur Cecil Pigou's magnum opus The Economics of Welfare. Pigou's pricing principles have had an enduring influence on the academic debate, with a widespread consensus having emerged among economists that Pigouvian taxes or subsidies are theoretically desirable, but politically infeasible. In this article, we revisit Pigou's contribution and argue that this consensus is somewhat spurious, particularly in two ways: (1) Economists are too quick to ignore the theoretical problems and subtleties that Pigouvian pricing still faces; (2) The wholesale skepticism concerning the political viability of Pigouvian pricing is at odds with its recent practical achievements. These two points are made by, first, outlining the theoretical and political challenges that include uncertainty about the social cost of carbon, the unclear relationship between the cost-benefit and cost-effectiveness approaches, distributional concerns, fragmented ministerial responsibilities, an unstable tax base, commitment problems, lack of acceptance and trust between government and citizens as well as incomplete international cooperation. Secondly, we discuss the recent political success of Pigouvian pricing, as evidenced by the German government's 2019 climate policy reform and the EU's Green Deal. We conclude by presenting a research agenda for addressing the remaining barriers that need to be overcome to make Pigouvian pricing a common political practice.}, language = {en} } @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} } @article{BaldeniusBernsteinKalkuhletal.2021, author = {Baldenius, Till and Bernstein, Tobias and Kalkuhl, Matthias and von Kleist-Retzow, Maximilian and Koch, Nicolas}, title = {Ordnungsrecht oder Preisinstrumente?}, series = {Ifo-Schnelldienst}, volume = {74}, journal = {Ifo-Schnelldienst}, number = {6}, publisher = {Institut f{\"u}r Wirtschaftsforschung}, address = {M{\"u}nchen}, issn = {0018-974X}, pages = {6 -- 10}, year = {2021}, language = {de} } @article{AlgieriKalkuhlKoch2017, author = {Algieri, Bernardina and Kalkuhl, Matthias and Koch, Nicolas}, title = {A tale of two tails: Explaining extreme events in financialized agricultural markets}, series = {Food policy : economics planning and politics of food and agriculture}, volume = {69}, journal = {Food policy : economics planning and politics of food and agriculture}, publisher = {Elsevier}, address = {Oxford}, issn = {0306-9192}, doi = {10.1016/j.foodpol.2017.05.004}, pages = {256 -- 269}, year = {2017}, abstract = {The substantial booms and busts in agricultural prices marked by extreme events across commodities lead to heated debates about the effects of speculative trading on commodity price fluctuations. This study proposes a new approach to understanding extreme events and boom-bust processes in agricultural markets. Using weekly futures data for twelve indexed agricultural commodities during 2006 to 2016, we find that extreme price changes, located in the 10\% tails of the distribution, cluster across agricultural markets. We then implement a multinomial logit model to investigate which factors are associated with the propagation of extreme events. Specifically, we disentangle three transmission conduits. (1) The macroeconomic conduit captures the possibility that the synchronized extreme price events are generated by business-cycle driven demand shifts mainly in emerging economies. (2) The financial conduit refers to potential links between extreme returns and the increasing flow of money from financial participants into agricultural futures markets. (3) Finally, the energy conduit accounts for possible spillover effects due to oil price shocks. Our results indicate an important role of managed money positions and oil prices while the real demand channel remains mostly insignificant. (C) 2017 Elsevier Ltd. All rights reserved.}, language = {en} }