@article{GrunerFussKalkuhletal.2022, author = {Gruner, Friedemann and Fuß, Sabine and Kalkuhl, Matthias and Minx, Jan C. and Strefler, Jessica and Merfort, Anne}, title = {Wie CO2-Entnahmen helfen k{\"o}nnen, die Klimaziele zu erreichen}, series = {Klima und Recht}, volume = {1}, journal = {Klima und Recht}, number = {1}, publisher = {C.H. Beck}, address = {M{\"u}nchen}, issn = {2750-0551}, pages = {18 -- 21}, year = {2022}, language = {de} } @article{ŠedovaKalkuhl2020, author = {Šedov{\´a}, Barbora and Kalkuhl, Matthias}, title = {Who are the climate migrants and where do they go?}, series = {World development}, volume = {129}, journal = {World development}, publisher = {Elsevier Science}, address = {Amsterdam}, issn = {0305-750X}, doi = {10.1016/j.worlddev.2019.104848}, pages = {19}, year = {2020}, abstract = {In this paper, we move from the large strand of research that looks at evidence of climate migration to the questions: who are the climate migrants? and where do they go? These questions are crucial to design policies that mitigate welfare losses of migration choices due to climate change. We study the direct and heterogeneous associations between weather extremes and migration in rural India. We combine ERAS reanalysis data with the India Human Development Survey household panel and conduct regression analyses by applying linear probability and multinomial logit models. This enables us to establish a causal relationship between temperature and precipitation anomalies and overall migration as well as migration by destination. We show that adverse weather shocks decrease rural-rural and international migration and push people into cities in different, presumably more prosperous states. A series of positive weather shocks, however, facilitates international migration and migration to cities within the same state. Further, our results indicate that in contrast to other migrants, climate migrants are likely to be from the lower end of the skill distribution and from households strongly dependent on agricultural production. We estimate that approximately 8\% of all rural-urban moves between 2005 and 2012 can be attributed to weather. This figure might increase as a consequence of climate change. Thus, a key policy recommendation is to take steps to facilitate integration of less educated migrants into the urban labor market.}, language = {en} } @techreport{BacheletKalkuhlKoch2022, type = {Working Paper}, author = {Bachelet, Marion and Kalkuhl, Matthias and Koch, Nicolas}, title = {What if working from home will stick?}, series = {CEPA Discussion Papers}, journal = {CEPA Discussion Papers}, number = {41}, issn = {2628-653X}, doi = {10.25932/publishup-53238}, url = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-532384}, pages = {28}, year = {2022}, abstract = {The COVID-19 pandemic created the largest experiment in working from home. We study how persistent telework may change energy and transport consumption and costs in Germany to assess the distributional and environmental implications when working from home will stick. Based on data from the German Microcensus and available classifications of working-from-home feasibility for different occupations, we calculate the change in energy consumption and travel to work when 15\% of employees work full time from home. Our findings suggest that telework translates into an annual increase in heating energy expenditure of 110 euros per worker and a decrease in transport expenditure of 840 euros per worker. All income groups would gain from telework but high-income workers gain twice as much as low-income workers. The value of time saving is between 1.3 and 6 times greater than the savings from reduced travel costs and almost 9 times higher for high-income workers than low-income workers. The direct effects on CO₂ emissions due to reduced car commuting amount to 4.5 millions tons of CO₂, representing around 3 percent of carbon emissions in the transport sector.}, language = {en} } @article{MontroneSteckelKalkuhl2022, author = {Montrone, Lorenzo and Steckel, Jan Christoph and Kalkuhl, Matthias}, title = {The type of power capacity matters for economic development}, series = {Resource and energy economics}, volume = {69}, journal = {Resource and energy economics}, publisher = {Elsevier}, address = {Amsterdam}, issn = {0928-7655}, doi = {10.1016/j.reseneeco.2022.101313}, pages = {17}, year = {2022}, abstract = {We examine the relationship between different types of power investments and regional economic dynamics. We construct a novel panel dataset combining data on regional GDP and power capacity additions for different technologies between 1960 and 2015, which covers 65\% of the global power capacity that has been installed in this period. We use an event study design to identify the effect of power capacity addition on GDP per capita, exploiting the fact that the exact amount of power capacity coming online each year is determined by random construction delays. We find evidence that GDP per capita increases by 0.2\% in the 6 years around the coming online of 100 MW coal-fired power capacity. We find similar effects for hydropower capacity, but not for any other type of power capacity. The positive effects are regionally bounded and stronger for projects on new sites (green-field). The magnitude of this effect might not be comparable to the total external costs of building new coal-fired power capacity, yet our results help to explain why policymakers favor coal investments for spurring regional growth.}, language = {en} } @article{KalkuhlWenz2020, author = {Kalkuhl, Matthias and Wenz, Leonie}, title = {The impact of climate conditions on economic production}, series = {Journal of Environmental Economics and Management}, volume = {103}, journal = {Journal of Environmental Economics and Management}, publisher = {Elsevier}, address = {San Diego}, issn = {0095-0696}, doi = {10.1016/j.jeem.2020.102360}, pages = {20}, year = {2020}, abstract = {We present a novel data set of subnational economic output, Gross Regional Product (GRP), for more than 1500 regions in 77 countries that allows us to empirically estimate historic climate impacts at different time scales. Employing annual panel models, long-difference regressions and cross-sectional regressions, we identify effects on productivity levels and productivity growth. We do not find evidence for permanent growth rate impacts but we find robust evidence that temperature affects productivity levels considerably. An increase in global mean surface temperature by about 3.5°C until the end of the century would reduce global output by 7-14\% in 2100, with even higher damages in tropical and poor regions. Updating the DICE damage function with our estimates suggests that the social cost of carbon from temperature-induced productivity losses is on the order of 73-142\$/tCO2 in 2020, rising to 92-181\$/tCO2 in 2030. These numbers exclude non-market damages and damages from extreme weather events or sea-level rise.}, language = {en} } @article{KornherKalkuhl2019, author = {Kornher, Lukas and Kalkuhl, Matthias}, title = {The gains of coordination - When does regional cooperation for food security make sense?}, series = {Global Food Security - AGRICULTURE POLICY ECONOMICS AND ENVIRONMENT}, volume = {22}, journal = {Global Food Security - AGRICULTURE POLICY ECONOMICS AND ENVIRONMENT}, publisher = {Elsevier}, address = {Amsterdam}, issn = {2211-9124}, doi = {10.1016/j.gfs.2019.09.004}, pages = {37 -- 45}, year = {2019}, abstract = {With the onset of the global food crisis, the discussion about the use and misuse of agricultural market interventions regained academic attention. As a result of economies of scale, centralized policy implementation at the regional level has the potential to reduce the budgetary costs of policies. Borrowing from the literature on international unions and international policy coordination, we develop a conceptual framework to analyze when regional policy implementation makes sense. This is the case whenever spill-overs from centralization are large and policy preferences, driven by country-specific characteristics, are homogeneous. Subsequently, we examine the advantageousness of centralized policy implementation for the West African region regarding the most common food security policies. We show that centralization of trade policies and emergency food reserves is beneficial, while buffer stocks, safety net policies, and producer support policies should be implemented at the national level.}, language = {en} } @article{WenzKalkuhlSteckeletal.2016, author = {Wenz, Leonie and Kalkuhl, Matthias and Steckel, Jan Christoph and Creutzig, Felix}, title = {Teleconnected food supply shocks}, series = {Environmental research letters}, volume = {11}, journal = {Environmental research letters}, publisher = {IOP Publ. Ltd.}, address = {Bristol}, issn = {1748-9326}, doi = {10.1088/1748-9326/11/3/035007}, pages = {10}, year = {2016}, abstract = {The 2008-2010 food crisis might have been a harbinger of fundamental climate-induced food crises with geopolitical implications. Heat-wave-induced yield losses in Russia and resulting export restrictions led to increases in market prices for wheat across the Middle East, likely contributing to the Arab Spring. With ongoing climate change, temperatures and temperature variability will rise, leading to higher uncertainty in yields for major nutritional crops. Here we investigate which countries are most vulnerable to teleconnected supply-shocks, i.e. where diets strongly rely on the import of wheat, maize, or rice, and where a large share of the population is living in poverty. We find that the Middle East is most sensitive to teleconnected supply shocks in wheat, Central America to supply shocks in maize, and Western Africa to supply shocks in rice. Weighing with poverty levels, Sub-Saharan Africa is most affected. Altogether, a simultaneous 10\% reduction in exports of wheat, rice, and maize would reduce caloric intake of 55 million people living in poverty by about 5\%. Export bans in major producing regions would put up to 200 million people below the poverty line at risk, 90\% of which live in Sub-Saharan Africa. Our results suggest that a region-specific combination of national increases in agricultural productivity and diversification of trade partners and diets can effectively decrease future food security risks.}, language = {en} } @misc{KalkuhlSteckelMontroneetal.2019, author = {Kalkuhl, Matthias and Steckel, Jan Christoph and Montrone, Lorenzo and Jakob, Michael and Peters, J{\"o}rg and Edenhofer, Ottmar}, title = {Successful coal phase-out requires new models of development}, series = {Nature Energy}, volume = {4}, journal = {Nature Energy}, number = {11}, publisher = {Nature Publ. Group}, address = {London}, issn = {2058-7546}, doi = {10.1038/s41560-019-0500-5}, pages = {897 -- 900}, year = {2019}, abstract = {Different energy sources have different spillovers on economic development and industrialization. Pathways of economic development based on renewable energy sources might require additional policies to support industrial development.}, language = {en} } @article{AmbergausdemMooreBekketal.2022, author = {Amberg, Maximilian and aus dem Moore, Nils and Bekk, Anke and Bergmann, Tobias and Edenhofer, Ottmar and Flachsland, Christian and George, Jan and Haywood, Luke and Heinemann, Maik and Held, Anne and Kalkuhl, Matthias and Kellner, Maximilian and Koch, Nicolas and Luderer, Gunnar and Meyer, Henrika and Nikodinoska, Dragana and Pahle, Michael and Roolfs, Christina and Schill, Wolf-Peter}, title = {Reformoptionen f{\"u}r ein nachhaltiges Steuer- und Abgabensystem}, series = {Perspektiven der Wirtschaftspolitik}, volume = {23}, journal = {Perspektiven der Wirtschaftspolitik}, number = {3}, publisher = {De Gruyter}, address = {Berlin}, issn = {1465-6493}, doi = {10.1515/pwp-2021-0051}, pages = {165 -- 199}, year = {2022}, abstract = {Steuern und Abgaben auf Produkte oder Verbrauch mit gesellschaftlichen Folgekosten (externe Kosten) - sogenannte Pigou- oder Lenkungssteuern - sind ein gesellschaftliches „Win-Win-Instrument". Sie verbessern die Wohlfahrt und sch{\"u}tzen gleichzeitig die Umwelt und das Klima. Dies wird erreicht, indem umweltsch{\"a}digende Aktivit{\"a}ten einen Preis bekommen, der m{\"o}glichst exakt der H{\"o}he des Schadens entspricht. Eine konsequente Bepreisung der externen Kosten nach diesem Prinzip k{\"o}nnte in Deutschland erhebliche zus{\"a}tzliche Einnahmen erbringen: Basierend auf bisherigen Studien zu externen Kosten w{\"a}ren zus{\"a}tzliche Einnahmen in der Gr{\"o}ßenordnung von 348 bis 564 Milliarden Euro pro Jahr (44 bis 71 Prozent der gesamten Steuereinnahmen) m{\"o}glich. Die Autoren warnen allerdings, dass die Bezifferung der externen Kosten mit erheblichen Unsicherheiten verbunden ist. Damit Lenkungssteuern und -abgaben ihre positiven Lenkungs- und Wohlstandseffekte voll entfalten k{\"o}nnen, seien zudem institutionelle Reformen notwendig.}, language = {de} } @article{KalkuhlEdenhofer2016, author = {Kalkuhl, Matthias and Edenhofer, Ottmar}, title = {Ramsey meets Th{\"u}nen}, series = {International tax and public finance}, volume = {24}, journal = {International tax and public finance}, publisher = {Springer}, address = {Dordrecht}, issn = {0927-5940}, doi = {10.1007/s10797-016-9403-6}, pages = {350 -- 380}, year = {2016}, abstract = {Land taxes can increase production in the manufacturing sector and enhance land conservation at the same time, which can lead to overall macroeconomic growth. Existing research emphasizes the non-distorting properties of land taxes (when fixed factors are taxed) as well as growth-enhancing impacts (when asset portfolios are shifted to reproducible capital). This paper furthers the neoclassical perspective on land taxes by endogenizing land allocation decisions in a multi-sector growth model. Based on von Th{\"u}nen's observation, agricultural land is created from wilderness through conversion and cultivation, both of which are associated with costs. In the steady state of our general equilibrium model, land taxes not only may reduce land consumption (associated with environmental benefits) but may also affect overall economic output, while leaving wages and interest rates unaffected. When labor productivity is higher in the manufacturing than in the agricultural sector and agricultural and manufactured goods are substitutes (or the economy is open to world trade), land taxes increase aggregate economic output. There is a complex interplay of conservation policy, technological change and land taxes, depending on consumer preferences, sectoral labor productivities and openness-to-trade. Our model introduces a new perspective on land taxes in current policy debates on development, tax reforms as well as forest conservation.}, language = {en} } @article{HaileKalkuhlAlgierietal.2017, author = {Haile, Mekbib Gebretsadik and Kalkuhl, Matthias and Algieri, Bernardina and Gebreselassie, Samuel}, title = {Price shock transmission}, series = {Agricultural economics}, volume = {48}, journal = {Agricultural economics}, number = {6}, publisher = {Wiley}, address = {Hoboken}, issn = {0169-5150}, doi = {10.1111/agec.12373}, pages = {769 -- 780}, year = {2017}, abstract = {This study assesses the degree of vertical price transmission along the wheat-bread value chain in Ethiopia. This is pursued by applying a vector error correction model and an impulse response analysis using monthly price data for the period 2000-2015. Our analysis considers transmission of price shocks across different market levels, including from the international and domestic wheat grain markets at the upstream to the domestic wheat bread market at the downstream of the value chain. The empirical findings indicate that significant cointegration exists across prices of the different market stages. There is a transmission from international prices to domestic prices at downstream markets, in particular to flour and bread prices. Prices at upstream markets are largely influenced by the domestic wholesale market. In general, the speed of adjustment is quite slow with a half-life of about one year for restoring the equilibrium price relationship. As price margins between the different market stages in the value chain have substantially decreased in the last 15 years, higher transmission, and thus exposure to international market shocks, can be expected in the future. The results also show that causal relationships exist between prices at different market stageswith the wholesale market identified as the key market level where prices and price expectations are formed.}, language = {en} } @article{DorbandJakobKalkuhletal.2019, author = {Dorband, Ira Irina and Jakob, Michael and Kalkuhl, Matthias and Steckel, Jan Christoph}, title = {Poverty and distributional effects of carbon pricing in low- and middle-income countries - A global comparative analysis}, series = {World development}, volume = {115}, journal = {World development}, publisher = {Elsevier}, address = {Oxford}, issn = {0305-750X}, doi = {10.1016/j.worlddev.2018.11.015}, pages = {246 -- 257}, year = {2019}, abstract = {Even though concerns about adverse distributional implications for the poor are one of the most important political challenges for carbon pricing, the existing literature reveals ambiguous results. For this reason, we assess the expected incidence of moderate carbon price increases for different income groups in 87 mostly low- and middle-income countries. Building on a consistent dataset and method, we find that for countries with per capita incomes of below USD 15,000 per year (at PPP-adjusted 2011 USD) carbon pricing has, on average, progressive distributional effects. We also develop a novel decomposition technique to show that distributional outcomes are primarily determined by differences among income groups in consumption patterns of energy, rather than of food, goods or services. We argue that an inverse U-shape relationship between energy expenditure shares and income explains why carbon pricing tends to be regressive in countries with relatively higher income. Since these countries are likely to have more financial resources and institutional capacities to deal with distributional issues, our findings suggest that mitigating climate change, raising domestic revenue and reducing economic inequality are not mutually exclusive, even in low- and middle-income countries. (C) 2018 The Authors. Published by Elsevier Ltd.}, language = {en} } @misc{DorbandJakobKalkuhletal.2018, author = {Dorband, Ira Irina and Jakob, Michael and Kalkuhl, Matthias and Steckel, Jan Christoph}, title = {Poverty and distributional effects of carbon pricing in low- and middle- income countries}, series = {Postprints der Universit{\"a}t Potsdam : Wirtschafts- und Sozialwissenschaftliche Reihe}, journal = {Postprints der Universit{\"a}t Potsdam : Wirtschafts- und Sozialwissenschaftliche Reihe}, number = {103}, issn = {1867-5808}, doi = {10.25932/publishup-42459}, url = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-424592}, pages = {12}, year = {2018}, abstract = {Even though concerns about adverse distributional implications for the poor are one of the most important political challenges for carbon pricing, the existing literature reveals ambiguous results. For this reason, we assess the expected incidence of moderate carbon price increases for different income groups in 87 mostly low- and middle-income countries. Building on a consistent dataset and method, we find that for countries with per capita incomes of below USD 15,000 per year (at PPP-adjusted 2011 USD) carbon pricing has, on average, progressive distributional effects. We also develop a novel decomposition technique to show that distributional outcomes are primarily determined by differences among income groups in consumption patterns of energy, rather than of food, goods or services. We argue that an inverse U-shape relationship between energy expenditure shares and income explains why carbon pricing tends to be regressive in countries with relatively higher income. Since these countries are likely to have more financial resources and institutional capacities to deal with distributional issues, our findings suggest that mitigating climate change, raising domestic revenue and reducing economic inequality are not mutually exclusive, even in low- and middle-income countries.}, language = {en} } @techreport{KalkuhlFranksGruneretal.2023, type = {Working Paper}, author = {Kalkuhl, Matthias and Franks, Max and Gruner, Friedemann and Lessmann, Kai and Edenhofer, Ottmar}, title = {Pigou's Advice and Sisyphus' Warning}, series = {CEPA Discussion Papers}, journal = {CEPA Discussion Papers}, number = {62}, issn = {2628-653X}, doi = {10.25932/publishup-57588}, url = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-575882}, pages = {66}, year = {2023}, abstract = {Carbon dioxide removal from the atmosphere is becoming an important option to achieve net zero climate targets. This paper develops a welfare and public economics perspective on optimal policies for carbon removal and storage in non-permanent sinks like forests, soil, oceans, wood products or chemical products. We derive a new metric for the valuation of non-permanent carbon storage, the social cost of carbon removal (SCC-R), which embeds also the conventional social cost of carbon emissions. We show that the contribution of CDR is to create new carbon sinks that should be used to reduce transition costs, even if the stored carbon is released to the atmosphere eventually. Importantly, CDR does not raise the ambition of optimal temperature levels unless initial atmospheric carbon stocks are excessively high. For high initial atmospheric carbon stocks, CDR allows to reduce the optimal temperature below initial levels. Finally, we characterize three different policy regimes that ensure an optimal deployment of carbon removal: downstream carbon pricing, upstream carbon pricing, and carbon storage pricing. The policy regimes differ in their informational and institutional requirements regarding monitoring, liability and financing.}, language = {en} } @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{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{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} } @techreport{FranksKalkuhlLessmann2022, type = {Working Paper}, author = {Franks, Max and Kalkuhl, Matthias and Lessmann, Kai}, title = {Optimal Pricing for Carbon Dioxide Removal Under Inter-Regional Leakage}, series = {CEPA Discussion Papers}, journal = {CEPA Discussion Papers}, number = {43}, issn = {2628-653X}, doi = {10.25932/publishup-53808}, url = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-538080}, pages = {12}, year = {2022}, 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 subsidies for CDR 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, terms-of-trade and fossil resource rent dynamics. First, the optimal removal subsidy tends to be larger than the carbon tax because of lower supply-side leakage on fossil resource markets. Second, terms-of-trade effects exacerbate this wedge for net resource exporters, implying even larger removal subsidies. Third, the optimal removal subsidy may fall below the carbon tax for resource-poor countries when marginal environmental damages are small.}, language = {en} } @article{HaenselFranksKalkuhletal.2022, author = {H{\"a}nsel, Martin C. and Franks, Max and Kalkuhl, Matthias and Edenhofer, Ottmar}, title = {Optimal carbon taxation and horizontal equity}, series = {Journal of environmental economics and management}, volume = {116}, journal = {Journal of environmental economics and management}, publisher = {Elsevier}, address = {Amsterdam}, issn = {0095-0696}, doi = {10.1016/j.jeem.2022.102730}, year = {2022}, abstract = {We develop a model of optimal taxation and redistribution under an ambitious climate target. We take into account vertical income differences, but also explicitly capture horizontal equity concerns by considering heterogeneous energy efficiencies. By deriving first- and second-best rules for policy instruments including carbon and labor taxes, transfers and energy subsidies, we investigate analytically how vertical and horizontal inequality is considered in the welfare maximizing tax structure. We calibrate the model to German household data and a 30 percent emission reduction goal and show that redistribution of carbon tax revenues via household-specific transfers is the first-best policy. Under plausible assumptions on inequality aversion, transfers to energy-intensive households should be about five times higher than transfers to energy-efficient households. Equal per-capita transfers do not require to observe households' efficiency type, but increase equity-weighted mitigation costs by around 5 percent compared to the first-best. Mitigation costs increase by less, if the government can implement a uniform clean energy subsidy or household-specific tax-subsidy schemes on energy consumption and labor income that target heterogeneous energy efficiencies. Horizontal equity concerns may therefore constitute a new second-best rationale for clean energy policies or differentiated energy taxes.}, language = {en} } @techreport{HaenselFranksKalkuhletal.2021, type = {Working Paper}, author = {H{\"a}nsel, Martin C. and Franks, Max and Kalkuhl, Matthias and Edenhofer, Ottmar}, title = {Optimal carbon taxation and horizontal equity}, series = {CEPA Discussion Papers}, journal = {CEPA Discussion Papers}, number = {28}, issn = {2628-653X}, doi = {10.25932/publishup-49812}, url = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-498128}, pages = {51}, year = {2021}, abstract = {We develop a model of optimal carbon taxation and redistribution taking into account horizontal equity concerns by considering heterogeneous energy efficiencies. By deriving first- and second-best rules for policy instruments including carbon taxes, transfers and energy subsidies, we then investigate analytically how horizontal equity is considered in the social welfare maximizing tax structure. We calibrate the model to German household data and a 30 percent emission reduction goal. Our results show that energy-intensive households should receive more redistributive resources than energy-efficient households if and only if social inequality aversion is sufficiently high. We further find that redistribution of carbon tax revenue via household-specific transfers is the first-best policy. Equal per-capita transfers do not suffer from informational problems, but increase mitigation costs by around 15 percent compared to the first- best for unity inequality aversion. Adding renewable energy subsidies or non-linear energy subsidies, reduces mitigation costs further without relying on observability of households' energy efficiency.}, language = {en} } @techreport{BlanzEydamHeinemannetal.2022, type = {Working Paper}, author = {Blanz, Alkis and Eydam, Ulrich and Heinemann, Maik and Kalkuhl, Matthias}, title = {Optimal carbon pricing with fluctuating energy prices — emission targeting vs. price targeting}, series = {CEPA Discussion Papers}, journal = {CEPA Discussion Papers}, number = {51}, issn = {2628-653X}, doi = {10.25932/publishup-56104}, url = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-561049}, pages = {12}, year = {2022}, abstract = {Prices of primary energy commodities display marked fluctuations over time. Market-based climate policy instruments (e.g., emissions pricing) create incentives to reduce energy consumption by increasing the user cost of fossil energy. This raises the question of whether climate policy should respond to fluctuations in fossil energy prices? We study this question within an environmental dynamic stochastic general equilibrium (E-DSGE) model calibrated on the German economy. Our results indicate that the welfare implications of dynamic emissions pricing crucially depend on how the revenues are used. When revenues are fully absorbed, a reduction in emissions prices stabilizes the economy in response to energy price shocks. However, when revenues are at least partially recycled, a stable emissions price improves overall welfare. This result is robust to different modeling assumptions.}, language = {en} } @article{KalkuhlSchwerhoffWaha2020, author = {Kalkuhl, Matthias and Schwerhoff, Gregor and Waha, Katharina}, title = {Land tenure, climate and risk management}, series = {Ecological economics}, volume = {171}, journal = {Ecological economics}, publisher = {Elsevier Science}, address = {Amsterdam [u.a.]}, issn = {0921-8009}, doi = {10.1016/j.ecolecon.2019.106573}, pages = {16}, year = {2020}, abstract = {We analyze to what extent climate conditions affect the prevalence of sharecropping as a form of traditional land tenure. We investigate how sharecropping tenure is related to climate risk and how it interacts with fertilizer use and livestock ownership that both influence production risk. We first develop a stylized theoretical model to illustrate the role of climate for land tenure and production. Our empirical analysis is based on more than 9000 households with considerable heterogeneity in climate conditions across several African countries. We find that farmers in areas with low precipitation are more likely to be sharecroppers. We further find evidence for risk management interaction effects as sharecropping farmers are less likely to own livestock and more likely to use fertilizer. In economies where formal kinds of insurance are unavailable, sharecropping thus functions as a form of insurance and reduces the need for potentially costly risk management strategies.}, language = {en} } @article{RamakrishnanKalkuhlAhmadetal.2020, author = {Ramakrishnan, Anjali and Kalkuhl, Matthias and Ahmad, Sohail and Creutzig, Felix}, title = {Keeping up with the Patels}, series = {Energy research \& social science}, volume = {70}, journal = {Energy research \& social science}, publisher = {Elsevier}, address = {Amsterdam}, issn = {2214-6296}, doi = {10.1016/j.erss.2020.101742}, pages = {12}, year = {2020}, abstract = {End-users base their consumption decisions not only on available budget and direct use value, but also on their social environment. The underlying social dynamics are particularly important in the case of consumer goods that implicate high future energy demand and are, hence, also key for climate mitigation. This paper investigates the impact of social factors, with a focus on 'status perceptions', on car and appliance ownerships by urban India households. Using two rounds of the household-level data from the India Human Development Survey (IHDS, 2005 and 2012), we test for the impact of social factors in addition to economic, demographic, locational, and housing on ownership levels. Starting with factor analysis to categorise appliances by their latent characteristics, we then apply the bivariate ordered probit model to identify drivers of consumption among the urban households. We find that while income and household demographics are predominant drivers of car and appliance uptake, the household's perception of status, instrumented by a variable measuring expenditure on conspicuous consumption, emerges as a key social dimension influencing the uptake. The results indicate how households identify themselves in society influences their corresponding car and appliance consumption. A deeper understanding of status-based consumption is, therefore, essential to designing better demand-side solutions to low carbon consumption.}, 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} } @techreport{KalkuhlAmbergBergmannetal.2022, type = {Working Paper}, author = {Kalkuhl, Matthias and Amberg, Maximilian and Bergmann, Tobias and Knopf, Brigitte and Edenhofer, Ottmar}, title = {Gaspreisdeckel, Mehrwertsteuersenkung, Energiepauschale}, publisher = {Mercator Research Institute on Global Commons and Climate Change (MCC) gGmbH}, address = {Berlin}, pages = {23}, year = {2022}, language = {de} } @article{KozickaKalkuhlBrockhaus2017, author = {Kozicka, Marta and Kalkuhl, Matthias and Brockhaus, Jan}, title = {Food Grain Policies in India and their Implications for Stocks and Fiscal Costs}, series = {Journal of Agricultural Economics}, volume = {68}, journal = {Journal of Agricultural Economics}, number = {1}, publisher = {Wiley-Blackwell}, address = {Hoboken}, issn = {0021-857X}, doi = {10.1111/1477-9552.12176}, pages = {98 -- 122}, year = {2017}, abstract = {We analyse current and possible future reforms of the Indian food policies for the most important staple grains, wheat and rice, within a two-commodity dynamic partial equilibrium model with stochastic shocks. The model is empirically grounded and reproduces past values well. It uses a new reduced-form approach to capture private storage dynamics. We evaluate the implementation of the National Food Security Act (NFSA) under several policy measures with the current regime as well as two scenarios with a regime change - implementation of cash transfers and deficiency payments. Implications for market fundamentals and fiscal costs are simulated in the medium term - until 2020/21. The NFSA puts a high pressure on fiscal costs and public stocks. Relying on imports with low support prices results in low fiscal costs and stable, but higher domestic and international prices, and a high risk of zero stocks. A policy strategy to manipulate procurement prices in order to maintain public stocks close to the norms leads to slightly higher fiscal costs with lower, but more volatile prices. The highest domestic price volatility occurs under a strategy which uses export bans in order to maintain sufficient public stocks. A cash-based regime can bring considerable savings and curb fiscal costs, particularly if targeted to the poor, and would leave sufficient stocks due to higher private stocks.}, language = {en} } @techreport{BlanzEydamHeinemannetal.2023, type = {Working Paper}, author = {Blanz, Alkis and Eydam, Ulrich and Heinemann, Maik and Kalkuhl, Matthias and Moretti, Nikolaj}, title = {Fiscal Policy and Energy Price Shocks}, series = {CEPA Discussion Papers}, journal = {CEPA Discussion Papers}, number = {70}, issn = {2628-653X}, doi = {10.25932/publishup-61276}, url = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-612763}, pages = {33}, year = {2023}, abstract = {The effects of energy price increases are heterogeneous between households and firms. Financially constrained poorer households, who spend a larger relative share of their income on energy, are particularly affected. In this analysis, we examine the macroeconomic and welfare effects of energy price shocks in the presence of credit-constrained households that have subsistence-level energy demand. Within a Dynamic Stochastic General Equilibrium (DSGE) model calibrated for the German economy, we compare the performance of different policy measures (transfers and energy subsidies) and different financing schemes (income tax vs. debt). Our results show that credit-constrained households prefer debt over tax financing regardless of the compensation measure due to their difficulty to smooth consumption. On the contrary, rich households tend to prefer tax-financed measures as they increase the labor supply of poor households. From an aggregate perspective, tax-financed measures targeting firms effectively cushion aggregate output losses.}, language = {en} } @misc{OttoPiontekKalkuhletal.2020, author = {Otto, Christian and Piontek, Franziska and Kalkuhl, Matthias and Frieler, Katja}, title = {Event-based models to understand the scale of the impact of extremes}, series = {Nature energy}, volume = {5}, journal = {Nature energy}, number = {2}, publisher = {Nature Publishing Group}, address = {London}, issn = {2058-7546}, doi = {10.1038/s41560-020-0562-4}, pages = {111 -- 114}, year = {2020}, abstract = {Climate change entails an intensification of extreme weather events that can potentially trigger socioeconomic and energy system disruptions. As we approach 1 degrees C of global warming we should start learning from historical extremes and explicitly incorporate such events in integrated climate-economy and energy systems models.}, language = {en} } @techreport{KellnerAmbergBergmannetal.2022, type = {Working Paper}, author = {Kellner, Maximilian and Amberg, Maximilian and Bergmann, Tobias and Roolfs, Christina and Kalkuhl, Matthias}, title = {Entlastungspakete f{\"u}r Energiepreisanstiege}, publisher = {Mercator Research Institute on Global Commons and Climate Change (MCC) gGmbH}, address = {Berlin}, doi = {10.5281/zenodo.6617130}, pages = {23}, year = {2022}, language = {de} } @article{BlanzEydamHeinemannetal.2022, author = {Blanz, Alkis and Eydam, Ulrich and Heinemann, Maik and Kalkuhl, Matthias}, title = {Energiepreiskrise und Klimapolitik:}, series = {Ifo-Schnelldienst}, volume = {75}, journal = {Ifo-Schnelldienst}, number = {5}, publisher = {Ifo Institut f{\"u}r Wirtschaftsforschung}, address = {M{\"u}nchen}, issn = {0018-974X}, pages = {34 -- 38}, year = {2022}, abstract = {Sollte Klimapolitik auf Energiepreisanstiege reagieren und kurzfristig CO2-Preise anpassen, um Haushalte zu entlasten? Alkis Blanz, Ulrich Eydam, Maik Heinemann und Matthias Kalkuhl, Mercator Research Institute on Global Commons and Climate Change (MCC) und Universit{\"a}t Potsdam, zeigen, dass die Verwendung der Einnahmen aus der CO2-Bepreisung von entscheidender Bedeutung ist. Werden diese weitestgehend durch Steuersenkungen oder Transfers an Haushalte r{\"u}ckverteilt, sollten CO2-Preise nicht an kurzfristige Energiepreisschwankungen angepasst werden. Haushalte profitieren st{\"a}rker von einer direkten Stabilisierung ihres Einkommens als von der Stabilisierung der Energiepreise. Werden Einnahmen aus der CO2-Bepreisung nicht r{\"u}ckerstattet, sind dagegen antizyklische CO2-Preise wohlfahrtserh{\"o}hend.}, language = {de} } @techreport{LessmannGrunerKalkuhletal.2024, type = {Working Paper}, author = {Lessmann, Kai and Gruner, Friedemann and Kalkuhl, Matthias and Edenhofer, Ottmar}, title = {Emissions Trading with Clean-up Certificates}, series = {CEPA Discussion Papers}, journal = {CEPA Discussion Papers}, number = {79}, issn = {2628-653X}, doi = {10.25932/publishup-64136}, url = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-641368}, pages = {35}, year = {2024}, abstract = {We analyze how conventional emissions trading schemes (ETS) can be modified by introducing "clean-up certificates" to allow for a phase of net-negative emissions. Clean-up certificates bundle the permission to emit CO2 with the obligation for its removal. We show that demand for such certificates is determined by cost-saving technological progress, the discount rate and the length of the compliance period. Introducing extra clean-up certificates into an existing ETS reduces near-term carbon prices and mitigation efforts. In contrast, substituting ETS allowances with clean-up certificates reduces cumulative emissions without depressing carbon prices or mitigation in the near term. We calibrate our model to the EU ETS and identify reforms where simultaneously (i) ambition levels rise, (ii) climate damages fall, (iii) revenues from carbon prices rise and (iv) carbon prices and aggregate mitigation cost fall. For reducing climate damages, roughly half of the issued clean-up certificates should replace conventional ETS allowances. In the context of the EU ETS, a European Carbon Central Bank could manage the implementation of cleanup certificates and could serve as an enforcement mechanism.}, language = {en} } @techreport{KalkuhlFlachslandKnopfetal.2022, type = {Working Paper}, author = {Kalkuhl, Matthias and Flachsland, Christian and Knopf, Brigitte and Amberg, Maximilian and Bergmann, Tobias and Kellner, Maximilian and St{\"u}ber, Sophia and Haywood, Luke and Roolfs, Christina and Edenhofer, Ottmar}, title = {Effects of the energy price crisis on households in Germany}, publisher = {Mercator Research Institute on Global Commons and Climate Change (MCC) gGmbH}, address = {Berlin}, pages = {35}, year = {2022}, language = {en} } @techreport{SteckelMissbachOhlendorfetal.2022, type = {Working Paper}, author = {Steckel, Jan Christoph and Missbach, Leonard and Ohlendorf, Nils and Feindt, Simon and Kalkuhl, Matthias}, title = {Effects of the energy price crisis on European households}, publisher = {Mercator Research Institute on Global Commons and Climate Change (MCC) gGmbH}, address = {Berlin}, pages = {30}, year = {2022}, language = {en} } @article{PiontekKalkuhlKriegleretal.2019, author = {Piontek, Franziska and Kalkuhl, Matthias and Kriegler, Elmar and Schultes, Anselm and Leimbach, Marian and Edenhofer, Ottmar and Bauer, Nico}, title = {Economic Growth Effects of Alternative Climate Change Impact Channels in Economic Modeling}, series = {Environmental \& resource economics : the official journal of the European Association of Environmental and Resource Economists}, volume = {73}, journal = {Environmental \& resource economics : the official journal of the European Association of Environmental and Resource Economists}, number = {4}, publisher = {Springer}, address = {Dordrecht}, issn = {0924-6460}, doi = {10.1007/s10640-018-00306-7}, pages = {1357 -- 1385}, year = {2019}, abstract = {Despite increasing empirical evidence of strong links between climate and economic growth, there is no established model to describe the dynamics of how different types of climate shocks affect growth patterns. Here we present the first comprehensive, comparative analysis of the long-term dynamics of one-time, temporary climate shocks on production factors, and factor productivity, respectively, in a Ramsey-type growth model. Damages acting directly on production factors allow us to study dynamic effects on factor allocation, savings and economic growth. We find that the persistence of impacts on economic activity is smallest for climate shocks directly impacting output, and successively increases for direct damages on capital, loss of labor and productivity shocks, related to different responses in savings rates and factor-specific growth. Recurring shocks lead to large welfare effects and long-term growth effects, directly linked to the persistence of individual shocks. Endogenous savings and shock anticipation both have adaptive effects but do not eliminate differences between impact channels or significantly lower the dissipation time. Accounting for endogenous growth mechanisms increases the effects. We also find strong effects on income shares, important for distributional implications. This work fosters conceptual understanding of impact dynamics in growth models, opening options for links to empirics.}, language = {en} } @article{WenzCarrKoegeletal.2023, author = {Wenz, Leonie and Carr, Robert Devon and K{\"o}gel, Noah and Kotz, Maximilian and Kalkuhl, Matthias}, title = {DOSE - global data set of reported sub-national economic output}, series = {Scientific data}, volume = {10}, journal = {Scientific data}, number = {1}, publisher = {Nature Publishing Group}, address = {London}, issn = {2052-4463}, doi = {10.1038/s41597-023-02323-8}, pages = {1 -- 17}, year = {2023}, abstract = {Many phenomena of high relevance for economic development such as human capital, geography and climate vary considerably within countries as well as between them. Yet, global data sets of economic output are typically available at the national level only, thereby limiting the accuracy and precision of insights gained through empirical analyses. Recent work has used interpolation and downscaling to yield estimates of sub-national economic output at a global scale, but respective data sets based on official, reported values only are lacking. We here present DOSE — the MCC-PIK Database Of Sub-national Economic Output. DOSE contains harmonised data on reported economic output from 1,661 sub-national regions across 83 countries from 1960 to 2020. To avoid interpolation, values are assembled from numerous statistical agencies, yearbooks and the literature and harmonised for both aggregate and sectoral output. Moreover, we provide temporally- and spatially-consistent data for regional boundaries, enabling matching with geo-spatial data such as climate observations. DOSE provides the opportunity for detailed analyses of economic development at the subnational level, consistent with reported values.}, language = {en} } @article{SedovaKalkuhlMendelsohn2020, author = {Sedova, Barbora and Kalkuhl, Matthias and Mendelsohn, Robert}, title = {Distributional impacts of weather and climate in rural India}, series = {Economics of disasters and climate change}, volume = {4}, journal = {Economics of disasters and climate change}, number = {1}, publisher = {Springer}, address = {Cham}, issn = {2511-1280}, doi = {10.1007/s41885-019-00051-1}, pages = {5 -- 44}, year = {2020}, abstract = {Climate-related costs and benefits may not be evenly distributed across the population. We study distributional implications of seasonal weather and climate on within-country inequality in rural India. Utilizing a first difference approach, we find that the poor are more sensitive to weather variations than the non-poor. The poor respond more strongly to (seasonal) temperature changes: negatively in the (warm) spring season, more positively in the (cold) rabi season. Less precipitation is harmful to the poor in the monsoon kharif season and beneficial in the winter and spring seasons. We show that adverse weather aggravates inequality by reducing consumption of the poor farming households. Future global warming predicted under RCP8.5 is likely to exacerbate these effects, reducing consumption of poor farming households by one third until the year 2100. We also find inequality in consumption across seasons with higher consumption during the harvest and lower consumption during the sowing seasons.}, language = {en} } @article{KotzWenzStechemesseretal.2021, author = {Kotz, Maximilian and Wenz, Leonie and Stechemesser, Annika and Kalkuhl, Matthias and Levermann, Anders}, title = {Day-to-day temperature variability reduces economic growth}, series = {Nature climate change}, volume = {11}, journal = {Nature climate change}, number = {4}, publisher = {Nature Publishing Group}, address = {London}, issn = {1758-678X}, doi = {10.1038/s41558-020-00985-5}, pages = {319 -- 325}, year = {2021}, abstract = {Elevated annual average temperature has been found to impact macro-economic growth. However, various fundamental elements of the economy are affected by deviations of daily temperature from seasonal expectations which are not well reflected in annual averages. Here we show that increases in seasonally adjusted day-to-day temperature variability reduce macro-economic growth independent of and in addition to changes in annual average temperature. Combining observed day-to-day temperature variability with subnational economic data for 1,537 regions worldwide over 40 years in fixed-effects panel models, we find that an extra degree of variability results in a five percentage-point reduction in regional growth rates on average. The impact of day-to-day variability is modulated by seasonal temperature difference and income, resulting in highest vulnerability in low-latitude, low-income regions (12 percentage-point reduction). These findings illuminate a new, global-impact channel in the climate-economy relationship that demands a more comprehensive assessment in both climate and integrated assessment models.}, 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{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{LessmannKalkuhl2023, author = {Lessmann, Kai and Kalkuhl, Matthias}, title = {Climate finance intermediation}, series = {Journal of the Association of Environmental and Resource Economists}, volume = {11}, journal = {Journal of the Association of Environmental and Resource Economists}, number = {1}, publisher = {University of Chicago Press}, address = {Chicago, IL}, issn = {2333-5955}, doi = {10.1086/725920}, pages = {213 -- 251}, year = {2023}, abstract = {Interest rates are central determinants of saving and investment decisions. Costly financial intermediation distorts these price signals by creating a spread between deposit and loan rates. This study investigates how bank spreads affect climate policy in its ambition to redirect capital. We identify various channels through which interest spreads affect carbon emissions in a dynamic general equilibrium model. Interest rate spreads increase abatement costs due to the higher relative price for capital-intensive carbon-free energy, but they also tend to reduce emissions due to lower overall economic growth. For the global average interest rate spread of 5.1 percentage points, global warming increases by 0.2°C compared to the frictionless economy. For a given temperature target to be achieved, interest rate spreads necessitate substantially higher carbon taxes. When spreads arise from imperfect competition in the intermediation sector, the associated welfare costs can be reduced by clean energy subsidies or even eliminated by economy-wide investment subsidies.}, 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{KozickaWeberKalkuhl2019, author = {Kozicka, Marta and Weber, Regine and Kalkuhl, Matthias}, title = {Cash vs. in-kind transfers}, series = {Food Security}, volume = {11}, journal = {Food Security}, number = {4}, publisher = {Springer}, address = {New York}, issn = {1876-4517}, doi = {10.1007/s12571-019-00942-x}, pages = {915 -- 927}, year = {2019}, abstract = {Historically, India has relied on subsidizing staple food as a major instrument in improving food security. Recently, however, cash transfers have entered the debate as an alternative, as they are associated with lower market distortions, leakages and fiscal costs. This study contributes to this debate by analyzing India's Targeted Public Distribution System (TPDS). Our main objective was to explain the under-purchase, or low take-up, from the TPDS, which is typically attributed to 'leakage', i.e. the diversion of food grains from eligible consumers. We provide an alternative solution based on self-targeting; while poorer households increase their consumption from the TPDS, wealthier households restrain from consuming subsidized commodities. Using a large household dataset, we estimated that such a voluntary opt-out system, based on income, would save a minimum of 6.5\% of grains released through the TPDS. Besides these demand-driven aspects, our analysis indicates that poor regions perform better at lowering the diversion of grains and that large targeting errors exist among female-led households. Finally, we find substantial regional price differences that would benefit the poor and rural population under a uniform cash-transfer system that does not correct for regional price levels.}, 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{KalkuhlFernandezMilanSchwerhoffetal.2018, author = {Kalkuhl, Matthias and Fernandez Milan, Blanca and Schwerhoff, Gregor and Jakob, Michael and Hahnen, Maren and Creutzig, Felix}, title = {Can land taxes foster sustainable development?}, series = {Land use policy : the international journal covering all aspects of land use}, volume = {78}, journal = {Land use policy : the international journal covering all aspects of land use}, publisher = {Elsevier Science Publishers Ltd.}, address = {Oxford}, issn = {0264-8377}, doi = {10.1016/j.landusepol.2018.07.008}, pages = {338 -- 352}, year = {2018}, abstract = {Economists argue that land rent taxation is an ideal form of taxation as it causes no deadweight losses. Nevertheless, pure land rent taxation is rarely applied. This paper revisits the case of land taxation for developing countries. We first provide an up-to-date review on land taxation in development countries, including feasibility and implementation challenges. We then simulate land tax reforms for Rwanda, Peru, Nicaragua and Indonesia, based on household surveys. We find that (i) land taxes provide a substantial untapped potential for tax revenues at minimal deadweight losses; that (ii) linear land value taxes tend to put a high relative burden on poor households as land ownership is pervasive; (iii) non-linear tax schemes could avoid adverse effects on the poor; and that (iv) with technological advances, administrative costs of land taxes have reduced substantially and are outweighed by tax revenues and co-benefits of formalized land tenure. Enforcement and compliance remain, however, a key challenge.}, language = {en} } @article{SinghalPahleKalkuhletal.2021, author = {Singhal, Puja and Pahle, Michael and Kalkuhl, Matthias and Sommer, Stephan and Levesque, Antoine and Berneiser, Jessica}, title = {Beyond good faith}, series = {SSRN eLibrary / Social Science Research Network}, journal = {SSRN eLibrary / Social Science Research Network}, publisher = {SSRN - Elsevier}, address = {Rochester, NY}, issn = {1556-5068}, doi = {10.2139/ssrn.3947800}, pages = {29}, year = {2021}, abstract = {The ambitious climate targets set by industrialized nations worldwide cannot be met without decarbonizing the building stock. Using Germany as a case study, this paper takes stock of the extensive set of energy efficiency policies that are already in place and clarifies that they have been designed "in good faith" but lack in overall effectiveness as well as cost-efficiency in achieving these climate targets. We map out the market failures and behavioural considerations that are potential reasons for why realized energy savings fall below expectations and why the household adoption of energy-efficient and low-carbon technologies has remained low. We highlight the pressing need for data and modern empirical research to develop targeted and cost-effective policies seeking to correct these market failures. To this end, we identify some key research questions and identify gaps in the data required for evidence-based policy.}, language = {en} } @techreport{KalkuhlFlachslandKnopfetal.2022, type = {Working Paper}, author = {Kalkuhl, Matthias and Flachsland, Christian and Knopf, Brigitte and Amberg, Maximilian and Bergmann, Tobias and Kellner, Maximilian and St{\"u}ber, Sophia and Haywood, Luke and Roolfs, Christina and Edenhofer, Ottmar}, title = {Auswirkungen der Energiepreiskrise auf Haushalte in Deutschland}, publisher = {Mercator Research Institute on Global Commons and Climate Change (MCC) gGmbH}, address = {Berlin}, pages = {37}, year = {2022}, language = {de} } @article{KalkuhlSteckelEdenhofer2020, author = {Kalkuhl, Matthias and Steckel, Jan Christoph and Edenhofer, Ottmar}, title = {All or nothing}, series = {Journal of environmental economics and management}, volume = {100}, journal = {Journal of environmental economics and management}, publisher = {Elsevier}, address = {San Diego}, issn = {0095-0696}, doi = {10.1016/j.jeem.2019.01.012}, pages = {21}, year = {2020}, abstract = {This paper develops a new perspective on stranded assets in climate policy using a partial equilibrium model of the energy sector. Political-economy related aspects are considered in the government's objective function. Lobbying power of firms or fiscal considerations by the government lead to time inconsistency: The government will deviate from a previously announced carbon tax which creates stranded assets. Under rational expectations, we show that a time-consistent policy outcome exists with either a zero carbon tax or a prohibitive carbon tax that leads to zero fossil investments - an "all-or-nothing" policy. Although stranded assets are crucial to such a bipolar outcome, they disappear again under time-consistent policy. Which of the two outcomes (all or nothing) prevails depends on the lobbying power of owners of fixed factors (land and fossil resources) but not on fiscal revenue considerations or on the lobbying power of renewable or fossil energy firms.}, language = {en} } @article{SurethKalkuhlEdenhoferetal.2023, author = {Sureth, Michael and Kalkuhl, Matthias and Edenhofer, Ottmar and Rockstr{\"o}m, Johan}, title = {A welfare economic approach to planetary boundaries}, series = {Jahrb{\"u}cher f{\"u}r National{\"o}konomie und Statistik}, volume = {243}, journal = {Jahrb{\"u}cher f{\"u}r National{\"o}konomie und Statistik}, number = {5}, publisher = {De Gruyter Oldenbourg}, address = {Berlin}, issn = {0021-4027}, doi = {10.1515/jbnst-2022-0022}, pages = {477 -- 542}, year = {2023}, abstract = {The crises of both the climate and the biosphere are manifestations of the imbalance between human extractive, and polluting activities and the Earth's regenerative capacity. Planetary boundaries define limits for biophysical systems and processes that regulate the stability and life support capacity of the Earth system, and thereby also define a safe operating space for humanity on Earth. Budgets associated to planetary boundaries can be understood as global commons: common pool resources that can be utilized within finite limits. Despite the analytical interpretation of planetary boundaries as global commons, the planetary boundaries framework is missing a thorough integration into economic theory. We aim to bridge the gap between welfare economic theory and planetary boundaries as derived in the natural sciences by presenting a unified theory of cost-benefit and cost-effectiveness analysis. Our pragmatic approach aims to overcome shortcomings of the practical applications of CEA and CBA to environmental problems of a planetary scale. To do so, we develop a model framework and explore decision paradigms that give guidance to setting limits on human activities. This conceptual framework is then applied to planetary boundaries. We conclude by using the realized insights to derive a research agenda that builds on the understanding of planetary boundaries as global commons.}, language = {en} } @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} }