@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{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}
}