TY - JOUR A1 - Wenz, Leonie A1 - Carr, Robert Devon A1 - Kögel, Noah A1 - Kotz, Maximilian A1 - Kalkuhl, Matthias T1 - DOSE - global data set of reported sub-national economic output JF - Scientific data N2 - 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. KW - economics KW - environmental health KW - geography Y1 - 2023 U6 - https://doi.org/10.1038/s41597-023-02323-8 SN - 2052-4463 VL - 10 IS - 1 SP - 1 EP - 17 PB - Nature Publishing Group CY - London ER - TY - JOUR A1 - Lessmann, Kai A1 - Kalkuhl, Matthias T1 - Climate finance intermediation BT - interest spread effects in a climate policy model JF - Journal of the Association of Environmental and Resource Economists N2 - 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. KW - financial friction KW - banking KW - greenhouse gas mitigation KW - investment subsidy Y1 - 2023 U6 - https://doi.org/10.1086/725920 SN - 2333-5955 SN - 2333-5963 VL - 11 IS - 1 SP - 213 EP - 251 PB - University of Chicago Press CY - Chicago, IL ER - TY - JOUR A1 - Sureth, Michael A1 - Kalkuhl, Matthias A1 - Edenhofer, Ottmar A1 - Rockström, Johan T1 - A welfare economic approach to planetary boundaries JF - Jahrbücher für Nationalökonomie und Statistik N2 - 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. KW - cost-benefit analysis KW - cost-effectiveness analysis KW - global commons KW - planetary boundaries KW - precautionary principle KW - shadow price KW - uncertainty KW - welfare economics Y1 - 2023 U6 - https://doi.org/10.1515/jbnst-2022-0022 SN - 0021-4027 SN - 2366-049X VL - 243 IS - 5 SP - 477 EP - 542 PB - De Gruyter Oldenbourg CY - Berlin ER - TY - JOUR A1 - Franks, Max A1 - Kalkuhl, Matthias A1 - Lessmann, Kai T1 - Optimal pricing for carbon dioxide removal under inter-regional leakage JF - Journal of environmental economics and management N2 - 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. Y1 - 2022 U6 - https://doi.org/10.1016/j.jeem.2022.102769 SN - 1096-0449 SN - 0095-0696 VL - 117 PB - Elsevier CY - Amsterdam ER -