TY - JOUR A1 - Singhal, Puja A1 - Pahle, Michael A1 - Kalkuhl, Matthias A1 - Sommer, Stephan A1 - Levesque, Antoine A1 - Berneiser, Jessica T1 - Beyond good faith BT - why evidence-based policy is necessary to decarbonize buildings cost-effectively JF - SSRN eLibrary / Social Science Research Network N2 - 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. KW - energy efficiency KW - decarbonization KW - housing sector KW - heat demand KW - evidence-based policy Y1 - 2021 U6 - https://doi.org/10.2139/ssrn.3947800 SN - 1556-5068 PB - SSRN - Elsevier CY - Rochester, NY ER - TY - JOUR A1 - Edenhofer, Ottmar A1 - Kalkuhl, Matthias A1 - Roolfs, Christina T1 - Carbon pricing and revenue recycling BT - an overview of vertical and horizontal equity effects for Germany JF - CESifo forum Y1 - 2021 UR - https://www.cesifo.org/DocDL/CESifo-Forum-2021-5-edenhofer-kalkuhl-roolfs-carbon-pricing-september.pdf SN - 2190-717X SN - 1615-245X VL - 22 IS - 5 SP - 10 EP - 14 PB - Ifo CY - Munich ER - TY - JOUR A1 - Diluiso, Francesca A1 - Annicchiarico, Barbara A1 - Kalkuhl, Matthias A1 - Minx, Jan Christoph T1 - Climate actions and macro-financial stability BT - the role of central banks JF - Journal of environmental economics and management N2 - 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. KW - Climate policy KW - Green transition KW - Monetary policy KW - Capital requirements KW - Green quantitative easing KW - Euro area Y1 - 2021 U6 - https://doi.org/10.1016/j.jeem.2021.102548 SN - 0095-0696 SN - 1096-0449 VL - 110 PB - Elsevier CY - Amsterdam ER - TY - JOUR A1 - Diluiso, Francesca A1 - Walk, Paula A1 - Manych, Niccolo A1 - Cerutti, Nicola A1 - Chipiga, Vladislav A1 - Workman, Annabelle A1 - Ayas, Ceren A1 - Cui, Ryna Yiyun A1 - Cui, Diyang A1 - Song, Kaihui A1 - Banisch, Lucy A. A1 - Moretti, Nikolaj A1 - Callaghan, Max W. A1 - Clarke, Leon A1 - Creutzig, Felix A1 - Hilaire, Jerome A1 - Jotzo, Frank A1 - Kalkuhl, Matthias A1 - Lamb, William F. A1 - Löschel, Andreas A1 - Müller-Hansen, Finn A1 - Nemet, Gregory F. A1 - Oei, Pao-Yu A1 - Sovacool, Benjamin K. A1 - Steckel, Jan Christoph A1 - Thomas, Sebastian A1 - Wiseman, John A1 - Minx, Jan C. T1 - Coal transitions - part 1 BT - a systematic map and review of case study learnings from regional, national, and local coal phase-out experiences JF - Environmental research letters N2 - 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. KW - climate change mitigation KW - coal transitions KW - evidence synthesis KW - political economy KW - systematic map Y1 - 2021 U6 - https://doi.org/10.1088/1748-9326/ac1b58 SN - 1748-9326 VL - 16 IS - 11 PB - Institute of Physics Publishing (IOP) CY - Bristol ER - TY - JOUR A1 - Kotz, Maximilian A1 - Wenz, Leonie A1 - Stechemesser, Annika A1 - Kalkuhl, Matthias A1 - Levermann, Anders T1 - Day-to-day temperature variability reduces economic growth JF - Nature climate change N2 - 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. KW - Climate change KW - Climate-change impacts KW - Economics KW - Environmental economics KW - Environmental impact Y1 - 2021 U6 - https://doi.org/10.1038/s41558-020-00985-5 SN - 1758-678X SN - 1758-6798 VL - 11 IS - 4 SP - 319 EP - 325 PB - Nature Publishing Group CY - London ER - TY - RPRT A1 - Hänsel, Martin C. A1 - Franks, Max A1 - Kalkuhl, Matthias A1 - Edenhofer, Ottmar T1 - Optimal carbon taxation and horizontal equity BT - A welfare-theoretic approach with application to German household data T2 - CEPA Discussion Papers N2 - 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. T3 - CEPA Discussion Papers - 28 KW - carbon price KW - horizontal equity KW - redistribution KW - renewable energy subsidies KW - climate policy KW - just transition Y1 - 2021 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-498128 SN - 2628-653X IS - 28 ER - TY - JOUR A1 - Baldenius, Till A1 - Bernstein, Tobias A1 - Kalkuhl, Matthias A1 - von Kleist-Retzow, Maximilian A1 - Koch, Nicolas T1 - Ordnungsrecht oder Preisinstrumente? BT - zur Verteilungswirkung von Klimaschutzmaßnahmen im Verkehr JF - Ifo-Schnelldienst Y1 - 2021 UR - https://www.ifo.de/DocDL/sd-2021-06-loeschel-etal-klimapolitik-verteilungswirkungen.pdf#page=4 SN - 0018-974X SN - 2700-8371 SN - 2199-4455 VL - 74 IS - 6 SP - 6 EP - 10 PB - Institut für Wirtschaftsforschung CY - München ER - TY - JOUR A1 - Edenhofer, Ottmar A1 - Franks, Max A1 - Kalkuhl, Matthias T1 - Pigou in the 21st century BT - a tribute on the occasion of the 100th anniversary of the publication of The Economics of Welfare JF - International tax and public finance N2 - 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. KW - Environmental economics KW - Climate change economics KW - Carbon pricing KW - Pigouvian taxation KW - Economic policy Y1 - 2021 U6 - https://doi.org/10.1007/s10797-020-09653-y SN - 0927-5940 SN - 1573-6970 VL - 28 IS - 5 SP - 1090 EP - 1121 PB - Springer CY - Dordrecht ER -