TY - JOUR A1 - Haile, Mekbib Gebretsadik A1 - Kalkuhl, Matthias A1 - Algieri, Bernardina A1 - Gebreselassie, Samuel T1 - Price shock transmission BT - evidence from the wheat-bread market value chain in Ethiopia JF - Agricultural economics N2 - 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. KW - Q02 KW - Q11 KW - Q13 KW - L11 KW - M31 KW - Value chain KW - Price transmission KW - Impulse response KW - Wheat KW - Ethiopia Y1 - 2017 U6 - https://doi.org/10.1111/agec.12373 SN - 0169-5150 SN - 1574-0862 VL - 48 IS - 6 SP - 769 EP - 780 PB - Wiley CY - Hoboken ER - TY - JOUR A1 - Kornher, Lukas A1 - Kalkuhl, Matthias T1 - The gains of coordination - When does regional cooperation for food security make sense? JF - Global Food Security - AGRICULTURE POLICY ECONOMICS AND ENVIRONMENT N2 - 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. KW - Food security KW - Regional cooperation KW - West Africa KW - International unions Y1 - 2019 U6 - https://doi.org/10.1016/j.gfs.2019.09.004 SN - 2211-9124 VL - 22 SP - 37 EP - 45 PB - Elsevier CY - Amsterdam ER - TY - JOUR A1 - Kozicka, Marta A1 - Weber, Regine A1 - Kalkuhl, Matthias T1 - Cash vs. in-kind transfers BT - the role of self-targeting in reforming the Indian food subsidy program JF - Food Security N2 - 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. KW - Food security KW - Policies KW - India KW - Targeted public distribution system KW - Self-targeting KW - Cash transfers Y1 - 2019 U6 - https://doi.org/10.1007/s12571-019-00942-x SN - 1876-4517 SN - 1876-4525 VL - 11 IS - 4 SP - 915 EP - 927 PB - Springer CY - New York ER - TY - JOUR A1 - Šedová, Barbora A1 - Kalkuhl, Matthias T1 - Who are the climate migrants and where do they go? BT - Evidence from rural India JF - World development N2 - 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. KW - climate change KW - migration KW - household analysis KW - India KW - econometrics Y1 - 2020 U6 - https://doi.org/10.1016/j.worlddev.2019.104848 SN - 0305-750X SN - 1873-5991 VL - 129 PB - Elsevier Science CY - Amsterdam ER - TY - JOUR A1 - Kozicka, Marta A1 - Kalkuhl, Matthias A1 - Brockhaus, Jan T1 - Food Grain Policies in India and their Implications for Stocks and Fiscal Costs BT - a Dynamic Partial Equilibrium Analysis JF - Journal of Agricultural Economics N2 - 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. KW - Fiscal costs KW - food grain policies KW - grain storage KW - India KW - NFSA KW - reforms Y1 - 2017 U6 - https://doi.org/10.1111/1477-9552.12176 SN - 0021-857X SN - 1477-9552 VL - 68 IS - 1 SP - 98 EP - 122 PB - Wiley-Blackwell CY - Hoboken ER - TY - JOUR A1 - Kalkuhl, Matthias A1 - Fernandez Milan, Blanca A1 - Schwerhoff, Gregor A1 - Jakob, Michael A1 - Hahnen, Maren A1 - Creutzig, Felix T1 - Can land taxes foster sustainable development? BT - An assessment of fiscal, distributional and implementation issues JF - Land use policy : the international journal covering all aspects of land use N2 - 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. KW - Fiscal policy KW - Public economics KW - Optimal taxes KW - Tax incidence KW - Land use Y1 - 2018 U6 - https://doi.org/10.1016/j.landusepol.2018.07.008 SN - 0264-8377 SN - 1873-5754 VL - 78 SP - 338 EP - 352 PB - Elsevier Science Publishers Ltd. CY - Oxford ER - TY - JOUR A1 - Ramakrishnan, Anjali A1 - Kalkuhl, Matthias A1 - Ahmad, Sohail A1 - Creutzig, Felix T1 - Keeping up with the Patels BT - conspicuous consumption drives the adoption of cars and appliances in India JF - Energy research & social science N2 - 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. KW - Residential energy demand KW - Perceived socioeconomic status KW - Social KW - drivers KW - Energy policy KW - Car ownership KW - Appliance diffusion Y1 - 2020 U6 - https://doi.org/10.1016/j.erss.2020.101742 SN - 2214-6296 SN - 2214-6326 VL - 70 PB - Elsevier CY - Amsterdam ER - TY - JOUR A1 - Algieri, Bernardina A1 - Kalkuhl, Matthias A1 - Koch, Nicolas T1 - A tale of two tails: Explaining extreme events in financialized agricultural markets JF - Food policy : economics planning and politics of food and agriculture N2 - 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. KW - Agricultural prices KW - Futures market KW - Tail events KW - GARCH analysis KW - Multinomial logit Y1 - 2017 U6 - https://doi.org/10.1016/j.foodpol.2017.05.004 SN - 0306-9192 SN - 1873-5657 VL - 69 SP - 256 EP - 269 PB - Elsevier CY - Oxford ER - TY - GEN A1 - Otto, Christian A1 - Piontek, Franziska A1 - Kalkuhl, Matthias A1 - Frieler, Katja T1 - Event-based models to understand the scale of the impact of extremes T2 - Nature energy N2 - 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. KW - Climate-change impacts KW - Energy economics KW - Socioeconomic scenarios Y1 - 2020 U6 - https://doi.org/10.1038/s41560-020-0562-4 SN - 2058-7546 VL - 5 IS - 2 SP - 111 EP - 114 PB - Nature Publishing Group CY - London ER - TY - JOUR A1 - Kalkuhl, Matthias A1 - Schwerhoff, Gregor A1 - Waha, Katharina T1 - Land tenure, climate and risk management JF - Ecological economics N2 - 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. KW - traditional land tenure KW - climate KW - risk management KW - agriculture KW - Africa KW - sharecropping Y1 - 2020 U6 - https://doi.org/10.1016/j.ecolecon.2019.106573 SN - 0921-8009 SN - 1873-6106 VL - 171 PB - Elsevier Science CY - Amsterdam [u.a.] 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 - TY - JOUR A1 - Blanz, Alkis A1 - Eydam, Ulrich A1 - Heinemann, Maik A1 - Kalkuhl, Matthias T1 - Energiepreiskrise und Klimapolitik: BT - sind antizyklische CO2-Preise sinnvoll? JF - Ifo-Schnelldienst N2 - 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 Universität Potsdam, zeigen, dass die Verwendung der Einnahmen aus der CO2-Bepreisung von entscheidender Bedeutung ist. Werden diese weitestgehend durch Steuersenkungen oder Transfers an Haushalte rückverteilt, sollten CO2-Preise nicht an kurzfristige Energiepreisschwankungen angepasst werden. Haushalte profitieren stärker von einer direkten Stabilisierung ihres Einkommens als von der Stabilisierung der Energiepreise. Werden Einnahmen aus der CO2-Bepreisung nicht rückerstattet, sind dagegen antizyklische CO2-Preise wohlfahrtserhöhend. Y1 - 2022 UR - https://www.ifo.de/DocDL/sd-2022-05-kalkuhl-etal-antizyklische-co2-preise.pdf SN - 0018-974X SN - 2199-4455 VL - 75 IS - 5 SP - 34 EP - 38 PB - Ifo Institut für Wirtschaftsforschung CY - München ER - TY - GEN A1 - Dorband, Ira Irina A1 - Jakob, Michael A1 - Kalkuhl, Matthias A1 - Steckel, Jan Christoph T1 - Poverty and distributional effects of carbon pricing in low- and middle- income countries BT - a global comparative analysis T2 - Postprints der Universität Potsdam : Wirtschafts- und Sozialwissenschaftliche Reihe N2 - 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. T3 - Zweitveröffentlichungen der Universität Potsdam : Wirtschafts- und Sozialwissenschaftliche Reihe - 103 KW - carbon pricing KW - distributional effect KW - decomposition analysis KW - global comparison KW - household data KW - low- and middle-income countries Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-424592 SN - 1867-5808 IS - 103 ER - TY - JOUR A1 - Dorband, Ira Irina A1 - Jakob, Michael A1 - Kalkuhl, Matthias A1 - Steckel, Jan Christoph T1 - Poverty and distributional effects of carbon pricing in low- and middle-income countries - A global comparative analysis JF - World development N2 - 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. KW - Carbon pricing KW - Distributional effect KW - Decomposition analysis KW - Global comparison KW - Household data KW - Low- and middle-income countries Y1 - 2019 U6 - https://doi.org/10.1016/j.worlddev.2018.11.015 SN - 0305-750X VL - 115 SP - 246 EP - 257 PB - Elsevier CY - Oxford 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 - Montrone, Lorenzo A1 - Steckel, Jan Christoph A1 - Kalkuhl, Matthias T1 - The type of power capacity matters for economic development BT - evidence from a global panel JF - Resource and energy economics N2 - 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. KW - Energy and development KW - Economic growth KW - Public infrastructure KW - Public investments KW - Electricity sector Y1 - 2022 U6 - https://doi.org/10.1016/j.reseneeco.2022.101313 SN - 0928-7655 VL - 69 PB - Elsevier CY - Amsterdam 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 - Edenhofer, Ottmar A1 - Kalkuhl, Matthias A1 - Ockenfels, Axel T1 - Das Klimaschutzprogramm der Bundesregierung BT - eine Wende der deutschen Klimapolitik? JF - Perspektiven der Wirtschaftspolitik N2 - Das Klimaschutzgesetz hat einen Paradigmenwechsel eingeleitet: den Einstieg in eine CO2-Bepreisung als künftiges Leitinstrument der Klimapolitik. Auf den ersten Blick ist der CO2-Preis unter einer Fülle von Fördermaßnahmen und ordnungsrechtlichen Regelungen verschüttet, deren Wirksamkeit und Kosten höchst unsicher sind. Der CO2-Preis ist aber so angelegt, dass er langfristig das dominante Instrument einer europäisch harmonisierten Klimapolitik werden kann. Der angedeutete Paradigmenwechsel der deutschen Klimapolitik öffnet damit die Tür, die europäische und internationale Kooperation zu stärken. Dazu ist es aber notwendig, neben der europäischen auch die globale Klimapolitik neu auszurichten. Auch dort sollten sich die Verhandlungen statt auf nationale Mengenziele auf CO2-Preise konzentrieren. Die erforderliche Kooperation wird möglich, wenn die Regierungen Transferzahlungen strategisch und reziprok nutzen. So könnte die Effektivität der Klimapolitik erhöht werden und es ließen sich die entstehenden Verteilungskonflikte entschärfen. KW - Klimaschutzgesetz KW - CO2-Preis KW - Emissionshandel KW - internationale Kooperation KW - Klimawandel KW - Klimapolitik KW - Deutschland KW - EU Y1 - 2020 U6 - https://doi.org/10.1515/pwp-2020-0001 SN - 1465-6493 SN - 1468-2516 VL - 21 IS - 1 SP - 4 EP - 18 PB - De Gruyter CY - Berlin ER - TY - JOUR A1 - Kalkuhl, Matthias A1 - Wenz, Leonie T1 - The impact of climate conditions on economic production BT - evidence from a global panel of regions JF - Journal of Environmental Economics and Management N2 - 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. KW - climate change KW - climate damages KW - climate impacts KW - growth regression KW - global warming KW - panel regression KW - cross-sectional regression KW - damage KW - function KW - social costs of carbon Y1 - 2020 U6 - https://doi.org/10.1016/j.jeem.2020.102360 SN - 0095-0696 SN - 1096-0449 VL - 103 PB - Elsevier CY - San Diego ER - TY - JOUR A1 - Wenz, Leonie A1 - Kalkuhl, Matthias A1 - Steckel, Jan Christoph A1 - Creutzig, Felix T1 - Teleconnected food supply shocks JF - Environmental research letters N2 - 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. KW - food security KW - trade shocks KW - vulnerability KW - climate change KW - teleconnections Y1 - 2016 U6 - https://doi.org/10.1088/1748-9326/11/3/035007 SN - 1748-9326 VL - 11 PB - IOP Publ. Ltd. CY - Bristol ER - TY - JOUR A1 - Amberg, Maximilian A1 - aus dem Moore, Nils A1 - Bekk, Anke A1 - Bergmann, Tobias A1 - Edenhofer, Ottmar A1 - Flachsland, Christian A1 - George, Jan A1 - Haywood, Luke A1 - Heinemann, Maik A1 - Held, Anne A1 - Kalkuhl, Matthias A1 - Kellner, Maximilian A1 - Koch, Nicolas A1 - Luderer, Gunnar A1 - Meyer, Henrika A1 - Nikodinoska, Dragana A1 - Pahle, Michael A1 - Roolfs, Christina A1 - Schill, Wolf-Peter T1 - Reformoptionen für ein nachhaltiges Steuer- und Abgabensystem BT - wie Lenkungssteuern effektiv und gerecht für den Klima- und Umweltschutz ausgestaltet werden können JF - Perspektiven der Wirtschaftspolitik N2 - 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 schützen gleichzeitig die Umwelt und das Klima. Dies wird erreicht, indem umweltschädigende Aktivitäten einen Preis bekommen, der möglichst exakt der Höhe des Schadens entspricht. Eine konsequente Bepreisung der externen Kosten nach diesem Prinzip könnte in Deutschland erhebliche zusätzliche Einnahmen erbringen: Basierend auf bisherigen Studien zu externen Kosten wären zusätzliche Einnahmen in der Größenordnung von 348 bis 564 Milliarden Euro pro Jahr (44 bis 71 Prozent der gesamten Steuereinnahmen) möglich. 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 können, seien zudem institutionelle Reformen notwendig. KW - Externalitäten KW - Pigou-Steuern KW - Nachhaltige Steuerreform KW - Energiewende Y1 - 2022 U6 - https://doi.org/10.1515/pwp-2021-0051 SN - 1465-6493 SN - 1468-2516 VL - 23 IS - 3 SP - 165 EP - 199 PB - De Gruyter CY - Berlin 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 - 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 - Kalkuhl, Matthias A1 - Edenhofer, Ottmar T1 - Ramsey meets Thünen BT - the impact of land taxes on economic development and land conservation JF - International tax and public finance N2 - 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 Thünen’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. KW - Structural shift KW - Structural change KW - REDD KW - Henry George KW - Forest conservation KW - Sustainability KW - Johann Heinrich von Thunen Y1 - 2016 U6 - https://doi.org/10.1007/s10797-016-9403-6 SN - 0927-5940 SN - 1573-6970 VL - 24 SP - 350 EP - 380 PB - Springer CY - Dordrecht ER - TY - GEN A1 - Kalkuhl, Matthias A1 - Steckel, Jan Christoph A1 - Montrone, Lorenzo A1 - Jakob, Michael A1 - Peters, Jörg A1 - Edenhofer, Ottmar T1 - Successful coal phase-out requires new models of development T2 - Nature Energy N2 - 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. Y1 - 2019 U6 - https://doi.org/10.1038/s41560-019-0500-5 SN - 2058-7546 VL - 4 IS - 11 SP - 897 EP - 900 PB - Nature Publ. Group CY - London ER - TY - JOUR 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 JF - Journal of environmental economics and management N2 - 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. Y1 - 2022 U6 - https://doi.org/10.1016/j.jeem.2022.102730 SN - 0095-0696 SN - 1096-0449 VL - 116 PB - Elsevier CY - Amsterdam ER - TY - JOUR A1 - Edenhofer, Ottmar A1 - Kalkuhl, Matthias A1 - Requate, Tilman A1 - Steckel, Jan Christoph T1 - How assets get stranded BT - the impact of climate policy on capital and fossil fuel owners : introduction to the JEEM special section on climate policy and political economy JF - Journal of environmental economics and management N2 - 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. Y1 - 2020 U6 - https://doi.org/10.1016/j.jeem.2020.102300 SN - 0095-0696 SN - 1096-0449 VL - 100 PB - Elsevier CY - Amsterdam 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 - RPRT A1 - Kalkuhl, Matthias A1 - Flachsland, Christian A1 - Knopf, Brigitte A1 - Amberg, Maximilian A1 - Bergmann, Tobias A1 - Kellner, Maximilian A1 - Stüber, Sophia A1 - Haywood, Luke A1 - Roolfs, Christina A1 - Edenhofer, Ottmar T1 - Effects of the energy price crisis on households in Germany BT - socio-political challenges and policy options Y1 - 2022 UR - https://www.mcc-berlin.net/fileadmin/data/C18_MCC_Publications/2022_MCC_Effects_of_the_energy_price_crisis_on_households.pdf PB - Mercator Research Institute on Global Commons and Climate Change (MCC) gGmbH CY - Berlin 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 - Gruner, Friedemann A1 - Fuß, Sabine A1 - Kalkuhl, Matthias A1 - Minx, Jan C. A1 - Strefler, Jessica A1 - Merfort, Anne T1 - Wie CO2-Entnahmen helfen können, die Klimaziele zu erreichen JF - Klima und Recht Y1 - 2022 UR - https://beck-online.beck.de/?typ=reference&y=300&z=KLIMR&b=2022&s=18&n=1 SN - 2750-0551 VL - 1 IS - 1 SP - 18 EP - 21 PB - C.H. Beck CY - München ER - TY - JOUR A1 - Sedova, Barbora A1 - Kalkuhl, Matthias A1 - Mendelsohn, Robert T1 - Distributional impacts of weather and climate in rural India JF - Economics of disasters and climate change N2 - 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. KW - climate change KW - weather KW - inequality KW - household analysis KW - India KW - econometrics Y1 - 2019 U6 - https://doi.org/10.1007/s41885-019-00051-1 SN - 2511-1280 SN - 2511-1299 VL - 4 IS - 1 SP - 5 EP - 44 PB - Springer CY - Cham ER - TY - RPRT A1 - Kalkuhl, Matthias A1 - Flachsland, Christian A1 - Knopf, Brigitte A1 - Amberg, Maximilian A1 - Bergmann, Tobias A1 - Kellner, Maximilian A1 - Stüber, Sophia A1 - Haywood, Luke A1 - Roolfs, Christina A1 - Edenhofer, Ottmar T1 - Auswirkungen der Energiepreiskrise auf Haushalte in Deutschland BT - sozialpolitische Herausforderungen und Handlungsoptionen Y1 - 2022 UR - https://www.mcc-berlin.net/fileadmin/data/C18_MCC_Publications/2022_MCC_Auswirkungen_der_Energiepreiskrise_auf_Haushalte.pdf PB - Mercator Research Institute on Global Commons and Climate Change (MCC) gGmbH CY - Berlin ER - TY - RPRT A1 - Steckel, Jan Christoph A1 - Missbach, Leonard A1 - Ohlendorf, Nils A1 - Feindt, Simon A1 - Kalkuhl, Matthias T1 - Effects of the energy price crisis on European households BT - socio-political challenges and policy options Y1 - 2022 UR - https://www.mcc-berlin.net/fileadmin/data/C18_MCC_Publications/2022_MCC_Effects_of_the_energy_price_crisis_on_European_households.pdf PB - Mercator Research Institute on Global Commons and Climate Change (MCC) gGmbH CY - Berlin ER - TY - RPRT A1 - Kalkuhl, Matthias A1 - Amberg, Maximilian A1 - Bergmann, Tobias A1 - Knopf, Brigitte A1 - Edenhofer, Ottmar T1 - Gaspreisdeckel, Mehrwertsteuersenkung, Energiepauschale BT - wie kann die Bevölkerung zielgenau und schnell entlastet werden? Y1 - 2022 UR - https://www.mcc-berlin.net/fileadmin/data/C18_MCC_Publications/2022_MCC_Gaspreise_und_Entlastungsma%C3%9Fnahmen.pdf PB - Mercator Research Institute on Global Commons and Climate Change (MCC) gGmbH CY - Berlin ER - TY - RPRT A1 - Kellner, Maximilian A1 - Amberg, Maximilian A1 - Bergmann, Tobias A1 - Roolfs, Christina A1 - Kalkuhl, Matthias T1 - Entlastungspakete für Energiepreisanstiege BT - Auswirkungen und Nachbesserungsbedarf Y1 - 2022 UR - https://www.mcc-berlin.net/fileadmin/user_upload/Kalkuhl/2022_MCC_Entlastungspakete_fuer_Energiepreisanstiege_.pdf U6 - https://doi.org/10.5281/zenodo.6617130 PB - Mercator Research Institute on Global Commons and Climate Change (MCC) gGmbH CY - Berlin ER - 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 - 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 - Kalkuhl, Matthias A1 - Steckel, Jan Christoph A1 - Edenhofer, Ottmar T1 - All or nothing BT - climate policy when assets can become stranded JF - Journal of environmental economics and management N2 - 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. KW - Climate policy KW - Optimal control KW - Political economy KW - Public finance KW - Credible policy KW - Time inconsistency Y1 - 2020 U6 - https://doi.org/10.1016/j.jeem.2019.01.012 SN - 0095-0696 SN - 1096-0449 VL - 100 PB - Elsevier CY - San Diego 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 - RPRT A1 - Bachelet, Marion A1 - Kalkuhl, Matthias A1 - Koch, Nicolas T1 - What if working from home will stick? BT - Distributional and climate impacts for Germany T2 - CEPA Discussion Papers N2 - 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. T3 - CEPA Discussion Papers - 41 KW - commuting KW - home office KW - COVID-19 KW - energy expenditure KW - carbon emissions Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-532384 SN - 2628-653X IS - 41 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 - Franks, Max A1 - Kalkuhl, Matthias A1 - Lessmann, Kai T1 - Optimal Pricing for Carbon Dioxide Removal Under Inter-Regional Leakage T2 - CEPA Discussion Papers 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 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. T3 - CEPA Discussion Papers - 43 KW - carbon pricing KW - trade KW - unilateral climate policy KW - terms-of-trade effects KW - removal subsidies Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-538080 SN - 2628-653X IS - 43 ER - TY - RPRT A1 - Kalkuhl, Matthias A1 - Franks, Max A1 - Gruner, Friedemann A1 - Lessmann, Kai A1 - Edenhofer, Ottmar T1 - Pigou’s Advice and Sisyphus’ Warning BT - Carbon Pricing with Non-Permanent Carbon-Dioxide Removal T2 - CEPA Discussion Papers N2 - 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. T3 - CEPA Discussion Papers - 62 KW - Carbon Dioxide Removal KW - Carbon Capture KW - Social Cost of Carbon KW - Climate Policy KW - Impermanence Y1 - 2023 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-575882 SN - 2628-653X IS - 62 ER - TY - RPRT A1 - Blanz, Alkis A1 - Eydam, Ulrich A1 - Heinemann, Maik A1 - Kalkuhl, Matthias A1 - Moretti, Nikolaj T1 - Fiscal Policy and Energy Price Shocks T2 - CEPA Discussion Papers N2 - 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. T3 - CEPA Discussion Papers - 70 KW - energy prices KW - E-DSGE KW - fiscal policy KW - welfare Y1 - 2023 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-612763 SN - 2628-653X IS - 70 ER - TY - RPRT A1 - Blanz, Alkis A1 - Eydam, Ulrich A1 - Heinemann, Maik A1 - Kalkuhl, Matthias T1 - Optimal carbon pricing with fluctuating energy prices — emission targeting vs. price targeting T2 - CEPA Discussion Papers N2 - 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. T3 - CEPA Discussion Papers - 51 KW - energy prices KW - E-DSGE KW - climate policy KW - welfare Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-561049 SN - 2628-653X IS - 51 ER - 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 - Piontek, Franziska A1 - Kalkuhl, Matthias A1 - Kriegler, Elmar A1 - Schultes, Anselm A1 - Leimbach, Marian A1 - Edenhofer, Ottmar A1 - Bauer, Nico T1 - Economic Growth Effects of Alternative Climate Change Impact Channels in Economic Modeling JF - Environmental & resource economics : the official journal of the European Association of Environmental and Resource Economists N2 - 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. KW - Climate change KW - Damages KW - Economic growth KW - Impact channels KW - Production factors KW - Persistence Y1 - 2018 U6 - https://doi.org/10.1007/s10640-018-00306-7 SN - 0924-6460 SN - 1573-1502 VL - 73 IS - 4 SP - 1357 EP - 1385 PB - Springer CY - Dordrecht ER -