Template-Type: ReDIF-Paper 1.0 Number: 2016.01 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-001.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.01 Title: An Empirical Analysis of the Public Spending Decomposition on Organized Crime Author-Name: Maria Berrittella Author-X-Name-First: Maria Author-X-Name-Last: Berrittella Author-WorkPlace-Name: Università degli Studi di Palermo, Dipartimento di Scienze Economiche, Aziendali e Statistiche Author-Name: Carmelo Provenzano Author-X-Name-First: Carmelo Author-X-Name-Last: Provenzano Author-WorkPlace-Name: Facoltà di Scienze Economiche e Giuridiche, Università Kore di Enna Abstract: The aim of this paper is to investigate, empirically, what components of the public spending imply a decreasing effect on the organized crime and what components create opportunities for the organized crime, discussing also the role of government efficiency. The findings show a strikingly consistent pattern. Organized crime mainly operates in the distribution of the public spending for health, housing and community amenities. There is a decreasing effect on organized crime of the public expenditure devoted to education and to create morality values, such as the expenditure for recreation, culture and religion. Finally, government efficiency in public spending is beneficial for reducing the opportunities of the organized crime. Keywords: Government Efficiency, Organized Crime, Public Spending Classification-JEL: C13, H50, K40 Creation-Date: 201601 Template-Type: ReDIF-Paper 1.0 Number: 2016.02 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-002.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.02 Title: Sharing R&D Investments in Breakthrough Technologies to Control Climate Change Author-Name: Santiago J. Rubio Author-X-Name-First: Santiago J. Author-X-Name-Last: Rubio Author-WorkPlace-Name: Department of Economic Analysis and ERI-CES, University of Valencia Abstract: This paper examines international cooperation on technological development as an alternative to international cooperation on GHG emission reductions. In order to analyze the scope of cooperation, a three-stage technology agreement formation game is solved. First, countries decide whether or not to sign up to the agreement. Then, in the second stage, the signatories (playing together) and the non-signatories (playing individually) select their investment in R&D. In this stage, it is assumed that the signatories not only coordinate their levels of R&D investment but also pool their R&D efforts to fully internalize the spillovers of their investment in innovation. Finally, in the third stage, each country decides non-cooperatively upon its level of energy production. Emissions depend on the decisions made regarding investment and production. If a country decides to develop a breakthrough technology in the second stage, its emissions will be zero in the third stage. For linear environmental damages and quadratic investment costs, the grand coalition is stable if marginal damages are large enough to justify the development of a breakthrough technology that eliminates emissions completely, and if technology spillovers are not very important. Keywords: International Environmental Agreements, R&D Investment, Technology Spillovers, Breakthrough Technologies Classification-JEL: D74, F53, H41, Q54, Q55 Creation-Date: 201601 Template-Type: ReDIF-Paper 1.0 Number: 2016.03 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-003.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.03 Title: Spatial Heat Transport, Polar Amplification and Climate Change Policy Author-Name: W. Brock Author-X-Name-First: W. Author-X-Name-Last: Brock Author-WorkPlace-Name: Economics Department, University of Wisconsin and University of Missouri Author-Name: A. Xepapadeas Author-X-Name-First: A. Author-X-Name-Last: Xepapadeas Author-WorkPlace-Name: Athens University of Economics and Business Abstract: This paper is, to our knowledge, the first paper in climate economics to consider the combination of spatial heat transport and polar amplification. We simplified the problem by stratifying the Earth into latitude belts and assuming, as in North et al. (1981), that the two hemispheres were symmetric. Our results suggest that it is possible to build climate economic models that include the very real climatic phenomena of heat transport and polar amplification and still maintain analytical tractability. We derive optimal fossil fuel paths under heat transport with and without polar amplification. We show that the optimal tax function depends not only on the distribution of welfare weights but also on the distribution of population across latitudes, the distribution of marginal damages across latitudes and cross latitude in- teractions of marginal damages, and climate dynamics. We also determine optimal taxes per unit of emission and show that, in contrast to the standard results suggesting spatially uniform emission taxes, poorer latitudes should be taxed less per unit emissions than richer latitudes. Keywords: Climate Change, Heat Transport, Polar Amplification, Welfare Maximization, Fossil Fuels, Optimal Taxation Classification-JEL: Q54, Q58, C61 Creation-Date: 201601 Template-Type: ReDIF-Paper 1.0 Number: 2016.04 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-004.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.04 Title: Employee Representation Legislations and Innovation Author-Name: Filippo Belloc Author-X-Name-First: Filippo Author-X-Name-Last: Belloc Author-WorkPlace-Name: Department of Economic Studies, University “G. d'Annunzio" Abstract: We analyse how countries' innovation outcomes are affected by national legislations of worker participation to corporate governance. We develop a model of employee representation laws (ERL) and innovation in the presence of incomplete labour contracts and predict heterogeneous ERL effects across different systems of dismissal regulation. We then perform a panel regression analysis, exploiting 2-digit panel data for 21 manufacturing sectors of USA, UK, India, France and Germany, over the 1977-2005 period. We find that ERL effects on aggregate innovation output are positive, statistically significant and higher in magnitude where national labour laws impose significant firing costs to the firm with respect to institutional settings in which firing costs are low or absent. These results are robust to possible technology selection dynamics, endogeneity and institutional changes in the legal system of patent protection. We also estimate ERL effects on innovation conditional on firing costs at an industry level and show that the impact of ERL is relatively larger in those sectors where the human capital contribution to production is higher. Our results have relevant implications for the optimal design of employee representation legislations. Keywords: Employee Representation Law, Innovation, Panel data Classification-JEL: K31, O31, P51 Creation-Date: 201601 Template-Type: ReDIF-Paper 1.0 Number: 2016.05 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-005.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.05 Title: Sea Level Rise, Radical Uncertainties and Decision-Maker’s Liability: the European Coastal Airports Case Author-Name: Leonid V. Sorokin Author-X-Name-First: Leonid V. Author-X-Name-Last: Sorokin Author-WorkPlace-Name: Peoples’ Friendship University of Russia Author-Name: Gérard Mondello Author-X-Name-First: Gérard Author-X-Name-Last: Mondello Author-WorkPlace-Name: University of Nice Sophia Antipolis Abstract: Until now, most of the growing climate legal litigations mainly concern environmental associations or victims against energy of energy-users firms or States. However, in a near future, because of exacerbating sudden floods linked to climate change, future litigations could (will) concern infrastructure governance versus private companies. Indeed, sues would (will) concern the financial losses these last ones would (will) endure because the infrastructure managers did not make convenient protection choices in due time. This paper particularly investigates the case of coastal airports at the European level. It insists on the importance of climate scientists divergent opinions about the sea level rise and its consequences for decision-takers concerning their potential legal liability for negligence. Keywords: Climate Change, Sea Level Rise, Flood, Airports, Transportation Infrastructures, Legal Liability, Uncertainty Classification-JEL: K32, Q54, R53 Creation-Date: 201601 Template-Type: ReDIF-Paper 1.0 Number: 2016.06 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-006.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.06 Title: Anatomy of Risk Premium in UK Natural Gas Futures Author-Name: Beatriz Martínez Author-X-Name-First: Beatriz Author-X-Name-Last: Martínez Author-WorkPlace-Name: Department of Business Finance, University of Valencia Author-Name: Hipòlit Torró Author-X-Name-First: Hipòlit Author-X-Name-Last: Torró Author-WorkPlace-Name: Financial and Actuarial Economics, University of Valencia Abstract: In many futures markets, trading is concentrated in the front contract and positions are rolled-over until the strategy horizon is attained. In this paper, a pair-wise comparison between the conventional risk premium and the accrued risk premium in rolled-over positions in the front contract is carried out for UK natural gas futures. Several novel results are obtained. Firstly, and most importantly, the accrued risk premium in rollover strategies is significatively larger than conventional risk premiums and increases with the time to delivery. Specifically, for strategy horizons between three and six months, this difference increases from 1% to 10%. Secondly, it is the first time that risk premium in day-ahead futures has been measured in this market. The average value of the day-ahead risk premium is 0.5% per day and it is statistically significant. Thirdly, all risk premiums are significantly larger and more volatile in winter. Finally, risk premium time-variation is analyzed using a regression model. It is shown that reservoirs, weather, liquidity, volatility, skewness, and seasons are able in all cases to explain between 21% and 59% of the risk premium time-variation (depending on the futures maturity and sub-period). Keywords: Natural Gas Market, Futures Premium, Rollover, Seasonal Risk Premiums Classification-JEL: G13, L95 Creation-Date: 201601 Template-Type: ReDIF-Paper 1.0 Number: 2016.07 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-007.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.07 Title: Access to Short-term Credit and Consumption Smoothing within the Paycycle Author-Name: Mary Zaki Author-X-Name-First: Mary Author-X-Name-Last: Zaki Author-WorkPlace-Name: University of Maryland, Department of Agricultural and Resource Economics Abstract: I study the effect of access to payday loans on the timing, level and composition of consumption. Using a newly obtained military administrative dataset of sales at on-base grocery and department stores, I examine how consumption behavior changes after the passage of a federal law that effectively bans military personnel from accessing payday loans in some states but not others. The military setting is ideal for this analysis because military personnel are assigned to locations across the United States with varying degrees of access to payday loans. Furthermore, since military personnel face varying known wait times between paycheck receipts throughout the year, I can examine daily consumption patterns in ways that were infeasible with previous datasets and surveys. I first present evidence that food expenditures spike on payday and are significantly lower at the end of a pay period; the fact that these patterns hold for perishable goods like produce indicates that food consumption is also not smooth, even over a two-week period. Then using a difference-in-difference framework, I find that payday loan access enables consumers to better smooth their consumption between paychecks, with no detectable effect on the level of food consumption. These patterns imply that payday loans enable liquidity-constrained individuals to smooth their consumption. However, I also find suggestive evidence that they lead to temptation purchases. Military personnel purchase more alcohol and electronics when given access to payday loans. Further evidence suggests that there may be significant heterogeneity in the population, with indications of present-biased preferences among some individuals and forward-looking, self controlled behavior among others. Keywords: Consumption Behavior, Short-term Credit Classification-JEL: D14, D18, G23 Creation-Date: 201601 Template-Type: ReDIF-Paper 1.0 Number: 2016.08 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-008.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.08 Title: EU ETS Facets in the Net: How Account Types Influence the Structure of the System Author-Name: Simone Borghesi Author-X-Name-First: Simone Author-X-Name-Last: Borghesi Author-WorkPlace-Name: University of Siena, Department of International and Political Sciences, Italy Author-Name: Andrea Flori Author-X-Name-First: Andrea Author-X-Name-Last: Flori Author-WorkPlace-Name: IMT Institute for Advanced Studies Lucca, Italy Abstract: In this work, we investigate which countries have been more central during Phases I and II of the European Emission Trading Scheme (EU ETS) with respect to the different types of accounts operating in the system. We borrow a set of centrality measures from Network Theory's tools to describe how the structure of the system has evolved over time and to identify which countries have been in the core or in the periphery of the network. In doing this, we investigate by means of extensive partitions on the different types of accounts and transactions characterizing the EU ETS whether the role of intermediaries (approximated by Person Holding Accounts - PHAs) has affected the overall structure of the system. Preliminary findings over the period 2005-2012 suggest that PHAs have played a prominent role in the transaction of permits, heavily influencing the configuration of the system. This motivates further research on the impact of non-regulated entities in the EU ETS design. Keywords: Emission Trading, EU ETS, European Union Transaction Log (EUTL) data, Account and Transaction Types, Network Analysis, Centrality Measures Classification-JEL: C45, D85, L14, Q48, Q54, Q58 Creation-Date: 201601 Template-Type: ReDIF-Paper 1.0 Number: 2016.09 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-009.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.09 Title: Carbon Storage and Bioenergy: Using Forests for Climate Mitigation Author-Name: Alice Favero Author-X-Name-First: Alice Author-X-Name-Last: Favero Author-WorkPlace-Name: Sohngen Author-Name: Robert Mendelsohn Author-X-Name-First: Robert Author-X-Name-Last: Mendelsohn Author-WorkPlace-Name: Yale University Author-Name: Brent Sohngen Author-X-Name-First: Brent Author-X-Name-Last: Sohngen Author-WorkPlace-Name: Ohio State University Abstract: The carbon mitigation literature has separately considered using forests to store carbon and as a source of bioenergy. In this paper, we look at both options to reach a 2°C mitigation target. This paper combines the global forest model, GTM, with the IAM WITCH model to study the optimal use of forestland to reach an aggressive global mitigation target. The analysis confirms that using both options is preferable to using either one alone. At first, while carbon prices are low, forest carbon storage dominates. However, when carbon prices pass $235/tCO2, wood bioenergy with CCS becomes increasingly important as a mechanism to remove CO2 from the atmosphere. The use of both mechanisms increases global forestland at the expense of marginal cropland. While the storage program dominates, natural forestland expands. But when the wood bioenergy program starts, natural forestland shrinks as more forests become managed for higher yields. Keywords: Climate Change, Woody Biomass, Carbon Sequestration, BECCS, Forestry, Carbon Mitigation, Integrated Assessment Model Classification-JEL: Q23, Q42, Q54 Creation-Date: 201601 Template-Type: ReDIF-Paper 1.0 Number: 2016.10 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-010.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.10 Title: Adapting to Climate Change: an Analysis under Uncertainty Author-Name: David García-León Author-X-Name-First: David Author-X-Name-Last: García-León Author-WorkPlace-Name: University of Alicante Abstract: Climate change is a phenomenon beset with major uncertainties and researchers should include them in Integrated Assessment Models. However, including further dimensions in IAM models comes at a cost. In particular, it makes most of these models suffer from the curse of dimensionality. In this study we benefit from a state-reduced framework to overcome those problems. In an attempt to advance in the modelling of adaptation within IAM models, we apply this methodology to shed some light on how the optimal balance between mitigation and adaptation changes under different stochastic scenarios. We find that stochastic technology growth hardly affects the optimal bundle of mitigation and adaptation whereas uncertainty about the value of climate sensitivity and the possibility of tipping points hitting the system change substantially the composition of the optimal mix as both persuade the risk-averse social planner to invest more in mitigation. Overall, we identify that including uncertainty into the model tends to favour (long-lasting) mitigation with respect to (instantaneous) adaptation. Further research should address the properties of the optimal mix when a stock of adaptation can be built. Keywords: Climate Change, Adaptation, Mitigation, Dynamic Programming, Uncertainty, Integrated Assessment, DICE Classification-JEL: C61, D58, D90, O44, Q01, Q54, Q56 Creation-Date: 201601 Template-Type: ReDIF-Paper 1.0 Number: 2016.11 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-011.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.11 Title: Exploring the Potential for Energy Efficiency in Turkey Author-Name: Simone Tagliapietra Author-X-Name-First: Simone Author-X-Name-Last: Tagliapietra Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: Energy efficiency is one of the key crossroads between energy, climate and economic issues. In fact, it represents one of the most cost effective ways to enhance security of energy supply, to reduce emissions of greenhouse gases and to enhance economic competitiveness at one fell swoop. This paper explores the potential for energy efficiency gains in Turkey, a country characterized by a strong growth in energy demand and by a strong need of better security of supply, emissions reduction and economic competitiveness. Keywords: Energy Efficiency, Turkey, Sustainability Classification-JEL: Q41, Q43, Q48 Creation-Date: 201602 Template-Type: ReDIF-Paper 1.0 Number: 2016.12 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-012.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.12 Title: Reforming the IPCC’s Assessment of Climate Change Economics Author-Name: Gabriel Chan Author-X-Name-First: Gabriel Author-X-Name-Last: Chan Author-WorkPlace-Name: Humphrey School of Public Affairs, University of Minnesota Author-Name: Carlo Carraro Author-X-Name-First: Carlo Author-X-Name-Last: Carraro Author-WorkPlace-Name: University of Venice and Fondazione Eni Enrico Mattei Author-Name: Ottmar Edenhofer Author-X-Name-First: Ottmar Author-X-Name-Last: Edenhofer Author-WorkPlace-Name: Mercator Research Institute on Global Commons and Climate Change and Potsdam Institute for Climate Impact Research Author-Name: Charles Kolstad Author-X-Name-First: Charles Author-X-Name-Last: Kolstad Author-WorkPlace-Name: Stanford University Author-Name: Robert Stavins Author-X-Name-First: Robert Author-X-Name-Last: Stavins Author-WorkPlace-Name: John F. Kennedy School of Government, Harvard University Abstract: The Intergovernmental Panel on Climate Change (IPCC) is broadly viewed as the world’s most legitimate scientific assessment body that periodically assesses the economics of climate change (among many other topics) for policy audiences. However, growing procedural inefficiencies and limitations to substantive coverage have made the IPCC an increasingly unattractive forum for the most qualified climate economists. Drawing on our observations and personal experience working on the most recent IPCC report, published last year, we propose four reforms to the IPCC’s process that we believe will lower the cost for volunteering as an IPCC author: improving interactions between governments and academics, making IPCC operations more efficient, clarifying and strengthening conflict of interest rules, and expanding outreach. We also propose three reforms to the IPCC’s substantive coverage to clarify the IPCC’s role and to make participation as an author more intellectually rewarding: complementing the IPCC with other initiatives, improving the integration of economics with other disciplines, and providing complete data for policymakers to make decisions. Despite the distinct characteristics of the IPCC that create challenges for authors unlike those in any other review body, we continue to believe in the importance of the IPCC for providing the most visible line of public communication between the scholarly community and policymakers. Keywords: Scientific Assessment, Intergovernmental Panel on Climate Change (IPCC), Scientific Communication Classification-JEL: Q5, Q58 Creation-Date: 201603 Template-Type: ReDIF-Paper 1.0 Number: 2016.13 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-013.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.13 Title: Modeling Uncertainty in Climate Change: A Multi-Model Comparison Author-Name: Kenneth Gillingham Author-X-Name-First: Kenneth Author-X-Name-Last: Gillingham Author-WorkPlace-Name: Yale University, New Haven, CT, USA Author-Name: William Nordhaus Author-X-Name-First: William Author-X-Name-Last: Nordhaus Author-WorkPlace-Name: Yale University, New Haven, CT, USA Author-Name: David Anthoff Author-X-Name-First: David Author-X-Name-Last: Anthoff Author-WorkPlace-Name: University of California, Berkeley, USA Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Bocconi University, Milan, Italy Author-Name: Haewon McJeon Author-X-Name-First: Haewon Author-X-Name-Last: McJeon Author-WorkPlace-Name: PNNL, College Park, Maryland, USA Author-Name: Geoffrey Blanford Author-X-Name-First: Geoffrey Author-X-Name-Last: Blanford Author-WorkPlace-Name: EPRI, USA Author-Name: Peter Christensen Author-X-Name-First: Peter Author-X-Name-Last: Christensen Author-WorkPlace-Name: Aarhus University, Denmark Author-Name: John Reilly Author-X-Name-First: John Author-X-Name-Last: Reilly Author-WorkPlace-Name: MIT, Cambridge, MA, USA Author-Name: Paul Sztorc Author-X-Name-First: Paul Author-X-Name-Last: Sztorc Author-WorkPlace-Name: Yale University, New Haven, USA Abstract: The economics of climate change involves a vast array of uncertainties, complicating both the analysis and development of climate policy. This study presents the results of the first comprehensive study of uncertainty in climate change using multiple integrated assessment models. The study looks at model and parametric uncertainties for population, total factor productivity, and climate sensitivity. It estimates the pdfs of key output variables, including CO2 concentrations, temperature, damages, and the social cost of carbon (SCC). One key finding is that parametric uncertainty is more important than uncertainty in model structure. Our resulting pdfs also provide insights on tail events. Keywords: Climate Change, Integrated Assessment Models Classification-JEL: Q540 Creation-Date: 201603 Template-Type: ReDIF-Paper 1.0 Number: 2016.14 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-014.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.14 Title: Accelerated Depreciation, Default Risk and Investment Decisions Author-Name: Paolo M. Panteghini Author-X-Name-First: Paolo M. Author-X-Name-Last: Panteghini Author-WorkPlace-Name: Università degli Studi di Brescia, CESifo and AccounTax Lab Author-Name: Sergio Vergalli Author-X-Name-First: Sergio Author-X-Name-Last: Vergalli Author-WorkPlace-Name: Università degli Studi di Brescia and Fondazione Eni Enrico Mattei (FEEM) Abstract: In this article we focus on a representative firm that can decide when to invest under default risk. On the one hand, this firm can benefit from generous tax depreciation allowances, on the other hand it faces a default risk. Our aim is to study the effects of tax depreciation allowances in a risky environment. As will be shown in our numerical analysis, generous tax depreciation allowances lead to a decrease in a firm’s leverage and, in most cases, cause a reduction in default risk. This result has a strong policy implication, in that it shows that an investment stimulus pack is expected neither to increase the default risk nor to cause financial instability. Keywords: Capital Structure, Contingent Claims, Corporate Taxation and Hybrid Securities Classification-JEL: H2 Creation-Date: 201603 Template-Type: ReDIF-Paper 1.0 Number: 2016.15 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-015.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.15 Title: Vertical Differentiation and Collusion: Cannibalization or Proliferation? Author-Name: Jean J. Gabszewicz Author-X-Name-First: Jean J. Author-X-Name-Last: Gabszewicz Author-WorkPlace-Name: CORE, Université Catholique de Louvain Author-Name: Marco A. Marini Author-X-Name-First: Marco A. Author-X-Name-Last: Marini Author-WorkPlace-Name: Università La Sapienza, Roma Author-Name: Ornella Tarola Author-X-Name-First: Ornella Author-X-Name-Last: Tarola Author-WorkPlace-Name: Università La Sapienza, Roma Abstract: In this paper, we tackle the dilemma of pruning versus proliferation in a vertically differentiated oligopoly under the assumption that some firms collude and control both the range of variants for sale and their corresponding prices, likewise a multiproduct firm. We analyse whether pruning emerges and, if so, a fighting brand is marketed. We find that it is always more profitable for colluding firms to adopt a pricing strategy such that some variants are withdrawn from the market. Under pruning, these firms commercialize a fighting brand only when facing competitors in a low-end market. The same findings do not hold when firms are horizontally differentiated along a circle. Keywords: Vertically Differentiated Markets, Cannibalization, Market Pruning, Price Collusion Classification-JEL: D42, D43, L1, L12, L13, L41 Creation-Date: 201603 Template-Type: ReDIF-Paper 1.0 Number: 2016.16 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/ndl2016-016-nuovo.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.16 Title: Global Energy Demand in a Warming Climate Author-Name: Enrica De Cian Author-X-Name-First: Enrica Author-X-Name-Last: De Cian Author-WorkPlace-Name: Centro Euro-Mediterraneo sui Cambiamenti Climatici and Fondazione Eni Enrico Mattei Author-Name: Ian Sue Wing Author-X-Name-First: Ian Sue Author-X-Name-Last: Wing Author-WorkPlace-Name: Dept. of Earth & Environment, Boston University Abstract: This paper combines an econometric analysis of the response of energy demand to temperature and humidity exposure with future scenarios of climate change and socioeconomic development to characterize climate impacts on energy demand at different spatial scales. Globally, future climate change is expected to have a moderate impact on energy demand, in the order of 6-11%, depending on the degree of warming, because of compensating effects across regions, fuels, and sectors. Climate-induced changes in energy demand are disproportionally larger in tropical regions. South America, Asia, and Africa, increase energy demand across all sectors and climate scenarios, while Europe, North America and Oceania exhibit mixed responses, but with consistent reductions in the residential sector. Even so, only Europe and Oceania in the moderate warming scenario experience aggregate reductions in energy use, as commercial electricity use increases significantly. We find that climate change has a regressive impact on energy demand, with the incidence of increased energy demand overwhelmingly falling on low- and middle-income countries, raising the question whether climate change could exacerbate energy poverty. Keywords: Panel Data, Climate Change, Adaptation, Energy Classification-JEL: N5, O13, Q1, Q54 Creation-Date: 201603 Template-Type: ReDIF-Paper 1.0 Number: 2016.17 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-017.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.17 Title: Understanding Dynamic Conditional Correlations between Commodities Futures Markets Author-Name: Niaz Bashiri Behmiri Author-X-Name-First: Niaz Bashiri Author-X-Name-Last: Behmiri Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Milan Author-Name: Matteo Manera Author-X-Name-First: Matteo Author-X-Name-Last: Manera Author-WorkPlace-Name: University of Milan-Bicocca and Fondazione Eni Enrico Mattei, Milan Author-Name: Marcella Nicolini Author-X-Name-First: Marcella Author-X-Name-Last: Nicolini Author-WorkPlace-Name: University of Pavia and Fondazione Eni Enrico Mattei, Milan Abstract: We estimate dynamic conditional correlations between 10 commodities futures returns in energy, metals and agriculture markets over the period 1998-2014 with a DCC-GARCH model. We look at the factors influencing those correlations, adopting a pooled mean group (PMG) estimator. Macroeconomic variables are significantly correlated with agriculture-energy and metals-energy dynamic conditional correlations; while financial variables are relevant in the agriculture-energy correlations and poorly significant in the metals-energy ones. Speculative activity is generally not statistically significant. Correlations started increasing in the years before the financial crisis and decreased at the end of our period of analysis. Keywords: Multivariate GARCH, Dynamic Conditional Correlations, Future Markets, Commodities Classification-JEL: Q42, Q11, C32 Creation-Date: 201603 Template-Type: ReDIF-Paper 1.0 Number: 2016.18 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-018.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.18 Title: Alternative Approaches for Rating INDCs: a Comparative Analysis Author-Name: Marinella Davide Author-X-Name-First: Marinella Author-X-Name-Last: Davide Author-WorkPlace-Name: Centro Euro-Mediterraneo sui Cambiamenti Climatici, FEEM and University of Venice Author-Name: Paola Vesco Author-X-Name-First: Paola Author-X-Name-Last: Vesco Author-WorkPlace-Name: Centro Euro-Mediterraneo sui Cambiamenti Climatici Abstract: The “Intended nationally determined contributions” (INDCs) communicated by both developing and developed countries represent a crucial element of the Paris agreement. This paper aims at analysing the INDCs submitted by Parties, through the different tools and approaches proposed by the research community. In particular, our analysis looks at the different ways to assess the effectiveness of the proposed emission reduction pledges, both in terms of aggregate and national efforts. However, we also consider other factors that will be critical in determining the success of the Paris talks, such as the coherence and fairness of single contributions. Keywords: Paris Agreement, INDCs, Mitigation, Ambition, Efficiency, Equity, Carbon Budget Classification-JEL: F50, F51, F53, K33 Creation-Date: 201603 Template-Type: ReDIF-Paper 1.0 Number: 2016.19 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-019.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.19 Title: Climate Change Policy under Polar Amplification Author-Name: W. Brock Author-X-Name-First: W. Author-X-Name-Last: Brock Author-WorkPlace-Name: Economics Department, University of Wisconsin, University of Missouri and Beijer Fellow Author-Name: A. Xepapadeas Author-X-Name-First: A. Author-X-Name-Last: Xepapadeas Author-WorkPlace-Name: Athens University of Economics and Business, Department of International and European Economic Studies and Beijer Fellow Abstract: Polar amplification is an established scientific fact which has been associated with the surface albedo feedback and to heat and moisture transport from the Equator to the Poles. In this paper we unify a two-box climate model, which allows for heat and moisture transport from the southern region to the northern region, with an economic model of welfare optimization. Our main contribution is to show that by ignoring spatial heat and moisture transport and the resulting polar amplification, the regulator may overestimate or underestimate the tax on GHG emissions. The direction of bias depends on the relations between marginal damages from temperature increase in each region. We also determine the welfare cost when a regulator mistakenly ignores polar amplification. Finally we show the adjustments necessary to the market discount rate due to transport phenomena as well as how our two-box model can be extended to Ramsey-type optimal growth models. Numerical simulations confirm our theoretical results. Keywords: Polar Amplification, Spatial Heat and Moisture Transport, Optimal Policy, Emission Taxes, Market Discount Rate Classification-JEL: Q54, Q58 Creation-Date: 201603 Template-Type: ReDIF-Paper 1.0 Number: 2016.20 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-020.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.20 Title: A Note on Pollution Regulation With Asymmetric Information Author-Name: Alberto Pench Author-X-Name-First: Alberto Author-X-Name-Last: Pench Author-WorkPlace-Name: Department of Political Sciences, University of Pisa Abstract: The paper addresses the problem of information asymmetry between a regulator and the polluting firms and proposes a very simple mechanism where the regulator is free to choose, without communicating in advance to the firms, between two instruments: an effluent fee or a standard: as a result in a real world setting this uncertainty might induce firms to a truthful revelation. Moreover, under the assumption of linear marginal abatement or marginal social damage functions, in many cases the resulting optimal behaviour might be an under reporting for some firms and an over reporting for others so that the resulting marginal aggregate benefit function might be not so far from the true one and the aggregate pollution level attained by the mechanism not so far from optimal. Keywords: Effluent Fee, Standards, Asymmetric Information, Truthful Revelation Classification-JEL: H23, Q5 Creation-Date: 201603 Template-Type: ReDIF-Paper 1.0 Number: 2016.21 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-021.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.21 Title: Building Uncertainty into the Adaptation Cost Estimation in Integrated Assessment Models Author-Name: Anil Markandya Author-X-Name-First: Anil Author-X-Name-Last: Markandya Author-WorkPlace-Name: BC3 Author-Name: Enrica De Cian Author-X-Name-First: Enrica Author-X-Name-Last: De Cian Author-WorkPlace-Name: CMCC and FEEM Author-Name: Laurent Drouet Author-X-Name-First: Laurent Author-X-Name-Last: Drouet Author-WorkPlace-Name: CMCC and FEEM Author-Name: Josué M. Polanco-Martìnez Author-X-Name-First: Josué M. Author-X-Name-Last: Polanco-Martìnez Author-WorkPlace-Name: BC3 Author-Name: Francesco Bosello Author-X-Name-First: Francesco Author-X-Name-Last: Bosello Author-WorkPlace-Name: CMCC and FEEM Abstract: This paper proposes an operationally simple and easily generalizable methodology to incorporate climate change damage uncertainty into Integrated Assessment Models (IAMs). Uncertainty is transformed into a risk-premium, damage-correction, region-specific factor by extracting damage distribution means and variances from an ensemble of socio economic and climate change scenarios. This risk premium quantifies what society would be willing to pay to insure against the uncertainty of the damages, and it can be considered an add-up to the standard “average damage”. Our computations show the addition to be significant, but highly sensitive to the coefficient of relative risk aversion. Once the climate change damage function incorporates the risk premium into the model, results show a substantial increase in both mitigation and adaptation, reflecting a more conservative attitude by the social planner. Interestingly, adaptation is stimulated more than mitigation in the first half of the century, while the situation reverses afterwards. Over the century, the risk premium correction fosters more mitigation, which doubles, than adaptation, which rises by about 80%. Keywords: Risk, Uncertainty, Climate, Adaptation, Mitigation Classification-JEL: Q2, Q3, D8, D9, D62 Creation-Date: 201603 Template-Type: ReDIF-Paper 1.0 Number: 2016.22 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-022.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.22 Title: Too Early to Pick Winners: Disagreement across Experts Implies the Need to Diversify R&D Investment Author-Name: Laura Diaz Anadon Author-X-Name-First: Laura Diaz Author-X-Name-Last: Anadon Author-WorkPlace-Name: Harvard Kennedy School and Harvard University Author-Name: Erin Baker Author-X-Name-First: Erin Author-X-Name-Last: Baker Author-WorkPlace-Name: University of Massachusetts Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Bocconi University, Fondazione Eni Enrico Mattei and Centro Euro-Mediterraneo sui Cambiamenti Climatici Author-Name: Lara Aleluia Reis Author-X-Name-First: Lara Aleluia Author-X-Name-Last: Reis Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Centro Euro-Mediterraneo sui Cambiamenti Climatici Abstract: Mitigating climate change will require innovation in energy technologies. Policy makers are faced with the question of how to promote this innovation, and whether to focus on a few technologies or to spread their bets. We present results on the extent to which public R&D might shape the future cost of energy technologies by 2030. We bring together three major expert elicitation efforts carried out by researchers at UMass Amherst, Harvard, and FEEM, covering nuclear, solar, Carbon Capture and Storage (CCS), bioelectricity, and biofuels. The results show experts believe that there will be decreasing returns to R&D and report median cost reductions around 20% for most of the technologies at the R&D budgets considered. Although the returns to solar and CCS R&D show some promise, the lack of consensus across studies, and the larger magnitude of the R&D investment involved in these technologies, calls for caution when defining what technologies would benefit the most from additional public R&D. Indeed, the wide divergence of opinions suggests that it is still too early to pick winners and that a broad portfolio of investments may be the best option. Keywords: R&D Investments, Energy Technology, Expert Elicitation, Risk and Reward, Low-carbon Innovation Classification-JEL: Q40 Creation-Date: 201603 Template-Type: ReDIF-Paper 1.0 Number: 2016.23 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-023.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.23 Title: Macroeconomic and Financial Effects of Oil Price Shocks: Evidence for the Euro Area Author-Name: Claudio Morana Author-X-Name-First: Claudio Author-X-Name-Last: Morana Author-WorkPlace-Name: Università di Milano Bicocca, CeRP-Collegio Carlo Alberto and Rimini Centre for Economic Analysis Abstract: The paper investigates the macroeconomic and financial effects of oil prices shocks in the euro area since its creation in 1999, with a special focus on the recent slump. The analysis is carried out episode by episode, within a time-varying parameter framework, consistent with the view that "not all the oil price shocks are alike", yet without imposing any a priori identification assumption. We find evidence of recessionary effects triggered not only by oil price hikes, but also by oil price slumps in some cases, likewise for the most recent episode, which is also rising deflation risk and financial distress. In addition through uncertainty effects, the current slump might then be depressing aggregate demand by increasing the real interest rate, as ECB monetary policy is already conducted at the zero lower bound. The increase in real money balances following the slump points to the accommodation of the shock by the ECB, concurrent with the implementation of the Quantitative Easing policy (Q.E.). Yet, in so far as Q.E failed to generate inflationary expectations within the current and expected environment of soft oil prices, the case for a more expansionary use of fiscal policy than in the past would become compelling, in order to counteract the deflationary and recessionary threats to the euro area. Keywords: Oil Price Shocks, Oil Price-macroeconomy Relationship, Risk Factors, Semiparametric Dynamic Conditional Correlation Model, Time-varying Parameter Models Classification-JEL: E30, E50, C32 Creation-Date: 201603 Template-Type: ReDIF-Paper 1.0 Number: 2016.24 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-024.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.24 Title: China’s Pursuit of Environmentally Sustainable Development: Harnessing the New Engine of Technological Innovation Author-Name: Wei Jin Author-X-Name-First: Wei Author-X-Name-Last: Jin Author-WorkPlace-Name: School of Economics, UNSW Business School, The University of New South Wales and School of Public Policy and Management, Zhejiang University Author-Name: ZhongXiang Zhang Author-X-Name-First: ZhongXiang Author-X-Name-Last: Zhang Author-WorkPlace-Name: College of Management and Economics, Tianjin University Abstract: Whether China continues its business-as-usual investment-driven, environment-polluting growth pattern or adopts an investment and innovation-driven, environmentally sustainable development holds important implications for both national and global environmental governance. Building on a Ramsey-Cass-Koopmans growth model that features endogenous technological change induced by R&D and knowledge stock accumulation, this paper presents an exposition, both analytically and numerically, of the mechanism underlining China’s economic transition from an investment-driven, pollution-intensive to an investment and innovation-driven, environmentally sustainable growth path. We show that if R&D technological innovation is incorporated into China’s growth mechanism, then at some tipping point in time when marginal welfare gain of R&D for knowledge accumulation becomes equalized with that of investment for physical asset deployment, China’s economy will launch capital investment and R&D simultaneously and make a transition to a sustainable growth path along which consumption, capital investment, and R&D have a balanced share of 5: 4: 1, consumption, capital stock, and knowledge stock all grow at a rate of 4.9%, and environmental quality improves at a rate of 2.5%. In contrast, if R&D technological innovation is not harnessed as a new growth engine, then China’s economy will follow its business-as-usual investment-driven growth path along which standalone accumulation of dirty physical capital stock will lead to an more than 200-fold increase in environmental pollution. Keywords: Endogenous Technological Change, Sustainable Development, Economic Growth Model, China’s Economic Transition Classification-JEL: Q55, Q58, Q43, Q48, O13, O31, O33, O44, F18 Creation-Date: 201603 Template-Type: ReDIF-Paper 1.0 Number: 2016.25 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-025.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.25 Title: Tipping Points and Loss Aversion in International Environmental Agreements Author-Name: Doruk Iris Author-X-Name-First: Doruk Author-X-Name-Last: Iris Author-WorkPlace-Name: School of Economics, Sogang University, Mapo-gu, Seoul Author-Name: Alessandro Tavoni Author-X-Name-First: Alessandro Author-X-Name-Last: Tavoni Author-WorkPlace-Name: Grantham Research Institute on Climate Change and the Environment, London School of Economics, London Abstract: We study the impact of loss-aversion and the threat of catastrophic damages, which we jointly call threshold concerns, on international environmental agreements. We aim to understand whether a threshold for dangerous climate change is as an effective coordination device for countries to overcome the global free-riding problem and abate sufficiently to avoid disaster. We focus on loss-averse countries negotiating either under the threat of either high environmental damages (loss domain), or low damages (gain domain). Under symmetry, that is when countries display identical degrees of threshold concern, we show that such beliefs have a positive effect on reducing the emission levels of both signatories to the treaty and non-signatories, leading to higher global welfare and weakly larger coalitions of signatories. We then introduce asymmetry, by allowing countries to differ in the degree of concern about the threat of disaster. We show that stable coalitions are mostly formed by the countries with higher threshold concern. When enough countries having no threshold concern could cause the coalition size to diminish, regardless of the other countries have strong or mild threshold concerns. Keywords: Catastrophic Climate Change, Threshold, Loss-Aversion, International Environmental Agreements, Coalition Formation Game Classification-JEL: D0, D03, Q5, Q50, Q58 Creation-Date: 201603 Template-Type: ReDIF-Paper 1.0 Number: 2016.26 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-026.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.26 Title: Delegation and Public Pressure in a Threshold Public Goods Game: Theory and Experimental Evidence Author-Name: Doruk Iris Author-X-Name-First: Doruk Author-X-Name-Last: Iris Author-WorkPlace-Name: Sogang University Author-Name: Jungmin Lee Author-X-Name-First: Jungmin Author-X-Name-Last: Lee Author-WorkPlace-Name: Sogang University and Institute for the Study of Labor (IZA) Author-Name: Alessandro Tavoni Author-X-Name-First: Alessandro Author-X-Name-Last: Tavoni Author-WorkPlace-Name: London School of Economics, Grantham Research Institute on Climate Change and Environment Abstract: The provision of global public goods, such as climate change mitigation and managing fisheries to avoid overharvesting, requires the coordination of national contributions. The contributions are managed by elected governments who, in turn, are subject to public pressure on the matter. In an experimental setting, we randomly assign subjects into four teams, and ask them to elect a delegate by a secret vote. The elected delegates repeatedly play a one shot public goods game in which the aim is to avoid losses that can ensue if the sum of their contributions falls short of a threshold. Earnings are split evenly among the team members, including the delegate. We find that delegation causes a small reduction in the group contributions. Public pressure, in the form of teammates’ messages to their delegate, has a significant negative effect on contributions, even though the messages are designed to be payoff-inconsequential (i.e., cheap talk). The reason for the latter finding is that delegates tend to focus on the least ambitious suggestion. In other words, they focus on the lower of the two public good contributions preferred by their teammates. This finding is consistent with the prediction of our model, a modified version of regret theory. Keywords: Delegation, Cooperation, Threshold Public Goods Game, Climate Experiment, Regret Theory Classification-JEL: C72, C92, D81, H4, Q54 Creation-Date: 201603 Template-Type: ReDIF-Paper 1.0 Number: 2016.27 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-027.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.27 Title: Extending the EU Commission’s Proposal for a Reform of the EU Emissions Trading System Author-Name: Stefan P. Schleicher Author-X-Name-First: Stefan P. Author-X-Name-Last: Schleicher Author-WorkPlace-Name: Wegener Center for Climate and Global Change at the University of Graz Author-Name: Angela Köppl Author-X-Name-First: Angela Author-X-Name-Last: Köppl Author-WorkPlace-Name: Austrian Institute of Economic Research Author-Name: Alexander Zeitlberger Author-X-Name-First: Alexander Author-X-Name-Last: Zeitlberger Author-WorkPlace-Name: Wegener Center for Climate and Global Change at the University of Graz Abstract: Pursuing an evidence based approach we summarize the key elements of the European Commission’s proposal of July 2015 for a reform of the EU Emissions Trading System and offer facts about the current state of EU ETS that underline the needs for such a reform. We supply key data for understanding the current state of EU ETS and report in particular the share of freely allocated allowances in emissions for the various sectors since the start of EU ETS in 2005. This is the most relevant parameter for evaluating the stringency and cost impacts of the EU ETS on sectors and installations. We provide propositions for enhancing the allocation procedure of both free and auctioned allowances, the fundamental element in the cap and trade design of this system. We link this procedure closely to the relevant suggestions of the Commission proposal and offer extensions that can make in particular the allocation of free allowances more targeted and effective. We indicate how the impacts of free allowances can be calculated both for sectors and installations and conclude that these reform steps could reduce the administrative burden of the system. Keywords: EU Emissions Trading System, Reform Options, EU Commission’s Proposal Classification-JEL: Q53, Q54 Creation-Date: 201603 Template-Type: ReDIF-Paper 1.0 Number: 2016.28 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-028.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.28 Title: A Systemic Approach to the Development of a Policy Mix for Material Resource Efficiency Author-Name: Tomas Ekvall Author-X-Name-First: Tomas Author-X-Name-Last: Ekvall Author-WorkPlace-Name: IVL Swedish Environmental Research Institute Author-Name: Martin Hirschnitz-Garbers Author-X-Name-First: Martin Author-X-Name-Last: Hirschnitz-Garbers Author-WorkPlace-Name: Ecologic Institut gemeinnuetzige GmbH Author-Name: Fabio Eboli Author-X-Name-First: Fabio Author-X-Name-Last: Eboli Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) Author-Name: Aleksander Sniegocki Author-X-Name-First: Aleksander Author-X-Name-Last: Sniegocki Author-WorkPlace-Name: Warszawski Instytut Studiów Ekonomicznych (WISE) Abstract: Increasing material use efficiency is important to mitigate future supply risks and minimize environmental impacts associated with the production of the materials. The policy mix presented in this paper aims to reduce the use of virgin metals in the EU by 80% by 2050. We used a heuristic framework and a systems perspective for designing the policy mix that combines primary instruments (aimed to achieve the 80% reduction target – e.g. a materials tax, technical regulations and removal of environmentally harmful subsidies) and supportive instruments (aimed to reduce barriers to implementing the primary instruments and to contribute towards the policy objectives – e.g. research & development support, and advanced recycling centers). Furthermore, instruments were designed so as to increase political feasibility: e.g. taxes were gradually increased as part of a green fiscal reform, and border-tax adjustments were introduced to reduce impacts on competitiveness. However, even in such a policy mix design ongoing ex-ante assessments indicate that the policy mix will be politically difficult to implement – and also fall short of achieving the 80% reduction target. Nonetheless, we suggest combining primary and supportive instruments into coherent and dynamic policy mixes as a promising step towards system reconfigurations for sustainability. Keywords: Policy Mix, Policy Development, Resource Efficiency, Material Efficiency, Recycling, European Union, Sensitivity Model Classification-JEL: L72, Q32 Creation-Date: 201603 Template-Type: ReDIF-Paper 1.0 Number: 2016.29 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-029.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.29 Title: The Water Abstraction License Regime in Italy: A Case for Reform? Author-Name: Silvia Santato Author-X-Name-First: Silvia Author-X-Name-Last: Santato Author-WorkPlace-Name: Euro-Mediterranean Centre on Climate Change and Fondazione Eni Enrico Mattei Author-Name: Jaroslav Mysiak Author-X-Name-First: Jaroslav Author-X-Name-Last: Mysiak Author-WorkPlace-Name: Euro-Mediterranean Centre on Climate Change and Fondazione Eni Enrico Mattei Author-Name: Carlos Dionisio Pérez-Blanco Author-X-Name-First: Carlos Dionisio Author-X-Name-Last: Pérez-Blanco Author-WorkPlace-Name: Euro-Mediterranean Centre on Climate Change and Fondazione Eni Enrico Mattei Abstract: The current Water Abstraction License (WAL) regime in Italy is no longer flexible enough to cope with the challenges posed by human-induced climate and global environmental changes. The cornerstones of the current regime were laid down in the 1930s and have remained essentially unchanged ever since. The sole noteworthy reform of the Italian WAL regime was the decentralization of the regulatory competences from the state to the regional authorities in the late 1990s. In this paper, we review the WAL regimes across the administrative regions comprising the Po River Basin District (PRBD), the largest and economically most important in Italy. PRBD’s WAL regime includes a rigid and scattered WAL normative that hinders the performance of bottom-up conflict resolution mechanisms at a basin scale; a water pricing scheme that does not reflect the cost of water conveyance and use, and does not encourage efficient water allocation; and the lack of a central WAL register, which delays and in some cases impedes an environmental impact assessment for issuing new licenses or renewing existing ones, and does not allow prioritizing applications according to their full economic value. We argue these deficiencies may compromise both the integrity of riverine and water dependent ecosystems and the economic uses of water. This paper offers insights that can inform reform of water allocations in the PRBD and elsewhere in Italy and in Europe. Keywords: Water Abstractions License, Water Fee, Water Security, Po River Basin District Classification-JEL: Q21, Q25, Q28 Creation-Date: 201603 Template-Type: ReDIF-Paper 1.0 Number: 2016.30 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-030.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.30 Title: Strategic Subsidies for Green Goods Author-Name: Carolyn Fischer Author-X-Name-First: Carolyn Author-X-Name-Last: Fischer Author-WorkPlace-Name: Resources for the Future, Gothenburg University, FEEM, and CESifo Research Network Abstract: Globally and locally, government support policies for green goods (like renewable energy) are much more popular internationally than raising the cost of bads (as through carbon taxes). These support policies may encourage downstream consumption (renewable energy deployment) or upstream development and manufacturing of those technologies. The use of subsidies—particularly upstream ones—is disciplined by World Trade Organization agreements, and its subsidies code lacks exceptions for transboundary externalities like human health or resource conservation, including those related to combating global climate change. The strategic trade literature has devoted little attention to the range of market failures related to green goods. This paper considers the market for a new environmental good that when consumed downstream may provide external benefits like reduced emissions. The technology is traded internationally but provided by a limited set of upstream suppliers that may operate in imperfect markets, such as with market power or external scale economies. We examine the national incentives and global rationales for offering production and consumption subsidies in producer countries, allowing that some of the downstream market may lie in nonregulating third-party countries. Although technology producer countries can benefit from restraints on upstream subsidies, global welfare is higher without them, and market failures imply that optimal subsidies are even higher. We supplement the analysis with numerical simulations of the case of renewable energy, exploring optimal subsidies for the major renewable energy producing and consuming regions and the cost of restrictions on upstream subsidies. Keywords: International Trade, Subsidies, Imperfect Competition, Externalities, Emissions Leakage Classification-JEL: F13, F18, H21, Q5 Creation-Date: 201603 Template-Type: ReDIF-Paper 1.0 Number: 2016.31 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-031.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.31 Title: Environmental Protection for Sale: Strategic Green Industrial Policy and Climate Finance Author-Name: Carolyn Fischer Author-X-Name-First: Carolyn Author-X-Name-Last: Fischer Author-WorkPlace-Name: Resources for the Future, Gothenburg University, FEEM, and CESifo Research Network Abstract: Industrial policy has long been criticized as subject to protectionist interests; accordingly, subsidies to domestic producers face disciplines under World Trade Organization agreements, without exceptions for environmental purposes. Now green industrial policy is gaining popularity as governments search for low-carbon solutions that also provide jobs at home. The strategic trade literature has largely ignored the issue of market failures related to green goods. I consider the market for a new environmental good (like low-carbon technology) whose downstream consumption provides external benefits (like reduced emissions). Governments may have some preference for supporting domestic production, such as by interest-group lobbying, introducing a political distortion in their objective function. I examine the national incentives and global rationales for offering production (upstream) and deployment (downstream) subsidies in producer countries, allowing that some of the downstream market may lie in nonregulating third-party countries. Restraints on upstream subsidies erode global welfare when environmental externalities are large enough relative to political distortions. Climate finance is an effective alternative if political distortions are large and governments do not undervalue carbon costs. Numerical simulations of the case of renewable energy indicate that a modest social cost of carbon can imply benefits from allowing upstream subsidies. Keywords: Green Industrial Policy, Emissions Leakage, Externalities, International Trade, Renewable Energy, Subsidies Classification-JEL: F13, F18, H21, Q5 Creation-Date: 201604 Template-Type: ReDIF-Paper 1.0 Number: 2016.32 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-032.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.32 Title: Keeping up with the e-Joneses: Do Online Social Networks Raise Social Comparisons? Author-Name: Fabio Sabatini Author-X-Name-First: Fabio Author-X-Name-Last: Sabatini Author-WorkPlace-Name: Sapienza University of Rome and LCSR National Research University Higher School of Economics Author-Name: Francesco Sarracino Author-X-Name-First: Francesco Author-X-Name-Last: Sarracino Author-WorkPlace-Name: Institut national de la statistique et des études économiques du Grand-Duché du Luxembourg (STATEC), Agence pour la normalisation et l’ économie de la connaissance (ANEC) and LCSR National Research University Higher School of Economics Abstract: Online social networks, such as Facebook, disclose an unprecedented volume of personal information amplifying the occasions for social comparisons, which can be a cause of frustration. We test the hypothesis that the use of social networking sites (SNS) increases social comparisons as proxied by people’s dissatisfaction with their income and we compare the effect of SNS in Western and Eastern European countries. After controlling for the possibility of reverse causality, our results suggest that SNS users have a higher probability to compare their achievements with those of others. In Western countries, this leads individuals to a lower satisfaction with their economic conditions. The opposite holds in Eastern countries, where upward comparisons seemingly strengthen the hope that an improvement in individuals’ economic conditions will occur (so called “tunnel effect”). We conclude that SNS can be a strong engine of frustration for their users depending on the institutional and economic circumstancesKeywords: Social Networks, Social Networking Sites, Social Comparisons, Satisfaction with Income, Relative Deprivation Classification-JEL: D83, I31, O33, Z1, Z13 Creation-Date: 201604 Template-Type: ReDIF-Paper 1.0 Number: 2016.33 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-033.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.33 Title: Advances and Slowdowns in Carbon Capture and Storage Technology Development Author-Name: Aurora D’Aprile Author-X-Name-First: Aurora Author-X-Name-Last: D’Aprile Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Centro Euro-Mediterraneo sui Cambiamenti Climatici (CMCC) Abstract: With the long term goal of holding the increase in the global average temperature to well below 2°C and "to pursue efforts to limit the temperature increase to 1.5°C", the Paris Agreement puts renewed attention on the portfolio of technologies needed to achieve consistent emission reductions and reach "a balance between anthropogenic emissions by sources and removals by sinks” in the second half of this century. Carbon capture and storage (CCS) technology, after having been hailed as a promising mitigation option around a decade ago, is undergoing a gruelling path to stay on top of the expectations. The opportunities and constraints in deploying large-scale carbon capture and storage systems are of the utmost actuality, as the technology promises to get rid of up to 90% of the most common greenhouse gases produced in industrial and energy plants before they reach the atmosphere (or even to achieve “negative” emissions, if combined with biomass). Despite potential benefits, CCS development and deployment proceeded at a far slower rate than what was expected and are struggling to emerge as a sound low-carbon choice for governments and investors. Based on recent existing literature, this reflection explores the main progress and deadlocks in CCS’s difficult path. Keywords: Climate Change, Carbon Sequestration, CCS, Carbon Mitigation, Low-carbon Technology Classification-JEL: Q42, Q55, Q58 Creation-Date: 201604 Template-Type: ReDIF-Paper 1.0 Number: 2016.34 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-034.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.34 Title: Economic Implications of EU Mitigation Policies: Domestic and International Effects Author-Name: Francesco Bosello Author-X-Name-First: Francesco Author-X-Name-Last: Bosello Author-WorkPlace-Name: FEEM, CMCC and University of Milan Author-Name: Marinella Davide Author-X-Name-First: Marinella Author-X-Name-Last: Davide Author-WorkPlace-Name: FEEM, CMCC and University of Venice Author-Name: Isabella Alloisio Author-X-Name-First: Isabella Author-X-Name-Last: Alloisio Author-WorkPlace-Name: FEEM and CMCC Abstract: The EU has a consolidated climate and energy regulation: it played a pioneering role by adopting a wide range of climate change policies and establishing the first regional Emission Trading Scheme (EU ETS). These policies, however, raise several concerns regarding both their environmental effectiveness and their potentially negative effect on the economy, especially in terms of growth and competitiveness. The paper reviews the European experience in order to understand if these concerns are supported by quantitative evidence. It thus focuses on key economic indicators, such as costs, competitiveness and carbon leakage as assessed by quantitative ex-ante and ex-post analyses. A dedicated section, extends the investigation to the potential extra-EU spillover of the EU mitigation policy with a particular attention to developing countries. The objective of the paper is to highlight both the limits and the opportunities of the EU regulatory framework in order to offer policy insights to emerging and developing countries that are on the way to implement climate change measures. Overall, the European experience shows that the worries about the costs and competitiveness losses induced by climate regulation are usually overestimated, especially in the long term. In addition, a tightening climate policy regime in the EU might in fact negatively impact developing countries via deteriorated trade relations. Nonetheless it tends to facilitate a resource relocation that if well governed could be beneficial to those countries where the poor are mainly involved in rural activities. Keywords: Climate Change, Climate Policy, Mitigation, Economic Impacts, GDP, Competitiveness Classification-JEL: F64, H23, O44, O52, Q54, R11 Creation-Date: 201604 Template-Type: ReDIF-Paper 1.0 Number: 2016.35 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-035.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.35 Title: The Political Economy of Energy Innovation Author-Name: Shouro Dasgupta Author-X-Name-First: Shouro Author-X-Name-Last: Dasgupta Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and CMCC Author-Name: Enrica De Cian Author-X-Name-First: Enrica Author-X-Name-Last: De Cian Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and CMCC Author-Name: Elena Verdolini Author-X-Name-First: Elena Author-X-Name-Last: Verdolini Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and CMCC Abstract: This paper empirically investigates the effects of environmental policy, institutions, political orientation, and lobbying on energy innovation and finds that they significantly affect the incentives to innovate and create cleaner energy efficient technologies. We conclude that political economy factors may act as barriers even in the presence of stringent environmental policy, implying that, to move towards a greener economy, countries should combine environmental policy with a general strengthening of institutional quality, consider the influence of government’s political orientation on environmental policies, and the implications of the size of energy intensive sectors in the economy. Keywords: Energy Innovation, Environmental Policy, Patents, Political Economy Classification-JEL: C23, D02, O30, Q58 Creation-Date: 201605 Template-Type: ReDIF-Paper 1.0 Number: 2016.36 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-036.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.36 Title: Distributional and Welfare Impacts of Renewable Subsidies in Italy Author-Name: Roberta Distante Author-X-Name-First: Roberta Author-X-Name-Last: Distante Author-WorkPlace-Name: Maersk Line Author-Name: Elena Verdolini Author-X-Name-First: Elena Author-X-Name-Last: Verdolini Author-WorkPlace-Name: Centro Euro-Mediterraneo sui Cambiamenti Climatici (CMCC) and Fondazione Eni Enrico Mattei Author-Name: Massimo Tavoni Author-X-Name-First: Massimo Author-X-Name-Last: Tavoni Author-WorkPlace-Name: Centro Euro-Mediterraneo sui Cambiamenti Climatici (CMCC), Fondazione Eni Enrico Mattei and Politecnico di Milano Abstract: We empirically assess the distributional impacts and welfare effects of policies to incentivize renewable electricity production for the case of Italy. We use data from the Household Budget Survey between 2000 and 2010 to estimate a demand system in which energy goods' shares of expenditure are modelled using different empirical approaches. We show that the general Exact Affine Stone Index (EASI) demand system provides more robust estimates of price elasticities of each composite good than the commonly used Almost Ideal Demand System (AIDS). The estimated coefficients are used to perform a welfare analysis of the Italian renewable electricity production incentive policy. We show that different empirical approaches give rise to significantly different estimates of price elasticities and that methodological choices are the reasons for the very high elasticities of substitutions estimated using similar data by previous contributions. We find no evidence of regressivity of the incidence of the Italian renewable incentive scheme in the period under consideration. The renewable subsidies act as a middle-class tax, with the higher welfare losses experienced by households in the second to fourth quintiles of the expenditure distribution. Keywords: Energy taxes, Consumer Demand System, Welfare Effects, Equity Classification-JEL: D12, H22, Q48 Creation-Date: 201605 Template-Type: ReDIF-Paper 1.0 Number: 2016.37 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-037.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.37 Title: Ellsberg Re-revisited: An Experiment Disentangling Model Uncertainty and Risk Aversion Author-Name: Loic Berger Author-X-Name-First: Loic Author-X-Name-Last: Berger Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Bocconi University and Fondazione Eni Enrico Mattei (FEEM) Abstract: The results of an experiment extending Ellsberg's setup demonstrate that attitudes towards ambiguity and compound uncertainty are closely related. However, this association is much stronger when the second layer of uncertainty is subjective than when it is objective. Provided that the compound probabilities are simple enough, we find that most subjects, consisting of both students and policy makers, (1) reduce compound objective probabilities, (2) do not reduce compound subjective probabilities, and (3) are ambiguity non-neutral. By decomposing ambiguity into risk and model uncertainty, and jointly eliciting the attitudes individuals manifest towards these two types of uncertainty, we characterize individuals' degree of ambiguity aversion. Our data provides evidence of decreasing absolute ambiguity aversion and constant relative ambiguity aversion. Keywords: Ambiguity Aversion, Model Uncertainty, Reduction of Compound Lotteries, Non-expected Utility, Subjective Probabilities, Decreasing Absolute Ambiguity Aversion Classification-JEL: D81 Creation-Date: 201605 Template-Type: ReDIF-Paper 1.0 Number: 2016.38 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-038.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.38 Title: Sharing Skills and Needs between Providers and Users of Climate Information to Create Climate Services: Lessons from the Northern Adriatic Case Study Author-Name: Valentina Giannini Author-X-Name-First: Valentina Author-X-Name-Last: Giannini Author-WorkPlace-Name: Centro Euro-Mediterraneo sui Cambiamenti Climatici Author-Name: Alessio Bellucci Author-X-Name-First: Alessio Author-X-Name-Last: Bellucci Author-WorkPlace-Name: Centro Euro-Mediterraneo sui Cambiamenti Climatici Author-Name: Silvia Torresan Author-X-Name-First: Silvia Author-X-Name-Last: Torresan Author-WorkPlace-Name: Centro Euro-Mediterraneo sui Cambiamenti Climatici Abstract: The need to cope with the expected impacts of climate change on socio-ecological systems calls for a closer dialogue between climate scientists and the community of climate information users (e.g. decision makers belonging to public institutions). We describe an interactive process designed to bridge this gap by establishing a two-way communication, based on mutual learning. We analyse the need of climate information for the integrated assessment of climate change impacts on the coastal zone of the Northern Adriatic Sea, which is considered to be particularly vulnerable to several climate-related phenomena, e.g. heavy rainfall events, pluvial flood, and sea-level rise, causing potentially high damages to coastal eco-systems and urban areas (e.g. acqua alta in the Venice Lagoon). A participatory process is designed engaging representatives from both the scientific and local stakeholders communities, and facilitated by a boundary organization, embodied by the Euro-Mediterranean Center on Climate Change. Keywords: Decision Making, Climate Products, Climate Services, Risk Assessment, Northern Adriatic, Participatory Process, CLIM-RUN Classification-JEL: O1, Q2, R5 Creation-Date: 201605 Template-Type: ReDIF-Paper 1.0 Number: 2016.39 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-039.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.39 Title: Policies for a more Dematerialized EU Economy. Theoretical Underpinnings, Political Context and Expected Feasibility Author-Name: Andrea Bigano Author-X-Name-First: Andrea Author-X-Name-Last: Bigano Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Euro-Mediterranean Center on Climate Change (CMCC) Author-Name: Aleksander Sniegocki Author-X-Name-First: Aleksander Author-X-Name-Last: Sniegocki Author-WorkPlace-Name: Warsaw Institute for Economic Studies (WISE) Author-Name: Jacopo Zotti Author-X-Name-First: Jacopo Author-X-Name-Last: Zotti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and University of Trieste Abstract: Economic activities affect the environment through a multiplicity of channels. Besides generating GHG emissions that induce climatic changes, every modern economy is connected to the environment throughout a continuous flow of materials. To generate economic wealth, a modern economy demands natural resources, and produces a continuous flow of waste. The scarcity of natural resources and the negative externalities arising along the life cycle of the resources from the extraction of the resources to their transformation, the use of the final products and eventually the final disposal of the latter seem natural motivations for the current policy push towards a more dematerialized and a more circular economy. The EU in particular appears to be approaching a new frontier of the environmental policy. The main contribution of this paper is a qualitative assessment of this strategy. To this aim, we first investigate the theoretical and political rationale for the EU to foster dematerialization, and on this basis, we provide an economic assessment of the effective feasibility of the initiative. From a theoretical economics point of view, the paper provides an overview of the main externalities arising from materials’ extraction, use and disposal. In a policy perspective, the paper reviews the state of affairs of the major world countries (USA, Japan and China in particular) on this issue, and contextualizes the EU action in a global perspective. This paper investigates whether in this policy field the EU can globally play a decisive role by itself or its role may be limited to providing a good example for other countries to follow, as in the case of the reduction of GHG emissions. In the second part of the paper we discuss some of the most promising policies put forward by the DYNAMIX project. On the basis of the qualitative policy assessment performed in DYNAMIX, we illustrate why these measures might be worth serious consideration. A discussion regarding the political economy of the policies under scrutiny complements the analysis of their effectiveness and efficiency. Keywords: Dematerialization, Absolute Decoupling, Resource Efficiency, Policy Mixes, Qualitative Assessment Classification-JEL: H23, O44, Q01, Q32 Creation-Date: 201605 Template-Type: ReDIF-Paper 1.0 Number: 2016.40 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-040.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.40 Title: COP 21 and Economic Theory: Taking Stock Author-Name: Henry Tulkens Author-X-Name-First: Henry Author-X-Name-Last: Tulkens Author-WorkPlace-Name: CORE, Université catholique de Louvain Abstract: The texts of the COP 21 Decision and its Annex are scrutinized from the particular point of view of the extent to which economic theoretic concepts can be considered to inspire them. While this is shown to be partially the case in some of the intentions, the texts themselves contain more diplomatically formulated promises than implementation of mainstream well established economic concepts. Keywords: Economic and Game Theory Concepts, International Climate Agreements, Voluntary Cooperation, Greenhouse Gas Emissions, Transfers Classification-JEL: F02, F55,H40, H87,Q52, Q54 Creation-Date: 201605 Template-Type: ReDIF-Paper 1.0 Number: 2016.41 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-041.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.41 Title: Institutions and the Environment: Existing Evidence and Future Directions Author-Name: Shouro Dasgupta Author-X-Name-First: Shouro Author-X-Name-Last: Dasgupta Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Centro Euro-Mediterraneo sui Cambiamenti Climatici Author-Name: Enrica De Cian Author-X-Name-First: Enrica Author-X-Name-Last: De Cian Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Centro Euro-Mediterraneo sui Cambiamenti Climatici Abstract: In this review we synthetize the existing contributions that use econometric approaches to examine the influence of institutions and governance on environmental policy, environmental outcomes, and investments. The paper describes how the relationship between institutions and various response variables related to environmental performance and environmental policy have been conceptualized and operationalized in the literature, and it summarizes the main findings. The second part of the paper outlines avenues for future research in the specific context of energy and climate change. We identify various opportunities for empirical work that have recently emerged with the growing availability of data in the field of green investments, climate, and energy policy. Expanding the current empirical literature towards these research topics is of scientific and policy relevance, and can provide important insights on the broader field of sustainability transition and sustainable development. Keywords: Institutions, Environmental Performance, Environmental Policy, Investments Classification-JEL: O10, Q5, Q00, P16 Creation-Date: 201606 Template-Type: ReDIF-Paper 1.0 Number: 2016.42 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-042.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.42 Title: The WITCH 2016 Model - Documentation and Implementation of the Shared Socioeconomic Pathways Author-Name: Johannes Emmerling Author-X-Name-First: Johannes Author-X-Name-Last: Emmerling Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy Author-Name: Laurent Drouet Author-X-Name-First: Laurent Author-X-Name-Last: Drouet Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy Author-Name: Lara Aleluia Reis Author-X-Name-First: Lara Aleluia Author-X-Name-Last: Reis Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy Author-Name: Michela Bevione Author-X-Name-First: Michela Author-X-Name-Last: Bevione Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy Author-Name: Loic Berger Author-X-Name-First: Loic Author-X-Name-Last: Berger Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy Bureau Fédéral du Plan, Belgium Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy, Bocconi University, Italy Author-Name: Samuel Carrara Author-X-Name-First: Samuel Author-X-Name-Last: Carrara Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy Author-Name: Enrica De Cian Author-X-Name-First: Enrica Author-X-Name-Last: De Cian Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy Author-Name: Gauthier De Maere D'Aertrycke Author-X-Name-First: Gauthier Author-X-Name-Last: De Maere D'Aertrycke Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy, Engie, Belgium Author-Name: Tom Longden Author-X-Name-First: Tom Author-X-Name-Last: Longden Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy, University of Technology Sydney, Australia Author-Name: Maurizio Malpede Author-X-Name-First: Maurizio Author-X-Name-Last: Malpede Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy Author-Name: Giacomo Marangoni Author-X-Name-First: Giacomo Author-X-Name-Last: Marangoni Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy Author-Name: Fabio Sferra Author-X-Name-First: Fabio Author-X-Name-Last: Sferra Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy, Climate Analytics, Germany Author-Name: Massimo Tavoni Author-X-Name-First: Massimo Author-X-Name-Last: Tavoni Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy, Politecnico di Milano, Italy Author-Name: Jan Witajewski-Baltvilks Author-X-Name-First: Jan Author-X-Name-Last: Witajewski-Baltvilks Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC), Italy, Institute for Structural Research, Poland Author-Name: Petr Havlik Author-X-Name-First: Petr Author-X-Name-Last: Havlik Author-WorkPlace-Name: International Institute for Applied Systems Analysis (IIASA), Austria Abstract: This paper describes the WITCH - World Induced Technical Change Hybrid - model in its structure, calibration, and the implementation of the SSP/RCP scenario implementation. The WITCH model is a regionally disaggregated hard-linked model based on a Ramsey type optimal growth model and a detailed bottom-up energy sector model. A particular focus of the model is the modeling or technical change and RnD investments and the analysis of cooperative and non-cooperative climate policies. Moreover, the WITCH 2016 version now includes land-use change modeling based on the GLOBIOM model, and air pollutants, as well as detailed modeling of the transport sector and the possibility for stochastic modeling. This version has been also used to implement the Shared Socioeconomic Pathways (SSPs) set of scenarios and RCP based climate policies to provide a new set of climate scenarios. In this paper, we describe in detail the mathematical formulation of the WITCH model, the solution method and calibration, as well as the implementation of the five SSP scenarios. This report therefore provides detailed information for interested users of the model, and for understanding the implementation of the different “worlds" of the SSP. Keywords: Integrated Assessment Model, SSPs, Climate Change, Scenarios Classification-JEL: Q54, C63 Creation-Date: 201606 Template-Type: ReDIF-Paper 1.0 Number: 2016.43 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-043.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.43 Title: How Green are Economists? Author-Name: Stefano Carattini Author-X-Name-First: Stefano Author-X-Name-Last: Carattini Author-WorkPlace-Name: Haute école de gestion de Genève, University of Applied Sciences Western Switzerland and Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science Author-Name: Alessandro Tavoni Author-X-Name-First: Alessandro Author-X-Name-Last: Tavoni Author-WorkPlace-Name: Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science Abstract: The market for voluntary carbon offsets has grown steadily in the last decade, yet it remains a very small niche. Most emissions from business travel are still not offset. This paper exploits a unique dataset examining the decision to purchase carbon offsets at two academic conferences in environmental and ecological economics. We find that having the conference expenses covered by one's institution increases the likelihood of offsetting, but practical and ethical reservations as well as personal characteristics and preferences also play an important role. We draw lessons from the effect of objections on the use of offsets and discuss the implications for practitioners and policy-makers. Based on our findings, we conclude that ecological and environmental economists should be more involved in the design and use of carbon offsets. Keywords: Voluntary Carbon Offsetting, Public Goods, Ecological Economics, Environmental Economics Classification-JEL: D6, H8, Q4 Creation-Date: 201606 Template-Type: ReDIF-Paper 1.0 Number: 2016.44 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-044.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.44 Title: Firm Employment Growth, R&D Expenditures and Exports Author-Name: Marco Di Cintio Author-X-Name-First: Marco Author-X-Name-Last: Di Cintio Author-WorkPlace-Name: Department of Economics, Management, Mathematics and Statistics, University of Salento Author-Name: Sucharita Ghosh Author-X-Name-First: Sucharita Author-X-Name-Last: Ghosh Author-WorkPlace-Name: Department of Economics, The University of Akron Author-Name: Emanuele Grassi Author-X-Name-First: Emanuele Author-X-Name-Last: Grassi Author-WorkPlace-Name: Department of Economics, Management, Mathematics and Statistics, University of Salento Abstract: This paper studies firms’ decisions to export and invest in R&D and their effects on employment growth and labor flows for a sample of Italian SMEs operating in the manufacturing industry. After accounting for the under-reporting of R&D in SMEs, our quantile regressions reveal that (i) R&D is associated with higher employment growth rates, higher hiring rates and lower separation rates; (ii) R&D-induced exports are negatively related to employment growth and accessions and positively related to separations; and (iii) pure exports are not a driver of employment growth and labor flows. Keywords: Exports, R&D, Firm Growth, Quantile Regression Classification-JEL: J63, M51, O31, F14 Creation-Date: 201606 Template-Type: ReDIF-Paper 1.0 Number: 2016.45 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-045.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.45 Title: Promoting Renewable Energy and Energy Efficiency in Africa: A Framework to Evaluate Employment Generation and Cost-effectiveness Author-Name: Nicola Cantore Author-X-Name-First: Nicola Author-X-Name-Last: Cantore Author-WorkPlace-Name: UNIDO Author-Name: Patrick Nussbaumer Author-X-Name-First: Patrick Author-X-Name-Last: Nussbaumer Author-WorkPlace-Name: UNIDO Author-Name: Max Wei Author-X-Name-First: Max Author-X-Name-Last: Wei Author-WorkPlace-Name: Lawrence Berkeley National Laboratory Author-Name: Daniel Kammen Author-X-Name-First: Daniel Author-X-Name-Last: Kammen Author-WorkPlace-Name: Energy and Resources Group, University of California and Goldman School of Public Policy, University of California Abstract: The ongoing debate over the cost-effectiveness of renewable energy (RE) and energy efficiency (EE) deployment often hinges on the current cost of incumbent fossil-fuel technologies versus the long-term benefit of clean energy alternatives. This debate is often focused on mature or ‘industrialized’ economies and externalities such as job creation. In many ways, however, the situation in developing economies is at least as or even more interesting due to the generally faster current rate of economic growth and of infrastructure deployment. On the one hand, RE and EE could help decarbonize economies in developing countries, but on the other hand, higher upfront costs of RE and EE could hamper short-term growth. The methodology developed in this paper confirms the existence of this trade-off for some scenarios, yet at the same time provides considerable evidence about the positive impact of EE and RE from a job creation and employment perspective. By extending and adopting a methodology for Africa designed to calculate employment from electricity generation in the U.S., this study finds that energy savings and the conversion of the electricity supply mix to renewable energy generates employment compared to a reference scenario. It also concludes that the costs per additional job created tend to decrease with increasing levels of both EE adoption and RE shares. Keywords: Renewable Energy, Employment, Energy Efficiency, Africa Classification-JEL: N77, O13, Q40 Creation-Date: 201606 Template-Type: ReDIF-Paper 1.0 Number: 2016.46 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-046.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.46 Title: Finding Common Ground when Experts Disagree: Belief Dominance over Portfolios of Alternatives Author-Name: Erin Baker Author-X-Name-First: Erin Author-X-Name-Last: Baker Author-WorkPlace-Name: University of Massachusetts Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Bocconi University and Fondazione Eni Enrico Mattei (FEEM) Author-Name: Ahti Salo Author-X-Name-First: Ahti Author-X-Name-Last: Salo Author-WorkPlace-Name: Aalto University Abstract: We address the problem of choosing a portfolio of policies under “deep uncertainty.” We introduce the idea of belief dominance as a way to derive a set of non-dominated portfolios and robust individual alternatives. Our approach departs from the tradition of providing a single recommended portfolio; rather, it derives a group of good portfolios. The belief dominance concept allows us to synthesize multiple expert- or model- based beliefs by uncovering the range of alternatives that are intelligent responses to the range of beliefs. This goes beyond solutions that are optimal for any specific set of beliefs to uncover other defensible solutions that may not otherwise be revealed. We illustrate our approach using an important problem in the climate change and energy policy context: choosing among clean energy technology R&D portfolios. We demonstrate how the belief dominance concept can reveal portfolios and alternatives that would otherwise remain uncovered. Keywords: Deep Uncertainty, Decision Making under Uncertainty, Robust, Dominance Classification-JEL: D8, D78, D81 Creation-Date: 201607 Template-Type: ReDIF-Paper 1.0 Number: 2016.47 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-047.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.47 Title: The Future Prospects of Energy Technologies: Insights from Expert Elicitations Author-Name: Elena Verdolini Author-X-Name-First: Elena Author-X-Name-Last: Verdolini Author-WorkPlace-Name: CMCC and FEEM Author-Name: Laura Diaz Anadón Author-X-Name-First: Laura Diaz Author-X-Name-Last: Anadón Author-WorkPlace-Name: John F. Kennedy School of Government, Harvard University and University College London Author-Name: Erin Baker Author-X-Name-First: Erin Author-X-Name-Last: Baker Author-WorkPlace-Name: University of Massachusetts Amherst Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: CMCC, FEEM and Bocconi University Author-Name: Lara Aleluia Reis Author-X-Name-First: Lara Aleluia Author-X-Name-Last: Reis Author-WorkPlace-Name: CMCC and FEEM Abstract: Expert elicitation is a process for eliciting subjective probability distributions from experts about items of interest to decision makers. These methods have been increasingly applied in the energy domain to collect information on the future cost and performance of specific energy technologies and the associated uncertainty. This article reviews the existing expert elicitations on energy technologies with three main objectives: (1) to provide insights on expert elicitation methods and how they compare/complement other approaches to inform public energy decision making; (2) to review all recent elicitation exercises about future technology costs; and (3) to discuss the main results from these expert elicitations, in terms of implied rates of cost reduction and the role of R&D investments in shaping these reductions, and compare it with insights from backward looking approaches. We argue that the emergence of data on future energy costs through expert elicitations provides the opportunity for more transparent and robust analyses incorporating technical uncertainty to assess energy and climate change mitigation policies. Keywords: Energy Technologies, R&D Investments, Expert Elicitations, Uncertainty Classification-JEL: Q5, Q55 Creation-Date: 201607 Template-Type: ReDIF-Paper 1.0 Number: 2016.48 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-048.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.48 Title: Measures, Drivers and Effects of Green Employment: Evidence from US Local Labor Markets, 2006-2014 Author-Name: Francesco Vona Author-X-Name-First: Francesco Author-X-Name-Last: Vona Author-WorkPlace-Name: OFCE-SciencesPo, Sophia Antipolis Author-Name: Giovanni Marin Author-X-Name-First: Giovanni Author-X-Name-Last: Marin Author-WorkPlace-Name: IRCrES-CNR, Milan Author-Name: Davide Consoli Author-X-Name-First: Davide Author-X-Name-Last: Consoli Author-WorkPlace-Name: INGENIO CSIC-UPV, Valencia Abstract: This paper explores the nature and the key empirical regularities of green employment in US local labor markets between 2006 and 2014. We construct a new measure of green employment based on the task content of occupations. Descriptive analysis reveals the following: 1. the share of green employment oscillates between 2 and 3 percent, and its trend is strongly pro-cyclical; 2. green jobs yield a 4 percent wage premium; 3. despite moderate catching-up across areas, green jobs remain more geographically concentrated than similar non-green jobs; and 4. the top green areas are mostly high-tech. As regards the drivers, changes in environmental regulation are a secondary force compared to the local endowment of green knowledge and resilience in the face of the great recession. To assess the impact of moving to greener activities, we estimate that one additional green job is associated with 4.2 (2.4 in the crisis period) new jobs in non-tradable activities in the local economies. Keywords: Green Employment, Local Labor Markets, Environmental Regulation, Environmental Technologies, Local Multipliers Classification-JEL: J23, O33, Q52, R23 Creation-Date: 201607 Template-Type: ReDIF-Paper 1.0 Number: 2016.49 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-049.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.49 Title: The Regularity and Irregularity of Travel: an Analysis of the Consistency of Travel Times Associated with Subsistence, Maintenance and Discretionary Activities Author-Name: Thomas Longden Author-X-Name-First: Thomas Author-X-Name-Last: Longden Author-WorkPlace-Name: Centre for Health Economics Research and Evaluation (CHERE), University of Technology Sydney Abstract: Regular and irregular travel patterns coincide with different underlying purposes of travel and days of the week. Within this paper, it is shown that the balance between subsistence (i.e. work) and discretionary (i.e. leisure) activities is related to differences in travel patterns and explains consistency across years. Using eight years of time use diary entries this paper finds that travel time related to subsistence activities tends to be regular and stable. In contrast, travel time associated with discretionary activities tends to be more unpredictable and varies greatly between discretionary and non-discretionary days. These findings have consequences for the travel time budget literature as consistency of average travel time is found to be driven by work days, which are frequent and have stable travel times. This is offset by discretionary days as they tend to have longer travel times with greater variability but are fewer in number. Keywords: Travel Time Stability, Time Allocation, Discretionary Activities, Switching Model Classification-JEL: R4, R41 Creation-Date: 201607 Template-Type: ReDIF-Paper 1.0 Number: 2016.50 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-050.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.50 Title: Did the Paris Agreement Plant the Seeds of a Climate Consistent International Financial Regime? Author-Name: Dipak Dasgupta Author-X-Name-First: Dipak Author-X-Name-Last: Dasgupta Author-WorkPlace-Name: The Energy & Resource Institute (TERI) Author-Name: Etienne Espagne Author-X-Name-First: Etienne Author-X-Name-Last: Espagne Author-WorkPlace-Name: Centre d’Etudes Prospectives et d’Information Internationale (CEPII) Author-Name: Jean-Charles Hourcade Author-X-Name-First: Jean-Charles Author-X-Name-Last: Hourcade Author-WorkPlace-Name: Centre International de Recherche sur l’Environnement et le Développement (CIRED) Author-Name: Irving Minzer Author-X-Name-First: Irving Author-X-Name-Last: Minzer Author-WorkPlace-Name: Johns Hopkins University, School of Advanced International Studies (SAIS) Author-Name: Seyni Nafo Author-X-Name-First: Seyni Author-X-Name-Last: Nafo Author-WorkPlace-Name: African Group at the UNFCCC Author-Name: Baptiste Perissin-Fabert Author-X-Name-First: Baptiste Author-X-Name-Last: Perissin-Fabert Author-WorkPlace-Name: Commissariat Général au Développement Durable (CGDD) Author-Name: Nick Robins Author-X-Name-First: Nick Author-X-Name-Last: Robins Author-WorkPlace-Name: Inquiry into the Design of a Sustainable Financial System (UNEP) Author-Name: Alfredo Sirkis Author-X-Name-First: Alfredo Author-X-Name-Last: Sirkis Author-WorkPlace-Name: Centro Brasil no Clima (CBC) Abstract: Finance has been critical to the development of interest and momentum concerning the Paris Agreement, which emerged from COP21. However, a quick scan of the accord could lead many to derive a disappointing picture because of the absence of practical commitments to financial devices that can limit the risks of climate change. We support the opposite view that the text marks a new departure by committing countries to “making financial flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development ». This was matched by parallel developments such as the Financial Stability Board’s launch of a new Task Force on climate disclosure. We argue that, further steps now need to be taken within the broader context of financing the new model of prosperity laid out in the UN Sustainable Development Goals (UN, September 2015). At a time of increasing financial uncertainty and inadequate investment in the real economy, putting in place a framework for financing the transition to a low-carbon, resilient model of development is now an economic imperative – and an immense opportunity. Mitigating the systemic risks of climate change while putting the global financial system on a path toward balanced and sustainable development, is in the long-term strategic interests of both industrialized and developing countries and we suggest what practical steps can be accomplished in a near future in this direction. Keywords: COP 21, Paris Agreement, Climate Finance Classification-JEL: Q5, Q58, F53 Creation-Date: 201607 Template-Type: ReDIF-Paper 1.0 Number: 2016.51 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-051.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.51 Title: Bridging the Gap: Do Fast Reacting Fossil Technologies Facilitate Renewable Energy Diffusion? Author-Name: Elena Verdolini Author-X-Name-First: Elena Author-X-Name-Last: Verdolini Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Centro Euro-Mediterraneo per i Cambiamenti Climatici Author-Name: Francesco Vona Author-X-Name-First: Francesco Author-X-Name-Last: Vona Author-WorkPlace-Name: OFCE Sciences-Po and SKEMA Business School Author-Name: David Popp Author-X-Name-First: David Author-X-Name-Last: Popp Author-WorkPlace-Name: Syracuse University and NBER Abstract: The diffusion of renewable energy in the power system implies high supply variability. Lacking economically viable storage options, renewable energy integration has so far been possible thanks to the presence of fast-reacting mid-merit fossil-based technologies, which act as back-up capacity. This paper discusses the role of fossil-based power generation technologies in supporting renewable energy investments. We study the deployment of these two technologies conditional on all other drivers in 26 OECD countries between 1990 and 2013. We show that a 1% percent increase in the share of fast-reacting fossil generation capacity is associated with a 0.88% percent increase in renewable in the long run. These results are robust to various modifications in our empirical strategy, and most notably to the use of system-GMM techniques to account for the interdependence of renewable and fast-reacting fossil investment decisions. Our analysis points to the substantial indirect costs of renewable energy integration and highlights the complementarity of investments in different generation technologies for a successful decarbonization process. Keywords: Renewable Energy Investments, Fossil Energy Investments, Complementarity, Energy and Environmental Policy Classification-JEL: Q42, Q48, Q55, O33 Creation-Date: 201608 Template-Type: ReDIF-Paper 1.0 Number: 2016.52 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-052.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.52 Title: Climate Engineering under Deep Uncertainty and Heterogeneity Author-Name: Johannes Emmerling Author-X-Name-First: Johannes Author-X-Name-Last: Emmerling Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Centro Euromediterraneo sui Cambiamenti Climatici (CMCC) Author-Name: Vassiliki Manoussi Author-X-Name-First: Vassiliki Author-X-Name-Last: Manoussi Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) Author-Name: Anastasios Xepapadeas Author-X-Name-First: Anastasios Author-X-Name-Last: Xepapadeas Author-WorkPlace-Name: Athens University of Economics and Business Abstract: Climate Engineering, and in particular Solar Radiation Management (SRM) has become a widely discussed climate policy option to study in recent years. However, its potentially strategic nature and unforeseen side effects provide major policy and scientific challenges. We study the role of the SRM implementation and its strategic dimension in a model with two heterogeneous countries with the notable feature of model misspecification on the impacts from SRM. We find that deep uncertainty leads to a reduction in SRM deployment both under cooperation and strategic behavior, which is a more relevant issue if countries act strategically. Furthermore, we demonstrate that the heterogeneity in impacts from SRM has an asymmetric effect on the optimal policy and could typically lead to unilateral SRM implementation. We also consider heterogeneous degrees of ambiguity aversion, in which case the more confident country only will use SRM. Keywords: Climate Change, Solar Radiation Management, Uncertainty, Robust Control, Differential Game Classification-JEL: Q53, Q54 Creation-Date: 201608 Template-Type: ReDIF-Paper 1.0 Number: 2016.53 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-053.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.53 Title: Do Extreme Weather Events Generate Attention to Climate Change? Author-Name: Matthew R. Sisco Author-X-Name-First: Matthew R. Author-X-Name-Last: Sisco Author-WorkPlace-Name: Center for Research on Environmental Decisions, Columbia University Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Bocconi University and Fondazione Eni Enrico Mattei Author-Name: Elke U. Weber Author-X-Name-First: Elke U. Author-X-Name-Last: Weber Author-WorkPlace-Name: Center for Research on Environmental Decisions, Columbia University Abstract: We analyzed the effects of 10,748 weather events on attention to climate change between December 2011 and November 2014 in local areas across the United States. Attention was gauged by quantifying the relative increase in Twitter messages about climate change in the local area around the time of each event. Coastal floods, droughts, wildfires, strong wind, hail, excessive heat, extreme cold, and heavy snow events all had detectable effects. Attention was reliably higher directly after events began, compared to directly before. This suggests that actual experiences with extreme weather events are driving the increases in attention to climate change, beyond the purely descriptive information provided by the weather forecasts directly beforehand. Financial damage associated with the weather events had a positive and significant effect on attention, although the effect was small. The abnormality of each weather event’s occurrence compared to local historical activity was also a significant predictor. In particular and in line with past research, relative abnormalities in temperature (“local warming”) generated attention to climate change. In contrast, wind speed was predictive of attention to climate change in absolute levels. These results can be useful to predict short-term attention to climate change for strategic climate communications, and to better forecast long-term climate policy support. Keywords: Climate Attention, Social Media, Extreme Weather Classification-JEL: Q54, C81, D80 Creation-Date: 201608 Template-Type: ReDIF-Paper 1.0 Number: 2016.54 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-054.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.54 Title: Inequality and the Social Cost of Carbon Author-Name: David Anthoff Author-X-Name-First: David Author-X-Name-Last: Anthoff Author-WorkPlace-Name: Energy and Resources Group, University of California Author-Name: Johannes Emmerling Author-X-Name-First: Johannes Author-X-Name-Last: Emmerling Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) Abstract: This paper presents a novel way to disentangle inequality aversion over time from inequality aversion between regions in the computation of the Social Cost of Carbon. Our approach nests a standard efficiency based Social Cost of Carbon estimate and an equity weighted Social Cost of Carbon estimate as special cases. We also present a methodology to incorporate more fine grained regional resolutions of income and damage distributions than typically found in integrated assessment models. Finally, we present quantitative estimates of the Social Cost of Carbon that use our disentangling of different types of inequality aversion. We use two integrated assessment models (FUND and RICE) for our numerical exercise to get more robust findings. Our results suggest that inequality considerations lead to a higher (lower) SCC values in high (low) income regions relative to an efficiency based approach, but that the effect is less strong than found in previous studies that use equity weighting. Our central estimate is that the Social Cost of Carbon increases roughly by a factor of 2.5 from a US perspective when our disentangled equity weighting approach is used. Keywords: Social Cost of Carbon, Inequality, Climate Change, Discounting, Equity Weighting, Integrated Assessment Model Classification-JEL: D63, H43, Q54 Creation-Date: 201608 Template-Type: ReDIF-Paper 1.0 Number: 2016.55 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-055.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.55 Title: Priority for the Worse Off and the Social Cost of Carbon Author-Name: Matthew Adler Author-X-Name-First: Matthew Author-X-Name-Last: Adler Author-WorkPlace-Name: Duke University School of Law Author-Name: David Anthoff Author-X-Name-First: David Author-X-Name-Last: Anthoff Author-WorkPlace-Name: Energy and Resources Group, University of California Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Bocconi University Author-Name: Greg Garner Author-X-Name-First: Greg Author-X-Name-Last: Garner Author-WorkPlace-Name: The Pennsylvania State University Author-Name: Klaus Keller Author-X-Name-First: Klaus Author-X-Name-Last: Keller Author-WorkPlace-Name: The Pennsylvania State University and Carnegie Mellon University Author-Name: Nicolas Treich Author-X-Name-First: Nicolas Author-X-Name-Last: Treich Author-WorkPlace-Name: INRA, University of Toulouse Abstract: The social cost of carbon (SCC) is a monetary measure of the harms from carbon emission. Specifically, it is the reduction in current consumption that produces a loss in social welfare equivalent to that caused by the emission of a ton of CO2. The standard approach is to calculate the SCC using a discounted-utilitarian social welfare function (SWF)—one that simply adds up the well-being numbers (utilities) of individuals, as discounted by a weighting factor that decreases with time. The discounted-utilitarian SWF has been criticized both for ignoring the distribution of well-being, and for including an arbitrary preference for earlier generations. Here, we use a prioritarian SWF, with no time-discount factor, to calculate the SCC in the integrated assessment model RICE. Prioritarianism is a well-developed concept in ethics and theoretical welfare economics, but has been, thus far, little used in climate scholarship. The core idea is to give greater weight to well-being changes affecting worse off individuals. We find substantial differences between the discounted-utilitarian and non-discounted prioritarian SCC. Keywords: Prioritarianism, Social Welfare Function, Social Cost of Carbon Classification-JEL: Q54, I30 Creation-Date: 201608 Template-Type: ReDIF-Paper 1.0 Number: 2016.56 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-056.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.56 Title: Deforestation Rate in the Long-run: the Case of Brazil Author-Name: Luca Di Corato Author-X-Name-First: Luca Author-X-Name-Last: Di Corato Author-WorkPlace-Name: Swedish University of Agricultural Sciences Author-Name: Michele Moretto Author-X-Name-First: Michele Author-X-Name-Last: Moretto Author-WorkPlace-Name: University of Padova, Fondazione Eni Enrico Mattei and Centro Studi Levi-Cases Author-Name: Sergio Vergalli Author-X-Name-First: Sergio Author-X-Name-Last: Vergalli Author-WorkPlace-Name: University of Brescia and Fondazione Eni Enrico Mattei Abstract: In this article we study the long-run average rate of forest conversion in Brazil. Deforestation results from the following trade-off: on the one hand, the uncertain value of benefits associated with forest conservation (biodiversity, carbon sequestration and other ecosystem services), on the other hand, the economic profits associated with land development (agriculture, ranching, etc.). We adopt the model by Bulte et al. (2002) as theoretical frame for studying land conversion and then derive, following Di Corato et al. (2013), the associated long-run average rate of forest conversion. We then identify the parameters to be used in our model. The object of our simulation is Brazil and 27 states. Our aim is to compute under several scenarios the time required to develop the remaining forested land in these states. We provide potential future scenarios, in terms of forest coverage, for the next 20, 100 and 200 years. Our results suggest that the uncertainty characterizing forest benefits plays a relevant role in deterring deforestation. We find that these benefits, if growing at a sufficiently high rate, may significantly slow down the conversion process. In contrast, a higher volatility accelerates the process of deforestation. We indicate the Brazilian states where forests are expected to be saturated earlier. In this respect, we find that forestland currently available may be expected to be fully converted within a 200-year horizon. Keywords: Deforestation, Long-run, Natural Resources Management, Optimal Stopping Classification-JEL: C61, D81, Q24, Q58 Creation-Date: 201609 Template-Type: ReDIF-Paper 1.0 Number: 2016.57 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-057.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.57 Title: Exploring the Community Structure of Complex Networks Author-Name: Carlo Drago Author-X-Name-First: Carlo Author-X-Name-Last: Drago Author-WorkPlace-Name: University of Rome “Niccolò Cusano” Abstract: Regarding complex networks, one of the most relevant problems is to understand and to explore community structure. In particular it is important to define the network organization and the functions associated to the different network partitions. In this context, the idea is to consider some new approaches based on interval data in order to represent the different relevant network components as communities. The method is also useful to represent the network community structure, especially the network hierarchical structure. The application of the methodologies is based on the Italian interlocking directorship network. Keywords: Complex Networks, Community Detection, Communities, Interval Data, Interlocking Directorates Classification-JEL: C4, C60, L14 Creation-Date: 201609 Template-Type: ReDIF-Paper 1.0 Number: 2016.58 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-058.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.58 Title: The Strategic Use of Abatement by a Polluting Monopoly Author-Name: Guiomar Martín-Herrán Author-X-Name-First: Guiomar Author-X-Name-Last: Martín-Herrán Author-WorkPlace-Name: Department of Applied Economics and IMUVa, University of Valladolid Author-Name: Santiago J. Rubio Author-X-Name-First: Santiago J. Author-X-Name-Last: Rubio Author-WorkPlace-Name: Department of Economic Analysis and ERI-CES, University of Valencia Abstract: This paper evaluates the effects of the lack of regulatory commitment on emission tax applied by the regulator, abatement effort made by the monopoly and social welfare comparing two alternative policy games. The first game assumes that the regulator commits to an ex-ante level of the emission tax. In the second one, in a first stage the regulator and the monopolist simultaneously choose the emission tax and abatement respectively, and in a second stage the monopolist selects the output level. We find that the lack of commitment leads to lower taxation and abatement that yield larger emissions and, consequently, a larger steady-state pollution stock. Moreover, the increase of environmental damages because of the increase in the pollution stock more than compensates the increase in consumer surplus and the decrease in abatement costs resulting in a reduction of social welfare. Thus, our analysis indicates that the lack of commitment has a negative impact of welfare although this detrimental effect decreases with abatement costs. Keywords: Monopoly, Commitment, Emission Tax, Abatement, Stock Pollutant Classification-JEL: H23, L12, L51, Q52, Q55 Creation-Date: 201609 Template-Type: ReDIF-Paper 1.0 Number: 2016.59 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-059.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.59 Title: Price Competition in Product Variety Networks Author-Name: Philip Ushchev Author-X-Name-First: Philip Author-X-Name-Last: Ushchev Author-WorkPlace-Name: NRU-Higher School of Economics Author-Name: Yves Zenou Author-X-Name-First: Yves Author-X-Name-Last: Zenou Author-WorkPlace-Name: Monash University, Stockholm University, IFN and CEPR Abstract: We develop a product-differentiated model where the product space is a network defined as a set of varieties (nodes) linked by their degrees of substitutability (edges). We also locate consumers into this network, so that the location of each consumer (node) corresponds to her “ideal” variety. We show that, even though prices need not to be strategic complements, there exists a unique Nash equilibrium in the price game among firms. Equilibrium prices are determined by both firms’ sign-alternating Bonacich centralities and the average willingness to pay across consumers. They both hinge on the network structure of the firm-product space. We also investigate how local product differentiation and the spatial discount factor affect the equilibrium prices. We show that these effects non-trivially depend on the network structure. In particular, we find that, in a star-shaped network, the firm located in the star node does not always enjoy higher monopoly power than the peripheral firms. Keywords: Networks, Product Variety, Monopolistic Competition, Spatial Competition Classification-JEL: D43, L11, L13 Creation-Date: 201609 Template-Type: ReDIF-Paper 1.0 Number: 2016.60 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-060.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.60 Title: Investing in Photovoltaics: Timing, Plant Sizing and Smart Grids Flexibility Author-Name: Marina Bertolini Author-X-Name-First: Marina Author-X-Name-Last: Bertolini Author-WorkPlace-Name: University of Padova and Centro Studi "Giorgio Levi Cases" Author-Name: Chiara D’Alpaos Author-X-Name-First: Chiara Author-X-Name-Last: D’Alpaos Author-WorkPlace-Name: University of Padova and Centro Studi "Giorgio Levi Cases" Author-Name: Michele Moretto Author-X-Name-First: Michele Author-X-Name-Last: Moretto Author-WorkPlace-Name: University of Padova, Fondazione Eni Enrico Mattei (FEEM) and Centro Studi "Giorgio Levi Cases" Abstract: In Italy and in many EU countries, the last decade was characterized by a large development of distributed generation power plants. Their presence determined new critical issues for the design and management of the overall energy system and the electric grid due to the presence of discontinuous production sources. It is commonly agreed that contingent problems that affect local grids (e.g. inefficiency, congestion rents, power outages, etc.) may be solved by the implementation of a “smarter” electric grid. The main feature of smarts grid is the great increase in production and consumption flexibility. Smart grids give producers and consumers, the opportunity to be active in the market and strategically decide their optimal production/consumption scheme. The paper provides a theoretical framework to model the prosumer’s decision to invest in a photovoltaic power plant, assuming it is integrated in a smart grid. To capture the value of managerial flexibility, a real option approach is implemented. We calibrate and test the model by using data from the Italian energy market. Keywords: Smart Grids, Renewable Energy Sources, Real Options, Prosumer Classification-JEL: Q42, C61, D81 Creation-Date: 201609 Template-Type: ReDIF-Paper 1.0 Number: 2016.61 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-061.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.61 Title: Quantifying the Effects of Expert Selection and Elicitation Design on Experts’ Confidence in their Judgments about Future Energy Technologies Author-Name: Gregory F. Nemet Author-X-Name-First: Gregory F. Author-X-Name-Last: Nemet Author-WorkPlace-Name: University of Wisconsin-Madison Author-Name: Laura Diaz Anadon Author-X-Name-First: Laura Diaz Author-X-Name-Last: Anadon Author-WorkPlace-Name: John F. Kennedy School of Government, Harvard University Author-Name: Elena Verdolini Author-X-Name-First: Elena Author-X-Name-Last: Verdolini Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Centro Euro-Mediterraneo per i Cambiamenti Climatici Abstract: Expert elicitations are frequently used to characterize future technology outcomes. However their usefulness is limited, in part because: estimates across studies are not easily comparable; choices in survey design and expert selection may bias results; and over-confidence is a persistent problem. We provide quantitative evidence of how these choices affect experts’ estimates of the costs of future energy technologies. We harmonize data from 19 elicitations, involving 215 experts, on the 2030 costs of 5 energy technologies: nuclear, biofuels, bioelectricity, solar, and carbon capture. We control for expert characteristics, survey design, and public R&D investment levels on which the elicited values are conditional. We find that, on average, when experts respond to elicitations in person, they ascribe lower confidence (larger uncertainty) to their estimates than when responding via mail or online. In-person interviews also produce more optimistic assessments of best-case (10th percentile) outcomes. The impacts of expert affiliation—government, private sector, or academic—and geography—US or EU—are also significant; academics and US experts have lower confidence than other types of experts. Higher R&D investment levels have no effect on the confidence of experts’ judgments. R&D reduces both the median and breakthrough (10th percentile) cost estimates, although the size of the effect varies across technologies. These results indicate the source, direction, and size of bias in energy technology elicitations. They also point to the technology specificity of some of the effects. These biases should be seriously considered, both in interpreting the results of existing elicitations and in designing new ones. Keywords: Expert Elicitations, Uncertainty, Energy Technologies, Heuristic Biases, Survey Design Classification-JEL: O13, O14, Q4 Creation-Date: 201611 Template-Type: ReDIF-Paper 1.0 Number: 2016.62 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-062.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.62 Title: Intermediate Input Linkage and Carbon Leakage Author-Name: Zengkai Zhang Author-X-Name-First: Zengkai Author-X-Name-Last: Zhang Author-WorkPlace-Name: College of Management and Economics, Tianjin University Author-Name: ZhongXiang Zhang Author-X-Name-First: ZhongXiang Author-X-Name-Last: Zhang Author-WorkPlace-Name: College of Management and Economics, Tianjin University Abstract: Climate regulations tend to target energy intensive sectors whose products are widely used in industrial production as intermediate inputs, such as electricity, and the carbon abatement may be partially offset by intermediate input-led leakage. This paper aims to examine the impact of intermediate input linkage on the carbon leakage both theoretically and empirically. On the theoretical part, we develop a Harberger-type model with an input-output linkage structure, identify four leakage effects and derive closed-form solutions for these leakage effects. On the empirical part, we build a computable general equilibrium model of China for empirical simulation and introduce Structural Decomposition Analysis to link both the theoretical and empirical models. By imposing a carbon price on the electricity generation sector, our results show significant carbon leakage. Our decomposition analysis further suggests that such a leakage is mainly through the production substitution effect, followed by the multiplier effect. Both of the two effects are closely related to the intermediate input linkage, and thus shed some light on importance of considering sectoral linkage when discussing the carbon leakage issue of climate policies. Keywords: Carbon Leakage, Sectoral Linkage, Climate Regulation, General Equilibrium Model, Production Substitution Effect, Multiplier Effect Classification-JEL: Q55, Q58, Q43, Q48, O13, O31, O33, O44, F18 Creation-Date: 201611 Template-Type: ReDIF-Paper 1.0 Number: 2016.63 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-063.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.63 Title: Climate-induced International Migration and Conflicts Author-Name: Cristina Cattaneo Author-X-Name-First: Cristina Author-X-Name-Last: Cattaneo Author-WorkPlace-Name: FEEM and CMCC Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Bocconi University, FEEM and CMCC Abstract: Population movements will help people facing the impact of climate change. However, the resulting large scale displacements may also produce security risks for receiving areas. The objective of this paper is to empirically estimate if the inflows of climate-induced migrants increase the risk of conflicts in receiving areas. Using data from 1960 to 2000, we show that climate-induced migrants are not an additional determinant of civil conflicts and civil wars in receiving areas. Keywords: Conflict, Global Warming, Emigration Classification-JEL: Q54, F22, Q34, H56 Creation-Date: 201611 Template-Type: ReDIF-Paper 1.0 Number: 2016.64 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-064.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.64 Title: Preferences for Energy Efficiency vs. Renewables: How Much Does a Ton of CO2 Emissions Cost? Author-Name: Anna Alberini Author-X-Name-First: Anna Author-X-Name-Last: Alberini Author-WorkPlace-Name: AREC, University of Maryland and FEEM Author-Name: Andrea Bigano Author-X-Name-First: Andrea Author-X-Name-Last: Bigano Author-WorkPlace-Name: FEEM and CMCC Author-Name: Milan Šcasný Author-X-Name-First: Milan Author-X-Name-Last: Šcasný Author-WorkPlace-Name: Charles University, Environment Center Author-Name: Iva Zverinová Author-X-Name-First: Iva Author-X-Name-Last: Zverinová Author-WorkPlace-Name: Charles University, Environment Center Abstract: Concerns about climate change are growing, and so is the demand for information about the costs and benefits of mitigating greenhouse gas emissions. This paper seeks to estimate the benefits of climate change mitigation, as measured by the public’s willingness to pay for such policies. We investigate the preferences of Italian and Czech households towards climate change mitigation policy options directly related to residential energy use. We use discrete choice experiments, which are administered in a standardized fashion to representative samples in the two countries through computer-assisted web interviews. The willingness to pay per ton of CO2 emissions avoided is €132 Euro for the Italians and 94 Euro for the Czech respondents (at 2014 purchasing power parity). We find evidence of considerable heterogeneity in WTP driven by income. The two samples differ in their “domestic” income elasticities of WTP, but comparison across the two countries suggests an income elasticity of WTP of one. Keywords: Energy-efficiency Incentives, Stated Preferences, CO2 Emissions Reductions, CO2 Mitigation Policies, Conjoint Choice Experiments, WTP for CO2 Emissions Reductions Classification-JEL: Q41, Q48, Q54, Q51 Creation-Date: 201611 Template-Type: ReDIF-Paper 1.0 Number: 2016.65 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-065.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.65 Title: Nodewise Decay in Two-way Flow Nash Network: a Study of Network Congestion Author-Name: Banchongsan Charoensook Author-X-Name-First: Banchongsan Author-X-Name-Last: Charoensook Author-WorkPlace-Name: Keimyung Adams College, Keimyung University Abstract: This paper studies a noncooperative model of network formation. Built upon the two-way flow model of Bala and Goyal (2000a), it assumes that information decay as it flows through each agent, and the decay is increasing and concave in the number of his links. This assumption results in the fact that a large set of Nash networks are disconnected and consist of components of different sizes, a feature that resembles that of real-world networks. Discussions on this insight are provided. Keywords: Two-way Flow Network, Network Formation, Information Network Classification-JEL: C72, D85 Creation-Date: 201611 Template-Type: ReDIF-Paper 1.0 Number: 2016.66 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-066.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.66 Title: Knowledge Creation between Integrated Assessment Models and Initiative-Based Learning - An Interdisciplinary Approach Author-Name: Enrica De Cian Author-X-Name-First: Enrica Author-X-Name-Last: De Cian Author-WorkPlace-Name: FEEM and CMCC Author-Name: Johannes Buhl Author-X-Name-First: Johannes Author-X-Name-Last: Buhl Author-WorkPlace-Name: Wuppertal Institute for Climate, Environment, Energy Author-Name: Samuel Carrara Author-X-Name-First: Samuel Author-X-Name-Last: Carrara Author-WorkPlace-Name: FEEM and CMCC Author-Name: Michela Bevione Author-X-Name-First: Michela Author-X-Name-Last: Bevione Author-WorkPlace-Name: FEEM and CMCC Author-Name: Silvia Monetti Author-X-Name-First: Silvia Author-X-Name-Last: Monetti Author-WorkPlace-Name: Wuppertal Institute for Climate, Environment, Energy Author-Name: Holger Berg Author-X-Name-First: Holger Author-X-Name-Last: Berg Author-WorkPlace-Name: Wuppertal Institute for Climate, Environment, Energy Abstract: This paper explores the opportunities for integrating Initiative Based Learning (IBL) and Integrated Assessment Models (IAMs) in order to improve our understanding of learning in the context of societal transition pathways, and more specifically by focusing on solar PV as an energy transition technology. Our analysis shows that IAMs and IBL conceptualize learning in a very different way, and the two approaches have major structural differences with respect to the geographical as well as the temporal scale of analysis. This is also due to the different goals of the two methodologies. The aim of IAM is to develop long-term energy and technology scenarios for the next thirty to eighty years, and to describe learning processes mostly to account for future potential improvements in technologies, while IBL focuses on understanding the configuration of actors in specific institutional settings that legitimize and support specific technologies and ultimately lead to dynamics of social learning. Although ambitious forms of integration between IAMs and IBL are not feasible today, the two approaches can be used in parallel and lead to mutual enrichment via a process that we label a two-way recursive collaboration. Keywords: Social Learning, Innovation Diffusion, Technology Adoption, Integrated Assessment, Case Study, Transition Research, Initiative-based Learning, Solar PV Learning Curves Classification-JEL: O31, O33, O35, Q42 Creation-Date: 201611 Template-Type: ReDIF-Paper 1.0 Number: 2016.67 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-067.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.67 Title: Are China’s Climate Commitments in a Post-Paris Agreement Sufficiently Ambitious? Author-Name: ZhongXiang Zhang Author-X-Name-First: ZhongXiang Author-X-Name-Last: Zhang Author-WorkPlace-Name: College of Management and Economics, Tianjin University Abstract: In international climate change negotiations, China’s role is an issue of perennial concern. In particular, the lack of quantitative, absolute emissions commitments from China has been the focus. In line with changing domestic and international contexts, China is recalibrating its stance and strategy. Its participation in international climate change negotiations has evolved from playing a peripheral role to gradually moving to the centre. This article examines China’s stance and role in international climate change negotiations from a historical perspective. In so doing, the article discusses the evolution of international climate negotiations and China’s stance in the lead-up to and at the Paris conference. With Paris behind us, the focus is now turning to the implementation of the Paris Agreement. The article discusses post-Paris issues in the international context and in particular in China’s context. These affect the post Paris negotiations and hold the key to achieving desired outcomes. Keywords: International Climate Negotiations, Copenhagen Accord, Paris Agreement, China Classification-JEL: Q01, Q5, Q58 Creation-Date: 201611 Template-Type: ReDIF-Paper 1.0 Number: 2016.68 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-068.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.68 Title: Access to Modern Energy: a Review of Barriers, Drivers and Impacts Author-Name: Jacopo Bonan Author-X-Name-First: Jacopo Author-X-Name-Last: Bonan Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) Author-Name: Stefano Pareglio Author-X-Name-First: Stefano Author-X-Name-Last: Pareglio Author-WorkPlace-Name: Università Cattolica del Sacro Cuore and Fondazione Eni Enrico Mattei (FEEM) Author-Name: Massimo Tavoni Author-X-Name-First: Massimo Author-X-Name-Last: Tavoni Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Politecnico di Milano Abstract: Universal access to modern energy services, in terms of access to electricity and to modern cooking facilities, has been recognized as a fundamental challenge for development. Despite strong praise for action and the deployment of large-scale electrification programs and improved cookstove (ICS) distribution campaigns, few studies have shed light on the barriers to, the enablers of and the impacts of access to energy on development outcomes, using rigorous methodologies. This paper reviews this recent strand of research, trying to fill these gaps. We focus on the demand-side and household perspective. Our main outcomes of interest are electricity connection and ICS adoption for the analysis of barriers, time allocation, labour market outcomes and welfare for the impact analysis. We provide evidence of significant wellbeing impacts of electrification, and mixed evidence for cookstoves. Keywords: Impact Evaluation, Energy Poverty, Energy Access, Rural Electrification, Modern Cookstoves, Literature Review Classification-JEL: O1, O13, Q4, Q48 Creation-Date: 201611 Template-Type: ReDIF-Paper 1.0 Number: 2016.69 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-069.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.69 Title: Increasing Anti-Malaria Bednet Uptake Using Information and Distribution Strategies: Evidence from a Randomized Experiment in Senegal Author-Name: Jacopo Bonan Author-X-Name-First: Jacopo Author-X-Name-Last: Bonan Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) Author-Name: Philippe LeMay-Boucher Author-X-Name-First: Philippe Author-X-Name-Last: LeMay-Boucher Author-WorkPlace-Name: Heriot-Watt University Author-Name: Michel Tenikue Author-X-Name-First: Michel Author-X-Name-Last: Tenikue Author-WorkPlace-Name: Luxembourg Institute of Socio-Economic Research (LISER) Abstract: We evaluate the effects of different marketing and distribution techniques on the purchase of Long-Lasting Insecticide-Treated Nets (LL-ITN). Using a randomized controlled trial in urban Senegal, we look at the impacts of receiving information on malaria-related issues and of different sale treatments. We find that overall information has no significant effect on the demand for LL-ITNs, but has a significant effect on individuals who have never attended school and have poor knowledge of malaria. Receiving an offer to purchase an LL-ITN with a voucher valid for 7 days increases purchases by 23 percentage points, compared to an on-the-spot sale offer. Keywords: Malaria, Senegal, Randomized Experiment, Bednets, Distribution Campaign Classification-JEL: C93, I12, I15 Creation-Date: 201611 Template-Type: ReDIF-Paper 1.0 Number: 2016.70 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-070.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.70 Title: Informed Trading in Oil-Futures Market Author-Name: Olivier Rousse Author-X-Name-First: Olivier Author-X-Name-Last: Rousse Author-WorkPlace-Name: Université Grenoble Alpes Author-Name: Benoît Sévi Author-X-Name-First: Benoît Author-X-Name-Last: Sévi Author-WorkPlace-Name: Université de Nantes Abstract: The weekly release of the U.S. inventory level by the DOE-EIA is known as the market mover in the U.S. oil futures market and to be a significant piece of information for all world oil markets in which the WTI is a price benchmark. We uncover suspicious trading patterns in the WTI futures markets in days when the inventory level is released that are higher than economists’ forecasts: there are significantly more orders initiated by buyers in the two hours preceding the official release of the inventory level. We also show a clear drop in the average price of -0.25% ahead of the news release. This is consistent with informed trading. We also provide evidence of an asymmetric response of the oil price to the news, and highlight an over-reaction that is partly compensated in the hours following the announcement. Keywords: Insider Trading, WTI Crude Oil Futures, Intraday Data, Inventory Release Classification-JEL: G13, G14, Q4 Creation-Date: 201611 Template-Type: ReDIF-Paper 1.0 Number: 2016.71 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/ndl2016-071.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.71 Title: Transition Towards a Green Economy in Europe: Innovation and Knowledge Integration in the Renewable Energy Sector Author-Name: C. Conti Author-X-Name-First: Chiara Author-X-Name-Last: Conti Author-WorkPlace-Name: Sapienza University of Rome Author-Name: M. L. Mancusi Author-X-Name-First: Maria Luisa Author-X-Name-Last: Mancusi Author-WorkPlace-Name: Catholic University (Milan) and CRIOS, Bocconi University Author-Name: F. Sanna-Randaccio Author-X-Name-First: Francesca Author-X-Name-Last: Sanna-Randaccio Author-WorkPlace-Name: Sapienza University of Rome Author-Name: R. Sestini Author-X-Name-First: Roberta Author-X-Name-Last: Sestini Author-WorkPlace-Name: Sapienza University of Rome Author-Name: E. Verdolini Author-X-Name-First: Elena Author-X-Name-Last: Verdolini Author-WorkPlace-Name: Fondazione CMCC and Fondazione Eni Enrico Mattei Abstract: A major concern regarding innovation in clean technologies in the EU is that the fragmentation of its innovation system may hinder knowledge flows and, consequently, spillovers across member countries. A low intensity of knowledge flows across EU states can negatively impact their technological base, suppressing opportunities for further innovations and hindering the movement towards the technological frontier. This paper evaluates the fragmentation of the EU innovation system in the field of renewable energy sources (RES) by examining the intensity and direction of knowledge spillovers over the years 1985-2010. We modify the original double exponential knowledge diffusion model to provide information on the degree of integration of EU countries’ innovation efforts and to assess how citation patterns changed over time. We show that EU RES inventors have increasingly built “on the shoulders of the other EU giants”, intensifying their citations to other member countries and decreasing those to domestic inventors. Furthermore, the EU strengthened its position as source of RES knowledge for the US. Finally, we show that this pattern is peculiar to RES, with other traditional (i.e. fossil-based) energy technologies behaving in a completely different way. Keywords: Knowledge Spillovers, Renewable Energy Technologies, Fossil Energy Technologies, EU Innovation Classification-JEL: Q55, Q58, Q42, O31, O33 Creation-Date: 201612 Template-Type: ReDIF-Paper 1.0 Number: 2016.72 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-072.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.72 Title: Junior Farmer Field Schools, Agricultural Knowledge and Spillover Effects: Quasi-experimental Evidence from Northern Uganda Author-Name: Jacopo Bonan Author-X-Name-First: Jacopo Author-X-Name-Last: Bonan Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) Author-Name: Laura Pagani Author-X-Name-First: Laura Author-X-Name-Last: Pagani Author-WorkPlace-Name: University of Milano-Bicocca Abstract: We analyse the impact of a junior farmer field school project in Northern Uganda on students’ agricultural knowledge and practices. We also test for the presence of intergenerational learning spillover within households. We use differences-in-differences estimators with ex-ante matching. We find that the program had positive effects on students’ agricultural knowledge and adoption of good practices and that it produced some spillover effects in terms of improvements of household agricultural knowledge and food security. Overall, our results point to the importance of adapting the basic principles of farmer field schools to children. Keywords: Junior Farmer Field Schools, Agricultural Extension, Intergenerational Learning Spillover, Uganda Classification-JEL: O13, O22, O55, C93 Creation-Date: 201612 Template-Type: ReDIF-Paper 1.0 Number: 2016.73 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-073.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.73 Title: Economic Impacts of El Niño Southern Oscillation: Evidence from the Colombian Coffee Market Author-Name: Andrea Bastianin Author-X-Name-First: Andrea Author-X-Name-Last: Bastianin Author-WorkPlace-Name: University of Milan Author-Name: Alessandro Lanza Author-X-Name-First: Alessandro Author-X-Name-Last: Lanza Author-WorkPlace-Name: Euro-Mediterranean Center on Climate Change Author-Name: Matteo Manera Author-X-Name-First: Matteo Author-X-Name-Last: Manera Author-WorkPlace-Name: University of Milan-Bicocca and Fondazione Eni Enrico Mattei Abstract: We develop a structural econometric model to study the impacts of El Niño Southern Oscillation (ENSO) on Colombian coffee production, exports and price. Our empirical specification is consistent with an economic model of the coffee market that, in the short-run, is characterized by a downward-sloping demand curve and by a vertical supply curve. This allows the study of the effects of unpredictable innovations to ENSO on the Colombian coffee price, while controlling for shocks arising from both the supply and the demand-side of the market. We show that El Niño events (i.e. positive shocks to ENSO) might be beneficial for production and exports and tend to decrease the price of coffee. On the contrary, La Niña conditions (i.e. negative shocks to ENSO) depress coffee production and exports and increase price. However, the overall impact of ENSO shocks is small. In the short-run, ENSO shocks explain 2% of the fluctuations of coffee production and 0.2% of the variability of the price of coffee. In the long-run, these percentages rise to 8% and 6%, respectively. Both in the short-run and in the long-run, demand-side shocks are more relevant than supply-side shocks in explaining the dynamics of the price of coffee. Keywords: Coffee, Colombia, El Niño, ENSO, La Niña, Structural VAR Classification-JEL: C32, O13, Q02, Q11, Q54 Creation-Date: 201612 Template-Type: ReDIF-Paper 1.0 Number: 2016.74 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/ndl2016-074.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.74 Title: Can Hypothetical Time Discounting Rates Predict Actual Behaviour: Evidence from a Randomized Experiment Author-Name: Jacopo Bonan Author-X-Name-First: Jacopo Author-X-Name-Last: Bonan Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) Author-Name: Philippe LeMay-Boucher Author-X-Name-First: Philippe Author-X-Name-Last: LeMay-Boucher Author-WorkPlace-Name: Heriot-Watt University Author-Name: Douglas Scott Author-X-Name-First: Douglas Author-X-Name-Last: Scott Author-WorkPlace-Name: The University of Nottingham Abstract: This paper estimates time preference parameters using commonly-applied methodologies, with the aim of investigating the link between these measures and actual economic behaviour. An experiment was conducted in the city of Thies, in Senegal, using the unique reference numbers of banknotes as a means of determining an individual’s willingness to save money. The findings of this experiment provide an innovative comparison between real choices, and choices made in the presence of hypothetical rewards. Our research indicates that individuals display a far greater degree of patience, when the possibility of genuine financial gain is made available to them. Our results show that hypothetical time preferences parameters are poor predictors of actual behaviour, prompting questions over the validity of commonly used measurements. Keywords: Time Preferences, Randomized Experiment, Senegal Classification-JEL: D01, D91, C93, O1 Creation-Date: 201612 Template-Type: ReDIF-Paper 1.0 Number: 2016.75 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-075.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.75 Title: Decarbonization Pathways in Southeast Asia: New Results for Indonesia, Malaysia, Philippines, Thailand and Viet Nam Author-Name: Francesco Bosello Author-X-Name-First: Francesco Author-X-Name-Last: Bosello Author-WorkPlace-Name: University of Milan, FEEM and CMCC Author-Name: Carlo Orecchia Author-X-Name-First: Carlo Author-X-Name-Last: Orecchia Author-WorkPlace-Name: FEEM and CMCC Author-Name: David A. Raitzer Author-X-Name-First: David A. Author-X-Name-Last: Raitzer Author-WorkPlace-Name: Asian Development Bank Abstract: Southeast Asia is one of the most vulnerable regions of the world to the impacts of climate change. At the same time, the region is also following a trajectory that could make it a major contributor to greenhouse gas emissions in the future. Understanding the economic implications of policy options for low carbon growth is essential to formulate instruments that achieve the greatest emissions reductions at lowest cost. This study focuses on five developing countries of Southeast Asia that collectively account for 90% of regional emissions in recent years—Indonesia, Malaysia, the Philippines, Thailand, and Viet Nam. The analyses are based on the CGE economy-energy-environment model ICES under an array of scenarios reflecting business as usual, fragmented climate policies, an approximately 2.4°C post 2020 global climate stabilization target, termed 650 parts per million (ppm) carbon dioxide (CO2) equivalent (eq), and an approximately 2°C global target (termed 500 ppm CO2 eq). Averted deforestation through reducing emissions from forest degradation and deforestation (REDD) is included in some scenarios. The study shows that global and coordinated action is found to be critical to the cost effectiveness of emissions stabilization policies. A 650ppm stabilization scenario (below 3°C in 2100) has a similar cost to the region to current fragmented targets, but achieves much higher levels of emissions reductions. However, only some of the countries have short-term emissions targets that are consistent with a stabilization scenario at 650ppm: these are Indonesia, Philippines and Viet Nam. None of the countries’ mid-term targets are coherent with more ambitious stabilization scenario at 500ppm. Keywords: Climate Change Mitigation, Asian Economies, Computable General Equilibrium Models Classification-JEL: Q54, Q58, C68 Creation-Date: 201612 Template-Type: ReDIF-Paper 1.0 Number: 2016.76 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-076.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.76 Title: The Cost of Climate Stabilization in Southeast Asia, a Joint Assessment with Dynamic Optimization and CGE Models Author-Name: Francesco Bosello Author-X-Name-First: Francesco Author-X-Name-Last: Bosello Author-WorkPlace-Name: University of Milan, FEEM and CMCC Author-Name: Giacomo Marangoni Author-X-Name-First: Giacomo Author-X-Name-Last: Marangoni Author-WorkPlace-Name: FEEM and CMCC Author-Name: Carlo Orecchia Author-X-Name-First: Carlo Author-X-Name-Last: Orecchia Author-WorkPlace-Name: FEEM and CMCC Author-Name: David A. Raitzer Author-X-Name-First: David A. Author-X-Name-Last: Raitzer Author-WorkPlace-Name: Asian Development Bank Author-Name: Massimo Tavoni Author-X-Name-First: Massimo Author-X-Name-Last: Tavoni Author-WorkPlace-Name: Politecnico di Milano, FEEM and CMCC Abstract: Southeast Asia is at a time one of the most vulnerable region to the impacts of a changing climate, with millions of its inhabitants still trapped in extreme poverty without access to energy and employed in climate-sensitive sectors, and, potentially, one of the world’s biggest contributors to global warming in the future. Fortunately, major Southeast Asian countries are also implementing policies to improve their energy and carbon efficiency and are discussing if and how to extend these further. The present study aims to assess the implications for energy consumption, energy intensity and carbon intensity in the Southeast Asia region of a set of short-term and long-term de-carbonization policies characterized by different degrees of ambition and international cooperation. The analysis applies two energy-climate-economic models. The first, the fully dynamic Integrated Assessment model WITCH, is more aggregated in the sectoral and country representation, but provides a detailed technological description of the energy sector. The second, the ICES Computable General Equilibrium model, offers a richer sectoral breakdown of the economy and of international trade patterns, but is less refined in the representation of technology. The joint application of these two complementary models allows the capture of distinct and key aspects of low- carbon development paths in Southeast Asia. Keywords: Climate Change Mitigation, Asian Economies, Computable General Equilibrium Models Classification-JEL: Q54, Q58, C68 Creation-Date: 201612 Template-Type: ReDIF-Paper 1.0 Number: 2016.77 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-077.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.77 Title: An Economic Assessment of Low-Carbon Investment Flows in the U.S. Power Sector Author-Name: Lu Wang Author-X-Name-First: Lu Author-X-Name-Last: Wang Author-WorkPlace-Name: Beijing Institute of Technology and Georgia Institute of Technology Author-Name: Alice Favero Author-X-Name-First: Alice Author-X-Name-Last: Favero Author-WorkPlace-Name: Georgia Institute of Technology Author-Name: Marilyn Brown Author-X-Name-First: Marilyn Author-X-Name-Last: Brown Author-WorkPlace-Name: Georgia Institute of Technology Abstract: This study used the GT NEMS model to analyze how the proposed federal regulation on carbon emissions will impact investments in the U.S. electricity generating capacity at the federal and Census Division level for 2016-2030. Results show that in order to reduce emissions by 32% by 2030, cumulative investments will increase from 399 to 414 billion USD by 2030. Under the scenario which addresses carbon leakage - covering new and existing power plants - cumulative investment will reach 475 billion USD by 2030. Addressing carbon leakage will affect not only the size of the investments but also the direction: when only existing power plants are covered investments in natural gas remains almost unchanged (123 billion USD) relative to the Reference case; while under the scenario that covers all power plants, investment in natural gas will be 24% lower and the investments in renewable will be 64% higher than the Reference. Carbon regulation will produce not only losers and winners among energy sources but also among U.S. states. While the South and Midwest states will experience much higher increase in cumulative investments with respect to the national average; Northeast and West states will reduce their overall investments by 2030 under the policy scenarios. Keywords: Clean Power Plan, Climate Change Mitigation Policy, Investment, Electricity, United States Classification-JEL: Q42, Q43, Q48, Q58 Creation-Date: 201612 Template-Type: ReDIF-Paper 1.0 Number: 2016.78 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-078.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.78 Title: The Changing Dynamics of Energy in Turkey Author-Name: Simone Tagliapietra Author-X-Name-First: Simone Author-X-Name-Last: Tagliapietra Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: This paper explores how Turkey’s politics and economy are affected by changes in global energy. To define which are the most relevant developments, the paper opens with an overview of the country's economic landscape. This analysis illustrates that energy, being the key driver behind its large current account deficit, represents a major point of vulnerability for the country. On this basis, the paper illustrates Turkey's energy matrix, an analysis that outlines the rising role of gas in the country's energy sector, both under the internal (i.e. growing share of the mix) and external (i.e. the country's potential role as regional gas hub) points of view. Finally, these issues are discussed with the aim of assessing the prospects for Turkey to turn gas into a geopolitical and economic asset for the country. Keywords: Turkey, Energy Security, Gas, TANAP, TAP, TurkStream Classification-JEL: Q40, Q42, Q48 Creation-Date: 201612 Template-Type: ReDIF-Paper 1.0 Number: 2016.79 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-079.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.79 Title: Climate Change, Water Scarcity in Agriculture and the Economy-Wide Impacts in a CGE Framework Author-Name: Roberto Ponce Author-X-Name-First: Roberto Author-X-Name-Last: Ponce Author-WorkPlace-Name: Universidad del Desarrollo Author-Name: Ramiro Parrado Author-X-Name-First: Ramiro Author-X-Name-Last: Parrado Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Centro Euro-Mediterraneo sui Cambiamenti Climatici Author-Name: Alejandra Stehr Author-X-Name-First: Alejandra Author-X-Name-Last: Stehr Author-WorkPlace-Name: Universidad de Concepción Author-Name: Francesco Bosello Author-X-Name-First: Francesco Author-X-Name-Last: Bosello Author-WorkPlace-Name: FEEM, CMCC and University of Milan Abstract: This paper analyzes the economic impacts of changes in water availability due to climate change. We develop a new modeling approach as an alternative to include water as a production factor within a global CGE model. We tailor the structure of the ICES model to characterize the key features of the world economy with a detailed representation of the agricultural sector. In order to reach this objective, a new database has been built to explicitly consider water endowments, precipitation changes, and unitary irrigation costs. Results suggest different economic consequences of climate change depending on the specific region. Impacts are related to change in crop production, endowment demands, and international trade. Keywords: CGE Models, Climate Change, Agriculture, Irrigation, Water Resources Classification-JEL: C68, Q54, Q15, Q25 Creation-Date: 201612 Template-Type: ReDIF-Paper 1.0 Number: 2016.80 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2016-080.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2016.80 Title: Policy- v. Individual Heterogeneity in the Benefits of Climate Change Mitigation: Evidence from a Stated-Preference Survey Author-Name: Anna Alberini Author-X-Name-First: Anna Author-X-Name-Last: Alberini Author-WorkPlace-Name: University of Maryland, FEEM and Centre for Energy Policy and Economics, ETH Zürich Author-Name: Milan Šcasný Author-X-Name-First: Milan Author-X-Name-Last: Šcasný Author-WorkPlace-Name: Charles University Environment Center Author-Name: Andrea Bigano Author-X-Name-First: Andrea Author-X-Name-Last: Bigano Author-WorkPlace-Name: FEEM, CMCC and Far East Federal University Abstract: The implementation of decarbonization policies depends crucially on the public’s willingness to pay for them. We use stated preference methods to investigate the public’s preferences for such policies. We ask three research questions. First, does the willingness to pay (WTP) for each ton of CO2 emissions reductions depend on the policies and on individual characteristics of the respondents? Second, how extensive is the variation associated with these factors? Third, what factors affect support for or opposition to a carbon tax? Based on the responses to discrete choice experiments from a sample of Italians, we find that the WTP per ton of CO2 ranges between € 6 and 130, depending on whether the public program is based on taxes, incentives, information-based approaches or standards. Further allowing for individual characteristics of the respondents, such as gender or education, and knowledge of climate change, results in a 300% change in WTP, holding the policy instrument the same. We conclude that the variation associated with the policy instrument is approximately of the same order of magnitude as that associated with individual characteristics of the respondents. Keywords: Climate Change Mitigation, WTP per ton of CO2 Emissions Reduced, Choice Experiments Classification-JEL: Q41, Q48, Q54, Q51 Creation-Date: 201612