Template-Type: ReDIF-Paper 1.0 Number: 2021.01 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-001.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.01 Title: Partial Order Algorithms for the Assessment of Italian Cities Sustainability Author-Name: Alberto Arcagni Author-X-Name-First: Alberto Author-X-Name-Last: Arcagni Author-WorkPlace-Name: University of Rome La Sapienza Author-Name: Laura Cavalli Author-X-Name-First: Laura Author-X-Name-Last: Cavalli Author-WorkPlace-Name: ENI Enrico Mattei Foundation Author-Name: Marco Fattore Author-X-Name-First: Marco Author-X-Name-Last: Fattore Author-WorkPlace-Name: University of Milano-Bicocca Abstract: In this paper, we introduce some recent non-aggregative algorithms, for the construction of synthetic indicators on multi-indicators systems, and exemplify them on data pertaining to the sustainability of main Italian cities. The procedure employs tools from Partial Order Theory and computes the final synthetic scores, without the compensation effects of classical composite indicators, so better preserving the nuances of city sustainability. Since turning multi-indicator systems into single synthetic indicators is unavoidably forcing, the procedure provides also ways to assess the degrees of “rankability” of statistical units, so to help researchers evaluating the soundness of the synthesis process. The algorithms introduced in the paper can be easily implemented, using the package Parsec, freely available in the R ecosystem. Keywords: Partially Ordered Set, Syntethic Indcators, Multi-indicator Systems Classification-JEL: C14, C43, D81 Creation-Date: 2021-02 Template-Type: ReDIF-Paper 1.0 Number: 2021.02 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-002.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.02 Title: Random Encounters and Information Diffusion about Product Quality 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: University of Rome La Sapienza and CREI Author-Name: Skerdilajda Zanaj Author-X-Name-First: Skerdilajda Author-X-Name-Last: Zanaj Author-WorkPlace-Name: DEM, University of Luxembourg Abstract: This paper explores how social interactions among consumers shape markets. In a two-country model, consumers meet and exchange information about the quality of the goods. As information spreads, the demands evolve, affecting the prices and quantities manufactured by pro?t-maximizing fi?rms. We show that market prices with informational frictions reach the duopoly price with full information, at the limit. However, this convergence can take two different paths depending on the size asymmetry between countries. In particular, when countries are of very different sizes, the single market does not immediately turn into a duopoly and monopoly prices may persist for several periods. Hence, the price-reducing trade effects may take longer to appear. In view of an intense globalization process, understanding how social meetings affect market outcomes is critical for understanding the performance of international economic integration. Keywords: Consumer Encounters, Information Diffusion, Country Size, Product Quality Classification-JEL: D42, D43, D83, F15, L13 Creation-Date: 2021-03 Template-Type: ReDIF-Paper 1.0 Number: 2021.03 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-003.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.03 Title: The Welfare Cost of Ignoring the Beta Author-Name: Christian Gollier Author-X-Name-First: Christian Author-X-Name-Last: Gollier Author-WorkPlace-Name: Toulouse School of Economics, University of Toulouse-Capitole Abstract: Because of risk aversion, any sensible investment valuation system should value less projects that contribute more to the aggregate risk, i.e., that have a larger income elasticity of net benefits. In theory, this is done by adjusting discount rates to consumption betas. But in reality, for various reasons (Arrow-Lind and WACC fallacies, market failures), most public and private institutions and people use a discount rate that is rather insensitive to the risk profile of their investment projects. I show in this paper that the economic consequences of the implied misallocation of capital are dire. To do this, I calibrate a Lucas model in which the investment opportunity set contains a myriad of projects with different expected returns and risk profiles. The welfare loss of using a single discount rate is equivalent to a permanent reduction in consumption that lies somewhere between 15% and 45%, depending upon which familiar discounting system is used. Economists should devote more energy to support a reform of public discounting systems in favor of what has been advocated by the normative interpretation of modern asset pricing theories over the last four decades. Keywords: Discounting, Investment Theory, Asset Pricing, Carbon Pricing, Arrow-Lind Theorem, WACC Fallacy, Rare Disasters, Capital Budgeting Classification-JEL: G12, H43, Q54 Creation-Date: 2021-03 Template-Type: ReDIF-Paper 1.0 Number: 2021.04 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-004.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.04 Title: The Economic Impact of Weather and Climate Author-Name: Richard S.J. Tol Author-X-Name-First: Richard S.J. Author-X-Name-Last: Tol Author-WorkPlace-Name: University of Sussex, Vrije Universiteit, Tinbergen Institute, CESifo, Colorado School of Mines Abstract: I propose a new conceptual framework to disentangle the impacts of weather and climate on economic activity and growth: A stochastic frontier model with climate in the production frontier and weather shocks as a source of inefficiency. I test it on a sample of 160 countries over the period 1950-2014. Temperature and rainfall determine production possibilities in both rich and poor countries; positively in cold countries and negatively in hot ones. Weather anomalies reduce inefficiency in rich countries but increase inefficiency in poor and hot countries; and more so in countries with low weather variability. The climate effect is larger that the weather effect. Keywords: Climate Change, Weather Shocks, Economic Growth, Stochastic Frontier Analysis Classification-JEL: D24, O44, O47, Q54 Creation-Date: 2021-03 Template-Type: ReDIF-Paper 1.0 Number: 2021.05 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-005.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.05 Title: Environmental and Energy Implications of Meat Consumption Pathways in Sub-Saharan Africa Author-Name: Giacomo Falchetta Author-X-Name-First: Giacomo Author-X-Name-Last: Falchetta Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM), Free University of Bozen-Bolzano Author-Name: Nicolò Golinucci Author-X-Name-First: Nicolò Author-X-Name-Last: Golinucci Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM), Politecnico di Milano Author-Name: Michel Noussan Author-X-Name-First: Michel Author-X-Name-Last: Noussan Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) Author-Name: Matteo Vincenzo Rocco Author-X-Name-First: Matteo Vincenzo Author-X-Name-Last: Rocco Author-WorkPlace-Name: Politecnico di Milano Abstract: In sub-Saharan Africa (SSA) diets are largely based on cereal or root staple crops. Together with socio-cultural change, economic and demographic growth could boost the demand for meat, with significant environmental repercussions. We model meat consumption pathways to 2050 for SSA based on several scenarios calibrated on historical demand drivers. To assess the consequent environmental impact, we adopt an environmentally-extended input-output (EEIO) framework and apply it on the EXIOBASE 3.3 hybrid tables. We find that, depending on the interplay of resources efficiency and demand growth, by 2050 global greenhouse gases emissions could grow by 1.4 [0.9-1.9] Gt CO2e/yr (~175% of current regional agriculture-related emissions), cropping and grazing-related land may cover additional 15 [12.5-21] · 106 km2 (one quarter of today’s global agricultural land), blue water consumption could rise by 36 [29-47] Gm3 /yr (nearly doubling the current regional agricultural consumption), the eutrophication potential could grow by 7.6 [4.9-9.5] t PO4e/yr and additional 0.9 [0.5-1.4] EJ/yr of fossil fuels and 49 [32-73] TWh/yr of electricity may be consumed. These results suggest that – in the absence of drastic resource efficiency or technological improvements – meat demand in SSA is bound to become a major sustainability challenge. We show that a partial substitution of the protein intake with plant-based alternatives carries significant potential for mitigating these impacts. The policies affecting farming practices and dietary choices will thus have a significant impact on regional and global environmental flows. Keywords: Meat Consumption, Economic Development, Environmental Impact Assessment, Environmentally Extended Input-output Analysis, Sub-Saharan Africa Classification-JEL: O13, Q01, Q21, Q56 Creation-Date: 2021-03 Template-Type: ReDIF-Paper 1.0 Number: 2021.06 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-006.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.06 Title: On the Water-Energy-Food Nexus: Is there Multivariate Convergence? Author-Name: Carlo Andrea Bollino Author-X-Name-First: Carlo Andrea Author-X-Name-Last: Bollino Author-WorkPlace-Name: University of Perugia, King Abdullah Petroleum Studies and Research (KAPSARC) Author-Name: Marzio Galeotti Author-X-Name-First: Marzio Author-X-Name-Last: Galeotti Author-WorkPlace-Name: University of Milan, King Abdullah Petroleum Studies and Research (KAPSARC) Abstract: This paper provides new evidence on the convergence process of energy, water and food per capita consumption levels for 108 countries from 1971 to 2018, using a common data set, with VAR and panel data approach. We establish a new notion of multivariate sigma and beta-convergence. The results reveal that there is evidence of sigma- absolute beta- and conditional beta-convergence process for the countries. Moreover, the multivariate approach reveals that there are spillover effects with complex positive impact of each variable on the others in the analyzed countries. The speed of convergence is simulated to assess when the desired levels according to the prescription of the SDG of per water, energy and food capita consumption is reached by each country. Results have important policy implications for interventions on macro variables. Investment has a positive accelerating effect on water convergence. In addition, investment, openness to foreign trade and inflow of foreign direct investment have a positive accelerating effect on food convergence as well as on energy convergence. Keywords: Water, Energy, Food Nexus, Multivariate Convergence, Sustainable Development Goals, Worldwide Countries Data Set Classification-JEL: C33, Q43, O11, O13, R11 Creation-Date: 2021-03 Template-Type: ReDIF-Paper 1.0 Number: 2021.07 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-007.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.07 Title: Urban Sprawl and Air Quality in European Cities: an Empirical Assessment Author-Name: Federica Cappelli Author-X-Name-First: Federica Author-X-Name-Last: Cappelli Author-WorkPlace-Name: Roma Tre University Author-Name: Gianni Guastella Author-X-Name-First: Gianni Author-X-Name-Last: Guastella Author-WorkPlace-Name: Università Cattolica del Sacro Cuore, Fondazione Eni Enrico Mattei Author-Name: Stefano Pareglio Author-X-Name-First: Stefano Author-X-Name-Last: Pareglio Author-WorkPlace-Name: Università Cattolica del Sacro Cuore, Fondazione Eni Enrico Mattei Abstract: In this paper we estimate the relationship between urban sprawl and a measure of air quality, namely the number of days in which the PM10 concentration exceeds safeguard limits in European Union cities. Building on a multidimensional representation of sprawl, the paper employs several indicators to account for built-up area development, population density, and residential discontinuity. The paper employs generalised additive models to disentangle the non-linear effects in the variables and the interaction effects of the three sprawl dimensions. A significant and robust effect of urban morphology emerges after controlling for socio-economic, demographic, and climatic factors and the geographical location of the city. We find that urban sprawl impacts positively on pollutant concentration, but the effect is highly context-specific because of threshold effects and interactions. Keywords: Air Pollution, Urban Sprawl, European Cities, Additive Models Classification-JEL: Q53, R14, C21 Creation-Date: 2021-03 Template-Type: ReDIF-Paper 1.0 Number: 2021.08 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-008.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.08 Title: The Role of Education and Income Inequality on Environmental Quality. A Panel Data Analysis of the EKC Hypothesis on OECD Author-Name: Paolo Maranzano Author-X-Name-First: Paolo Author-X-Name-Last: Maranzano Author-WorkPlace-Name: Department of Statistics and Quantitative Methods (DISMEQ), University of Milano-Bicocca Author-Name: Joao Paulo Cerdeira Bento Author-X-Name-First: Joao Paulo Author-X-Name-Last: Cerdeira Bento Author-WorkPlace-Name: Department of Economics, Management, Industrial Engineering and Tourism (DEGEIT), University of Aveiro Author-Name: Matteo Manera Author-X-Name-First: Matteo Author-X-Name-Last: Manera Author-WorkPlace-Name: Department of Economics, Management and Statistics (DEMS), University of Milano-Bicocca Abstract: We study the impact of human capital and the level of education on the pollution-income relationship controlling for income inequality in 17 OECD countries. By applying an innovative approach to country grouping, based on the temporal evolution of income inequality and clustering techniques to feature the annual value of the Gini Index on disposable income from 1987 to 2015, we have estimated panel data models by distinguishing between low and high levels of income inequality country clusters. Robustness checks and endogeneity tests are further performed considering as the discriminant factor the income inequality a ecting the countries in the sample. The findings highlight the role of the educational level and years of schooling in validating the EKC hypothesis. We recommend that this variable should not be neglected in future EKC studies. Therefore, any EKC theory should also acknowledge a new EKC model specification that we named the Educational EKC. Keywords: Pollution-Income, Environmental Kunzets Curve, Education, Income-Inequality, Panel Data, Clustering Classification-JEL: Q56, I24, I25, C51, C52, O15, O44 Creation-Date: 2021-03 Template-Type: ReDIF-Paper 1.0 Number: 2021.09 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-009.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.09 Title: Myopic Oligopoly Pricing Author-Name: Iwan Bos Author-X-Name-First: Iwan Author-X-Name-Last: Bos Author-WorkPlace-Name: Department of Organisation, Strategy and Entrepreneurship, Maastricht University Author-Name: Marco A. Marini Author-X-Name-First: Marco A. Author-X-Name-Last: Marini Author-WorkPlace-Name: Department of Social and Economic Sciences, Sapienza University of Rome Author-Name: Riccardo D. Saulle Author-X-Name-First: Riccardo D. Author-X-Name-Last: Saulle Author-WorkPlace-Name: Department of Economics and Management, University of Padova Abstract: This paper examines capacity-constrained oligopoly pricing with sellers who seek myopic improvements. We employ the Myopic Stable Set stability concept and establish the existence of a unique pure-strategy price solution for any given level of capacity. This solution is shown to coincide with the set of pure-strategy Nash equilibria when capacities are large or small. For an intermediate range of capacities, it predicts a price interval that includes the mixed-strategy support. This stability concept thus encompasses all Nash equilibria and offers a pure-strategy solution when there is none in Nash terms. In particular, it provides a behavioral rationale for different types of pricing dynamics, including real-world economic phenomena such as Edgeworth-like price cycles, price dispersion and supply shortages. Keywords: Behavioral IO, Bounded Rationality, Capacity Constraints, Oligopoly Pricing, Myopic Stable Set Classification-JEL: C72, D43, L13 Creation-Date: 2021-04 Template-Type: ReDIF-Paper 1.0 Number: 2021.10 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-010.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.10 Title: Information Diffusion and Spillover Dynamics in Renewable Energy Markets Author-Name: Samir Cedic Author-X-Name-First: Samir Author-X-Name-Last: Cedic Author-WorkPlace-Name: Linköping University Author-Name: Alwan Mahmoud Author-X-Name-First: Alwan Author-X-Name-Last: Mahmoud Author-WorkPlace-Name: Linköping University Author-Name: Matteo Manera Author-X-Name-First: Matteo Author-X-Name-Last: Manera Author-WorkPlace-Name: University of Milano-Bicocca, Fondazione Eni Enrico Mattei Author-Name: Gazi Salah Uddin Author-X-Name-First: Gazi Salah Author-X-Name-Last: Uddin Author-WorkPlace-Name: Linköping University Abstract: The aim of this paper is to analyze the connectedness between renewable energy (RE) sectors, the oil & gas sector and other assets using time-scale spillover approach. We find that the RE bioenergy firms are the most connected to oil & gas firms and oil prices. The bond market transmits spillover to the RE sectors, while it receives spillover from the oil & gas sector. Moreover, short-run connectedness drives the dynamic total connectedness. Since changes in bond rates mainly spillover to RE firms and not to oil & gas firms, policy makers should also be aware that changes in interest rates may impact the societal transition to a RE based energy system. Since a shock that increases connectedness in the short run will deter investors from investing in RE assets, it is important for climate policy makers to develop policies that reduce the effect of increased connectedness on RE investments. Keywords: Renewable Energy, Connectedness, Frequencies, Dynamics, Spillovers Classification-JEL: C1, G15, Q2, Q3, Q43 Creation-Date: 2021-04 Template-Type: ReDIF-Paper 1.0 Number: 2021.11 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-011.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.11 Title: Uncertainty and Stock Returns in Energy Markets: A Quantile Regression Approach Author-Name: Samir Cedic Author-X-Name-First: Samir Author-X-Name-Last: Cedic Author-WorkPlace-Name: Linköping University Author-Name: Alwan Mahmoud Author-X-Name-First: Alwan Author-X-Name-Last: Mahmoud Author-WorkPlace-Name: Linköping University Author-Name: Matteo Manera Author-X-Name-First: Matteo Author-X-Name-Last: Manera Author-WorkPlace-Name: University of Milano-Bicocca, Fondazione Eni Enrico Mattei Author-Name: Gazi Salah Uddin Author-X-Name-First: Gazi Salah Author-X-Name-Last: Uddin Author-WorkPlace-Name: Linköping University Abstract: The aim of this paper is to analyze the relationship between different types of uncertainty and stock returns of the renewable energy and the oil & gas sectors. We use the quantile regression approach developed by Koenker and d’Orey (1987; 1994) to assess which uncertainties are the potential drivers of stock returns under different market conditions. We find that the bioenergy and the oil & gas sectors are most sensitive to uncertainties. Both sectors are affected by financial, euro currency, geopolitical and economic policy uncertainties. Our results have several policy implications. Climate policy makers can prioritize policies that support bioenergy in order to reduce the potentially negative effects of uncertainties on bioenergy investment. Investors aiming to diversify their portfolio should be aware that many uncertainties are common drivers of bioenergy and oil & gas returns, the connectedness between assets of these energy types could therefore increase when uncertainty increases. Keywords: Uncertainty, Macroeconomic Conditions, Renewable Energy, Stock Returns, Quantile Regression Classification-JEL: C1, G15, Q2, Q3, Q43 Creation-Date: 2021-04 Template-Type: ReDIF-Paper 1.0 Number: 2021.12 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-012.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.12 Title: The potential role of hydrogen towards a low-carbon residential heating in Italy Author-Name: Sergio Tavella Author-X-Name-First: Sergio Author-X-Name-Last: Tavella Author-WorkPlace-Name: Robert Bosch SPA Società Unipersonale Author-Name: Michel Noussan Author-X-Name-First: Michel Author-X-Name-Last: Noussan Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: Buildings’ heating represents an important share of the total energy consumption in Italy, and to reach the challenging decarbonization targets set by the EU by 2050, a combination of measures and technologies will be required. This working paper presents an analysis of different scenarios comparing the penetration of buildings’ heating technologies for the residential sector in Italy. The objective of the research is to evaluate the potential contribution of different technologies, with a particular focus of the role that hydrogen may have to play, compared to other solutions, including heat pumps and renewable natural gas. The analysis compares the potential role of these technologies in reaching a decarbonized residential heating by 2050, by also discussing the main barriers and opportunities that lie ahead. The scenarios are defined starting from historical data of heating systems stock and sales, integrated with the know-how of experts of the sector to compare different pathways based on electrification or renewable gases. The results show that a combination of technologies will be in any case required in the heating sector, but also that other external factors will be of paramount importance, including the electricity decarbonization and energy efficiency measures on the building stock. Keywords: Heating, Residential Buildings, Hydrogen, Heat Pumps, Scenarios Classification-JEL: Q4, Q42, Q55 Creation-Date: 2021-05 Template-Type: ReDIF-Paper 1.0 Number: 2021.13 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-013.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.13 Title: Oil Price Shocks and Economic Growth in Oil-Exporting Countries Author-Name: Maryam Ahmadi Author-X-Name-First: Maryam Author-X-Name-Last: Ahmadi Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Matteo Manera Author-X-Name-First: Matteo Author-X-Name-Last: Manera Author-WorkPlace-Name: University of Milan-Bicocca, Fondazione Eni Enrico Mattei Abstract: The aim of this paper is to investigate how major net oil exporter economies react to oil price shocks. We contribute to the literature by considering, at the same time, the possible nonlinearity and asymmetry of this relationship with respect to sign, size and causes of the oil price shocks, as well as the state of the economy in which the shocks occur. We apply a Threshold Structural VAR approach, characterized by a separation of the observations into different regimes based on a threshold variable, to model time series non-linearities. We use the economic activity as the threshold variable, as it divides economic development in two regimes under which we expect the effects of oil price shocks to differ. First, We find that the effects of oil price shocks on oil exporting economies greatly depend on the underlying cause of the shocks as well as the state of the economy. Second, we find little evidence of asymmetric response of output to the sign of oil price shocks. Our main findings warn decision makers in the area of macroeconomic planning that, when making decisions based on the oil price, the underlying causes of its variations as well as the state of the economy in which the oil price shocks occur have to be considered. Keywords: Oil Market, Output Growth, Macroeconomic Policy, Threshold SVAR Classification-JEL: C3, G11, Q41, Q43 Creation-Date: 2021-05 Template-Type: ReDIF-Paper 1.0 Number: 2021.14 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-014.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.14 Title: Who emits CO2? Landscape of ecological inequalities in France from a critical perspective Author-Name: Antonin Pottier Author-X-Name-First: Antonin Author-X-Name-Last: Pottier Author-WorkPlace-Name: EHESS - CIRED Author-Name: Emmanuel Combet Author-X-Name-First: Emmanuel Author-X-Name-Last: Combet Author-WorkPlace-Name: ADEME Author-Name: Jean-Michel Cayla Author-X-Name-First: Jean-Michel Author-X-Name-Last: Cayla Author-WorkPlace-Name: EDF Author-Name: Simona de Lauretis Author-X-Name-First: Simona Author-X-Name-Last: de Lauretis Author-WorkPlace-Name: EDF – CIRED Author-Name: Franck Nadaud Author-X-Name-First: Franck Author-X-Name-Last: Nadaud Author-WorkPlace-Name: CNRS - CIRED Abstract: This article provides a panorama of greenhouse gas (GHG) emission inequalities between French households. It presents in a detailed and critical manner the methodological conventions that are used to compute “household emissions”, including the related assumptions. The most common responsibility principle, the “consumer responsibility”, assigns to households the emissions of the products that they consume, resulting in the carbon footprint. It focuses attention on the contributions of individuals, on their choices, and it may obscure the role of non-individual actors and also the collective component of GHG emissions, and it neglects the dimensions of responsibility that are not related to consumption choices. We estimate the distribution of household carbon footprints based on data from the 2011 French Household Budget Survey. Household emissions tend to increase with income, but they also show a strong variability linked to geographical and technical factors that force the consumer to use fossil fuels. Based on sectoral surveys (ENTD 2008; PHEBUS 2013), we also reconstruct household CO2 emissions linked to housing and transport energy. For transport, emissions are proportional to the distance travelled due to the predominant use of private cars. Urban settlement patterns constrain both the length of daily commuting and access to less carbon-intensive modes of transport. For housing, while the size of the dwelling increases with income and distance from urban centres, the first factor to account for variability of emissions is the heating system: this has little to do with income but more to do with settlement patterns, which constrain access to the various energy carriers. Finally, we discuss the difficulties, both technical and conceptual, that are involved in estimating emissions from the super-rich (the top 1 percent). Keywords: Greenhouse Gas Emissions, Carbon Footprint, Emissions Inequality, Household Expenditure Distribution, Responsibility Classification-JEL: D12, D30, Q56, R20 Creation-Date: 2021-05 Template-Type: ReDIF-Paper 1.0 Number: 2021.15 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-015.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.15 Title: An Implementation Approach to Rotation Programs Author-Name: Ville Korpela Author-X-Name-First: Ville Author-X-Name-Last: Korpela Author-WorkPlace-Name: University of Turku Author-Name: Michele Lombardi Author-X-Name-First: Michele Author-X-Name-Last: Lombardi Author-WorkPlace-Name: University of Glasgow Author-Name: Riccardo D. Saulle Author-X-Name-First: Riccardo D. Author-X-Name-Last: Saulle Author-WorkPlace-Name: University of Padova Abstract: Rotation programs are widely used in societies. Some examples are job rotations, rotation schemes in the management of common-pool resources, and rotation procedures in fair division problems. We study rotation programs via the implementation of Pareto efficient social choice rules under complete information. The notion of the rotation program predicts the outcomes. A rotation program is a myopic stable set whose states are arranged circularly, and agents can effectively move only between two consecutive states. We provide characterizing conditions for the implementation in rotation programs and show that, for multi-valued rules, our notion of rotation monotonicity is necessary and sufficient for implementation. Finally, we identify two classes of assignment problems that are implementable in rotation programs. Keywords: Rotation Programs, Job Rotation, Assignment Problems, Implementation, Right Structures, Stability Classification-JEL: C71, D71, D82 Creation-Date: 2021-05 Template-Type: ReDIF-Paper 1.0 Number: 2021.16 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-016.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.16 Title: An Adaptation-Mitigation Game: Does Adaptation Promote Participation in International Environmental Agreements? Author-Name: Miguel Borrero Author-X-Name-First: Miguel Author-X-Name-Last: Borrero Author-WorkPlace-Name: University of Valencia Author-Name: Santiago J. Rubio Author-X-Name-First: Santiago J. Author-X-Name-Last: Rubio Author-WorkPlace-Name: University of Valencia Abstract: This paper studies how the investment in adaptation can influence the participation in an international environmental agreement (IEA) when countries decide in adaptation before they choose their levels of emissions. Two types of agreements are studied, a complete agreement for which countries coordinate their decisions on adaptation and emissions, and an adaptation agreement for which there is only coordination when countries decide their levels of adaptation. In both cases, we assume that the degree of effectiveness of adaptation is bounded from above, in order words, adaptation can alleviate the environmental problem, but it cannot solve it by itself leading the vulnerability of the country to almost zero. Our results show that the grand coalition could be stable for both types of agreement, but for extremely high degrees of effectiveness of adaptation. If this condition is not satisfied, the model predicts low levels of membership. The standard result of three countries for the complete agreement. For the adaptation agreement participation can be higher than three, but not higher than six countries. In any case, we can conclude that under reasonable values for the degree of effectiveness of adaptation, in our model adaptation does not promote participation in an IEA. Keywords: International Environmental Agreements, Adaptation-Mitigation Game, Vulnerability, Effectiveness of Adaptation, Complete Agreement, Adaptation Agreement Classification-JEL: D62, F53, H41, Q54 Creation-Date: 2021-05 Template-Type: ReDIF-Paper 1.0 Number: 2021.17 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-017.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.17 Title: The Macroeconomic Effects of a Carbon Tax to Meet the U.S. Paris Agreement Target: The Role of Firm Creation and Technology Adoption Author-Name: Alan Finkelstein Shapiro Author-X-Name-First: Alan Author-X-Name-Last: Finkelstein Shapiro Author-WorkPlace-Name: Tufts University Author-Name: Gilbert E. Metcalf Author-X-Name-First: Gilbert E. Author-X-Name-Last: Metcalf Author-WorkPlace-Name: Tufts University Abstract: We analyze the quantitative labor market and aggregate effects of a carbon tax in a framework with pollution externalities and equilibrium unemployment. Our model incorporates endogenous labor force participation and two margins of adjustment influenced by carbon taxes: firm creation and green production-technology adoption. A carbon-tax policy that reduces carbon emissions by 35 percent - roughly the emissions reductions that will be required under the Biden Administration's new commitment under the Paris Agreement - and transfers the tax revenue to households generates mild positive long-run effects on consumption and output; a marginal increase in the unemployment and labor force participation rates; and an expansion in the number and fraction of firms that use green technologies. In the short term, the adjustment to higher carbon taxes is accompanied by gradual gains in output and consumption and a negligible expansion in unemployment. Critically, abstracting from endogenous firm entry and green-technology adoption implies that the same policy has substantial adverse short- and long-term effects on labor income, consumption, and output. Our findings highlight the importance of these margins for a comprehensive assessment of the labor market and aggregate effects of carbon taxes. Keywords: Environmental and Fiscal Policy, Carbon Tax, Endogenous Firm Entry, Green Technology Adoption, Search Frictions, Unemployment, Labor Force Participation Classification-JEL: E20, E24, E62, H23, O33, Q52, Q55 Creation-Date: 2021-05 Template-Type: ReDIF-Paper 1.0 Number: 2021.18 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-018.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.18 Title: Impact of climate smart agriculture on food security: an agent-based analysis Author-Name: Alan Davide Bazzana Author-X-Name-First: Davide Author-X-Name-Last: Bazzana Author-WorkPlace-Name: University of Brescia, Fondazione Eni Enrico Mattei Author-Name: Jeremy Foltz Author-X-Name-First: Jeremy Author-X-Name-Last: Foltz Author-WorkPlace-Name: University of Wisconsin-Madison Author-Name: Ying Zhang Author-X-Name-First: Ying Author-X-Name-Last: Zhang Author-WorkPlace-Name: Johns Hopkins University Abstract: The study proposes an agent-based model to investigate how adoption of climate smart agriculture (CSA) affects food security. The analysis investigates the role of social and ecological pressures (i.e. community network, climate change and environmental externalities) on the adoption of physical water and soil practices as well as crop rotation technique. The findings reveal that CSA may be an effective strategy to improve the rural populations' well-being for farm households with access to capital, strong social networks and access to integrated food markets. The climate scenario simulations indicate that farmers adopting CSA fare better than non-adopters, although CSA adoption does not fully counterbalance the severe climate pressures. In addition, farmers with poor connections to food markets benefit less from CSA due to stronger price oscillations. These results call for an active role for policy makers in encouraging adaptation through CSA adoption by increasing access to capital, improving food market integration and building social networks. Keywords: Climate Smart Agriculture, Food Security, Agent-Based Modelling, Externality, Sustainable Development Classification-JEL: C63, O13, Q1, Q15, Q55 Creation-Date: 2021-05 Template-Type: ReDIF-Paper 1.0 Number: 2021.19 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-019.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.19 Title: Permanent-Transitory decomposition of cointegrated time series via Dynamic Factor Models, with an application to commodity prices Author-Name: Chiara Casoli Author-X-Name-First: Chiara Author-X-Name-Last: Casoli Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Riccardo (Jack) Lucchetti Author-X-Name-First: Riccardo (Jack) Author-X-Name-Last: Lucchetti Author-WorkPlace-Name: Università Politecnica delle Marche Abstract: In this article, we propose a cointegration-based Permanent-Transitory decomposition for non-stationary Dynamic Factor Models. Our methodology exploits the cointegration relations among the observable variables and assumes they are driven by a common and an idiosyncratic component. The common component is further split into a long-term non-stationary part and a short-term stationary one. A Monte Carlo experiment shows that taking into account the cointegration structure in the DFM leads to a much better reconstruction of the space spanned by the factors, with respect to the most standard technique of applying a factor model in differenced systems. Finally, an application of our procedure to a set of different commodity prices allows to analyse the comovement among di erent markets. We find that commodity prices move together due to long-term common forces and that the trend for most primary good prices is declining, whereas metals and energy ones exhibit an upward or at least stable pattern since the 2000s. Keywords: Cointegration, Dynamic Factor Models, P-T decomposition, Commodity prices co-movement Classification-JEL: C32, C38, Q02 Creation-Date: 2021-07 Template-Type: ReDIF-Paper 1.0 Number: 2021.20 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-020.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.20 Title: Empowerment of social norms on water consumption Author-Name: Pauline Pedehour Author-X-Name-First: Pauline Author-X-Name-Last: Pedehour Author-WorkPlace-Name: Université de Nantes Author-Name: Lionel Richefort Author-X-Name-First: Lionel Author-X-Name-Last: Richefort Author-WorkPlace-Name: Université de Nantes Abstract: This study develops a model of water extraction with endogenous social norms. Many users are connected by a unique shared resource that can become scarce in case of over-exploitation. Preferences of individuals are guided by their extraction values and their taste for conformity to social norms which provide incentives to follow others. As the main result of this study, the uniqueness of the Nash equilibrium is established under a sufficient condition. Afterward, some comparative statics analysis shows the effects of change in individual heterogeneous parameters, conformism, and density of the network on the global quantity extracted. Welfare and social optimum properties are established to avoid the tragedy of the commons and sub-optimal consumptions of water. Lastly, this theoretical framework is completed by extensions to highlight levers of water preservation, including the calibration of social norm incentives. Keywords: Comparative statics, Conformism, Nash equilibrium, Network, Social norms, Water extraction Classification-JEL: D04, D80, Q01, Q25 Creation-Date: 2021-07 Template-Type: ReDIF-Paper 1.0 Number: 2021.21 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-021.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.21 Title: The Analysis and the Measurement of Poverty: An Interval-Based Composite Indicator Author-Name: Carlo Drago Author-X-Name-First: Carlo Author-X-Name-Last: Drago Author-WorkPlace-Name: University “Niccolò Cusano”, NCI University in London Abstract: The analysis and measurement of poverty is a crucial and unsolved issue in the field of social science. This work aims to measure poverty as a multidimensional notion using a new composite indicator. However, subjective choices as different weighting schemes on the indicator's construction could affect their interpretation and policy. It is necessary to consider the possible weighting configurations randomly to overcome this problem, and it is proposed in this work as interval-based composite indicators based on the results. This work aims to obtain robust and reliable measures based on a relevant conceptual model of poverty we have identified, considering various factors as weightings. Methodologically speaking, it is proposed an original procedure for measuring poverty in which it is computed a different composite indicator for each simulated weighting scheme of the identified factors. The weighting scheme in the Monte-Carlo simulation randomly creates an interval-based composite indicator based on the results. The different intervals are compared using different criteria (upper bound, center, and lower bound), and various rankings help analyze extreme scenarios and policy hypotheses. Critical situations are identified in Sicilia, Calabria, Campania and Puglia. The results demonstrate a relevant and consistent indicator measurement and the shadow sector's relevant impact on the final measures. Keywords: Poverty, Composite Indicators, Interval Data, Interval-based Composite Indicators, Symbolic Data Classification-JEL: C02, C15, C43, I3, I32 Creation-Date: 2021-08 Template-Type: ReDIF-Paper 1.0 Number: 2021.22 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-022.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.22 Title: The day after tomorrow: mitigation and adaptation policies to deal with uncertainty Author-Name: Davide Bazzana Author-X-Name-First: Davide Author-X-Name-Last: Bazzana Author-WorkPlace-Name: Università degli Studi di Brescia, Fondazione Eni Enrico Mattei Author-Name: Francesco Menoncin Author-X-Name-First: Francesco Author-X-Name-Last: Menoncin Author-WorkPlace-Name: Università degli Studi di Brescia, Fondazione Eni Enrico Mattei Author-Name: Sergio Vergalli Author-X-Name-First: Sergio Author-X-Name-Last: Vergalli Author-WorkPlace-Name: Università degli Studi di Brescia, Fondazione Eni Enrico Mattei Abstract: The catastrophic events are characterized by “low frequency and high severity”. Nevertheless, during the last decades, both the frequency and the magnitude of these events have been significantly rising worldwide. In 2021, the European Commission adopted a new Strategy on Adaptation to Climate Change aiming to reinforce the adaptive capacity and minimize vulnerability to the effects of climate change and natural catastrophes. In a continuous time framework over an infinite horizon, we solve in closed form the problem of a representative consumer who holds a production technology (firm) and who optimises with respect to both the intertemporal consumption and the mix between an insurance (adaptation) against the magnitude of the catastrophic losses, and an effort strategy (mitigation) aimed at reducing the frequency of such losses. The catastrophic events are modelled as a Poisson jump process. We then propose some numerical simulations calibrated to the country-specific data of the five main European economies (Germany, France, Italy, Spain, and Netherlands). Our model demonstrates that an optimal mix of mitigation/effort strategies allows to reduce the volatility of the economic growth rate, even if its level may be lowered due to the effort costs. Simulations allow us to also conclude that different countries must optimally react differently to catastrophes, which means that a one-for-all policy does not seem to be optimal. Keywords: Uncertainty Modelling, Catastrophic Events, Mitigation, Adaptation, Optimal management Classification-JEL: C6; C61; Q5; Q54 Creation-Date: 2021-08 Template-Type: ReDIF-Paper 1.0 Number: 2021.23 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-023.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.23 Title: Is high-speed rail green? Evidence from a quasi-natural experiment in China Author-Name: Liang Nie Author-X-Name-First: Liang Author-X-Name-Last: Nie Author-WorkPlace-Name: Ma Yinchu School of Economics, China Academy of Energy Author-Name: ZhongXiang Zhang Author-X-Name-First: ZhongXiang Author-X-Name-Last: Zhang Author-WorkPlace-Name: Ma Yinchu School of Economics, China Academy of Energy Abstract: Existing studies have investigated the environmental dividends of substituting high-speed rail for other energy-intensive vehicles from an engineering standpoint, but they have yet to explore the economic effects of high-speed rail and the associated carbon emission reduction benefits. To fill the research gap, we use panel data from 285 Chinese cities between 2004 and 2014, and employ a difference-in-difference model to empirically examine the impact of high-speed rail opening on CO2 emissions. Our results show that the opening of high-speed rail reduces local carbon emissions significantly. This finding is robust and is unaffected by outliers, control group selection, time trends, geography and expectation factors, or endogeneity. The mechanism test reveals that the structure, innovation, and FDI effects are three intermediate influence channels. Further research finds that the emission reduction benefit rises as the intensity of high-speed rail opening climbs the ladder, and high-speed rail service has a spillover effect within an 80-kilometer radius. Moreover, the carbon benefit of the Beijing-Shanghai high-speed rail line far surpasses its carbon footprint, indicating that the line is green. Based on these findings, we recommend that China should support the expansion of high-speed rail in order to reduce carbon emissions in a scientific and responsible manner. Keywords: High-speed rail, CO2 emissions, Impact mechanism, Difference-in-difference, China Classification-JEL: Q54; Q56; O13; R11; P28 Creation-Date: 2021-10 Template-Type: ReDIF-Paper 1.0 Number: 2021.24 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-024.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.24 Title: Towards the decarbonization of the power sector – a comparison of China, the EU and the US based on historical data Author-Name: Michel Noussan Author-X-Name-First: Michel Author-X-Name-Last: Noussan Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, SciencesPo - Paris School of International Affairs Author-Name: Manfred Hafner Author-X-Name-First: Manfred Author-X-Name-Last: Hafner Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, SciencesPo - Paris School of International Affairs, Johns Hopkins University - School of Advanced International Studies Author-Name: Loyle Campbell Author-X-Name-First: Loyle Author-X-Name-Last: Campbell Author-WorkPlace-Name: SciencesPo - Paris School of International Affairs Author-Name: Xinqing Lu Author-X-Name-First: Xinqing Author-X-Name-Last: Lu Author-WorkPlace-Name: SciencesPo - Paris School of International Affairs Author-Name: Pier Paolo Raimondi Author-X-Name-First: Pier Paolo Author-X-Name-Last: Raimondi Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Istituto Affari Internazionali Author-Name: Erpu Zhu Author-X-Name-First: Erpu Author-X-Name-Last: Zhu Author-WorkPlace-Name: FSciencesPo - Paris School of International Affairs Abstract: This work compares the different decarbonization strategies of the power sector in China, the European Union and the United States, by considering the historical evolution of electricity generation and the current situation. Such a comparison is gaining a broader significance when evaluated with an additional level of geographic detail, by comparing European countries, Chinese provinces, and US states. The differences among these geographies highlight the challenges and opportunities of pushing towards low-carbon technologies, by making clear that regional decarbonization will need to address very different local contexts. Moreover, multiple policy and planning levels are involved, and those mechanisms are different in the three blocs being compared. Our analysis shows that these three blocs, although moving towards similar decarbonization targets, are currently at different levels of carbon intensity. The zero-carbon pathway will need to be declined in different local goals, based on the availability of low-carbon resources and the electricity demand. Given the geographical differences between demand and supply, and the likely increase of electricity demand, an improvement of power transmission networks will be essential. This work is part of a series of papers on the geopolitics of the energy transition in China, the European Union and the United States of America. Keywords: Electricity, Power, Decarbonization, Energy Transition, China, EU, US Classification-JEL: N70; O13; P48; Q42 Creation-Date: 2021-10 Template-Type: ReDIF-Paper 1.0 Number: 2021.25 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-025.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.25 Title: Energy exchange among heterogeneous prosumers under price uncertainty Author-Name: Marta Castellini Author-X-Name-First: Marta Author-X-Name-Last: Castellini Author-WorkPlace-Name: Università degli Studi di Brescia, Fondazione Eni Enrico Mattei Author-Name: Luca Di Corato Author-X-Name-First: Luca Author-X-Name-Last: Di Corato Author-WorkPlace-Name: Ca’ Foscari University of Venice Author-Name: Michele Moretto Author-X-Name-First: Michele Author-X-Name-Last: Moretto Author-WorkPlace-Name: Università degli Studi di Padova Author-Name: Sergio Vergalli Author-X-Name-First: Sergio Author-X-Name-Last: Vergalli Author-WorkPlace-Name: Università degli Studi di Brescia, Fondazione Eni Enrico Mattei Abstract: In this paper, we provide a real options model framing prosumers’ investment in photovoltaic plants. This is presented in a Smart Grid context where the exchange of energy among prosumers is possible. We determine the optimal size of the photovoltaic installations based on the influence the self-consumption profiles on the exchange of energy among prosumers. We calibrate the model using figures relative to the Northern Italy energy market and investigate the investment decision allowing for different prosumer profiles and consider several combinations of their individual energy demand and supply. Our findings show that the shape of individual energy demand and supply curves is crucial to the exchange of energy among prosumers, and that there could be circumstances under which no exchange occurs. Keywords: Smart Grids, Renewable Energy Sources, Real Options, Prosumer, Peer to Peer Energy Trading Classification-JEL: Q42; C61; D81 Creation-Date: 2021-10 Template-Type: ReDIF-Paper 1.0 Number: 2021.26 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-026.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.26 Title: Learning about Unprecedented Events: Agent-Based Modelling and the Stock Market Impact of COVID-19 Author-Name: Davide Bazzana Author-X-Name-First: Davide Author-X-Name-Last: Bazzana Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Michele Colturato Author-X-Name-First: Michele Author-X-Name-Last: Colturato Author-WorkPlace-Name: University of Pavia Author-Name: Roberto Savona Author-X-Name-First: Roberto Author-X-Name-Last: Savona Author-WorkPlace-Name: University of Brescia Abstract: We model the learning process of market traders during the unprecedented COVID-19 event. We introduce a behavioral heterogeneous agents’ model with bounded rationality by including a correction mechanism through representativeness (Gennaioli et al., 2015). To inspect the market crash induced by the pandemic, we calibrate the STOXX Europe 600 Index, when stock markets suffered from the greatest single-day percentage drop ever. Once the extreme event materializes, agents tend to be more sensitive to all positive and negative news, subsequently moving on to close-to-rational. We find that the deflation mechanism of less representative news seems to disappear after the extreme event. Keywords: Agent-Based Model, Representativeness, Unprecedented Events Classification-JEL: G11; G12; G14; C63 Creation-Date: 2021-10 Template-Type: ReDIF-Paper 1.0 Number: 2021.27 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-027.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.27 Title: The start-up decision under default risk Author-Name: Nicola Comincioli Author-X-Name-First: Nicola Author-X-Name-Last: Comincioli Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Università degli Studi di Brescia Author-Name: Paolo M. Panteghini Author-X-Name-First: Paolo M. Author-X-Name-Last: Panteghini Author-WorkPlace-Name: University of Brescia, CESifo Author-Name: Sergio Vergalli Author-X-Name-First: Sergio Author-X-Name-Last: Vergalli Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Università degli Studi di Brescia Abstract: This study introduces a real option model to investigate how fiscal policy affects a representative firm's investment decision and to measure its welfare effects. On the one hand, the effects of financial instability on the optimal investment timing and on the probability of default are studied. On the other hand, it is shown how the net present value of an investment project, the tax revenue generated and the welfare are influenced by financial instability. Then, a comparison of welfare effects of tax policy on start-ups, mature and obliged firms is provided. This comparison provides policy-makers a tool to shape their tax systems according to the characteristics of their firms. All presented analyses are supported by numerical simulations, based on realistic data. Keywords: Real Options, Business Taxation, Default Risk Classification-JEL: H25; G33; G38 Creation-Date: 2021-10 Template-Type: ReDIF-Paper 1.0 Number: 2021.28 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-028.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.28 Title: Better to grow or better to improve? Measuring environmental efficiency in OECD countries with a Stochastic Environmental Kuznets Frontier Author-Name: Oleg Badunenko Author-X-Name-First: Oleg Author-X-Name-Last: Badunenko Author-WorkPlace-Name: Brunel University Author-Name: Marzio Galeotti Author-X-Name-First: Marzio Author-X-Name-Last: Galeotti Author-WorkPlace-Name: University of Milan Author-Name: Lester C. Hunt Author-X-Name-First: Lester C. Author-X-Name-Last: Hunt Author-WorkPlace-Name: University of Portsmouth Abstract: The standard approach to the Environmental Kuznets Curve (EKC) holds that as a country develops and GDP per capita grows environmental degradation initially increases but eventually it reaches a turning point where environmental degradation begins to decline. Environmental degradation takes many forms, one of them being emissions of harmful gases. According to the EKC concept, a country can reduce emissions by ‘growing’. The standard approach implicitly assumes that a country emits as little as possible for its economic development, whereas in reality, a country might emit above the best attainable level of emissions. Therefore, emissions could be reduced before and after the turning point by becoming more environmentally efficient – i.e., ‘improving’ the emissions level. This article proposes a Stochastic Environmental Kuznets Frontier (SEKF) which is estimated for CO2 emissions for OECD countries and used to benchmark each country before and after the turning point differently, thus, indicating how a country could ‘grow’ and/or ‘improve’ to reduce its CO2 emissions. Additionally, we analyse the role of the stringency of environmental policies in reducing a country’s carbon inefficiency measured by the distance from the benchmark EKC and find widespread carbon inefficiencies that could be reduced by more stringent market-based environmental policies. Keywords: Environment and growth, Environmental Kuznets Curve, CO2 emissions, Panel data, OECD countries, Stochastic frontier approach, Stochastic Environmental Kuznets Frontier, Environmental Policy Stringency Classification-JEL: O44; Q56; Q54; C13; C33 Creation-Date: 2021-11 Template-Type: ReDIF-Paper 1.0 Number: 2021.29 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-029.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.29 Title: Carbon Boards and Transition Risk: Explicit and Implicit exposure implications for Total Stock Returns and Dividend Payouts Author-Name: Matteo Mazzarano Author-X-Name-First: Matteo Author-X-Name-Last: Mazzarano Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Università Cattolica del Sacro Cuore Author-Name: Gianni Guastella Author-X-Name-First: Gianni Author-X-Name-Last: Guastella Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Università Cattolica del Sacro Cuore Author-Name: Stefano Pareglio Author-X-Name-First: Stefano Author-X-Name-Last: Pareglio Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Università Cattolica del Sacro Cuore Author-Name: Anastasios Xepapadeas Author-X-Name-First: Anastasios Author-X-Name-Last: Xepapadeas Author-WorkPlace-Name: thens University of Economics and Business, University of Bologna Abstract: The Security and Exchange Commission (SEC) has considered climate change as a risk issue since 2010. Several emission disclosure initiatives exist aimed at informing investors about the financial risks associated with a zero or low carbon transition. Stricter regulations, particularly in a few sectors, could affect operations costs, ultimately impacting companies financial performances, especially of listed companies. There are two ways these companies can disclose their transition risk exposure and are not alternatives. One is the explicit declaration of exposure to transition risk in the legally binding documents that listed companies must provide authorities. The other is the disclosure of GHG equivalent emissions, which is implicitly associated with transition risk exposure. This paper empirically analyses to what extent US companies stock returns incorporate information about transition risk by using explicit and implicit risk measures and comparing them. In addition, multiple total stock return measures distinguishing dividend payouts from simple stock returns. Results suggest that both explicit and implicit risks are positively related to dividend payouts and not to stock returns, while the overall effect on total stock returns is negative. Evidence supports the view that market operators price negatively the transition risk exposure and, probably as a consequence, boards in carbon intensive companies use dividend policies to attract investment in risky companies. Keywords: Climate risk, Transition Risk, SEC-10K, Mandatory Disclosure, Text analysis, CAPM Classification-JEL: G35; G32; G38; Q54 Creation-Date: 2021-11 Template-Type: ReDIF-Paper 1.0 Number: 2021.30 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-030.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.30 Title: Demography, growth and robots in advanced and emerging economies Author-Name: Matteo Lanzafame Author-X-Name-First: Matteo Author-X-Name-Last: Lanzafame Author-WorkPlace-Name: Asian Development Bank Abstract: This paper provides estimates of the impact of demographic change on labor productivity growth, relying on annual data over 1961-2018 for a panel f 90 advanced and emerging economies. We find that increases in both the young and old population shares have significantly negative effects on labor productivity growth, working via various channels – including physical and human capital accumulation. Splitting the analysis for advanced and emerging economies shows that population ageing has a greater effect on emerging economies than on advanced economies. Extending the benchmark model to include a proxy for the robotization of production, we find evidence indicating that automation reduces the negative effects unfavorable demographic change – in particular, population aging-on labor productivity. Keywords: Demographic Change, Labor Productivity, Robots Classification-JEL: C33, J11, O40 Creation-Date: 2021-12 Template-Type: ReDIF-Paper 1.0 Number: 2021.31 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-031.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.31 Title: Can the diligent governance increase subjective wellbeing? New evidence from environmental regulations in China Author-Name: Shu Guo Author-X-Name-First: Shu Author-X-Name-Last: Guo Author-WorkPlace-Name: Tianjin University Author-Name: ZhongXiang Zhang Author-X-Name-First: ZhongXiang Author-X-Name-Last: Zhang Author-WorkPlace-Name: China Academy of Energy Abstract: With the pearance of “wellbeing stagnation”, the Chinese government has gradually realized the negative impact of increasingly severe environmental problem on people’s wellbeing, and has then has formulated a series of environmental policies. Based on the balanced panel data from2014 to 2018 from China Family Panel Studies (CFPS)and by means of the fixed effects model, we analyze the relationships between heterogeneous environmental regulations (ERs) and subjective wellbeing (SWB) from the perspective of diligent governance. Our results show that command-control environmental regulation (CER) and voluntary environmental regulation (VER)have positive effects on SWB, but there existthe heterogeneity effects in the links between ERs and SWB. Vulnerable populations, including those with rural hukou, less educated, have paidmore attention to VER, whereas the view of other groups is the opposite. Similarly, the people with low incomes or living in economically underdeveloped areas or western region, are sensitive to VER, while the others only pay attention to CER.The SWB of those with better health can be enhanced by CER, and the SWB of those with poor health are unaffected by CER and VER.Further channel analysis illustrates that CER can improve SWB by increasing people’s evaluation of the government, while VER cannot. Our results imply that the people would place more weight on environmental governance as their income rises, and can help the government institute more flexible environmental policies to improve people’s wellbeing. Keywords: Subjective wellbeing, Environmental regulations, Heterogeneity, Balanced Panel Data, China Classification-JEL: Q53, Q56, O13, R11, P28, H11 Creation-Date: 2021-12 Template-Type: ReDIF-Paper 1.0 Number: 2021.32 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-032.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.32 Title: Myopic Oligopoly Pricing Author-Name: Iwan Bos Author-X-Name-First: Iwan Author-X-Name-Last: Bos Author-WorkPlace-Name: Maastricht University Author-Name: Marco A. Marini Author-X-Name-First: Marco A. Author-X-Name-Last: Marini Author-WorkPlace-Name: Sapienza University of Rome Author-Name: Riccardo D. Saulle Author-X-Name-First: Riccardo D. Author-X-Name-Last: Saulle Author-WorkPlace-Name: University of Padova Abstract: This paper examines capacity-constrained oligopoly pricing with sellers who seek myopic improvements. We employ the Myopic Stable Set solution concept and establish the existence of a unique pure-strategy price solution for any given level of capacity. This solution is shown to coincide with the set of pure-strategy Nash equilibria when capacities are large or small. For an intermediate range of capacities, it predicts a price interval that includes the mixedstrategy support. This stability concept thus encompasses all Nash equilibria and offers a pure-strategy solution when there is none in Nash terms. It particularly provides a behavioral rationale for different pricing patterns, including Edgeworth price cycles and states of hyper-competition with supply shortages. We also analyze the impact of a change in firm size distribution. A merger among the biggest firms may lead to more price dispersion as it increases the maximum and decreases the minimum myopically stable price. Keywords: Bounded Rationality, Capacity Constraints, Mergers, Myopic Stable Set, Oligopoly Pricing, Supply Shortages Classification-JEL: C72, D43, L13 Creation-Date: 2021-12 Template-Type: ReDIF-Paper 1.0 Number: 2021.33 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-033.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.33 Title: Decreasing Incomes Increase Selfishness Author-Name: Nickolas Gagnon Author-X-Name-First: Nickolas Author-X-Name-Last: Gagnon Author-WorkPlace-Name: Aarhus University Author-Name: Riccardo D. Saulle Author-X-Name-First: Riccardo D. Author-X-Name-Last: Saulle Author-WorkPlace-Name: University of Padova Author-Name: Henrik W. Zaunbrecher Author-X-Name-First: Henrik W. Author-X-Name-Last: Zaunbrecher Author-WorkPlace-Name: Maastricht University Abstract: We use a controlled laboratory experiment to study the causal impact of income decreases within a time period on redistribution decisions at the end of that period, in an environment where we keep fixed the sum of incomes over the period. First, we investigate the effect of a negative income trend (intra-personal decrease), which means a decreasing income compared to one’s recent past. Second, we investigate the effect of a negative income trend relative to the income trend of another person (inter-personal decrease). If intra-personal or inter-personal decreases create dissatisfaction for an individual, that person may become more selfish to obtain compensation. We formalize both effects in a multi-period model augmenting a standard model of inequality aversion. Overall, conditional on exhibiting sufficiently-strong social preferences, we find that individuals indeed behave more selfishly when they experience decreasing incomes. While many studies examine the effect of income inequality on redistribution decisions, we delve into the history behind one’s income to isolate the effect of income changes. Keywords: Income Inequality, Income Change, Social Preferences, Social Comparison, Income Redistribution Classification-JEL: C91, D31, D63 Creation-Date: 2021-12 Template-Type: ReDIF-Paper 1.0 Number: 2021.34 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-034.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.34 Title: Comparison between China, the EU and the US’s climate and energy governance: How policies are made and implemented at different levels Author-Name: Xinqing Lu Author-X-Name-First: Xinqing Author-X-Name-Last: Lu Author-WorkPlace-Name: Sciences Po, Paris School of International Affairs Author-Name: Erpu Zhu Author-X-Name-First: Erpu Author-X-Name-Last: Zhu Author-WorkPlace-Name: Sciences Po, Paris School of International Affairs Author-Name: Loyle Campbell Author-X-Name-First: Loyle Author-X-Name-Last: Campbell Author-WorkPlace-Name: Sciences Po, Paris School of International Affairs Author-Name: Manfred Hafner Author-X-Name-First: Manfred Author-X-Name-Last: Hafner Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Sciences Po, Paris School of International Affairs, The John Hopkins University, School of Advanced International Studies Author-Name: Michel Noussan Author-X-Name-First: Michel Author-X-Name-Last: Noussan Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Sciences Po, Paris School of International Affairs Author-Name: Pier Paolo Raimondi Author-X-Name-First: Pier Paolo Author-X-Name-Last: Raimondi Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Istituto Affari Internazionali Abstract: This paper compares the different multi-level climate and energy governance in China, the European Union and the United States. While many comparisons across these three economies exist, they concentrate on comparing the climate and energy “policy instruments” and their results. This paper puts a focus on the importance of institutionalized multi-level governance processes, i.e., the “politics” – the actors and interaction processes inherent in a mode of governance, and the “polities” – the institutional setting. How are priorities and targets decided from both bottom-up and top-down processes? How do the central governments exert control over local authorities and ensure the implementation of their policies? How do the central governments enforce and evaluate the results of the policies? And finally, how do citizens play a role in the multi-level governance in these three blocs? Analysis of multilevel governance highlights the importance of target setting and cadre evaluation in China whereas legislation is the dominant process in the EU and the US. Keywords: Multi-level Governance, Climate Policy, Energy Policy, Energy Transition, China, the European Union, the United States Classification-JEL: N50, Q48, Q58 Creation-Date: 2021-12 Template-Type: ReDIF-Paper 1.0 Number: 2021.35 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-035.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.35 Title: Securing decarbonized road transport – a comparison of how EV deployment has become a critical dimension of battery security strategies for China, the EU, and the US Author-Name: Xinqing Lu Author-X-Name-First: Xinqing Author-X-Name-Last: Lu Author-WorkPlace-Name: Sciences Po, Paris School of International Affairs Author-Name: Erpu Zhu Author-X-Name-First: Erpu Author-X-Name-Last: Zhu Author-WorkPlace-Name: Sciences Po, Paris School of International Affairs Author-Name: Loyle Campbell Author-X-Name-First: Loyle Author-X-Name-Last: Campbell Author-WorkPlace-Name: Sciences Po, Paris School of International Affairs Author-Name: Manfred Hafner Author-X-Name-First: Manfred Author-X-Name-Last: Hafner Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Sciences Po, Paris School of International Affairs, The John Hopkins University, School of Advanced International Studies Author-Name: Michel Noussan Author-X-Name-First: Michel Author-X-Name-Last: Noussan Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Sciences Po, Paris School of International Affairs Author-Name: Pier Paolo Raimondi Author-X-Name-First: Pier Paolo Author-X-Name-Last: Raimondi Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Istituto Affari Internazionali Abstract: This paper compares how the pursuit of self-sufficient Lithium-ion battery production by the three main geo-economic players (China, the European Union, and the United States) is unfolding by looking at the electrification of the transport sector. The analysis of this paper uses the concept of energy security and the 4 As outlined by the Asia Pacific Energy Research Center (2007) to outline the availability, accessibility, affordability, and acceptability of Lithium-ion (Li- Ion) batteries for each respective actor. This paper aims to compare the dynamics of each geoeconomic player’s EV deployment along these four indicators. Most work in this field assesses the battery strategies of these three geo-economic players individually or focuses on EV deployment from a purely economics perspective. In contrast, this paper attempts to bridge this gap through the framework of energy security to compare how each of the three player’s battery strategy connects to broader EV deployment. Adopting this framework allows us to highlight how China’s strong industrial policies and generous incentives contrast to the government multilateral alliance-building done in the European Union and the overwhelmingly dominant role of private actors found in the United States. This paper is part of a series of working papers comparing the climate and energy policies of China, the European Union, and the United States to better understand the geopolitics surrounding global decarbonization. Keywords: Lithium-Ion Batteries, Electric Vehicles, Energy Transition, Energy Security, China, the European Union, the United States Classification-JEL: Q48, Q30, F59 Creation-Date: 2021-12 Template-Type: ReDIF-Paper 1.0 Number: 2021.36 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2021-036.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2021.36 Title: Towards An Inclusive Energy Transition Beyond Coal – A comparison of just transition policies away from coal between China, the EU and the US Author-Name: Xinqing Lu Author-X-Name-First: Xinqing Author-X-Name-Last: Lu Author-WorkPlace-Name: Sciences Po, Paris School of International Affairs Author-Name: Erpu Zhu Author-X-Name-First: Erpu Author-X-Name-Last: Zhu Author-WorkPlace-Name: Sciences Po, Paris School of International Affairs Author-Name: Loyle Campbell Author-X-Name-First: Loyle Author-X-Name-Last: Campbell Author-WorkPlace-Name: Sciences Po, Paris School of International Affairs Author-Name: Manfred Hafner Author-X-Name-First: Manfred Author-X-Name-Last: Hafner Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Sciences Po, Paris School of International Affairs, The John Hopkins University, School of Advanced International Studies Author-Name: Michel Noussan Author-X-Name-First: Michel Author-X-Name-Last: Noussan Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Sciences Po, Paris School of International Affairs Author-Name: Pier Paolo Raimondi Author-X-Name-First: Pier Paolo Author-X-Name-Last: Raimondi Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Istituto Affari Internazionali Abstract: This paper compares different just transition pathways in China, the European Union and the United States of America by comparing the current state of the coal sector and just transition policies away from coal. How can social justice in the energy transition be achieved under different models of energy governance? Since these three blocs have only made some progress on just transition policies and legislations for workers and communities impacted by the coal phase down or phase out in recent years, there have not been many studies comparing them to each other. The analysis in this paper shows that while all three blocs work towards ensuring the integration of coal workers and coal communities into the clean economy in the process of coal reduction, their approaches to achieving a just transition differ in terms of policy frameworks, financing resources, specific measures and public participation. This paper is part of a series of FEEM working papers of comparison studies of China, the EU and the US in the field of climate and energy. Keywords: Energy Transition, Just Transition, Coal Phase Out, Inclusiveness, China, the European Union, the United States Classification-JEL: Q38, Q56, Q58 Creation-Date: 2021-12