Template-Type: ReDIF-Paper 1.0 Number: 2023.01 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-001-1.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.01 Title: Shop Until You Drop: the Unexpected Effects of Anticonsumerism and Environmentalism Author-Name: Giovanni Maccarrone Author-X-Name-First: Giovanni Author-X-Name-Last: Maccarrone Author-WorkPlace-Name: Department of Social and Economic Sciences, Sapienza Università di Roma 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 Università di Roma Author-Name: Ornella Tarola Author-X-Name-First: Ornella Author-X-Name-Last: Tarola Author-WorkPlace-Name: Department of Social and Economic Sciences, Sapienza Università di Roma Abstract: In an economy where consumers are heterogeneous in their preferences over the hedonic and environmental attributes of goods on sale, we explore the effects of anti-consumerism and environmentalism. We show that when the environmental attributes of products come at the expense of the hedonic attributes, a higher supply of anti-consumerism and environmentalism yields the expected positive effect on the environment. In contrast, when hedonic and environmental attributes are jointly met by a good, higher levels of anti-consumerism and environmentalism negatively affect the society’s environmental footprint. Moreover, the impact of anti-consumerism and environmentalism on social welfare is far from being obvious, giving rise to unexpected redistributive effects between firms and consumers. Keywords: Environmentalism, Hedonism, Anti-consumerism, Hedonic and environmental product attributes, Vertical product differentiation Classification-JEL: D11, L13, Q50 Creation-Date: 2023-02 Template-Type: ReDIF-Paper 1.0 Number: 2023.02 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-002-1.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.02 Title: Does P2P Trading Favor Investments in PV-Battery Systems? Author-Name: Francesca Andreolli Author-X-Name-First: Francesca Author-X-Name-Last: Andreolli Author-WorkPlace-Name: ECCO Climate Think Tank Author-Name: Chiara D'Alpaos Author-X-Name-First: Chiara Author-X-Name-Last: D'Alpaos Author-WorkPlace-Name: Department of Department of Civil, Architectural and Environmental Engineering, University of Padova Author-Name: Peter Kort Author-X-Name-First: Peter Author-X-Name-Last: Kort Author-WorkPlace-Name: Department of Econometrics and Operations Research, Tilburg University Abstract: Due to the deployment of distributed renewable energy sources (e.g., solar), the introduction of communication technologies, and the digitalization of the power system (e.g., smart meters, control devices), energy consumers are switching from passive to active in the management of their energy consumption, production, and storage patterns. In a consumer-centric energy market, Peer-to-Peer (P2P) trading allows consumers and prosumers to directly trade energy without any intermediation by traditional energy suppliers. In this paper, we investigate households’ decisions to invest in domestic PV plants coupled with battery storage, namely PV battery systems (PVBs), and to participate in a local energy community (EC), in which energy quotas can be exchanged among EC members via P2P trading. Thanks to storage and P2P, households can strategically decide their optimal course of action and their optimal energy production/consumption patterns and can actively offer services that other EC participants bid for. In detail, we examine whether P2P trading can increase the value of investments in PVBs and affect the decision on both the optimal investment timing and size. Following the real options approach, we develop a stochastic optimization model. Our results show that ceteris paribus, thanks to P2P trading opportunities, households accelerate investments and invest in larger plants compared to scenarios in which P2P trading in not permitted. According to our findings, at current market prices, it is never optimal to invest immediately and, as P2P traded energy increases, households invest earlier and in smaller plants. Keywords: PV Plants, Battery Storage, P2P Trading, Real Options, Dynamic Stochastic Optimization Classification-JEL: Q42, C61, D81 Creation-Date: 2023-02 Template-Type: ReDIF-Paper 1.0 Number: 2023.03 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-003.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.03 Title: Dynamic Regulation of Public Franchises with Imperfectly Correlated Demand Shocks Author-Name: Marco Buso Author-X-Name-First: Marco Author-X-Name-Last: Buso Author-WorkPlace-Name: Department of Economics and Management, University of Padova and Interuniversity Centre for Public Economics (CRIEP) Author-Name: Cesare Dosi Author-X-Name-First: Cesare Author-X-Name-Last: Dosi Author-WorkPlace-Name: Department of Economics and Management, University of Padova and Interuniversity Centre for Public Economics (CRIEP) Author-Name: Michele Moretto Author-X-Name-First: Michele Author-X-Name-Last: Moretto Author-WorkPlace-Name: Department of Economics and Management, University of Padova and Interuniversity Centre for Public Economics (CRIEP) Abstract: In a continuous-time setting, we study the design of a dynamic contract between a government and a private entity, wherein the latter commits to pay the government in return for the exclusive right to sell a service by operating a public facility. Private revenues are modelled as depending on the unobservable ability to seize market opportunities and on imperfectly correlated changes in consumers’ preferences. We show that optimal regulation requires an appropriate combination of fixed and variable payments to the government, acting together both as an information revelation mechanism and as a risk sharing device. Keywords: Public-private partnerships, Public franchises, Adverse selection, Dynamic contracts, Persistent demand shocks Classification-JEL: D81, D82, D86, H54 Creation-Date: 2023-02 Template-Type: ReDIF-Paper 1.0 Number: 2023.04 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-004.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.04 Title: Is Climate Transition Risk Priced into Corporate Credit Risk? Evidence from Credit Default Swaps Author-Name: Andrea Ugolini Author-X-Name-First: Andrea Author-X-Name-Last: Ugolini Author-WorkPlace-Name: Department of Economics, Management and Statistics, University of Milano-Bicocca Author-Name: Juan C. Reboredo Author-X-Name-First: Juan C. Author-X-Name-Last: Reboredo Author-WorkPlace-Name: Universidade de Santiago de Compostela, Department of Economics, ECOBAS Research Center Author-Name: Javier Ojea-Ferreiro Author-X-Name-First: Javier Author-X-Name-Last: Ojea-Ferreiro Author-WorkPlace-Name: Bank of Canada Abstract: We study whether climate transition risk is reflected in the credit default swap (CDS) spreads of firms. Using information on the vulnerability of a firm’s value to the transition to a low carbon economy, we construct a climate transition risk (CTR) factor, and document how this factor shifts the term structure of the CDS spreads of more vulnerable firms but not of less vulnerable firms. Considering the impact of different climate transition policies on the CTR factor, we find that they have asymmetric and significant economic impacts on the credit risk of more vulnerable firms, and negligible effects on the remaining firms. Keywords: Climate transition risk, CDS spreads, credit risk Classification-JEL: C24, G12, G32, Q54 Creation-Date: 2023-02 Template-Type: ReDIF-Paper 1.0 Number: 2023.05 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-005.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.05 Title: Towards a Modelling Process for Simulating Socio-ecosystems with a Focus on Climate Change Adaptation Author-Name: Federico Cornacchia Author-X-Name-First: Federico Author-X-Name-Last: Cornacchia Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Alberto Gabino Martínez-Hernández Author-X-Name-First: Alberto Gabino Author-X-Name-Last: Martínez-Hernández Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Marco Bidoia Author-X-Name-First: Marco Author-X-Name-Last: Bidoia Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Carlo Giupponi Author-X-Name-First: Carlo Author-X-Name-Last: Giupponi Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Department of Economics, Ca’ Foscari University of Venice Abstract: As the impacts of climate change are expected to be increasingly disruptive, a growing share of the economic literature moved to modelling approaches to address the interconnectedness of social, economic, and environmental issues. Among them, System Dynamics (SD) stands out as a well-established modelling approach to analyse complex social-ecological systems. In order to benefit from such modelling exercises it is necessary to follow a structured process, bearing in mind that models should have as their ultimate ambition that of supporting decision-making processes. Yet, the connection with decision-making is addressed only in the last phases of the modelling process, with emphasis placed only on few particular sectors. Hence, a lack of a general framework that can be used as a reference to address climate change adaptation and which could provide insights to economic valuations to support decision-making processes for a different range of sectors emerges. Consistently, the present study aims to bridge the observed gap by employing a combined SES-DAPSIR framework to build a conceptual modelling process for simulating the behaviour of a generic socio-ecosystem, with a particular focus on climate change adaptation. It also illustrates how the proposed conceptual modelling process is concretely put into practice with an application for a coastal socio-ecosystem. This allows demonstrating how the proposed methodology constitute a potential common starting point for different targeted modelling exercises, resulting particularly useful when moving from analytical modelling to decision support. Keywords: Climate change adaptation, system dynamics, decision-making, socio-ecosystem, SES-DAPSIR framework, conceptual modelling Classification-JEL: C63, Q54, Q57 Creation-Date: 2023-03 Template-Type: ReDIF-Paper 1.0 Number: 2023.06 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-006.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.06 Title: Water challenges in socio-ecological systems: is human decision-making accounted for in the analysis of climate change adaptation options? Author-Name: Sara Floriani Zanini Author-X-Name-First: Sara Floriana Author-X-Name-Last: Zanini Author-WorkPlace-Name: Department of Management, Ca' Foscali University and Fondazione Eni Enrico Mattei Abstract: This mixed-method systematic review is motivated by the willingness to identify the efforts of the most recent developments of the literature on the understanding of water challenges in socioecological systems, particularly coastal ones. The attention, in the exercise, is directed at the analysis of individual and collective decision-making processes concerning the use of the environmental good. This is because ultimately, if it is true that water resources are affected by external trends and shocks, it is also relevant how distinct paths of local and regional level responses impact on resource status. The inquiry, departs from a conceptual point of view mainly pinpointing scholars’ already proposed method- ological solutions for the concern, being them mostly participatory modelling excercises, bayesian net- work analyses, multi-agent games and experiments and finally integrated assessment models. Even if methodological tools with a potential to explicitly represent human decision-making coupled with its connection with the natural environment do exist, these methods are found to be relatively superficially articulated in interdisciplinary water management analyses. Particularly, the study explores to what extent is the human behaviour, in relation to water resources, included into the extant analyses. Keywords: human behaviour, decision-making process, climate change adaptation, water resources Classification-JEL: D80, D90, Q25, Q54 Creation-Date: 2023-03 Template-Type: ReDIF-Paper 1.0 Number: 2023.07 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-007.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.07 Title: Carbon neutral lifestyles and NDCs: advice and policy perspectives Author-Name: Laura Cavalli Author-X-Name-First: Laura Author-X-Name-Last: Cavalli Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Chiara Boeri Author-X-Name-First: Chiara Author-X-Name-Last: Boeri Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: Climate change is one of the most important challenges for the present generation, which is living in decades characterized by a drastic increase in greenhouse gas emissions, especially in the most developed countries: not only the production realities – for which policies already largely provide for mitigation measures – contribute to emissions; but also, individual citizens to whom only a small part of the envisaged measures are addressed. Among the policies in which the demand side is little addressed are the Nationally Determined Contributions, which embody the efforts of each country to reduce national emissions and adapt to the impacts of climate change, as stated in the Paris Agreement signed in 2015 between the Member States of the United Nations Framework Convention on Climate Change (UNFCCC). Integrating advice on carbon neutral lifestyles in NDCs and long-term strategies could have positive implications in both social, economic, and environmental terms, paving the way for more holistic and inclusive policies, fundamental elements to pursue a development that is sustainable in the short and above all in the medium-long term. Taking this into account, the present work, which forms an integral part of the studies of WP 7 within the Horizon 2020 Project CAMPAIGNers- Citizens Acting on Mitigation Pathways through Active Implementation of a Goal-setting Network1, aims to understand what the consequences deriving from the inclusion of carbon neutral lifestyle advice in the Nationally Determined Contributions and national climate strategies would be, and to operationally implement practical examples and ways to include behavioural aspects of the carbon neutral lifestyle in the sectors studied, based on national data and statistics from the countries participating in the Project2. The innovative aspect of the Project lies in integrating the quantitative aspects deriving from the scientific evidence of official statistics with qualitative aspects generated by the collaboration between partners and stakeholders, in the form of surveys and focus groups: in this way it is possible to effectively overlap the spheres of economic and environmental analysis with that of policy making, providing a tool capable of directing strategies and international agendas. Keywords: Public Economics, Government, Environmental, Regional Household Behavior Classification-JEL: D1, H7, R2 Creation-Date: 2023-04 Template-Type: ReDIF-Paper 1.0 Number: 2023.08 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-008.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.08 Title: When Crime Tears Communities Apart: Social Capital and Organised Crime Author-Name: Francesca Maria Calamunci Author-X-Name-First: Francesca Maria Author-X-Name-Last: Calamunci Author-WorkPlace-Name: Department of Economics and Law, Sapienza University Author-Name: Federico Fabio Frattini Author-X-Name-First: Federico Fabio Author-X-Name-Last: Frattini Author-WorkPlace-Name: Trinity College Dublin and Fondazione Eni Enrico Mattei Abstract: What is the long-term effect of organised crime presence on social capital accumulation? By leveraging novel social capital and organised crime data, this study investigates this question within the Italian landscape. In an instrumental variable (IV) setting, we exploit the forced resettlement law that compelled organised crime members living in the South of Italy to resettle in the Centre-North area. Using a granular measure of tax compliance as a proxy for civic awareness, we find evidence that sustained exposure to mafia presence depresses social capital accumulation. This finding applies to other dimensions of social capital, such as civic engagement and political participation. Results are robust to a series of robustness checks, such as the alternative strategy which combines the migratory movements from the South and the allocation of Marshall Plan funds. The findings appear to be influenced by a tolerance of dishonest conduct, a decrease in institutional trust, and a general disengagement from social activities. Keywords: Organised Crime, Social Capital, Forced Resettlement, Expansion Classification-JEL: A13, J16, K4, N34, O15 Creation-Date: 2023-05 Template-Type: ReDIF-Paper 1.0 Number: 2023.09 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-009.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.09 Title: Warming the MATRIX: a Climate Assessment under Uncertainty and Heterogeneity Author-Name: Davide Bazzana Author-X-Name-First: Davide Author-X-Name-Last: Bazzana Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Department of Economics and Management, Università degli Studi di Brescia Author-Name: Massimiliano Rizzati Author-X-Name-First: Massimiliano Author-X-Name-Last: Rizzati Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Department of Economics and Management, Università degli Studi di Brescia Author-Name: Emanuele Ciola Author-X-Name-First: Emanuele Author-X-Name-Last: Ciola Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Department of Economics and Management, Università degli Studi di Brescia Author-Name: Enrico Turco Author-X-Name-First: Enrico Author-X-Name-Last: Turco Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and The Complexity Lab in Economics, Department of Economics and Finance, Catholic Univeristy of Milan Author-Name: Sergio Vergalli Author-X-Name-First: Sergio Author-X-Name-Last: Vergalli Author-WorkPlace-Name: Author-Name: Fondazione Eni Enrico Mattei and Department of Economics and Management, Università degli Studi di Brescia Abstract: This paper explores the potential impacts of climate change and mitigation policies on the Euro Area, considering the uncertainty and heterogeneity in both climate and economic systems. Using the MATRIX model, a multi-sector and multi-agent macroeconomic model, we simulate various climate scenarios by employing different carbon cycle models, damage functions, and marginal abatement curves found in the literature. We find that heterogeneous climate damages amplify both the magnitude and the volatility of GDP losses associated with global warming. By the end of the century, we estimate that assuming homogeneous shocks may underestimate the effects of climate change on aggregate output by up to one-third. Moreover, we find that the speed and feasibility of a low-carbon transition crucially depend on (i) the stringency of emission reduction targets, which determine the level of a carbon tax, and (ii) the rate of technological progress, which influences the shape of the abatement cost curve. Keywords: Energy Sector, Agent-Based Models, Macroeconomic Dynamics, Climate change, Climate Policy, Emission Abatement Classification-JEL: C63, Q52, Q58 Creation-Date: 2023-05 Template-Type: ReDIF-Paper 1.0 Number: 2023.10 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-010.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.10 Title: Neutralizing the Tentacles of Organized Crime. Assessment of the Impact of an Anti-Crime Measure on Mafia Violence in Italy Author-Name: Anna Laura Baraldi Author-X-Name-First: Anna Laura Author-X-Name-Last: Baraldi Author-WorkPlace-Name: Department of Economics, University of Campania Author-Name: Erasmo Pagani Author-X-Name-First: Erasmo Author-X-Name-Last: Pagani Author-WorkPlace-Name: Department of Law, University of Naples Federico II Author-Name: Marco Stimolo Author-X-Name-First: Marco Author-X-Name-Last: Stimolo Author-WorkPlace-Name: Department of Economic and Social Sciences, Università Politecnica delle Marche Abstract: Organised crime tightens its corrupting influence on politics through violent intimidation. Anti-crime measures that increase the cost of corruption but not of the exercise of violence might accordingly lead mafia-style organizations to retaliate by resorting to violence in lieu of bribery. On the other hand, this kind of anti-crime measure might also induce criminal clans to go inactive, owing to the lower expected payoff from the “business” of influencing politics, which would reduce violence. To determine which of these possible effects is prevalent, we undertake an empirical assessment of the impact of city council dissolution for mafia influence in Italy as prescribed by Decree Law 164/1991 in discouraging violence against politicians in the period 2010-2019. Our difference-in-differences analysis shows that in the dissolved municipalities the enforcement of the Law reduces violence and that the effect persists (at least) for two electoral rounds. The most likely driving channel of this result is the renewed pool of politicians elected after compulsory administration. These findings are robust to a series of endogeneity tests. Keywords: Organized Crime, Violence, Anti-corruption measures, Spillovers Classification-JEL: C25, D73, D78, I38, K42 Creation-Date: 2023-05 Template-Type: ReDIF-Paper 1.0 Number: 2023.11 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-011.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.11 Title: The connectedness of Energy Transition Metals Author-Name: Andrea Bastianin Author-X-Name-First: Andrea Author-X-Name-Last: Bastianin Author-WorkPlace-Name: Department of Economics, Management, and Quantitative Methods, University of Milan and Fondazione Eni Enrico Mattei Author-Name: Chiara Casoli Author-X-Name-First: Chiara Author-X-Name-Last: Casoli Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Marzio Galeotti Author-X-Name-First: Marzio Author-X-Name-Last: Galeotti Author-WorkPlace-Name: Department of Environmental Science and Policy, University of Milan and Fondazione Eni Enrico Mattei Abstract: We assess the degree of connectedness among 16 metals that are critical for the production of clean energy technologies. These commodities are the constituents of the Energy Transition Metals (ETMs) price index maintained by the International Monetary Fund and comprise base, precious, and minor metals. We rely on Vector Autoregressive models and generalized forecast error variance decomposition to quantify spillovers among ETMs returns and volatilities. By calculating both static and dynamic measures of connectedness, we gain insight into the patterns of shock transmission between ETMs. Our static analysis reveals that base and precious metals are net shock transmitters, while minor and most battery metals are net receivers. By splitting the analysis into three groups, we find that almost half of the connectedness originates within each group, whereas the other half is due to cross-group spillovers. Moreover, we find that the system-wide connectedness of returns is positively correlated with proxies of economic activity, whereas volatility connectedness seems to be more related to global economic policy uncertainty. Keywords: Connectedness, Energy Transition, Metals, Raw materials Classification-JEL: C32, Q02, Q41, Q43, Q48 Creation-Date: 2023-06 Template-Type: ReDIF-Paper 1.0 Number: 2023.12 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-012.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.12 Title: Investigating the Corporate Governance and Sustainability Relationship: A Bibliometric Analysis Using Keyword-Ensemble Community Detection Author-Name: Carlo Drago Author-X-Name-First: Carlo Author-X-Name-Last: Drago Author-WorkPlace-Name: University of Niccolò Cusano Author-Name: Fabio Fortuna Author-X-Name-First: Fabio Author-X-Name-Last: Fortuna Author-WorkPlace-Name: University of Niccolò Cusano Abstract: Sustainability is a business strategy combining economic, social, and environmental issues. This paper examines the corporate governance and sustainability literature. So we consider a new bibliometric database focusing on the network of keywords appearing in the literature. The quantitative approach is also new: we combine the information from different community detection algorithms to find the most important results and relationships in the literature. The final results show that the literature on corporate governance and sustainability raises an essential strategic question: for long-term sustainability if there needs to be a strong link between stakeholders and corporate social responsibility (CSR). So, considering a company’s actions’ social, economic, and environmental effects can help figure out how much corporate responsibility is needed. Also, companies that consider CSR and sustainability in their businesses find it easier to keep long-term relationships with customers, employees, and other stakeholders, which can be considered vital. Last, a strategic view of corporate governance should emphasize the importance of intellectual capital and the Triple-Bottom-Line approach to sustainable growth in a strategic view of corporate governance. In this sense, a more wholesome view of value creation aims to provide companies with better financial results while also serving society’s environment and social well-being. By addressing these issues, governments and other groups can make the business world more sustainable and responsible. Keywords: Corporate Governance, Sustainability, Bibliometric Analysis, Community Detection, Ensamble Community Detection Classification-JEL: L21, G34, Q56, C19, C38 Creation-Date: 2023-06 Template-Type: ReDIF-Paper 1.0 Number: 2023.13 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-013-1.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.13 Title: Social Sustainability in European Banks: A Machine Learning Approach using Interval- Based Composite Indicators Author-Name: Carlo Drago Author-X-Name-First: Carlo Author-X-Name-Last: Drago Author-WorkPlace-Name: University of Niccolò Cusano Author-Name: Loris Di Nallo Author-X-Name-First: Loris Author-X-Name-Last: Di Nallo Author-WorkPlace-Name: University of Cassino e del Lazio Meridionale Author-Name: Maria Lucetta Russotto Author-X-Name-First: Maria Lucetta Author-X-Name-Last: Russotto Author-WorkPlace-Name: University of Firenze Abstract: Promoting social information reporting and disclosure can promote sustainable banking. The paper aims to measure banking social sustainability by constructing a new interval-based composite indicator using the Thomson Reuters database. In this work, we propose an approach to constructing interval-based composite indicators that enhance the composite indicator’s construction sensibly, allowing us to measure the uncertainty due to the choices in the composite indicator design. The methodological approach employed is based on a Monte-Carlo simulation and allows for improving the information the composite indicators can obtain. So, we measure the value of the social indicator and its subcomponents and the value’s uncertainty due to the different possible weights. The results show that the best international ESG practices in European banks relate to French and United Kingdom Banks, primarily than Italian banks. Finally, we analyze innovative perspectives and propose policy recommendations, considering the growing attention to the issue of ESG disclosure and its adherence to reality, to support sustainable banking ecosystems. Keywords: Social Index, Sustainable Banking, ESG, Monte-Carlo Simulation, Machine Learning, Interval-based Composite Indicators Classification-JEL: G21, Q5, C02, C15, C43, C63 Creation-Date: 2023-06 Template-Type: ReDIF-Paper 1.0 Number: 2023.14 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-014.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.14 Title: Do Hospital Mergers Reduce Waiting Times? Theory and Evidence from the English NHS Author-Name: Vanessa Cirulli Author-X-Name-First: Vanessa Author-X-Name-Last: Cirulli Author-WorkPlace-Name: Italian Agency for Development Cooperation and Sapienza University of Rome Author-Name: Giorgia Marini Author-X-Name-First: Giorgia Author-X-Name-Last: Marini Author-WorkPlace-Name: Department of Juridical and Economic Studies (DSGE), Sapienza University of Rome Author-Name: Marco A. Marini Author-X-Name-First: Marco A. Author-X-Name-Last: Marini Author-WorkPlace-Name: Department of Social Sciences and Economics, Sapienza University of Rome Author-Name: Odd Rune Straume Author-X-Name-First: Odd Rune Author-X-Name-Last: Straume Author-WorkPlace-Name: Department of Economics/NIPE, University of Minho Abstract: We analyse – theoretically and empirically – the effect of hospital mergers on waiting times in healthcare markets where prices are fixed. Using a spatial modelling framework where patients choose provider based on travelling distance and waiting times, we show that the effect is theoretically ambiguous. In the presence of cost synergies, the scope for lower waiting times as a result of the merger is larger if the hospitals are more profit-oriented. This result is arguably confirmed by our empirical analysis, which is based on a conditional flexible difference-indifferences methodology applied to a long panel of data on hospital mergers in the English NHS, where we find that the effects of a merger on waiting times crucially rely on a legal status that can reasonably be linked to the degree of profit-orientation. Whereas hospital mergers involving Foundation Trusts tend to reduce waiting times, the corresponding effect of mergers involving hospitals without this legal status tends to go in the opposite direction. Keywords: Hospital merger, waiting times, profit-orientation Classification-JEL: I11, I18, L21, L41 Creation-Date: 2023-07 Template-Type: ReDIF-Paper 1.0 Number: 2023.15 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-015-1.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.15 Title: RICE-MED, an integrated assessment model for the Mediterranean basin: assessing the climate-economy-agriculture nexus Author-Name: Chiara Castelli Author-X-Name-First: Chiara Author-X-Name-Last: Castelli Author-WorkPlace-Name: Wiener Institut fur Internationale Wirtschaftsvergleiche Author-Name: Marta Castellini Author-X-Name-First: Marta Author-X-Name-Last: Castellini Author-WorkPlace-Name: Department of Economics and Management, University of Padua and Fondazione Eni Enrico Mattei Author-Name: Camilla Gusperti Author-X-Name-First: Camilla Author-X-Name-Last: Gusperti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Veronica Lupi Author-X-Name-First: Veronica Author-X-Name-Last: Lupi Author-WorkPlace-Name: Department of Environmental Economics, Institute for Environmental Studies, Vrije Universiteit Author-Name: Sergio Vergalli Author-X-Name-First: Sergio Author-X-Name-Last: Vergalli Author-WorkPlace-Name: Department of Environmental Economics, Institute for Environmental Studies, Vrije Universiteit Abstract: In this work we update the regionalization and the calibration of the Regional dynamic Integrated model of Climate and the Economy (RICE) in its 1999 version developed by Nordhaus and Boyer (2000), with a focus on the Mediterranean countries. Our aim is to assess the impact of climate change damages on their main macroeconomic variables in a context where all economies are fossil fuel based. In addition, we extend the model by introducing the uncertainty associated with a possible future catastrophic event, triggered by the temperature increase and variation over time, following the approach of Castelnuovo et al. (2003). We then develop an empirical exercise to asses the impact of climate change on the agricultural sector at country level. In this framework, we implement the traditional IAMs scenarios, namely the Business As Usual, the Social Optimum and the Temperature Limit, where population dynamics is calibrated according to the IIASA SSP2 projections. Among our findings, we show that, in the absence of renewable energy sources and break-through technologies, meeting the limit of a temperature increase of less than 2°C requires a carbon tax of more than 700 USD/tC by 2050, doubling by the end of this century. When uncertainty is introduced, the higher the probability of a possible catastrophic event and the greater the associated utility loss, the more society is willing to pay for a rising cost of carbon. The upward trend of the carbon tax relative to the no-uncertainty model is reduced by the end of the century in the temperature-limit scenario, due to the benefits associated with this policy and the inclusion in the model of societal awareness of the potential risks of climate change. In both versions of the model, the agricultural sector in the Southern Mediterranean countries is severely affected, and stringent policies can partially mitigate these impacts and reduce damages by 2100. Keywords: IAMs, climate change, carbon tax, carbon price, emissions, temperature, energy, Mediterranean region, Mediterranean countries Classification-JEL: Q54, H23, R13 Creation-Date: 2023-09 Template-Type: ReDIF-Paper 1.0 Number: 2023.16 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-016.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.16 Title: Dynamic, incentive-compatible contracting for health services Author-Name: Rosella Levaggi Author-X-Name-First: Rosella Author-X-Name-Last: Levaggi Author-WorkPlace-Name: Department of Economics and Management, University of Brescia Author-Name: Michele Moretto Author-X-Name-First: Michele Author-X-Name-Last: Moretto Author-WorkPlace-Name: Department of Economics and Management, University of Padua Author-Name: Paolo Pertile Author-X-Name-First: Paolo Author-X-Name-Last: Pertile Author-WorkPlace-Name: Department of Economics, University of Verona Abstract: This paper aims to characterise a dynamic, incentive-compatible contract for the provision of health services, allowing for both moral hazard and adverse selection. Patients’ severity changes over time following a stochastic process and is private information of the provider. We characterise the optimal dynamic contract and show that it is made up of two components: a time-invariant payment, which depends on the structural characteristics of the provider, and a time-varying component, which is affected by both patient and hospital characteristics. To illustrate the characteristics of the dynamic contract and compare it with a more standard static contract, we provide a numerical exercise calibrated with data from hip replacement hospitalisations in Italy. Keywords: hospital payments, dynamic mechanism design, DRG, two-part tariffs, adverse selection, moral hazard Classification-JEL: H42, I18, D82 Creation-Date: 2023-09 Template-Type: ReDIF-Paper 1.0 Number: 2023.17 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-017.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.17 Title: Italy’s National Recovery and Resilient Plan: Will it Narrow the North-South Productivity Gap? Author-Name: Luciano Mauro Author-X-Name-First: Luciano Author-X-Name-Last: Mauro Author-WorkPlace-Name: Università di Trieste Author-Name: Francesco Pigliaru Author-X-Name-First: Francesco Author-X-Name-Last: Pigliaru Author-WorkPlace-Name: Università di Cagliari and CRENoS Abstract: We develop an endogenous growth model to simulate the long-term impact of Italy’s National Recovery and Resilience Plan (NRRP) on the persistent North-South productivity gap. Our model underscores public investment as a catalyst for sustained economic growth and highlights the reliance of local government quality on the surrounding social capital. In regions with low social capital, local investment management diminishes efficiency due to prevalent misappropriation. In contrast, centralized management enhances the effectiveness of public action in these situations. The NRRP’s overall effect therefore relies on the government level to which investment management is assigned. Our quantitative exercises show that compared to centralization, decentralization weakens the NRRP’s impact on the relative position of the South. However, even under our best scenario — centralized management — the NRRP only slightly reduces the North-South productivity gap from 75% to 76.4%. Finally, our research highlights the pivotal role of a reform aimed at maintaining central control over Southern public investments well beyond 2026, when the NRRP’s actions and governance are due to stop. This type of reform can potentially yield more substantial, positive, and lasting impacts on the region. Keywords: Social capital, Regional convergence, Economic growth, Decentralization Classification-JEL: O4, N9, R5 Creation-Date: 2023-09 Template-Type: ReDIF-Paper 1.0 Number: 2023.18 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-018.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.18 Title: A Comparison between Sustainability Frameworks: an Integrated Reading through ESG Criteria for Business Strategies and Enterprise Risk Management Author-Name: Paola Casciotti Author-X-Name-First: Paola Author-X-Name-Last: Casciotti Author-WorkPlace-Name: Business Economist Abstract: Implementing the complex Agenda 2030, with its high global Sustainable Development Goals (SDGs) requires, in the by now short time horizon of reference, an extraordinary effort, at all institutionals and private levels, to converge effectively on the whole system of intermediate and interrelated targets. At the same time, it is highly strategic to ensure macro and microeconomic financial long term balances among public and private sectors. The role of Sustainable Finance, in this context, is absolutely central. On the legislative side, the evolution of international directives, from Non Financial Reporting to Sustainability Reporting, impose to pay attention to new criteria and contents, also in order to distinguish deviant greenwashing phenomena. The paper compares the main frameworks, concerning the multiple and complex dimensions of Sustainability, like the institutional ones (MDG, SDG, BES) and one of the most widespread standard of non financial reporting framework (GRI) adopted by companies. The study aims to identify suitable criteria to allow the development of a simplified integrated analysis model of all targets and indicators established and currently in use, in order to converge effectively on the SDGs, to implement coherent public and enterprise’s policies and to produce realistic sustainability reports. The identified suitable criteria are the so called “ESG” criteria, increasingly recommended in the context of Sustainable Finance and by Supervisory bodies, as drivers in sustainability analyses, portfolio selection and rating determination. The paper, therefore, shows the results achieved by comparing these frameworks according to the proposed classification based on the individual E-S-G criteria and on their possible combinations (ES-EG-SG-ESG), through multidimensional matrixes of each goal, dimension, target and indicator (n.° 855) of the examined frameworks. The analysis quantifies the importance of environmental, social and governance drivers and the importance of their combination for each framework considered and also through them altogether. As mentioned in this paper, further analysis by the author leads to develop, according to this ESG simplified classification approach, a new enterprise internal framework, to integrate both sustainability and financial drivers, into Corporates strategic investment decision models and internal capital allocation (tangible and intangible) policies. In this way, the integration of sustainability criteria in all enterprises’ decision-making and risk management and control processes, becomes more effective and coherent with the Sustainable Development Goals. Consequently, the complex frameworks analysed, may become more easily comparable and integrated at an application enterprise level. Keywords: ESG, SDGs, MDGs, GRI, Experimental Classification, Sustainable Finance, Integration, Enterprises, Corporate Risk Strategy, Sustainability Reporting, Sustainable Development Classification-JEL: F53, G390, L21, M14, O16, Q56 Creation-Date: 2023-10 Template-Type: ReDIF-Paper 1.0 Number: 2023.19 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-019.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.19 Title: Skills and human capital for the low-carbon transition in developing and emerging economies Author-Name: Francesco Vona Author-X-Name-First: Francesco Author-X-Name-Last: Vona Author-WorkPlace-Name: University of Milan and Fondazione Eni Enrico Mattei Abstract: Developing and emerging economies face enormous challenges to reconcile economic development and job creation with decarbonization. An essential aspect of such “early-stage” decoupling of growth and carbon emissions is to develop a skill base that favours the diffusion of green productions and technologies. This paper sheds light on the role of the adjustments in the skill supply and of labour market institutions to pursue such early stage decoupling in developing and emerging economies. The paper begins by defining green growth strategies and the associated green skill requirement. To overcome measurement issues and data limitations, it then assesses the advantages and disadvantages of the task-based approach to green labour markets, emphasizing critical issues for developing countries as well as the opportunities to collect original data. Finally, it derives some policy recommendations to solve the coordination failure between investments in skills, particularly technical skills, and green technology adoption. Keywords: Skills, tasks, green economy, developing and emerging economies, structural change, green technological change, labour market institutions Classification-JEL: J24, Q56, O13, O14 Creation-Date: 2023-10 Template-Type: ReDIF-Paper 1.0 Number: 2023.20 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-020.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.20 Title: Forecasts as Repeated Cheap Talk from an Expert of Unknown Statistical Bias Author-Name: Irebe Valsecchi Author-X-Name-First: Irene Author-X-Name-Last: Valsecchi Author-WorkPlace-Name: University of Milano-Bicocca Abstract: For two periods an expert E announces his forecast of the state to a decision-maker D who chooses action. They disagree about the precision of the probability assessments. At the end of period 1 the state is observed. In the last period E makes announcements more extreme than his forecasts. Despite countable equilibria, full revelation is never realised. When in period 1 E is interested in reputation only, the initial equilibrium partition is finite; E makes announcements of greater uncertainty with respect to his forecasts. When E is interested in action too, reputational concerns mitigate exaggerated reports. Keywords: Cheap-talk, expert, statistical bias Classification-JEL: D81, D84 Creation-Date: 2023-10 Template-Type: ReDIF-Paper 1.0 Number: 2023.21 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-021-1.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.21 Title: Understanding the role of supply and demand factors in the global wheat market: a Structural Vector Autoregressive approach Author-Name: Daniele Valenti Author-X-Name-First: Daniele Author-X-Name-Last: Valenti Author-WorkPlace-Name: Department of Management, Economics and Industrial Engineering, Politecnico di Milano School of Management and Fondazione Eni Enrico Mattei Author-Name: Danilo Bertoni Author-X-Name-First: Danilo Author-X-Name-Last: Bertoni Author-WorkPlace-Name: Department of Environmental Science and Policy, University of Milan Author-Name: Daniele Cavicchioli Author-X-Name-First: Daniele Author-X-Name-Last: Cavicchioli Author-WorkPlace-Name: Department of Environmental Science and Policy, University of Milan Author-Name: Alessandro Olper Author-X-Name-First: Alessandro Author-X-Name-Last: Olper Author-WorkPlace-Name: Department of Environmental Science and Policy, University of Milan Abstract: We present a Bayesian structural Vector Autoregressive model of the global wheat market to examine the relative importance of supply and demand shocks, which are interpreted as the fundamental driving forces of wheat price. To our knowledge, this is the first SVAR analysis that jointly considers (i) a Bayesian non-recursive specification, (ii) production and inventories as endogenous variables (iii) and an inventory-based detection strategy. Our main results indicate that: (i) the posterior median estimates for the price elasticity of supply and demand are mostly similar in their order of magnitude but opposite in signs (0.19 for supply and -0.20 for demand); (ii) the price and the inventories respond to global wheat market shocks differently, depending on the type of structural shock. We also show that the results obtained from Cholesy-type identified annual SVAR models for wheat market are potentially misleading and difficult to reconcile with the economic theory of competitive storage. Finally, we illustrate how unpredictable shifts in supply and demand contributed to the dynamic of wheat price between 2000 and 2022. Keywords: Bayesian structural VAR model, Price analysis, Global wheat market Classification-JEL: C11, C32, Q11, Q13 Creation-Date: 2023-10 Template-Type: ReDIF-Paper 1.0 Number: 2023.22 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-022.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.22 Title: Extended producer responsibility and trade flows in waste: The case of batteries Author-Name: Marco Compagnoni Author-X-Name-First: Marco Author-X-Name-Last: Compagnoni Author-WorkPlace-Name: Department of Economics and Management, University of Trento Author-Name: Marco Grazzi Author-X-Name-First: Marco Author-X-Name-Last: Grazzi Author-WorkPlace-Name: Department of Economic Policy, Catholic University of the Sacred Heart and Laboratory of Economics and Management, Sant’Anna School of Advanced Studies Author-Name: Fabio Pieri Author-X-Name-First: Fabio Author-X-Name-Last: Pieri Author-WorkPlace-Name: Department of Economics and Management, University of Trento and Centro Studi Luca d’Agliano Author-Name: Chiara Tomasi Author-X-Name-First: Chiara Author-X-Name-Last: Tomasi Author-WorkPlace-Name: Department of Economics and Management, University of Trento and Laboratory of Economics and Management, Sant’Anna School of Advanced Studies Abstract: In the debate on international waste trade, the focus on resource efficiency and recycling has gradually begun to accompany the focus on negative environmental externalities. In this context, we examine the impact of Extended Producer Responsibility (EPR) on the export of waste batteries (WB). EPR is considered as a key policy for the “marketization of waste”. On the other hand, WB are a hazardous waste that also contain a high concentration of critical raw materials. As such, they are of strategic importance for the recovery of critical resources, while at the same time requiring proper environmental management. Therefore, it is crucial to understand where WB are treated and how this is affected by related policies. Our results, based on difference-in-difference models in a gravity framework, show a consistent increase in WB exports after EPR implementation compared to the trend for other wastes. This result is likely to be an indirect consequence of the ability of EPR to support growth in waste collection rates, more accurate tracking of transboundary waste flows, and specialization of national waste management systems. In particular, EPR exports appear to be directed to countries with more advanced waste management systems rather than to developing countries. Keywords: Extended producer responsibility, batteries, trade, recycling, circular economy Classification-JEL: K32, Q51, Q53, Q56 Creation-Date: 2023-10 Template-Type: ReDIF-Paper 1.0 Number: 2023.23 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-023.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.23 Title: Is the Price Cap for Gas Useful? Evidence from European Countries Author-Name: Francesco Ravazzolo Author-X-Name-First: Francesco Author-X-Name-Last: Ravazzolo Author-WorkPlace-Name: Norwegian Business School and Free-University of Bozen-Bolzano Author-Name: Luca Rossini Author-X-Name-First: Luca Author-X-Name-Last: Rossini Author-WorkPlace-Name: University of Milan and Fondazione Eni Enrico Mattei Abstract: Since Russia’s invasion of Ukraine, many countries have pledged to end or restrict their oil and gas imports to curtail Moscow’s revenues and hinder its war effort. Thus, the European ministers agreed to trigger a cap on the gas price. To detect the importance of the price cap for gas, we provide a mixture representation for the gas price to detect the presence of outliers made by a truncated normal distribution and a uniform one. We focus our analysis on Germany and Italy, which are major Russian gas importers by exploiting the response of the different commodities to a gas shock through a Bayesian vector autoregressive (VAR) model. As a result, including a lower gas price cap smooths the impact of a gas shock on electricity prices, while not considering a price cap will increase exponentially this impact. Keywords: Bayesian time series, Forecasted error variance decomposition, Gas price cap, Impulse response function, Mixture representation Classification-JEL: C11, C32, Q41, Q43 Creation-Date: 2023-10 Template-Type: ReDIF-Paper 1.0 Number: 2023.24 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-024.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.24 Title: Climate Activism Favors Pro-environmental Consumption 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: Samuel Nocito Author-X-Name-First: Samuel Author-X-Name-Last: Nocito Author-WorkPlace-Name: Sapienza University of Rome Abstract: We investigate whether climate activism favors pro-environmental consumption by examining the impact of Fridays for Future (FFF) protests in Italy on second-hand automobile transactions in the strike-affected areas. Leveraging data on 10 million automobile transactions occurring before and after FFF, we exploit rainfall on the day of the events as exogenous source of attendance variation. Our findings reveal that local participation to the events is associated with a reduction in the per capita CO2 emissions of purchased cars, an uptick in the market share of low-emission vehicles and a corresponding decrease in the market share of high-emission counterparts. Notably, we uncover heterogeneous effects across gender and age groups. Results are primarily driven by a rise in the purchase of petrol cars, with electric cars contributing to a lesser extent, thereby displacing the demand for diesel vehicles. This evidence indicates substitution effects between goods prospectively subject to more stringent environmental regulations toward those obeying milder restrictions. The study provides valuable insights into the mechanisms underlying individuals’ consumption choices under the influence of social protests. Keywords: Fridays for Future, climate activism, green consumption, carbon emissions Classification-JEL: D12, D91, Q50, Q53, R41 Creation-Date: 2023-11 Template-Type: ReDIF-Paper 1.0 Number: 2023.25 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-025.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.25 Title: Gotta Catch ’Em All: CCUS with endogenous technical change Author-Name: Davide Bazzana Author-X-Name-First: Davide Author-X-Name-Last: Bazzana Author-WorkPlace-Name: Department of Economics and Management, University of Brescia and Fondazione Eni Enrico Mattei Author-Name: Nicola Comincioli Author-X-Name-First: Nicola Author-X-Name-Last: Comincioli Author-WorkPlace-Name: Department of Economics and Management, University of Brescia and Fondazione Eni Enrico Mattei Author-Name: Camilla Gusperti Author-X-Name-First: Camilla Author-X-Name-Last: Gusperti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Demis Legrenzi Author-X-Name-First: Demis Author-X-Name-Last: Legrenzi Author-WorkPlace-Name: Department of Economics and Management, University of Brescia and Fondazione Eni Enrico Mattei Author-Name: Massimiliano Rizzati Author-X-Name-First: Massimiliano Author-X-Name-Last: Rizzati Author-WorkPlace-Name: Department of Economics and Management, University of Brescia and Fondazione Eni Enrico Mattei Author-Name: Sergio Vergalli Author-X-Name-First: Sergio Author-X-Name-Last: Vergalli Author-WorkPlace-Name: Department of Economics and Management, University of Brescia and Fondazione Eni Enrico Mattei Abstract: Carbon Capture Utilization and Storage (CCUS) stands as a pivotal technology crucial for achieving the most ambitious climate objectives. Despite its prominent inclusion in energy mix projections, its current deployment falls short of the requisite level. Additionally, uncertainties surrounding future developments pose potential obstacles to its optimal diffusion. This study addresses two primary shortcomings that could impede the widespread adoption of CCUS. Firstly, it investigates how investments in CCUS technologies either compete with or complement other green research and development (R&D) activities. Secondly, it explores how the heterogeneity among different economies and the factors influencing the technology might lead to alternative configurations compared to the current trajectory. To address these issues, this study introduces CCUS into a regional Integrated Assessment Model (IAM) incorporating endogenous green R&D and heterogeneous cost functions. The model generates optimal pathways for both CCUS and green R&D, revealing a significant challenge: an insufficient valuation of R&D costs could potentially displace all investment in CCUS. Furthermore, the distribution of CCUS capital across regions by the end of the century necessitates substantial investments from regions with currently lower values, such as Europe and lower-income countries. This research underscores the imperative need for policies that mitigate uncertainties surrounding future technologies and coordinate contemporary state investments. Such policies are essential for CCUS to attain the envisaged contributions to emission reduction targets. Keywords: Carbon Capture Utilization and Storage (CCUS), Integrated Assessment Model (IAM), Green Research and Development (R&D), Climate Objectives, Technological Uncertainties, Regional Disparities, Emission Reduction Targets Classification-JEL: Q53, Q54, O32 Creation-Date: 2023-11 Template-Type: ReDIF-Paper 1.0 Number: 2023.26 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2023-026.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2023.26 Title: Is public debt environmentally friendly? The role of EU fiscal rules on environmental quality: An empirical assessment Author-Name: Giovanni Carnazza Author-X-Name-First: Giovanni Author-X-Name-Last: Carnazza Author-WorkPlace-Name: Department of Economics and Management, University of Pisa Author-Name: Thomas I. Renström Author-X-Name-First: Thomas I. Author-X-Name-Last: Renström Author-WorkPlace-Name: Department of Economics and Management, Centre for Environmental and Energy Economics, Durham University Author-Name: Luca Spataro Author-X-Name-First: Luca Author-X-Name-Last: Spataro Author-WorkPlace-Name: Department of Economics and Management, University of Pisa Abstract: The EU has embarked on multiple initiatives reflecting its commitment to environmental enhancement and sustainable transitions. Notable among these are the European Green Deal and the NextGenerationEU recovery plan, both pivotal in fostering eco-friendly policies and sustainable practices within the region. Conversely, the fiscal rules within the EU, designed to manage budgetary deficits and debt-to-GDP ratios, may pose challenges to the implementation of fiscal measures targeted at achieving environmental quality objectives. These regulatory constraints potentially curtail the fiscal space available for policies aligned with the environmental goals set forth by the EU. To address this issue, using a panel of 27 European member countries observed annually from 1995 to 2021, we investigate the impact of two different indicators on the overall carbon intensity: on the one hand, the implicit tax rate on energy reduces environmental pollution; on the other hand, an increase in the stringency of the European fiscal framework and/or the debt-to-GDP ratio increase carbon intensity. From a policy point of view, our outcomes stress the importance of shaping national and European regulations to foster more sustainable environmental development. Keywords: Fiscal Rules, European Union, Energy taxes, CO2 emissions, Government debt Classification-JEL: H23, H63, H87, Q53, Q58 Creation-Date: 2023-12