Template-Type: ReDIF-Paper 1.0 Number: 2025.01 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2025-01.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2025.01 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: Department of Social Sciences and Economics, Sapienza University of Rome Author-Name: Samuel Nocito Author-X-Name-First: Samuel Author-X-Name-Last: Nocito Author-WorkPlace-Name: Department of Social Sciences and Economics, 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 sales in rally-affected areas. Leveraging data on 10 million automobile transactions occurring before and after FFF mobilizations, we exploit rainfall on the day of the event as an exogenous source of attendance variation. Our findings reveal a reduction in both the total number of cars purchased and their average CO2 emissions, with an uptick in the market share of low-emission vehicles and a corresponding decrease in the market share of high-emission counterparts. We test for two potential mechanisms at work: one mediated by an increase in environmental awareness, the other induced by a rational anticipation of future stricter regulations. Empirical evidence suggests that the latter mechanism is generally more pronounced than the former. However, the first channel seems likely to be at work among individuals aged 18-25, a group that is potentially more involved in the FFF movement. Keywords: Fridays for Future, climate activism, green consumption, carbon emissions, automobiles Classification-JEL: D72, D12, Q53, R41 Creation-Date: 2025-01 Template-Type: ReDIF-Paper 1.0 Number: 2025.02 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2025-02.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2025.02 Title: Skill-Biased Employment and the Stringency of Environmental Regulations in European Countries Author-Name: Jose' Alberto Fuinhas Author-X-Name-First: Jose' Alberto Author-X-Name-Last: Fuinhas Author-WorkPlace-Name: Faculty of Economics, and Centre for Business and Economics Research (CeBER), University of Coimbra Author-Name: Asif Javed Author-X-Name-First: Asif Author-X-Name-Last: Javed Author-WorkPlace-Name: School of Advanced Studies, University of G. D'Annunzio Chieti-Pescara Author-Name: Dario Sciulli Author-X-Name-First: Dario Author-X-Name-Last: Sciulli Author-WorkPlace-Name: Department of Economic Studies, University of G. D'Annunzio Chieti-Pescara Author-Name: Edilio Valentini Author-X-Name-First: Edilio Author-X-Name-Last: Valentini Author-WorkPlace-Name: Department of Economic Studies, University of G. D'Annunzio Chieti-Pescara Abstract: Governments across the globe are implementing stricter environmental policies to combat climate change and promote sustainability. This study contributes to the growing literature exploring the influence of environmental policy on skill-biased employment across various occupations. Specifically, we examine the causal effect of the revised version of Environmental Policy Stringency Index (EPS) and its components on skill-biased employment, focusing on occupations such as managers, professionals, technicians, and manual workers across 21 European economies from 2008 to 2020. Using the Method of Moments Quantile Regression (MMQR), the findings reveal that stringent environmental policies affect employment shares across different occupational categories. Skilled workers tend to benefit more from such policies, with a notable increase in the employment of professionals across all policy measures and a more differentiated impact among technicians and managers. In contrast, manual workers are generally adversely affected by environmental policies. These asymmetric effects on occupations exacerbate labour market inequalities, including disparities in employment levels and potential earnings. This research highlights the importance of designing tailored policies to mitigate adverse labour market outcomes while facilitating a transition to sustainable economic practices. Keywords: Environmental policy stringency, Skilled workers, Employment, Method of Moments Quantile Regression Classification-JEL: Q58, J24 Creation-Date: 2025-01 Template-Type: ReDIF-Paper 1.0 Number: 2025.03 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2025-03.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2025.03 Title: The Enemy of my Enemy Author-Name: Alessandro Stringhi Author-X-Name-First: Alessandro Author-X-Name-Last: Stringhi Author-WorkPlace-Name: University of Siena Author-Name: Sara Gil-Gallen Author-X-Name-First: Sara Author-X-Name-Last: Gil-Gallen Author-WorkPlace-Name: Institute of Cognitive Sciences and Technologies, Italian National Research Council Author-Name: Andrea Albertazzi Author-X-Name-First: Andrea Author-X-Name-Last: Albertazzi Author-WorkPlace-Name: IMT School for Advanced Studies Lucca Abstract: This paper studies how competition between groups affects cooperation. In the control condition, pairs of subjects play an indefinitely repeated Prisoner s Dilemma game without external competition. In the treatment, two pairs compete against each other. No monetary rewards are tied to winning, isolating the bare impact of competition. In the treatment, cooperation increases by 16 percentage points. Strategies estimation shows a shift from selfish strategies (Always Defect) to cooperative ones (Grim Trigger). A theoretical model provides a rationale for the experimental results. Keywords: Competition, Cooperation, Prisoner s Dilemma, Repeated game Classification-JEL: C73, C92, D81 Creation-Date: 2025-01 Template-Type: ReDIF-Paper 1.0 Number: 2025.04 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2025-04.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2025.04 Title: Forecasting the Volatility 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: Xiao Li Author-X-Name-First: Xiao Author-X-Name-Last: Li Author-WorkPlace-Name: Department of Economics, Management, and Quantitative Methods, University of Milan; Fondazione Eni Enrico Mattei and University of Pavia Author-Name: Luqman Shamsudin Author-X-Name-First: Luqman Author-X-Name-Last: Shamsudin Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Department of Environmental Science and Policy, University of Milan Abstract: The transition to a cleaner energy mix, essential for achieving net-zero greenhouse gas emissions by 2050, will significantly increase demand for metals critical to renewable energy technologies. Energy Transition Metals (ETMs), including copper, lithium, nickel, cobalt, and rare earth elements, are indispensable for renewable energy generation and the electrification of global economies. However, their markets are characterized by high price volatility due to supply concentration, low substitutability, and limited price elasticity. This paper provides a comprehensive analysis of the price volatility of ETMs, a subset of Critical Raw Materials (CRMs). Using a combination of exploratory data analysis, data reduction, and visualization methods, we identify key features for accurate point and density forecasts. We evaluate various volatility models, including Generalized Autoregressive Conditional Heteroskedasticity (GARCH) and Stochastic Volatility (SV) models, to determine their forecasting performance. Our findings reveal significant heterogeneity in ETM volatility patterns, which challenge standard groupings by data providers and geological classifications. The results contribute to the literature on CRM economics and commodity volatility, offering novel insights into the complex dynamics of ETM markets and the modeling of their returns and volatilities. Keywords: Critical Raw Materials, Energy Transition, Features, Volatility, Forecasting, Density forecasts Classification-JEL: C22, C53, C58, Q02, Q30, Q42 Creation-Date: 2025-01 Template-Type: ReDIF-Paper 1.0 Number: 2025.05 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2025-05.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2025.05 Title: Green Investment in the EU and the US: Markup Insights Author-Name: Anastasia Bruni Author-X-Name-First: Anastasia Author-X-Name-Last: Bruni Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Catholic University of Sacred Heart Abstract: This paper examines the effect of green investments on market power. I measure the market power as markup following the method provided in De Loecker and Warzynski (2012). For green investments, I consider specifically the investments of firms in energy efficient technologies, both as the binary variable and as the continuous variable. This allows the examination of how the presence of such investments as well as their intensity affect markups. I use firm, age, year, sector and country fixed effects with a representative sample of indicatively 12,000 firms from the European Investment Bank Investment Survey (EIBIS) in the panel from 2016 to 2022. I find the positive and statistically significant relationship that holds also when applying the 2SLS-IV methodology. This study is particularly relevant for firms that are willing to increase their market power and to improve their environmentally friendly image in the eyes of their customers without the need of engaging in greenwashing practices. Instead, the firms are invited to consider energy efficiency investments as a concrete way of improving both their markups and the loyalty of their customers. Keywords: green investment, markup, market power, instrumental variable Classification-JEL: Q56, L11, D22, C36, O13 Creation-Date: 2025-02 Template-Type: ReDIF-Paper 1.0 Number: 2025.06 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2025-06.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2025.06 Title: Optimal investment in an energy storage system Author-Name: Marta Castellini Author-X-Name-First: Marta Author-X-Name-Last: Castellini Author-WorkPlace-Name: Department of Economics and Management "Marco Fanno", University of Padova, and Fondazione Eni Enrico Mattei Author-Name: Chiara D'Alpaos Author-X-Name-First: Chiara Author-X-Name-Last: D'Alpaos Author-WorkPlace-Name: Department of Civil, Environmental and Architectural Engineering, University of Padova Author-Name: Fulvio Fontini Author-X-Name-First: Fulvio Author-X-Name-Last: Fontini Author-WorkPlace-Name: Department of Law Studies, University of Salento and Climate Economics Chair, University Paris Dauphine Author-Name: Michele Moretto Author-X-Name-First: Michele Author-X-Name-Last: Moretto Author-WorkPlace-Name: Department of Economics and Management "Marco Fanno", University of Padova Abstract: Renewable energy production plays a crucial role in the energy transition. However, many renewable energy sources (RES) are intermittent, and there is often a mismatch between energy production and consumption, which can be partially solved by storage. In this paper, we investigate the investment decision in a photovoltaic (PV) power plant coupled with a Battery Energy Storage System (BESS), namely an Energy Storage System (ESS). We aim to investigate the relationship between the net present value (NPV) of the investment and the technical implications related to the maximum amount of energy to be stored while also accounting for the impact of energy prices. In our setting, the BESS is connected to the national power grid and the PV plant. Energy can be produced, purchased from the grid, stored, self-consumed, and fed into the grid. PV production and energy consumption loads evolve stochastically over time. In addition, as BESS are costly, energy stored has an opportunity cost, which depends on the prices of energy purchased from the grid and energy fed in and sold to the grid, respectively. However, BESS can significantly contribute to increase ESS managerial flexibility and, in turn, ESS value. In detail, we investigate the optimal BESS size that minimizes ESS net operating costs. We also provide insights on ESS optimal management strategy. Our results show that ESS net operating costs are relatively small. They reduce for increasing selling prices of energy, whereas they increase for increasing volatility of the stock of energy stored in the battery. Keywords: Renewable Energy Sources, Photo-voltaic, Battery Storage Classification-JEL: Q42, C61, D81 Creation-Date: 2025-02 Template-Type: ReDIF-Paper 1.0 Number: 2025.07 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2025-07.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2025.07 Title: Government Size, Civic Capital and Economic Performance: An O-ring approach Author-Name: Luciano Mauro Author-X-Name-First: Luciano Author-X-Name-Last: Mauro Author-WorkPlace-Name: Universita' di Trieste, DISPES and Duke University Author-Name: Francesco Pigliaru Author-X-Name-First: Francesco Author-X-Name-Last: Pigliaru Author-WorkPlace-Name: Universita' di Cagliari and CRENoS Author-Name: Gaetano Carmeci Author-X-Name-First: Gaetano Author-X-Name-Last: Carmeci Author-WorkPlace-Name: Universita' di Trieste, DEAMS Abstract: This paper explores how civic capital shapes the relationship between government size and economic performance. Building on an exogenous-growth version of Barro (1990), we incorporate O-ring technology to capture task complementarity in the public sector, highlighting the role of civic capital in reducing errors and malfeasance. Our model shows that greater civicness not only raises the inverted U-shaped relationship between government size and output but also shifts it rightward, increasing both economic performance and the optimal government size. We test these implications using a dynamic panel data model for 23 OECD countries from 1975 to 2010, estimated via system GMM. Our results support the hypothesized inverted-U relationship and demonstrate that civic capital significantly raises the threshold at which the marginal returns to government size approach zero. Thus, countries with higher civicness can sustain larger public sectors without compromising growth. This finding provides fresh insights into how deeply institutional quality, rooted in social trust, shapes the government-size growth nexus. Keywords: Social capital, Government size, O-ring theory, Economic growth Classification-JEL: O43, E02, H11, H21 Creation-Date: 2025-03 Template-Type: ReDIF-Paper 1.0 Number: 2025.08 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2025-08.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2025.08 Title: The geography of mining and its environmental impact in Europe 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 F. Del Bo Author-X-Name-First: Chiara F. Author-X-Name-Last: Del Bo Author-WorkPlace-Name: Department of Economics, Management and Quantitative Methods, University of Milan Author-Name: Luqman Shamsudin Author-X-Name-First: Luqman Author-X-Name-Last: Shamsudin Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Department of Environmental Science and Policy, University of Milan Abstract: We map the mining sector in Europe, with a focus on Energy Transition Metals (ETMs), and present an in-depth analysis of the environmental impact and associated monetary costs, at the regional level, of extraction activities. We aim to offer a spatially disaggregated view of the current mining projects and associated environmental costs in terms of CO2 emissions and their monetary value. To do this, we collected global warming potential (GWP) data from Life Cycle Assessment Impact Analysis (LCIA) and linked these to their expected monetary value. By considering the full spectrum of sourced ETMs, we map the environmental, physical, and monetary impact of current mining activities in Europe, and understand what a further increase in exploiting European reserves to reduce dependence from abroad and facilitate the green transition, could imply for European regions. Keywords: Critical raw materials, Europe, Life Cycle Assessment Impact Analysis, mining, regional Classification-JEL: L72, O52, Q32, Q51, R11 Creation-Date: 2025-03 Template-Type: ReDIF-Paper 1.0 Number: 2025.09 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2025-09.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2025.09 Title: Green Collars at the Voting Booth: Material Interest and Environmental Voting Author-Name: Enrico Cavallotti Author-X-Name-First: Enrico Author-X-Name-Last: Cavallotti Author-WorkPlace-Name: Trinity College Dublin, Department of Economics Author-Name: Italo Colantone Author-X-Name-First: Italo Author-X-Name-Last: Colantone Author-WorkPlace-Name: Bocconi University, Department of Social and Political Sciences, GREEN Research Centre, Baffi Research Centre, CESifo & Fondazione Eni Enrico Mattei Author-Name: Piero Stanig Author-X-Name-First: Piero Author-X-Name-Last: Stanig Author-WorkPlace-Name: Bocconi University, Department of Social and Political Sciences, GREEN Research Centre, & Dondena Research Centre Author-Name: Francesco Vona Author-X-Name-First: Francesco Author-X-Name-Last: Vona Author-WorkPlace-Name: University of Milan, Department of Environmental Science and Policy & Fondazione Eni Enrico Mattei Abstract: We study how occupation-related material interest affects environmental voting. Specifically, material interest hinges on the greenness vs. brownness of individual occupational profiles. That is, on the extent to which individuals are expected to benefit vs. lose in a greener economy. We employ individual-level data from 14 western European countries, over 2010-2019. To measure the greenness and brownness of occupational profiles, for each individual we compute predicted greenness and brownness scores based on the predicted probabilities to be employed in each possible occupation. These probabilities are combined with occupation-specific greenness and brownness scores. Individuals characterized by higher predicted brownness are less likely to vote for Green parties and for parties with a more environmentalist agenda, while the opposite holds for individuals characterized by higher predicted greenness. Voting preferences of brown profiles tend to converge towards those of greener profiles in regions that are better placed to gain from the green transition. Keywords: green voting, material interests, green jobs, brown jobs, labour market effects of the green transition Classification-JEL: D72, Q52, P16 Creation-Date: 2025-03 Template-Type: ReDIF-Paper 1.0 Number: 2025.10 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2025-10-1.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2025.10 Title: Accounting for the Multiple Sources of Inflation: an Agent-Based Model Investigation Author-Name: Leonardo Ciambezi Author-X-Name-First: Leonardo Author-X-Name-Last: Ciambezi Author-WorkPlace-Name: Universite' Cote D'Azur, CNRS, GREDEG and Institute of Economics and l'Embeds, Scuola Superiore Sant'Anna di Pisa Author-Name: Mattia Guerini Author-X-Name-First: Mattia Author-X-Name-Last: Guerini Author-WorkPlace-Name: Department of Economics and Management, University of Brescia, Fondazione Eni Enrico Mattei, Universite' Cote D'Azur, CNRS, GREDEG and Institute of Economics and l'Embeds, Scuola Superiore Sant'Anna di Pisa Author-Name: Mauro Napoletano Author-X-Name-First: Mauro Author-X-Name-Last: Napoletano Author-WorkPlace-Name: Universit C te D Azur, CNRS, GREDEG, OFCE - SciencesPo and Institute of Economics and l'Embeds, Scuola Superiore Sant'Anna di Pisa Author-Name: Andrea Roventini Author-X-Name-First: Andrea Author-X-Name-Last: Roventini Author-WorkPlace-Name: Institute of Economics and l Embeds, Scuola Superiore Sant Anna di Pisa and OFCE - SciencesPo Abstract: We develop a macroeconomic agent-based model to study the role of demand and supply factors in determining inflation dynamics. Local interactions of heterogeneous firms and households in the labor and goods markets characterize the model. Asymmetric information implies that firm selection is imperfect and depends both on firms relative prices and on their size. We calibrate the model on EU data by using the method of simulated moments and show that it can generate realistic inflation dynamics and a non-linear Phillips curve in line with recent empirical evidence. We then find that the traditional demand-led explanation of inflation stemming from a tight labor market only holds when selection in the goods markets is mostly driven by relative prices in comparison to firm size. Finally, we study the response of inflation to shocks impacting consumption, labor productivity, or energy costs. The results indicate that only demand shocks lead to wage-led inflation surges. Productivity shocks are entirely passed through to prices without affecting the income distribution. Energy shocks, instead, induce sellers inflation after changes in both firms cost structure and profit margins. This is in line with the recent empirical evidence for the Euro Area. Keywords: Inflation, agent-based models, market structure, mark-up rates, sellers inflation Classification-JEL: E31, E32, C63 Creation-Date: 2025-03 Template-Type: ReDIF-Paper 1.0 Number: 2025.11 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2025-11-1.pdf Handle: RePEc:fem:femwpa:2025.11 Title: Predictive AI and productivity growth dynamics: evidence from French firms Author-Name: Luca Fontanelli Author-X-Name-First: Luca Author-X-Name-Last: Fontanelli Author-WorkPlace-Name: University of Brescia, Department of Economics and Management, CMCC Foundation Euro-Mediterranean Center on Climate Change Author-Name: Mattia Guerini Author-X-Name-First: Mattia Author-X-Name-Last: Guerini Author-WorkPlace-Name: University of Brescia, Deparment of Economics and Management and Fondazione Eni Enrico Mattei Author-Name: Raffaele Miniaci Author-X-Name-First: Raffaele Author-X-Name-Last: Miniaci Author-WorkPlace-Name: University of Brescia, Department of Economics and Management Author-Name: Angelo Secchi Author-X-Name-First: Angelo Author-X-Name-Last: Secchi Author-WorkPlace-Name: PSE - University Paris 1 Pantheon-Sorbonne, CMCC - Foundation Euro-Mediterranean Center on Climate Change Abstract: While artificial intelligence (AI) adoption holds the potential to enhance business operations through improved forecasting and automation, its relation with average productivity growth remain highly heterogeneous across firms. This paper shifts the focus and investigates the impact of predictive artificial intelligence (AI) on the volatility of firms' productivity growth rates. Using firm-level data from the 2019 French ICT survey, we provide robust evidence that AI use is associated with increased volatility. This relationship persists across multiple robustness checks, including analyses addressing causality concerns. To propose a possible mechanisms underlying this effect, we compare firms that purchase AI from external providers ("AI buyers") and those that develop AI in-house ("AI developers"). Our results show that heightened volatility is concentrated among AI buyers, whereas firms that develop AI internally experience no such effect. Finally, we find that AI-induced volatility among "AI buyers" is mitigated in firms with a higher share of ICT engineers and technicians, suggesting that AI's successful integration requires complementary human capital. Keywords: Artificial intelligence, productivity growth volatility, coarsened exact matching Classification-JEL: D20, J24, O14, O33 Creation-Date: 2025-04