Search

Begin New Search Topic Climate Change Content Type Working Paper Publication Year within 25 Years

21. Time to say goodbye? The impact of environmental regulation on foreign divestment

Author:
Haiou Mao, Holger Görg, and Guopei Fang
Publication Date:
09-2023
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
We look at divestments by foreign firms – a topic that has received comparatively little attention in the literature – and investigate how changes in the regulatory environment in the host country may impact on such divestment decisions. We use the implementation of China’s Two Control Zone (TCZ) policy as a “quasi-natural experiment”, using detailed firm level combined with city level data for the empirical analysis. Our results show that the implementation of TCZ policy has led to higher probabilities of divestments by foreign firms in targeted TCZ cities and industries. The mechanism behind this seems to be a TCZ-induced increase in discharge fees and efforts to reduce SO2 emissions. Allowing for heterogeneity of effects, we find that the effect is particularly strong for firms from source countries with less stringent environmental regulation, and those using less advanced technology. We furthermore show that firms using intermediates from polluting industries also experience a higher probability of divestment.
Topic:
Climate Change, Environment, Foreign Direct Investment, Regulation, Business, and Divestment
Political Geography:
China and Asia

22. Regional Development and Internal Migration Aspects of Structural Transformation: A Case Study of Senegal

Author:
Askar Mukashov
Publication Date:
10-2023
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This study investigates regional development and internal migration dynamics within the context of modern structural transformation in Sub-Saharan Africa. We develop a regionalized Computable General Equilibrium model that incorporates regionalized production, endogenous interregional migration, and distinct migrant households. Using this model, we simulate the structural transformation of Senegal as a case study. Our findings demonstrate that agricultural stagnation, exacerbated by global climate change, underlies the economic underperformance of rural regions and amplifies regional income disparities. Furthermore, our analysis shows that outmigration from stagnating rural provinces to a more developed capital region positively influences overall economic growth and mitigates regional income inequality. Nevertheless, these effects are limited, and a proactive approach to addressing income inequality across the nation's regions would require supporting agriculture, as it represents a more equitable policy than promoting nonagricultural sectors in both rural and capital regions.
Topic:
Climate Change, Migration, Economic Growth, Labor Market, and Regional Development
Political Geography:
Africa

23. Potential efficiency gains from the introduction of an emissions trading system for the buildings and road transport sectors in the European Union

Author:
Wilfried Rickels, Christian Rischer, Felix Schenuit, and Sonja Peterson
Publication Date:
05-2023
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
In the European Union (EU), a second emissions trading system (EU ETS2) covering buildings, road transport and small energy and industrial installations is expected to be introduced from 2027. Until 2030, however, EU ETS2 will not be a separate pillar of EU climate policy, but will support Member States in meeting their national targets under the Effort Sharing Regulation (ESR). If there are net regional shifts in emission reductions within the EU ETS2, for example, if companies in one member state buy in aggregated terms net allowances, this must be compensated for at the national level. We study the EU ETS2 for the year 2030 using the general equilibrium model DART. In our analysis, the introduction of an EU ETS2 generates about a quarter of the efficiency gains of a comprehensive emissions trading system, assuming that nation states use the flexibility mechanisms of the ESR and compensate for regional abatement leakage through interstate emissions trading. However, this is only true if there is no extensive price stabilization in the EU ETS2. Our analysis suggests an EU ETS2 allowance price of around EUR 300/tCO2. Stabilizing the EU ETS2 price at the envisaged intervention price of 45 EUR/tCO2 would require about 415 million additional allowances and thus imply additional emissions of the same amount in 2030 alone.
Topic:
Climate Change, European Union, Economy, and Carbon Emissions
Political Geography:
Europe

24. Technology will save the climate! Attitudes towards Norway’s climate policy in four social groups

Author:
Åsta Dyrnes Nordø
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
The risk of opposition from the population increasingly plays a role in choosing the climate policy measures to achieve the objective to substantially reduce greenhouse gas emissions. In Norway, there is a long-standing cross-party consensus that the development of new technologies will be crucial for solving climate challenges. Comparing public opinion surveys, Norwegians are significantly more convinced that new technology will solve problems induced by climate change, compared people in other European countries. A concrete example of such a technology is carbon capture and storage (CCS). Despite discussions about the costs of establishing the technology, there is a cross-party consensus in Norway that CCS is a good and suitable measure for reaching climate policy goals. In this article, we review the historical background that has led to this broad support in Nor-way. Furthermore, we look at how this has been expressed in the political parties’ attitudes towards CCS. There has been a long standing consensus among all major parties that CCS should be developed and deployed. We argue that this lay the foundation for the societal support for CCS. We analyze data from the Norwegian Coordinated Online panels for research on DEMocracy and governance (KODEM) to examine the attitudes toward CCS among citizens and three functional elites, namely elected representatives, bureaucrats, and journalists. We find that CCS receives strong support in all four groups, but that citizens and elected representative are more skeptical compared to bureaucrats and journalists. However, when looking at the factors that influence the perception of CCS, the pattern is the same for all four groups. The more technology optimistic a person is, the more positively they tend to perceive CCS as a method to fight climate change. We also find that those who think the political efforts to reduce greenhouse gases are too great are less positive about CCS com-pared to those who think the efforts are appropriate or too small. Overall, the analysis indicates that all four societal groups are technology optimistic and characterized by the same attitudes toward climate change. We discuss the role of technology optimism in Norway’s climate policy and the reasons for the high degree of political consensus across groups with different societal functions.
Topic:
Climate Change, Science and Technology, Carbon Emissions, Elites, and Attitudes
Political Geography:
Europe and Norway

25. The EU’s approach to climate mobility: Which way forward?

Author:
Helena Hahn and Melanie Fessler
Publication Date:
10-2023
Content Type:
Working Paper
Institution:
European Policy Centre (EPC)
Abstract:
Climate mobility as a global issue needs strategic thinking about how people adapt, and the role mobility can play in alleviating the adverse effects of climate change. This Discussion Paper analyses what the EU is doing to deal with climate mobility. It addresses the complicated relationship between climate change, mobilities, and related challenges in modelling and projecting future scenarios. It also shows the multilateral policy developments relating to climate and migration and the EU’s actions on climate mobility, with a focus on two interrelated challenges: 1. Policy (in)coherence and counterproductive narratives. 2. Weak institutional coordination. The EU’s funding landscape is also addressed, focusing on the challenges of mainstreaming and monitoring when assessing the funds dedicated to this cause. It concludes with recommendations on impacts, multilateral engagement, policy, and funding, which outline practical steps to be taken in the short and long-term.
Topic:
Climate Change, European Union, and Mobility
Political Geography:
Europe

26. Planetary health: A holistic vision for people and the planet

Author:
Danielle Brady
Publication Date:
09-2023
Content Type:
Working Paper
Institution:
European Policy Centre (EPC)
Abstract:
The nexus between health and the environment has been underscored by crises such as COVID-19 and the climate crisis. As awareness of policy interlinkages grows, so does the need for more coordinated EU and national policymaking. Calls for a more holistic approach have long been recognised, but the pandemic has further emphasised the importance of dismantling existing barriers in policymaking to improve the health status of people, animals, and the planet. This Discussion Paper, funded by Sitra, the Finnish Innovation Fund, advocates for implementing a planetary health approach across all levels of governance to encourage transdisciplinary action and puts forward ten recommendations: Pursue coordinated policymaking by breaking down silos. Appoint an Executive Vice President for the Well-being Economy. Plan and implement national roadmaps and establish common indicators. Create best practices platforms. Adopt planetary health for health systems. Promote education on planetary health. Adopt a European-wide communication campaign. Invest in research and innovation. Foster the integration of the European Health Data Space with future data spaces. Work with international partners to adopt a global planetary health approach. Planetary health offers many benefits for health and the environment. However, without concentrated efforts to move beyond the traditional siloed approach to policymaking, the benefits may never be realised.
Topic:
Climate Change, Health, European Union, and COVID-19
Political Geography:
Global Focus

27. The Nexus Approach: Bringing together climate, human security, and demographic change in times of permacrisis

Author:
Eleonora Milazzo
Publication Date:
10-2023
Content Type:
Working Paper
Institution:
European Policy Centre (EPC)
Abstract:
The start of a new institutional cycle and the development of the European Council's Strategic Agenda will raise concerns about the EU's ability to respond to multiple problems in a more systemic and conscious style. Therefore, a holistic nexus approach that combines greater inter- and intra-institutional collaboration with strategic vision and principled leadership will be essential if the EU is to deliver on complex challenges. It will play a vital role in the EU’s ability to deal with today’s permacrisis with regard to climate change, human security, and demographic transformations. This Discussion Paper retraces the genesis of the nexus approach in humanitarian and development cooperation to draw lessons learned for the EU’s strategic thinking around systemic and deeply interconnected problems. It shows how a conscious strategic vision, more coherence, and principled leadership will be crucial if the EU is to tackle complex challenges effectively.
Topic:
Climate Change, Demographics, European Union, Crisis Management, and Human Security
Political Geography:
Europe

28. The Sunshine Problem: Climate Change and Managed Decline in the European Union

Author:
Timur Ergen and Luuk Schmitz
Publication Date:
12-2023
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
Decarbonization requires the winding down of – economically – fully viable, if not highly prosperous, lines of economic activity. Different from past episodes of industrial restructuring revolving around the managed decline of sunset industries, accelerating climate change requires reallocation away from economic activities where the metaphorical sun is still shining. Firms, owners, workers, regions, and polities structurally rely on these sources of prosperity and have interwoven their past and future lives with them. We argue that this problem has created a space for state actors to experiment with vertical industrial policies to manage the reallocation of resources from polluting to non-polluting activities. We illustrate this dynamic by investigating the least-likely case of the European Union, a polity heavily tilted towards market governance. European climate policymakers, we argue, have incrementally moved away from the primacy of regulatory, market-making tools and have introduced a plethora of vertical instruments to shift resources away from climate-harming fields. This experimentation with vertical policies unfolds against the backdrop of a thirtyyear institutional legacy of single market-oriented policy in the energy field.
Topic:
Climate Change, Industrial Policy, European Union, Social Cohesion, and Green Transition
Political Geography:
Europe

29. From Threat to Opportunity: Harnessing Climate Change to Build a Prosperous Future for Iraq and the Region

Author:
Azzam Alwash
Publication Date:
06-2023
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
Climate change and environmental degradation are adding serious strain to Iraqi coping capacities and governance mechanisms in a county already struggling with elevated water scarcity, instability and demographic growth. Widely recognised as a country at high-risk from climate change, Iraq faces the urgent need to diversify its economy away from hydrocarbon resources, while developing mechanisms of cooperation and co-dependency with regional neighbours to provide sustenance and opportunities to its youthful population. Drawing on Iraq’s history as a trade hub and bread basket for the region, Iraq and its neighbours need to urgently work together to overcome divisions and plan for a better future if the challenge of climate change is to be transformed into an opportunity capable of promoting stability and integration in an increasingly fragile Middle East.
Topic:
Climate Change, Environment, Water, Sustainable Development Goals, and Energy
Political Geography:
Iraq and Middle East

30. Climate Adaptation and Job Creation: Addressing the Climate and Livelihoods Crises in India

Author:
Anjana Thampi
Publication Date:
11-2023
Content Type:
Working Paper
Institution:
Political Economy Research Institute (PERI), University of Massachusetts Amherst
Abstract:
India was seventh in a list of the ten most affected countries due to extreme weather events in 2019. A sharp increase in the frequency and intensity of such events in the country by the end of the twenty-first century is projected. At the same time, relatively high economic growth rates have not resulted in secure and sustainable employment opportunities in the Indian economy. The loss of millions of jobs due to climate hazards in the country is also projected. In this context, I raise two key questions. First, are livelihoods in certain regions within India more vulnerable to climatic changes? The priority regions for adaptation planning and intervention are identified by constructing a livelihoods vulnerability index. Second, can institutional climate adaptation activities simultaneously address the climate and livelihoods crises in the country? The job creation estimates through five representative adaptation activities support the need for increased spending in a climate adaptation programme. Spending 1.5 percent of the GDP on a climate adaptation programme could create jobs to the extent of 1.3 percent of the labour force as of 2017-18. Investing 3 percent of the GDP on a combined climate adaptation and mitigation programme over the same amount spent instead on a fossil fuel-based programme would lead to net employment gains of around 2 percent of the labour force. This paper argues that investing in climate adaptation activities can secure livelihoods while improving mechanisms to build resilience to climate hazards. Such activities, if planned and implemented in accordance with the geographies, vulnerabilities, and socio-economic patterns of each region, could be transformational.
Topic:
Climate Change, Economic Growth, Job Creation, Adaptation, and Livelihoods
Political Geography:
South Asia and India