Many governments still help to keep fossil fuels cheap - sometimes by directly paying part of the supply cost (explicit subsidies), and at other times by not including the hidden costs of pollution and health problems they cause in their price (implicit subsidies). But what is the true cost to...

This paper estimates the effect of electricity prices on firm performance, focusing on firm productivity, sales, and employment. Using the World Bank Business Pulse Survey data for a sample of 24 emerging markets and developing economies during 2019-23, the paper estimates the average effect and...

This paper studies the effects of country-specific energy prices on food consumer price inflation (CPI) within a cross-country Phillips curve framework. It considers a panel of 36 OECD member and candidate economies using quarterly data from the start of 1994 to the end of 2021. We find that...

Leveraging data from the European Investment Survey (EIBIS) spanning 2019-2022, encompassing the pandemic crisis and the 2022 energy price shocks, our study investigates how uncertainty influence firms' climate action investment decisions in Europe at a time of one of the largest energy shocks...

Energy inflation is a major source of headline inflation volatility and forecast errors, therefore it is critical to model it accurately. This paper introduces a novel suite of Bayesian VAR models for euro area HICP energy inflation, which adopts a granular, bottom-up approach - disaggregating...

Carbon pricing is becoming increasingly common but raises equity concerns and is frequently perceived as putting higher burdens on the poor than the rich. This chapter discusses the reasons for unequal carbon price burdens across countries and population groups, through the lens of a comparative...

This 2024 edition of the energy prices and costs report follows a period of exceptional turbulence on global and European energy markets since 2020. The sustained period of high energy prices has had, and despite prices returning towards pre-crisis levels, continues to have, serious implications...

Since 2022, in almost every inflation category, a strong divergence in price dynamics among the EU countries has become visible. The first aim of this paper is to assess the impact of changes in energy prices on the differentiation in price dynamics in individual inflation categories in EU...

The expansion of heat pumps drives the electrification of the heating sector which is important to achieve Germany's ambitious climate targets. This paper examines the impact of heat pumps in combination with thermal storage on the flexibility of the German electricity system in 2030, focusing...

This study examines the static market and welfare effects of splitting the German bidding zone, comparing a two-zone and a three-zone configuration for a 2030 scenario. Using a state-of-the-art grid and market model with explicit representation of frictions in flow-based market coupling and...

Within the transition to climate-neutral energy systems, hydrogen has the potential to support decarbonization of multiple sectors. Just like in electricity markets, volatility in hydrogen supply and process-specific demand may lead to volatile prices in a hydrogen market. This volatility may...

Many governments still help to keep fossil fuels cheap - sometimes by directly paying part of the supply cost (explicit subsidies), and at other times by not including the hidden costs of pollution and health problems they cause in their price (implicit subsidies). But what is the true cost to...

Oil price increases that began in late 2020 led to a global proliferation of liquid fuel subsidies and price controls as governments tried to reduce, redistribute, or delay the impact of rising and volatile energy prices on consumers. This paper draws on a unique database to analyze the...

The aim of this study was to analyse energy subsidies and other financial support distributed in the EU27, at the national level, over the period 2015 to 2022 and, when data is available, to 2023. Quantitative analyses of the volume (in euros) and trends of subsidies are provided, with the...

The aim of this study was to analyse energy subsidies and other financial support distributed in the EU27, at the national level, over the period 2015 to 2022 and, when data is available, to 2023. Quantitative analyses of the volume (in euros) and trends of subsidies are provided, with the...

The study explores the concept of energy poverty and vulnerability within the German context, emphasizing the impact of rising energy costs and low energy efficiency of buildings on energy poor or vulnerable households. Vulnerability, in this setting, refers to the risk households face due to...

The Russian invasion of Ukraine in 2022 triggered an energy crisis in Germany, with consumer energy prices skyrocketing over the course of the year. Due to concerns about gas shortages, various programs aimed at reducing consumption were set up and the German Federal Government and numerous...

The energy crisis following Russia’s invasion of Ukraine exposed the heightened vulnerability of low-income households to rising heating costs, particularly those in energy inefficient buildings. Using data from the German Socio-Economic Panel (SOEP), this study examines the distributional...

This study investigates how credit to firms responds to an energy price shock by comparing the credit growth of similar firms with different energy intensities before and after the shock triggered by the Russian invasion of Ukraine. Credit growth of energy-intensive firms declined by 8.75...

The EU has consistently tackled the challenge of energy poverty (EP) through various legislative and non-legislative measures, particularly in the context of ongoing energy crisis, but it should also support the reduction of income inequality that might accelerate EP. The aim of this study is to...

Through facilitating direct energy transfer between producers and consumers and lowering intermediary expenses, peer-to-peer (P2P) energy trading presents notable advantages for individual prosumers. Moreover, peerto-peer trading permits proactive consumers to economically conduct their energy...

This handbook focuses on the various steps in the diagnosis phase, providing a detailed description of each step. It is of primary importance to take adequate time to understand the challenges and to design a response. A robust diagnosis will allow you to answer the most relevant questions when...

This handbook focuses on the various steps in the diagnosis phase, providing a detailed description of each step. It is of primary importance to take adequate time to understand the challenges and to design a response. A robust diagnosis will allow you to answer the most relevant questions when...

This paper reviews the post-Keynesian theory of inflation against the background of the simultaneous rise in inflation and profit shares in the course of the COVID-19 recovery and the Russian war in Ukraine. It distinguishes between the Keynes, Kaldor, Robinson, and Marglin tradition, and the...

Many countries have used energy subsidies to cushion the effects of high energy prices on households and firms. After documenting the transmission of oil supply shocks empirically in the United States and the Euro Area, we use a New Keynesian modeling framework to study the conditions under...

In this paper, the authors undertake a large microdata collection effort to quantify the energy shock households faced in England and Wales during the energy crisis, examining the incidence across demographics and building characteristics. Understanding the equity impacts of the energy crisis...

In 2023, heating energy prices increased by substantial 31 percent compared to the previous year, following a 33 percent increase already seen in 2022. Calculations based on data from the energy service provider ista show average price increases were the highest in the German state of Rhineland-...

We study how monetary policy shapes the aggregate and distributional effects of an energy price shock. Based on the observed heterogeneity in consumption exposures to energy and household wealth, we build a quantitative small open-economy HANK model that matches salient features of the Euro Area...

This report offers a comprehensive analysis of the persistence of energy poverty in the European Union (EU). The primary objective is to analyse the duration and magnitude of energy poverty over time and to identify the socioeconomic and demographic factors contributing to this persistence....

The 2023 edition of the energy prices and costs report, covering developments between 2020 and 2022, comes at a time of almost unprecedented upheavals in European and global energy markets; a time of great international economic and political instability. The changes brought by the energy...

This study, commissioned by the European Parliament's Policy Department for Citizens' Rights and Constitutional Affairs at the request of the PETI Committee, discusses the impact of the ongoing cost-of-living and energy crises on the standard of living for persons with disabilities. Based on...

This study, commissioned by the European Parliament's Policy Department for Citizens' Rights and Constitutional Affairs at the request of the PETI Committee, discusses the impact of the ongoing cost-of-living and energy crises on the standard of living for persons with disabilities. Based on...