The EU Emissions Trading System (EU ETS) leads to higher electricity prices and thus higher costs for electricity-intensive industries in the EU, reducing their competitiveness compared to those in non-EU countries. This disparity may result in carbon leakage, where production shifts abroad,...

This paper analyzes how ESG-linked executive compensation interacts with carbon taxation in a multitask principal-agent framework. A risk-neutral principal with financial and environmental preferences incentivizes a risk-averse manager to exert productive and abatement effort while facing an...

Döbbeling-Hildebrandt et al. (2024, DH2024) conduct a meta-analysis of the effectiveness of carbon pricing. DH2024's abstract concludes that 17 of 21 schemes evaluated in the literature produced substantial emissions reductions. A subsequent press release was headed: "Carbon pricing works"....

Since the Industrial Revolution, the increase in greenhouse gas emissions has led to a significant rise in global temperatures compared to the pre-industrial period. This development has heightened the importance of carbon pricing policies in combating climate change. This study aims to examine...

This paper analyzes how ESG-linked executive compensation interacts with carbon taxation in a multitask principal-agent framework. A risk-neutral principal with financial and environmental preferences incentivizes a risk-averse manager to exert productive and abatement effort while facing an...

The overarching aim of this report is to help Moldova meet its climate commitments, advance EU integration, and foster inclusive economic growth, while safeguarding vulnerable households and businesses throughout the transition. Achieving these objectives requires careful policy design that...

This article introduces Green EUROMOD, the environmental extension of the EU's tax-benefit microsimulation model EUROMOD. It provides a novel framework for evaluating the distributional, environmental, and fiscal impacts of green policy reforms across the 27 EU Member States. The model captures...

There is broad agreement that the European Union's post-2030 climate policy architecture - the framework of rules to reduce greenhouse gas emissions - needs to be simpler and more flexible, with market actors less constrained in how they mitigate emissions. However, simplification should not...

This essay examines the rise of "Green Deals" as large-scale state-sponsored active industrial policies to accelerate a transition toward climate neutrality. Building on the concept of mission-oriented innovation policy (MOIP), it documents how environmental and active industrial policies have...

This paper assesses the impact of the Swiss CO2 levy on residential heating energy demand and the associated CO2 emissions. Using the synthetic control method, the results show that the levy led to an average annual reduction in CO2 emissions of 6.5% during the post-treatment period (2008-2021),...

This paper argues that current carbon accounting overlooks an important part of climate action: avoided emissions, or emissions that never occur because cleaner products, services, or decisions replace higher-carbon alternatives. While companies are increasingly developing solutions that reduce...

I study optimal implementation of climate targets in a model with distortionary fiscal policy, learning-by-doing, and directed technical change. The key mechanism is that fiscal constraints link innovation policy to labor allocation, creating a tension between directing research and directing...

To address climate change and fulfill its international commitments to reducing carbon emissions, China has accelerated the low-carbon transformation of the thermal power sector through a carbon trading mechanism. However, as the "30·60″ dual-carbon target approaches, the carbon market still...

According to the International Energy Agency, energy security means that energy sources are always available at an affordable price. However, the 2021 and 2022 energy crises and the current global situation raise concerns about energy availability and affordability. As countries, especially...

Carbon dioxide removal (CDR) is considered essential for climate change mitigation, yet its optimal role in climate policy remains unclear in the presence of non-permanent storage, energy constraints, and fossil fuel scarcity. We integrate CDR into an analytic integrated assessment model to...

This paper develops a welfare and public economics perspective on optimal policies for carbon removal and storage (CDR) in permanent and non-permanent sinks. Non-permanent CDR reduces mitigation costs, even though the stored carbon is released into the atmosphere eventually. It may serve as...

This paper quantifies the relationship between economic exposure to climate policies and climate policy support. We develop a stylised theoretical model to decompose exposure through income, energy spending and vehicle use, and define consistent measures of these exposure channels. We then...

The intersection of environmental policies and trade policies on external diseconomies has received considerable attention in recent years. However, the impacts of the timing of pollution taxes versus import tariffs on economic performance have not been formally considered, and this forms the...

Firms' efforts to reduce pollution emissions in their production processes are induced by market forces as well as governmental regulatory instruments. The market forces, which might induce firms to increase production to maximize profits, work at cross-purposes. One of the common solutions is...

The EU Emissions Trading System (EU ETS) leads to higher electricity prices and thus higher costs for electricity-intensive industries in the EU, reducing their competitiveness compared to those in non-EU countries. This disparity may result in carbon leakage, where production shifts abroad,...