1st Workshop “Economic Theories and Low-carbon Transformation Policies”

Cambridge, 22nd-23rd June 2017
Jesus College (
Upper Hall), Cambridge University


The workshop aims to advance analytical research on economic processes and policies for low-carbon transformation: policies meaning the role and tools of government and governance, and transformation as involving significant changes and innovation in (organizational) behaviour, technologies and systems, investment and financing.

The main objective is to incorporate in analytic models lessons learnt (drawing on the underlying empirics) and responses to novel issues raised by the current context of the climate policy. Through this we aim to increase the visibility of this research agenda in economics and to strengthen intellectual foundations to enhance clarity and credibility for policy making.

The format of the workshop will be centred on presentations of about 20 minutes followed by 10 minutes discussion on the specific technical aspects of each paper. These will then be followed by panel discussions on broader insights emerging from the papers and other considerations relevant to each of the themes. Thus we aim to provide an opportunity to explore (i) insights for broader understanding (ii) policy implications (iii) emerging structures and questions.


Thursday, 22nd June

Scene-setting introduction from the organizers

Olga Chiappinelli & Karsten Neuhoff (DIW Berlin)

Michael Grubb (University College London)

Jean-Charles Hourcade (CIRED)

Session 1: Insights on the Political Economy of Transition

Chair: Toke Aidt (Cambridge University)

Renaud Foucart (Humboldt University): Political economy of climate policy | PDF, 213.01 KB

Olga Chiappinelli (DIW Berlin): Time-consistent carbon pricing | PDF, 306.06 KB

Carmen Arguedas (Universidad Autonoma Madrid): Enforcing regulatory standards in stock pollution problems | PDF, 1 MB

Session 2: Carbon pricing acknowledging political dynamics

Chair: Stephen Smith (University College London)

Luca Taschini (London School of Economics)Dynamic Supply Adjustment and Banking under Uncertainty: the Market Stability Reserve | PDF, 0.87 MB

Karsten Neuhoff (DIW Berlin): Carbon prices and targets | PDF, 364.15 KB

Session 3: Behavioural Dimension of Transition

Chair: Olga Chiappinelli (DIW Berlin)

Karolina Safarzynska (University of Warsaw): Policy lessons from integrating behavioural economics in climate-economy models | PDF, 0.79 MB

Michael Grubb (University College London)
: From macro to micro (and back again): new evidence and behavioural interpretations on the Bashmakov-Newbery constant of energy expenditure | PDF, 1.1 MB

Stefan Lamp (Toulouse School of Economics)
: Sunspots that matter: behavioral biases in solar technology adoption | PDF, 1.68 MB

Panel 1: How can applied theory support policy making for a transition: reflection on the day

Chair: Karsten Neuhoff (DIW Berlin)

Opening comments

Matthew Elliott (Caltech University & Cambridge University)

Will Blyth (Chatham House, Oxford Energy Associates)

Friday, 23rd June

Session 4: Innovation and Investments

Chair: Will McDowall (University College London)

David Newbery (Cambridge University): Learning by doing - how to judge whether supporting solar PV is justified | PDF, 1.16 MB

Pablo Salas (Cambridge University): System of Innovation and Inertia: A mathematical exploration with implications for climate change abatement | PDF, 0.62 MB

Session 5: Transition economics and implications for growth

Chair: Jean-Charles Hourcade (CIRED)

Etienne Espagne (CEPII): Climate, finance and growth: playing DICE with money | PDF, 2 MB

Jean-Francois Mercure (Radboud and Cambridge University): Macroeconomic impact of stranded fossil fuel assets | PDF, 6.13 MB

Simone Borghesi (University of Siena): Emission Trading and Foreign Direct Investments: an evolutionary theoretical model | PDF, 256.21 KB

Panel 2: How to capture policy mixes for transition in analytic frameworks?

Chair: Michael Grubb (University College London)

Opening comments:

Christina Hood (International Energy Agency): “Real-world” low-carbon policy packages for the energy sector | PDF, 1.19 MB

Jean-Charles Hourcade (CIRED)

Lunch policy session: How can climate policy bridge gap between short-term tensions and long-term benefits?

You can download the programme of the workshop here | PDF, 157.98 KB