Climate Policy Department Publications

An Auction Story: How Simple Bids Struggle with Uncertainty

Short-term electricity markets are key to an efficient production by generation units. We develop a two-period model to assess different bidding formats to determine for each bidding format the optimal bidding strategy of competitive generators facing price-uncertainty. We compare the results for simple bidding, block bidding and multi-part bidding. We find that even under optimal simple and block ...

Pricing Carbon Consumption: Synthesizing an Emerging Trend

Nearly every carbon price regulates the production of carbon emissions, typically at midstream points of compliance such as power plants, consistent with typical advice from the literature. Since the early 2010s however, policymakers in Australia, California, China, Japan and Korea have implemented carbon prices that regulate the consumption of carbon emissions, where points of compliance are further ...

The Local Economic Impact of Wind Power Deployment

This study focuses on the local economic impacts of wind power deployment.Wind power deployment is not necessarily driven by locally accruing economic payoffs only, but potentially also by other factors, such as emphasis on environmentally friendly energy production and its associated benefits. Thus, the local economic impacts of wind power deployment are ambiguous.We empirically test the existence ...

China's Emissions Trading Takes Steps Towards Big Ambitions

China recently announced its national emissions trading scheme, advancing market-based approaches to cutting greenhouse gas emissions. Its evolution over coming years will determine whether it becomes an effective part of China’s portfolio of climate policies.

Housework Allocation in Germany: The Role of Income and Gender Identity

ObjectivesThis article analyzes how couples allocate housework against the backdrop of three questions: (1) Does an individual's income—both in absolute and relative terms—influence his or her contribution to housework? (2) If so, does themagnitude of this influence differ by gender? and (3) How important are traditional gender roles on housework allocation?MethodsWe apply panel regression techniques ...

The Valley of Death, the Technology Pork Barrel, and Public Support for Large Demonstration Projects

Moving non-incremental innovations from the pilot scale to full commercial scale raises questions about the need and implementation of public support. Heuristics from the literature put policy makers in a dilemma between addressing a market failure and acknowledging a government failure: incentives for private investments in large scale demonstrations are weak (the valley of death) but the track record ...

A Review of Technology and Policy Deep Decarbonization Pathway Options for Making Energy-Intensive Industry Production Consistent with the Paris Agreement

Opening the Black Box of Energy Modelling: Strategies and Lessons Learned

The global energy system is undergoing a major transition, and in energy planning and decision-making across governments, industry and academia, models play a crucial role. Because of their policy relevance and contested nature, the transparency and open availability of energy models and data are of particular importance. Here we provide a practical how-to guide based on the collective experience of ...

Pricing and Capacity Provision in Electricity Markets: An Experimental Study

The creation of adequate investment incentives has been of great concern in the restructuring of the electricity sector. However, to achieve this, regulators have applied different market designs across countries and regions. In this paper we employ laboratory methods to explore the relationship between market design, capacity provision and pricing in electricity markets. Subjects act as firms, choosing ...

Productivity Measurement with Natural Capital

This paper proposes a measurement framework that explicitly accounts for the role of natural capital in productivity measurement. It is applied to aggregate economy data from the OECD Productivity Database, with natural capital data from the World Bank. It is shown that the direction of the adjustment to productivity growth depends on the rate of change of natural capital extraction relative to the ...