Topic Resource Markets

And Yet They Move: Energy Prices Fall When Key Interest Rates Increase, Despite Countervailing Effects

Energy prices have risen sharply as a result of the coronavirus pandemic as well as the Russian attack on Ukraine in February 2022. The resulting consumer price inflation is forcing the European Central Bank (ECB) to act in accordance with its mandate. However, the ECB expresses doubts that it will be able to have an impact on the price increases. As this Weekly Report based on an analysis of structural ...

A Collective Blueprint, Not a Crystal Ball: Overcoming Political Stalemates: The German Stakeholder Commission on Phasing out Coal

The future of coal remains contested in many countries, hindering necessary energy transitions. Collaborative governance approaches, such as stakeholder commissions, have been proposed as potential solution to resolve such societal conflicts. In Germany, a stakeholder commission process managed to overcome the existing stalemate situation, leading to the adoption of a coal phase-out by 2038. Celebrated ...

Broad Electricity Price Subsidies for Industry Are Not a Suitable Relief Instrument

The sharp rise in electricity prices has led to a discussion on possible subsidies for companies in the form of an industrial power tariff. The subsidies should help companies remain internationally competitive and prevent them from relocating overseas. Although German electricity prices for (industrial) firms are around the European average due to many tax exemptions, they are significantly higher ...

New Coal Mines in the Australian Galilee Basin Are Not Economically Viable and Are Prone to Become Stranded Assets

To limit the effects of climate change, we must significantly curtail the trading and use of coal as an energy source. Although the rise of renewable energy sources has already led to a reduction in the demand for and use of coal, new export-oriented coal mine projects are still being approved, and they often receive strong political support. However, whether these projects are economically viable ...

Chinese Loans to African Countries Differ from Western Development Loans

Over the past 20 years, China has granted a conspicuous amount of loans to African countries. New loan data show that compared to Western multilateral loans, Chinese loans have relatively high interest rates and shorter maturities, tend to be highly collateralized, and are volatile over time. Thus, Western loans are generally more likely to be in the economic interest of the borrowing country. Furthermore, ...

Green Premiums Are a Challenge and an Opportunity for Climate Policy Design: Comment

Adjusting green public support programmes to green premiums can reduce public spending, yet this is challenged by uncertainty. Underfunding green technologies can delay the green transition, and overfunding them can increase transition costs. Both risks of under- and overfunding can be reduced using responsive adjustments.

LNG Import Capacity Expansion in Germany: Short-term Relief Likely to Turn into Medium-term Stranded Assets

Energy Transition Metals: Bottleneck for Net-Zero Emissions?

The energy transition requires substantial amounts of metals, including copper, nickel, cobalt, and lithium. Are these metals a bottleneck? We identify metal-specific demand shocks, estimate supply elasticities, and study the price impact of the transition in a structural scenario analysis. Prices of these four metals would reach previous historical peaks but for an unprecedented, sustained period ...

De-Fueling Externalities: How Tax Salience and Fuel Substitution Mediate Climate and Health Benefits

This paper provides a comprehensive evaluation of the world’s largest environmental tax reform. We compare carbon and air pollutant emissions of the German transport sector and synthetic counterfactuals following the 1999 eco-tax reform, and find average re- ductions in external damages of around 80 billion Euros. We further show that the eco-tax induced low-carbon innovation and document much stronger ...

Geographical Balancing of Wind Power Decreases Storage Needs in a 100% Renewable European Power Sector

To reduce greenhouse gas emissions, many countries plan to massively expand wind power and solar photovoltaic capacities. These variable renewable energy sources require additional flexibility in the power sector. Both geographical balancing enabled by interconnection and electricity storage can provide such flexibility. In a 100% renewable energy scenario of twelve central European countries, we investigate ...