Industrialized countries and emerging economies must cooperate in order to decarbonize the emissions-intensive industrial sector and to limit global warming to 1.5 degrees Celsius. While Germany and the other G7 countries have committed to supporting emerging economies in their efforts to combat climate change via international climate finance, it remains to be seen how this support can be implemented ...
Integrated assessment models (IAMs) are the central tool for the quantitative analysis of climate change mitigation strategies. However, due to their global, cross-sectoral and centennial scope, IAMs cannot explicitly represent the temporal and spatial detail required to properly analyze the key role of variable renewable electricity (VRE) for decarbonizing the power sector and enabling emission reductions ...
Over the course of a decade, Mexico transitioned from a peak of 1.8% of GDP given as fuel subsidies in 2008 to generating positive fuel tax revenues equivalent to 1.6% of its GDP in 2018. This paper analyzes Mexico's carbon pricing experience: the mechanisms that made fossil fuel subsidies such a large burden on public finances, the strategies followed in its five-year phase-out, and the institutional ...
The shift to climate neutrality requires new process technologies for energy-intensive industries, such as steel, chemicals, or cement. A variety of technology options exist – but they face the challenges of (i) first-of-kind costs, (ii) higher operation and investment costs, and (iii) insufficient and uncertain carbon prices, which partly stem from political uncertainty. Existing innovation policy ...
Designing auctions that favor low resource quality installations allows countries to geographically diversify their renewable energy production, while lowering payments to low-cost producers. In this paper, we develop a stylized model showing that a discriminatory auction design favoring low-wind-yield locations leads to a tradeoff between production costs and producer rent and that the scheme can ...
The so-called traffic light coalition is facing a challenge: it has set ambitious energy policy targets, but can only achieve them if the pace of the energy transition is increased significantly. To contribute to the current energy policy debate, the Ampel-Monitor Energiewende (Monitor of the Traffic Light Coalition’s Energy Transition Targets) was developed at DIW Berlin. Based on open data, the Ampel-Monitor ...