Topic Climate Policy

Ampel-Monitor Energiewende Shows the Pace of the Energy Transition Must Be Accelerated Significantly

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 ...

Geopolitical and Climate Risks Threaten Financial Stability and Energy Transitions

We propose a framework to unravel the hurdles and opportunities for the renewable energy transition in con-temporary crises to examine the interconnections be-tween energy transition, climate risks, and geopolitical issues. The study focuses on Germany and emphasizes that neglecting climate-related risks leads to financial in-stability and hampers the energy transition. If Paris-aligned energy and ...

Carbon Contracts for Difference as an Instrument for Strengthening Climate Cooperation between Industrialized and Emerging Economies

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 ...

Bidirectional Coupling of a Long-term Integrated Assessment Model with an Hourly Power Sector Model

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 ...

Ampel-Monitor Energiewende #2: The State of Affairs on August 24, 2022

From Negative to Positive Carbon Pricing in Mexico

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 ...

Carbon Contracts-for-difference: How to De-risk Innovative Investments for a Low-carbon Industry?

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 ...

Chances and Barriers for Germany’s Low Carbon Transition: Quantifying Uncertainties in Key Influential Factors

With the energy sector being one of the largest sources of global greenhouse-gas emissions, a swift change in the ways of energy generation and consumption is needed for a fulfilment of climate goals. But while the existence of global warming and the resulting need for action are widely agreed upon, there is a lot of discussion around the concrete measures and their timeline. A major cause of this ...

Germany's Shift from Coal Offers Lessons for Just Transition Policy

As COP26 drew to a close earlier this month, almost 200 nations agreed to “phase down” coal power in the coming years. How this is done, for coal and other fossil fuels, will have implications for individuals and communities that depend on these resources for their livelihoods.  The first case study conducted by DIW Berlin focuses on Germany and the efforts it has undertaken to support ...

Distribution effects and incentive effects of coordinated climate and social policy

The aim of this research project is the development and empirical evaluation of climate and social policy instruments, which on the one hand contribute to achieving climate neutrality by 2045, and on the other hand could be implemented in a socially compatible way. The focus is on empirical analysis of the distribution and incentive effects including their interactions which are evaluated by...