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Refereed essays Web of Science

Is Russian Gas Still Needed in the European Union? Model-Based Analysis of Long-Term Scenarios

Aligned with the war in Ukraine, Russia has significantly withheld natural gas exports to Europe since 2021. As there are no EU-wide sanctions on imports of Russian natural gas, the Ukraine transit as well as imports via Turkey and LNG have remained active during 2022–24. However, the Russian-Ukrainian transit agreement expires at the end of 2024 and discussions about new sanctions on natural gas as ...
In: Energy Strategy Reviews 58 (2025), 101646, 10 S. | Lukas Barner, Franziska Holz, Christian von Hirschhausen, Claudia Kemfert
DIW Weekly Report 40/41/42 / 2024

Monetary Policy during the Energy Price Crisis: ECB Could Have Contained Inflation Earlier

Following the end of the coronavirus pandemic, the European Central Bank (ECB) was confronted with an unprecedented increase in energy prices. This led to consumer price inflation in the euro area far beyond the ECB’s inflation target of two percent, at times up to 10 percent. At the same time, the euro area economy was threatened by a recession, which resulted in the ECB facing conflicting objectives ...
2024| Gökhan Ider, Alexander Kriwoluzky, Frederik Kurcz, Ben Schumann
Diskussionspapiere 2089 / 2024

Friend, Not Foe - Energy Prices and European Monetary Policy

This paper first shows that, contrary to conventional wisdom, the European Central Bank (ECB) can influence global energy prices. Second, through Lucas critique-robust counterfactual analysis, we uncover that the ECB’s ability to affect fast-moving energy prices plays an important role in the transmission of monetary policy. Third, we empirically document that, to optimally fulfill its primary mandate, ...
2024| Gökhan Ider, Alexander Kriwoluzky, Frederik Kurcz, Ben Schumann
Refereed essays Web of Science

The Elephant in the Room: How Do We Regulate Gas Transportation Infrastructure as Gas Demand Declines? Commentary

The use of gas will decline dramatically as part of the transition to net zero. Modeling at European levelsshows that by 2050 about 70% less gaseous fuels will be used. Significant regulatory reform is needed todeal with the impacts of this decline on the gas grid.
In: One Earth 7 (2024), 7, S. 1158-1161 | Jan Rosenow, Richard Lowes, Claudia Kemfert
DIW Weekly Report 13/14 / 2024

Heat Transition: Municipalities Need Federal Support in Decommissioning Natural Gas Networks

Large parts of the existing natural gas distribution networks must be decommissioned due to the decarbonization of the heat supply. However, there are neither regulatory nor economic incentives for the gas network operators to do so and delaying the decommissioning could be expensive for the remaining customers. This Weekly Report analyzes to what extent municipalities can partially decommission the ...
2024| Isabell Braunger, Philipp Herpich, Franziska Holz, Julia Rechlitz, Claudia Kemfert
Externe Monographien

Trade Effects of Carbon Pricing Policies

Policies that affect the cost of using fossil fuels in production have a complex impact on the economy. In this paper, we focus on the role of these policies for the pattern of comparative advantage through their effect on production costs in manufacturing industries. Using data on carbon prices and fossil fuel subsidies, we show that less stringent carbon pricing policies increase comparative advantage ...
Geneva: WTO, 2024, 48 S.
(Staff Working Paper ; Research ERSD-2024-08) | Antonia Kurz, Stela Rubínová
Refereed essays Web of Science

VAT Pass-through and Competition: Evidence from the Greek Islands

We examine how competition affects VAT pass-through in isolated oligopolistic markets as defined by the Greek islands. Using daily gasoline prices and a difference-in-differences methodology, we investigate how changes in VAT rates are passed through to consumers in islands with different market structure. We show that pass-through increases with competition, going from 50% in monopoly to around 80% ...
In: International Journal of Industrial Organization 97 (2024), 103110, 18 S. | Lydia Dimitrakopoulou, Christos Genakos, Themistoklis Kampouris, Stella Papadokonstantaki
DIW Weekly Report 43/44 / 2024

Carbon Pricing: Swift Introduction of a Climate Dividend Needed, Reduce at Higher Incomes

With the transition from the German national emissions trading system to the European Emissions Trading System (EU ETS2) from 2027, final consumer prices for fossil motor and heating fuels are likely to rise significantly. This increase will affect low-income households more noticeably, as they spend a larger share of their income on energy than high-income households. Existing relief measures, such ...
2024| Stefan Bach, Mark Hamburg, Simon Meemken, Marlene Merker, Joris Pieper
Diskussionspapiere 2086 / 2024

Spatial Competition and Pass-through of Fuel Taxes: Evidence from a Quasi-natural Experiment in Germany

This paper analyses the pass-through rates and their determinants of the temporary German fuel discount in 2022 at its start and its termination. Based on a unique dataset of fuel station characteristics and prices, we employ a Regression Discontinuity in Time (RDiT) methodology to estimate heterogeneous pass-through rates. Our main contribution is to identify the impact of horizontal and vertical ...
2024| Frederik von Waldow, Heike Link
Externe Monographien

De-Fueling Externalities: Causal Effects of Fuel Taxation and Mediating Mechanisms for Reducing Climate and Pollution Costs

This paper provides the most comprehensive assessment of how fuel taxation reduces climate and pollution externalities with a quasi-experimental evaluation of the world’s largest environmental tax reform. Leveraging multiple causal inference methods, we compare carbon and air pollutant emissions of the actual and counterfactual German transport sector following the 1999 eco-tax reform and demonstrate ...
München: CESifo, 2023, 37 S.
(CESifo Working Papers ; 10508) | Pier Basaglia, Sophie M. Behr, Moritz A. Drupp

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