Oliver Schenker

• ZEW - Leibniz Centre for European Economic Research

We examine how the adverse impacts of weather shocks are distributed through the trade network. Exploiting a rich, theoretically derived, fixed effects structure, we find significant negative short-run effects of high temperature on exports. A month with an average temperature above 30 \documentclass[12pt]{minimal} \usepackage{amsmath} \usepackage{...

Investments in energy technologies are substantially governed by climate policy. We demonstrate analytically that price-based instruments, such as carbon-taxes, and quantity-based regulations, like emission trading systems, have distinct effects on the (co-)variance of power plant profits. If investors are risk-averse, these differences lead to div...

We study the determinants of emission leakage using a two-country general equilibrium model with heterogeneous firms and Cournot competition. We show that firms from the non-regulating country respond to the implementation of Pigouvian emission taxes on their competitors abroad and the subsequent gain in comparative advantage by increasing markups...

A well-known principle in public economics states that at least as many policy instruments as market failures are required to achieve an efficient outcome. In practice, however, regulatory power is often constrained, making implementing the first-best policy portfolio difficult or impossible. We analyze analytically and numerically how available po...

The risks imminent to younger technologies and markets may hinder renewable energy firms’ access to financing. This could curtail the investment needed for the transformation of the global energy sector. However, comprehensive analyses of the cost of debt of renewable and non-renewable energy firms are lacking. Here, we empirically analyse the diff...

Climate policy aims to reduce emissions by redirecting investment from emission-intensive toward carbon-neutral assets. One key instrument, carbon pricing, guides investors and asset managers by lowering the return of fossil fuel-related assets. This chapter reviews three key mechanisms on how sustainable finance can support climate policy: first,...

We examine how the adverse impacts of weather shocks are distributed through the trade network. Exploiting a rich, theoretically derived, fixed effects structure, we find significant negative short-run effects of high temperature on exports. A month with an average temperature above 30°C implies export losses of around three percent. These effects...

This background paper for the Forum Climate Economics 9 is based on current research projects from the BMBF funding priority Economics of Climate Change. The projects deal with challenges and chances that climate protection and the Paris Agreement entail on an international level. The present paper sheds light on barriers to the implementation of a...

Policymakers aiming for the unilateral regulation of transboundary pollutants, such as greenhouse gases, fear as a consequence rising emissions in non-regulating countries. This so-called pollution haven or carbon leakage effect is of particular concern in emission-intensive and trade-exposed sectors such as steel, aluminium or chemical production....

Tinbergen's seminal work showed that we need as many policy instruments as there are market failures to address. In practice, however, regulatory power is often constrained, making it difficult or impossible to implement the first-best policy portfolio. We analyze analytically and numerically how available policy instruments should be adjusted vis-...

Climate change is one of the key global challenges of the human society. Sustainable climate finance is essential for the transition to a lower-carbon economy. We show in this report that although many investment imperfections in the sustainable climate finance landscape are known among practitioners, most model-based climate policy economic impact...

We extend the literature on global supply chains by analyzing if and how unilateral environmental regulation induces offshoring. We develop an analytical model of two‐stage production processes that can be distributed between two countries and investigate unilateral emission pricing and its supplementation with border carbon taxes. In contrast to e...

Concise introductions to the main issues in energy policy and their interaction with environmental policies in the EU. The European Union (EU) faces critical challenges in energy policy making, the most pressing of which are how to achieve the deep greenhouse gas reductions promised at the December 2015 UN Conference of the Parties in Paris, and ho...

Klimawandelbedingte Kosten entstehen in einer Kaskade von Wirkungsmechanismen und -kreisläufen, die jeweils mit zahlreichen Unsicherheiten verbunden sind. Die Menge der Treibhausgasemissionen bestimmt, wie sich Atmosphäre und Klima auf der Erde verändern. Die Reaktion des Klimasystems mit seinen zahlreichen Rückkopplungseffekten führt zu regional u...

This paper discusses the interplay between international trade, regional adaptation to climate change and financial transfers for funding adaptation. It combines insights from a theoretical model of North-to-South transfers with the findings of a calibrated dynamic multi-region multi-sector computable general equilibrium model that takes into accou...

The European Union׳s current climate and energy policy has to operate under an ex ante unforeseen economic crisis. As a consequence prices for carbon emission allowances in the EU Emissions Trading System collapsed. However, this price collapse may be amplified by the interaction of a carbon emission cap with supplementary policy targets such as mi...

Current climate and energy policy has to operate under an ex-ante unforeseen economic crisis. An obvious consequence is the collapse of prices for carbon emission allowances as, for example, seen in the European Union. However, this price collapse may be ampli�ed by the interaction of a carbon emission cap and supplementary policy targets such as t...

The impacts of climate change vary significantly across world regions. Whereas tropical and subtropical regions are expected to suffer severely from the effects of climate change, the impacts in northern latitudes should remain relatively moderate. However, regions are not self-sufficient, and the costs of climate change can spread across regions t...

This paper has three messages mainly, which are observed in a simple model of climate change, international trade and regional adaptation. First, trade can be viewed as a kind of adaptation to climate change and variability, as trade can help to reduce direct impacts of global climate change on a region’s welfare. In particular, the less affected a...

This paper analyses the interplay between international trade, regional adaptation and North-to-South transfers for funding adaptation within the framework of a dynamic computable general equilibrium model, where impacts of climate change depend on changes in precipitation and temperature. If all regions, even the least developed ones, own the nece...

China has becoming in 2006 the world’s largest emitter of greenhouse gases (GHG), responsible for one-fifth of world’s emissions from power generation. And further strong growth in this sector is to be expected. To provide these additional power generation capacities substantial investments in China’s energy infrastructure are necessary. But the po...

We analyze carbon-related BAMs (focused on imports) as potential instruments to reduce emissions leakage. We combine an approach from international trade law with an economic approach. For the legal aspect we discuss the elements needed to include carbon-related BAMs within the current GATT and WTO frameworks. For the economic aspect, we assess the...

We present a dynamic multi-region, multi-good dynamic CGE model, which reacts sensitive to changes in regional climate. In the assessment of economic effects of global warming we distinguish between direct effects (impacts in the considered region) and spillover effects (impacts from foreign regions which spillover into the domestic region). This p...

Short abstract: We analyze the impact of international trade with transboundary pollution and endogenous-environmental policy on welfare and emissions in a general equilibrium model. Pollution in one industry affects another industry's output domestically and abroad. With international trade in final goods emission levels and emission-permit prices...

Within the analysis of economic effects of global warming we distinguish between direct effects (impacts in the considered region) and indirect effects (effects from causes abroad that spillover to home). We believe that for a highly developed, small open economy as Switzerland the indirect effects of climate change outnumber the direct costs of cl...

Not only after the failure of the Copenhagen climate conference 2009, border carbon adjustment (BCA) has received growing attention in the climate policy debate as a measure to combat "carbon leakage" and force non-abating countries to tighter climate policies. In this paper, we study the strategic interactions between international trade and clima...