1,720,993 research outputs found
The impact of phasing out fossil fuel subsidies on the low-carbon transition
No full textThere is growing consensus on the fact that fossil fuel subsidies provided by governments in high-income countries represent a misalignment on emissions’ reduction with the global climate agenda. In addition, a discussion emerged on the negative socio-economic and environmental externalities associated with fossil fuel subsidies. Nevertheless, pathways for phasing out fossil fuel subsidies in high income countries and their implications on the low-carbon transition have not yet been assessed. With the aim to narrow this knowledge gap, we extend the EIRIN Stock-Flow Consistent behavioral model to study the implications on sustainable development of the gradual phasing out of fossil fuels subsidies, whose revenues could be used by the government to subsidize energy investments in green capital (e.g. solar panels), either via fiscal policies or green bonds. We assess the effects on green growth, employment, credit and bonds market, as well as the distributive effects across heterogeneous households and sectors. A smooth phasing out of fossil fuels subsidies contributes to improve macroeconomic performance, to decrease inequality and helps the government to find fiscal space to support stable renewable energy policies. Renewable energy subsidies contribute to foster the low-carbon transition but could imply distributive effects, depending on the way in which they are implemented
Profiling identification with Europe and the EU project in the European regions
Full text linkRecent political events in the European Union (EU) highlighted a growing dissatisfaction of citizens in several EU regions with the EU institutions' management of socio-economic and financial challenges. This eventually led to a political legitimization crisis, whose drivers are partially shared among EU regions and partially area-specific. However, the relation between citizens' identification with the EU project and the regions' characteristics has not been analysed yet. In this article, we fill in this gap by addressing three research questions: i) To what extent do EU citizens identify with Europe and the EU project? ii) Do European regions have different patterns and level of identification? iii) Are the results driven by specific socio-economic variables? Answering these questions is crucial to inform a more inclusive and resilient design of the EU Cohesion Policy in a crucial period for reforming the EU. To this purpose, we develop a novel probabilistic classification model, IdentEU, which embeds with the concept of individual identification with Europe. We use micro-level data from a survey implemented within the PERCEIVE project. We find that the influencing variables that mostly affect (citizens and) regions' identification with the European project are: trust in the EU institutions, the effectiveness of EU Cohesion Policy and spending, and the level of corruption. These issues gain relevance at the light of three main challenges that affected the EU socio-economic development path in the last decade, i.e. the 2008 financial crisis, the globalization process, and Brexit
Mapping citizens' identification with the EU
Full text linkDo citizens show different patterns of European identification? Are the results driven by specific regional characteristics? Has Cohesion Policy an influence on EU citizens' identification?. With the aim to answer these questions, we develop a novel probabilistic model that allows classification of citizens according to their different patterns of identification with Europe and the European project. This model exploits the heterogeneity of citizens' identification patterns across the European regions and how they are influenced by individual and regional characteristics. The results of the analysis at regional level are presented with regards to nine case-study regions. The model builds on PERCEIVE's research results that develop the theoretical framework for the definition and measurement of the level of identification with EU and its drivers
Sustainable investing and climate transition risk: A portfolio rebalancing approach
Full text linkThe authors studied how greenness can be combined with other investment criteria to construct sets of corporate bond portfolios with decreasing exposure to climate transition risk. They apply the methodology to the European Central Bank’s asset purchase program. They define a weaker market neutrality principle as investing proportionally to the bond amount outstanding within Climate Policy Relevant Sectors. The portfolio rebalancing leads to a 10% reduction of exposure to climate transition risk. Then, the authors studied the relationship between bonds’ rebalancing and issuers’ environmental, social, and governance (ESG) characteristics and greenhouse gas (GHG) emissions. Bonds issued by firms with low (high) ESG risk and GHG emissions are more likely to be bought (sold) in the rebalancing. Finally, they analyzed the implications of portfolio rebalancing on financial markets, finding that changes in yields would be limited to less than 80 basis points on individual bonds. The approach can contribute to inform climate-aware portfolio rebalancing and sustainable investment strategies
A climate stress-test of the financial system
No full textThe urgency of estimating the impact of climate risks on the financial system is increasingly recognized among scholars and practitioners. By adopting a network approach to financial dependencies, we look at how climate policy risk might propagate through the financial system. We develop a network-based climate stress-test methodology and apply it to large Euro Area banks in a 'green' and a 'brown' scenario. We find that direct and indirect exposures to climate-policy-relevant sectors represent a large portion of investors' equity portfolios, especially for investment and pension funds. Additionally, the portion of banks' loan portfolios exposed to these sectors is comparable to banks' capital. Our results suggest that climate policy timing matters. An early and stable policy framework would allow for smooth asset value adjustments and lead to potential net winners and losers. In contrast, a late and abrupt policy framework could have adverse systemic consequences
The Agriculture’s Role for Sustainable and Inclusive Development
No full textSustainable development is characterized by interconnected social, economic, and ecological aspects
and it is at the core value of the worldwide economy. A participatory and accountable framework
is a prerequisite for inclusive and sustainable development; so power is redistributed, reducing
uncertainty, inequality and promoting shared prosperity. Despite its crucial importance and relevance,
barriers remain in making progress towards its implementation, in particular for the agricultural
sector. The purpose of this paper is to investigate the role of agriculture for sustainable and inclusive
development, highlighting environmental, economic and social dimensions. Then, we aim at
providing policy-makers more accessible results on trade-offs of alternative measures for greening
the agri-food system. The research is based on method of analysis based on an extensive review of
research evidence related in particular to Climate Smart Agriculture (CSA). Focusing on CSA role,
a set of priority actions for greening systems are drawn up. Results of analysis provide an insight on
a new System Dynamics model able to represent the complex causal relations and non-linear feedback
loops among key dimensions and actors of sustainable development. Furthermore investments/
measures coordination in agriculture and higher farmers’ knowledge are crucial driver in
reaching this ambition
Accounting for finance is key for climate mitigation pathways
No full textThe financial system—the ecosystem of investors (e.g., banks, investment funds, insurance), markets, and instruments—is often considered to play an enabling role in climate mitigation pathways to a low-carbon transition (1). But it can also have a hampering role, e.g., if investors' perceptions of low risk from a missed transition and low opportunities from a transition fail to trigger a reallocation of capital into low-carbon investments. This increases the chance of the transition not occurring within the time window required to stabilize the climate or occurring in a disorderly fashion. Indeed investors, who can influence the realization of climate mitigation pathways, themselves rely on estimates of climate mitigation pathways from process-based integrated assessment models (IAMs) (2). And IAMs do not model the financial system or investors' decisions; thus, the feedback loop between the financial system and mitigation pathways is not taken into account, neither by the IAMs nor by the finance community. This limitation to our understanding of the dynamics and the feasibility of the low-carbon transition weakens the ability of IAMs to inform policy and investment decisions. We propose a framework to capture the interdependence between investors' perception of future climate risk, depending on the credibility of climate policies, and the allocation of investments in the economy
A hybrid System Dynamics – Agent Based model to simulate Complex Adaptive Systems: a new methodological framework for sustainability analysis.
No full textSustainability analysis represents a form of Complex Adaptive Systems (CAS) because it involves multiple sectors and agents displaying non-linear and non-rational interacting behaviours characterized by feedbacks and time lags. Thus, it cannot be properly addressed with classical econometric models such as General Equilibrium Models (GEM), nor with traditional simulation models alone including System Dynamics (SD), Dynamic Systems (DS), Discrete Event Simulation (DES), Agent Based Models (ABM). We present a hybrid SD-ABM approach and argue that this may potentially better address such issues in a more informative and effective way because they exploit the strengths of both of these forms of models. In particular, we describe how this emerging modelling framework can contribute to understanding complex systems, increasing modelling accuracy and computational efficiency. Then, we highlight the methodological challenges of SD-ABM integration. Among the relevant applications, this new modelling approach would aid the understanding of the characteristics and evolution of the resources-economic growth-population nexus. There is an increasing need to research this nexus to help define the processes involved in the changes in prices of global commodities like oil and cereals since middle of the last decade which has partly been driven by a supply-demand mismatch. The SD-ABM hybrid model framework presented here will contribute to the wider development and refinement of hybrid models for sustainability analysis which will provide policy makers with meaningful and timely results on alternative policy scenarios in order to allow them to introduce more targeted low carbon, resource resilient environmental sustainability policies
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