Conference Agenda

This paper studies the aggregate and distributional economic impacts of the implementation of a carbon tax targeting fossil fuels emissions. We develop a multi-sector general equilibrium model featuring heterogeneous households, sectors and factors interconnected by input output linkages that allows us to capture the transmission of tax shocks throughout the production chain. We analytically characterize the welfare implications of the policy according to changes in consumption costs (use side) and factors income (source side) arising from the shifts in relative costs and resources allocations in the economy. We calibrate our model for the Brazilian economy and find that a carbon tax has a regressive effect. The dominant use channel has a consistently negative impact, overshadowing the source channel which showed mixed effects.

Fisheries play an important role for food security in terms of protein, micronutrients, and livelihoods. While several large scale models run scenario simulations of food availability and food security, fish and aquatic food supply is typically not included in these large models. A major obstacle to achieve this is missing data on the size and growth of numerous fish stocks worldwide. Based on a recently published bio-economic stock assessment method (BESA), we overcome this challenge and present here a model of marine fish supply and demand in coastal marine ecosystems worldwide, with parameters estimated from FAO data. We then simulate how marine fish consumption will develop until 2050, based on assumed developments of exogenous drivers under different scenarios, based on the shared socioeconomic pathways. While marine capture fish supply and demand is endogenous to the model, exogenous drivers, such as substitute availability, management effectiveness and climate change, reveal important impacts and levers for potential policy action.

To establish an effective waste management system, comprehensive understanding of waste flows, from their origin to composition, is crucial. Input-output models offer valuable insights into economic exchanges. However, existing Waste Extended Input-Output models have limitations in addressing the inefficiencies of waste treatment systems, as they overlook waste leakages into the environment. This paper addresses this gap by introducing a novel extension of the Waste Input-Output model, suitable for open systems where inefficiencies in waste collection and treatment are considered. The proposed extension integrates a new consumption sector, labeled "environment as a waste absorption sector," and introduces a novel production category, capturing waste flows from various sectors leaked into nature. The feasibility of this Modified Waste Input-Output approach is demonstrated through its application to the French economy, emphasizing the discharge of solid macro-plastic waste into oceans as an illustrative example of waste leakage to the environment.

Sufficiency, encompassing both absolute reductions in consumption and shifts to less environmentally impactful consumption modes, emerges as one of the necessary pillars of decarbonization. Yet, its broader economy-wide implications remain underexplored. To bridge this research gap, we develop a stylized macroeconomic model that integrates changes in consumption patterns within a disaggregated microeconomic production framework. We derive comparative statics to unravel three primary propagation channels for consumption changes: a direct demand effect that includes income reallocation, a price effect, and a substitution effect. While the income reallocation effect aligns with existing input-output literature, the other channels represent novel theoretical contributions to sufficiency studies. Importantly, we demonstrate that both the price and the substitution effect rely on the underlying structure of the economic production network and on the elasticities of substitution. Together, these effects drive the overall emissions reduction impact of sufficiency consumption changes. Using multi-regional input-output data, we calibrate our model to evaluate the impacts of two specific consumption changes: transitioning to a vegetarian diet and reducing personal vehicle usage. Our initial results show that both interventions lead to a reduction in overall emissions through the demand channel, of respectively 0.9 % and 2.6 %. We estimate rebound effects as high as 50 % due to the price and substitution effects. This suggests that existing literature may overestimate the emission reduction potential of sufficiency consumption changes by neglecting key macroeconomic feedback mechanisms.

This paper challenges the concept of green growth. We confront it to the Strong Sustainability paradigm, which limits substitutability of inputs. We extend the directed technical change model by Acemoglu et al. (2012) with two scenarios that reflect potential challenges to the transition from fossil fuels to clean energy. We show through simulations that both scenarios call for a degrowth phase; in the second one green growth eventually takes off nonetheless. This works innovates by providing a critical assessment of the prospects of both green growth and degrowth. We suggest it is important for future research to further the dialogue between the two concepts.

This review analyzes the evolution of environmental economic valuation. However, it does so from a novel perspective, as it makes a taxonomy of paradigms according to the common characteristics of the documents and initiatives included in each one: (i) economic valuation of the environment, (ii) valuation of ecosystem services, and (iii) natural capital accountability. The field has moved from a supply-driven and academic approach to a greater applicability and market-oriented approach. That implies that all the concepts, techniques, and methods developed during the first two phases are adapted to the needs of demand, institutions, and businesses. But it also signifies that the concept of value has been shifting to one of holding stakeholders accountable for their impacts and dependencies. As a result, a consensus has been reached on the relevance of taking into account natural capital and ecosystem services. Now, the necessary steps are beginning to be taken to integrate the value of nature into decision-making processes in both the public and private sectors, and new tools and initiatives are emerging with that aim (disclosure standards, green reporting, taxonomies, natural capital finance instruments, payment for ecosystem services, etc).

We study the impact of optimal climate policy on bank balance sheets during the transition to a low carbon economy in a model with financial frictions. We use an Environmental Dynamic Stochastic General Equilibrium (E-DSGE) two-sector model, featuring both an environmental externality and a friction in the financial sector. We examine transition risks for bank balance sheets resulting from stranded assets. We find that climate policy considerably impacts the financial sector by shrinking emission-intensive assets on their balance sheets, reducing the total value of these assets by 50\%. The expansion of the low-carbon sector can not fully compensate for these losses, leaving banks with a smaller balance sheet, which hampers their ability to finance the transition to a low carbon economy. Although our model does not feature heterogeneous banks, our results indicate that the balance bank of banks with a high concentration of emission-intensive assets would suffer significantly, and increases transition risks.