Conference Agenda

As a result of the energy crisis caused by the Russian invasion of Ukraine, 2023 was characterized by unprecedented price increases for heating fuels, namely gas and oil. On the political spectrum, the unforeseen events of the invasion and its impact on heating costs led to various crisis interventions by governments worldwide, many of which were concerning from a climate policy perspective. Using novel survey data from Germany this study demonstrates that the experience of economic hardship due to energy cost increases is associated with a significant decline in support for carbon pricing, which is widely regarded as the flagship policy for the fight against climate change by economists. The findings also underscore the potential of heightened public awareness about relief measures to mitigate the detrimental effects of distress. Consequently, despite their short-term adverse impact on carbon emissions, relief programs aimed at easing the short-term financial burden of unexpected price spikes may be a second-best option for ensuring climate policy stability. In anticipation of the EU Emissions Trading Scheme II (ETS2) implementation, these findings underscore the necessity of a re-evaluation of the Social Climate Fund. Specifically, there is a compelling rational for the automatic initiation of direct relief measures in response to unparalleled short-term price fluctuations. This would serve to maintain public support, not only for ETS2, but also for the broader European climate policy agenda.

This study presents results from a pre-registered randomized controlled trial involving 1,085 participants in Switzerland that have access to an E-bike, a car and public transport, and whose transport choices are monitored via a GPS-based app. The treatment consists in a monetary incentive that captures the main external costs and benefits associated with transport in the form of a Pigovian tax. The tax reduces transport-related external costs by 6.5%, predominantly by encouraging a shift away from driving towards E-biking and walking. Participants reduce their car travel distance by 8.2% on average, while increasing their cycling and walking distance by 12.6% and 6.1%, respectively. The effect is primarily driven by individuals who own a “fast” E-bike with support up to 45 km/h, rather than users of regular E-bikes. Besides a reduction in overall driving, the pricing also induces a shift of travel towards less congested time windows.

Does wind power deployment augment local business tax revenue, and what share of the

business tax income generated by wind turbines actually accrues to the municipal treasuries

on site? Employing a difference-in-differences approach, we estimate this share of potential

business tax payments that are retained locally. Our dataset encompasses 9,151 rural German

municipalities spanning the years 2003 to 2022. Our fndings reveal that about half of

the potential business tax payments remain in hosting municipalities. In particular, those

hosting municipalities receive fiscal benefits where turbine operators are located on site. We

also nd that a legal change in the formula apportionment has partially altered this to the

advantage of hosting municipalities in general.

The environmental impact of meat consumption is substantial and significant. The literature suggests that taxing meat could reduce environmental impacts but that effectiveness depends on the price elasticity of demand. This study uses different estimates of the price elasticity of the demand for meat in the Netherlands to assess the environmental impact of a meat tax, and discusses its distributional effects. It is important to pay attention to distributional effects as public acceptance for a meat tax is limited. This paper shows that for a lower bound Pigovian tax (10-35% price increase), the trade-offs are limited, but that there are choices with regard to tax instrument design. For one, the environmental impact of a VAT increase, which is relatively simple to implement, is similar to the effect of a lower bound Pigovian tax. However, a VAT affects the consumption of all meat products whereas a Pigovian tax mostly affects the consumption of beef: the reduction in meat consumption is lower under a Pigovian tax. In both cases, income effects seem limited: a Pigovian tax reduces the CO2 emissions of Dutch protein consumption with 8-24% at a cost of max 0.6% of net household income.