Conference Agenda

We analyze international environmental agreements in a two-stage game when governments have homo moralis preferences a la Alger and Weibull (2013, 2016). The countries base their decisions on the material payoff obtained on the hypothesis that all other countries act as they with predetermined probability. They are assumed to act morally w.r.t. both membership and emissions. We investigate the interaction and impact of that moral behavior on coalition formation and material payoff. The membership morality tends to increase while the emissions morality tends to decrease the coalition size, but the outcome is not smoothly determined by these opposite forces.

The role of sub-national actors such as cities, states and regions to mitigate climate change is increasingly recognized, reflected by numerous net-zero commitments. While their timing and emissions pathways imply a specific regional carbon budget, the underlying normative reasoning provided for their choice generally remains poor. We here propose a method to close this gap. Starting from an allocation to the (supra-)national level, we argue for a transparent normative basis for the further allocation across sub-national regions and implement such an allocation for the EU Member States in their NUTS-2 regional breakdown. We conclude that two carbon budgets, one for production-based emissions, one for consumption-based emissions, each derived according to the appropriate criteria, need to be followed, as regional governance levers and the sources of regional welfare concern both. Thereby, fair regional carbon budgets constitute a valuable benchmark to embrace sub-national agency within the multilevel governance of climate change.

Governments globally face the challenge of balancing policy measures to address social tensions while managing the fiscal costs of climate policies. This paper employs a comprehensive multi-sector E-DSGE model to assess the effectiveness of common fiscal measures. We rank these measures based on their carbon-saving potential by using the concept of carbon-saving fiscal multiplier. Our analysis yields three key findings: first, carbon pricing generally outperforms green subsidies in reducing emissions; second, among green subsidies, capital subsidies show the most promise but require time to yield benefits; and third, a combination of carbon pricing and green subsidies provides a welfare-enhancing cushion against the economic trade-offs of climate policy.

Hotter temperature can reduce work hours, productivity, and income. The risks and hazards associated with climate change impacts are expected to affect vulnerable workers more strongly, with impacts varying across regions. This heterogeneity in the impacts of climate change across a large landscape, such as India, requires attention. The empirical study investigates the impacts of heat stress on labour supply and labour productivity in Indian manufacturing sector using micro survey of industries and high resolution climate data. We find an evidence that 10 additional days recording daily maximum temperature above 35°C decreases labour supply by 2.9% and labour productivity by 0.40% significantly. The analysis is further extended to investigate whether there exists an evidence of heterogeneity in the heat impacts through gender lens and location-differentiated exposure of workers. Our results are indicative of the reduction in the marginal impact of a hot and humid day on labour supply in rural areas as compared to urban areas. We explore heterogeneity across heat impacts on male and female workers. We find that productivity of male workers is largely impacted as compared to that of female workers. An increase in an average daily maximum temperature by 1°C in a year, reduces male labour productivity by 0.15% and no evidence of impact on productivity of female workers. Proxying for climate adaptation expenses incurred by manufacturing plants to help adapt workers to heat, we find smaller marginal impacts of heat on labour supply for plants with higher welfare expenses. The study further provides an evidence that climate adaptation costs by firms to provide favourable working conditions to workers can significantly reduce the impact of heat stress on labour productivity. Our study is the first to investigate the extent to which manufacturing plants undertake climate adaptation measures and the existing limits to adaptation in India.