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 paper makes three key points: 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 temperatures can reduce firms performance due to decline in productivity of labor. The impacts associated with exogenous temperature shocks are expected to affect vulnerable firms and workers more strongly, with impacts varying across firm size and location. This heterogeneity in the impacts of climate change across a large landscape, such as India, requires attention. Using Recentered Influence Function (RIF) fixed-effects regression approach, we estimate unconditional reduced-form effects of the temperature distribution on firms productivity with a particular focus on labor channel. The distributional impacts of the increasing heat incidence is explored across low and high productivity firms, firms located in districts which are over-exposed and under-exposed to heat and firms located in rural and urban areas. The results indicate that the temperature rise has detrimental effects on firm-level productivity with negative effects thereof concentrated in the low productivity firms. We find heterogeneity in the impacts of temperature rise on labor productivity and capital productivity with the concentration of impacts found largely in firms located in over-exposed districts and/or rural areas. Exploring an important labor market implication of declining labor productivity through gender-differentiated impacts of temperature shocks on firm-level labor demand, we find that the temperature rise significantly reduces female work-days more than male work-days as well as work-days of permanent workers more than work-days of casual workers.