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[2017-04] Cost-effectiveness and incidence of alternative mechanisms for financing renewables
Xaquin Garcia-Muros, Christoph Böhringer and Mikel Gonzalez-Eguino

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The promotion of renewable energy in the electricity sector is increasing rapidly around the world based on its positive environmental and socioeconomic effects. However, there is also growing concern about the effect that these policies may have on the final price of electricity and how this may affect different social groups and competitiveness. Here we study distributional implications of different schemes for financing the promotion of renewables in the Spanish electricity sector. These schemes include exemptions from the electricity surcharge for residential and industry consumers and also various alternatives where the cost of renewables is not financed through the electricity bill but from other tax sources such as oil taxes, value added taxes or lump-sum transfers. The method that we use is an integration of a computable general equilibrium (CGE) model and a microsimulation (MS) model that enables us to capture a rich representation of the heterogeneity of households along with inter-sectoral and price-related effects, which are fundamental for analyzing the implications of schemes that are not restricted to the electricity sector. Our results provide evidence against using an electricity surcharge to finance the promotion of renewables due to its regressive effects. However, alternative financing options that do not increase electricity prices can significantly attenuate these adverse effects while not affecting welfare or competitiveness.
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[2017-03] Traveling for happiness, moving to adapt: An agent-based perspective on population mobility
Stefano Balbi

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Tourism and human migration research are gradually converging towards agent-based simulations as a methodology for exploring the complex feedbacks between human and natural components within social-ecological systems. Growing attention is given to the causes and effects of global environmental change and the study of social phenomena, as identity, lifestyle and attribution of value, in conjunction with sustainability analysis. Both tourism and migration are related to population mobility, relational values and to the pursuit of happiness, at the individual or at the household scale. Both are deeply affected by the globalization process, which increasingly blurs the distinction between the various classes of spatial-temporal movements. This article attempts to consider tourism and human migration under a unitary research framework, more compatible with the analysis of adaptation to shifting opportunities and social conflict prevention. We touch on the main methodological and thematic elements that indicate the mutual benefits of a combined agent-based perspective.
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[2017-02] Drivers of climate change opinion
Itxaso Ruiz, Sérgio Henrique Faria and Marc B. Neumann

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Understanding how different socio-cultural groups think about climate change is crucial for the successful implementation of climate policies. Here we review the main drivers of climate change opinion. Regardless of the socio-cultural context, knowledge of climate change (influenced by exposure to media and education) and belief in anthropogenic climate change (influenced by ethnography and political orientation) appear to be the main predictors of opinion. However, for action to occur, opinion about climate change must be modulated by risk aversion (shaped by climate change risk exposure, vulnerability and poverty). We illustrate how these interactions work by examining the willingness to accept climate policies.
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[2017-01] Towards successful adaptation: a checklist for the development of climate change adaptation plans
Marta Olazabal, Ibon Galarraga, James Ford, Alexandra Lesnikowski and Elisa Sainz de Murieta

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The earliest climate change adaptation plans emerged about ten years ago and are an increasingly important component of the international policy agenda. Because these plans by nature involve long-term objectives, some of the main questions raised in current adaptation tracking research studies are whether and how they will be implemented and what is required for these plans to successfully achieve their objectives? There is no consensus on how to define “successful adaptation” and there are multiple, sometimes competing, interpretations of success. In this working paper, we define three areas where climate change adaptation plans should focus on to successfully achieve their goals: policy and economy, science and learning and legitimacy. We develop a checklist that identifies required aspects for successful adaptation and sustainability in the long-term based on these three areas and related indicators. We suggest that plans follow this checklist as a guideline for plan development and institutional capacity building in the long term. We eventually discuss the adequacy of these metrics for assessing the credibility of developed climate adaptation policies.
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[2016-05] The geographic distribution of the economic impact of climate finance
María Victoria Román, Iñaki Arto and Alberto Ansuategi

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Current estimates at global level put the investments required to address climate change at around 1.3 trillion dollars per year in the coming decades. Most developing countries face financial constraints (public as well as private) and significant additional costs imposed on their development by the impacts of climate change. In the framework of international climate negotiations, industrialised countries have committed to assist financially developing countries in this effort.
Indeed, a specific fund (the Green Climate Fund) has been created to channel climate finance from donor to developing countries. This paper contributes to the literature dealing with climate finance allocation.
In particular, we study the global distribution of the economic impacts associated with these financial flows linked to 17 different mitigation options and nine adaptation options using a Global Multi-Regional Input-Output model. This methodological framework enables us to broaden the scope of analysis of the economic impacts of climate finance beyond the boundaries of the host country, and to capture the impacts generated in third countries through international trade. The results confirm the relevance of spill-over effects generated by climate finance, which account for (on average) 29% of the total impact. But the volume of spill-overs varies significantly depending on the type of climate action that is financed and the country that receives the funds. Therefore, international spill-overs are an aspect that countries might take into account when making decisions and negotiating about climate finance allocation, because they determine the distribution of economic gains associated to climate action.
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[2016-04] Beyond Ecosystem Services: A Food Security Perspective
Stefano Balbi and Ferdinando Villa

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Food is a primary provisioning ecosystem service. The concept of ecosystem services only focuses on the flow of services from nature to humans and doesn’t
consider human flows, which include both the flows from human to nature (i.e. the co-production of ecosystem services or environmental pressures caused by humans) and human to human flows (i.e. social flows). Neglecting human flows is a main issue for modelling food provision within the ecosystem services framework, especially so under a food security perspective, where food access greatly depend on economic entitlements and social networks. We use the example of food security to provide a blueprint for modelling the sustainability of provisioning ecosystem services by incorporating human flows.
We adopt an agent-based perspective that allows not only to capture critical flows between agents, but also to tag social agents with heterogeneous roles and behaviors. In complex coupled human-natural systems individual human behavior affects the emergence of collective outcomes of natural resource management. We conceptually model household behavior in the context of food provision within a rural village by framing it into a social-ecological governance compass based on four cardinal directions: differentiation, conformation, cooperation and competition. We argue that by acting together towards diet diversity, differentiation and cooperation may stimulate the rise of human flows that make a rural community more food secure. When generalized to the ecosystem services paradigm, the consequences of this study stand out. From a descriptive point of view scientists could draw more informed conclusions on both the environmental and social sustainability of the ecosystem services dynamics. From a normative point of view science could inform policymaking on how to stimulate the human flows that better optimize the flow of benefits from nature to humans.
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[2016-03] The role of flexible biofuel policies in meeting biofuel mandates
Anil Markandya, Kishore Dhavala and Alessandro Palma

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This study analyzes the role of biofuels in different markets. It focuses on the link between volatility in the yields of feedstocks and how these feed through to changes in the prices of biofuel crops under different rules for managing biofuel mandates. Under current mandates the impact seems to be significant, with the greatest being on price of sugar crops, followed by grains and oilseeds. Changes in mandates have different results in the EU, depending on crops and change in yields examined. The paper also looks at the implications of waivers in ‘bad’ years.
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[2016-02] Industrial and terrestrial carbon leakage under climate policy fragmentation
Mikel González-Eguino, Iñigo Capellán-Pérez, Iñaki Arto, Alberto Ansuategi and Anil Markandya

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One of the main concerns in international climate negotiations is policy fragmentation, which could increase
the carbon emissions of non-participating countries. Until very recently the carbon leakage literature has
focused mainly on “industrial” carbon leakage through various channels, such as the induced changes in the
prices of fossil fuels. But there is another potential channel that has received little attention so far: the carbon
leakage triggered by land use changes, referred to as “terrestrial” carbon leakage. This paper explores the
magnitudes of these two forms of leakage in a situation where CO2 emissions in all sectors, including from land
use change, are taxed equally. We explore the implications of different fragmentation scenarios using the
GCAM integrated assessment model. Our results show that total carbon leakage is at its highest when the
biggest developing regions do not participate, but its rate decreases with the size of the coalition. We also show
that under different fragmentation scenarios terrestrial carbon leakage may be the dominant type of leakage up
to 2050, due to deforestation in non-participating regions. The implications of shifting food and bioenergy
production to non-participating regions are also analyzed.
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[2016-01] What determines the magnitude of the economic impact of climate finance in recipient countries? A structural decomposition of value-added creation between countries.
María Victoria Román, Iñaki Arto and Alberto Ansuategi

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International climate finance flows are increasing year after year, and will continue to increase in the future if the financial goal agreed in Copenhagen (USD 100 billion per year by 2020) is to be reached. Apart from the climate mitigation and adaptation benefits, these monetary flows generate economic impacts via the purchase of goods and services. Due to the role of international trade, impacts not only happen where climate finance is disbursed but in all economies involved in the production chain of purchased goods. Climate finance recipient countries have different abilities to retain locally the generated economic benefits. Climate finance donor countries differ also in their ability to capture the benefits of climate finance disbursed in other countries. This paper helps to understand the drivers of the differences between several recipient and donor countries. Results identify the most relevant drivers for each country, and those sectors where largest potentials to increase the economic benefits of climate finance are. This is a valuable input of information for the design of general national strategies and sectoral plans aimed at maximizing the synergies between climate action and economic development.
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[2015-04] US climate policy: a critical assessment of intensity standards
Christoph Böhringer , Xaquin Garcia-Muros , Mikel Gonzalez-Eguino and Luis Rey

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Intensity standards have gained substantial momentum as a regulatory instrument in US climate policy. Energy-intensive and trade-exposed industries are traditionally opposed to initiatives for domestic carbon pricing as they are particularly vulnerable to competitiveness losses and refer to counterproductive emission leakage in a unilateral climate policy context. This has led to policy proposals where intensity standards on energy and carbon might at least in part substitute for explicit carbon pricing via taxes or emission allowances. In this paper we study the economic efficiency properties of intensity standards as an instrument of unilateral climate policy. We first develop a theoretical partial equilibrium framework and show that standards can have an ambiguous effect on carbon leakage. We then use an applied computable general equilibrium model of the global economy to gain quantitative insights into the effects of intensity standards for the case of the US. Our numerical results show that intensity standards may rather increase than decrease carbon leakage. Moreover, standards can lead to considerable welfare losses compared to uniform emission taxing. The tradability of standards across industries is a mechanism that can reduce these negative effects.
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[2015-03] Health impacts of atmospheric pollution in a changing climate
Leif Vogel, Joshua Vande Hey , Sérgio H. Faria , Joseph V. Spadaro

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Current annual global estimates of premature deaths from poor air quality are estimated in the range 2.6–4.4 million, and 2050 projections are expected to double against 2010 levels. In Europe, annual economic burdens are estimated at around 750 bn €. Climate change will further exacerbate air pollution burdens; therefore, a better understanding of the economic impacts on human societies has become an area of intense investigation. The MACC project series was a European research effort (2005–2015) addressing monitoring of air pollution. The outcome of this work has been integrated into a European capacity for Earth Observation, the Copernicus Atmospheric Monitoring Service (CAMS). In MACC/CAMS, key pollutant concentrations are computed at the European scale and globally by employing chemically-driven advanced transport models. Combining these efforts with an integrated assessment model for calculating the health impacts and damage costs of air pollution offers a novel and highly multidisciplinary approach with information gained at various spatial and temporal resolutions. These calculations are complementary to other, previous and ongoing efforts to assess health impact projections. It benefits the European community by contributing a novel approach to assess air quality at the local and regional levels, explores new pathways for exploiting earth observational data and benefits to long running EU commitments.
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[2015-02] The price of energy efficiency in the Spanish housing market
Amaia de Ayala, Ibon Galarraga and Joseph V. Spadaro

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The housing sector is a substantial consumer of energy, and therefore a focus for energy savings efforts. The Energy Performance Certificate (EPC) is the main EU policy to improve the energy performance of buildings. Following the implementation of the EPC Directive into Spanish law, from June 2013, all properties offered for sale or rented out in Spain are required to have an EPC. Given that this is a recently introduced regulation, unlike other European housing markets, the Spanish one lacks market data on energy efficiency (EE) labels and their impact on housing price. In order to overcome this gap, we determine the EE ratings of a sample of 1,507 homes across Spain on the basis of information collected previously through household surveys. This information allowed us to answer the question of whether or not, and to what extent, Spanish housing markets capitalise the value of EE. We apply the hedonic-price technique and observe that more energy efficient dwellings (meaning higher EE rating) have a price?premium between 5.4% and 9.8% compared to those with the same characteristics but lower EE level.
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[2015-01] Ecosystems and human health: towards a conceptual framework for assessing the co-benefits of climate change adaptation
Pablo Martinez-Juarez, Aline Chiabai, Sonia Quiroga Gómez and Tim Taylor

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This paper focuses on the impact that changes in natural ecosystems can have on human health. Green and blue areas promoted as adaptation measures may provide a wide range of co-benefits which should be taken into account when designing adaptation options. Otherwise sub-optimal policy may result. Here we first present an overview of some key adaptation measures, their possible impacts on the natural environment and associated health implications. Second, we discuss the benefits associated with the exposure to green and blue areas and build a theoretical framework for analysing co-benefits of adaptation to climate change, where such adaptation affects the natural environment. Third, we present an overview of the key literature addressing the relationship between health and exposure to natural environment, while classifying the studies according to the methodological approaches, and discussing main results and key issues. Results in the literature show a positive correlation between health and green areas, while blue areas have attracted less attention. The wide range of differentiated approaches in the literature highlights the need for an integrated conceptual framework to assess the health co-benefits of adaptation that interrelates with the natural environment. We provide the basis for such a conceptual framework that allows identifying the different aspects of this interaction.
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[2014-08] La pobreza energética y sus implicaciones
Mikel González-Eguino

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El sector energético se enfrenta en las próximas décadas a tres grandes transformaciones relacionadas con el cambio climático, la seguridad de suministro y la pobreza energética. Las dos primeras han sido analizadas ampliamente. Sin embargo, la pobreza energética ha pasado más desapercibida a pesar de tener una gran influencia en la vida de millones de personas, especialmente en los países más pobres.
Actualmente, 1.300 millones de personas (el 20% de la población mundial) no tienen acceso a la electricidad y 2.700 millones dependen del uso de la biomasa para cocinar. La pobreza energética tiene implicaciones importantes para la salud, la economía y el medio ambiente. Según la OMS, 1,3 millones de personas mueren al año por causas relacionadas con la contaminación interior asociada al uso de biomasa en cocinas inadecuadas. Aunque la pobreza energética no puede ser desligada del problema más amplio y complejo de la pobreza, el acceso a infraestructuras energéticas evitaría sus peores consecuencias y ayudaría a fomentar un desarrollo más autónomo. Según la IEA, el coste de universalizar el acceso a la energía para 2030 supondría una inversión anual de 35.000 millones de dólares; una cantidad muy inferior a las subvenciones otorgadas a las energías fósiles y equivalente al 2% de las tarifas eléctricas en los países de la OCDE.

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[2014-07] Hunting spectro-temporal information in unevenly spaced paleoclimate time series
Josué M. Polanco-Martínez and Sérgio H. Faria

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Here we present some preliminary results of a statistical–computational implementation to estimate the wavelet spectrum of unevenly spaced paleoclimate time series by means of the Morlet Weighted Wavelet Z-Transform (MWWZ). A statistical significance test is performed against an ensemble of first-order auto-regressive models (AR1) by means of Monte Carlo simulations. In order to demonstrate the capabilities of this implementation, we apply it to the oxygen isotope ratio (?18O) data of the GISP2 deep ice core (Greenland).
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[2014-06] The use of “Bonus-Malus” schemes for promoting energy-efficient household appliances: a case study for Spain
Ibon Galarraga and Luis M. Abadie

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Subsidies to promote the purchase of energy-efficient household appliances have been extensively used in many countries. This paper deals with the case of the Spanish rebate scheme, and proposes the use of both subsidies and taxes as a more effective way of promoting efficient appliances. The authors propose a sophisticated methodology for designing optimal combinations of taxes and subsides depending on different policy goals such as budget neutrality, increasing the proportion of efficient appliances, etc.
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[2014-05] A dynamic CGE modelling approach for analyzing trade-offs in climate change policy options: the case of Green Climate Fund
Alessandro Antimiani, Valeria Costantini, Anil Markandya, Chiara Martini, Alessandro Palma, and Maria Cristina Tommasino

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We investigate the trade-offs between economic growth and low carbon targets for developing and developed countries in the period up to 2035. Policy options are evaluated with an original version of the dynamic CGE model GDynE. Abatement costs appear to be strongly detrimental to economic growth for developing countries. We investigate options for reducing these costs that are consistent with a green growth strategy. We show that Green Climate Fund financed through a levy on carbon taxation can benefit all parties, and larger benefits are associated with investment of the Green Climate Fund to foster energy efficiency in developing countries.
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[2014-04] New climate scenario framework implementation in the GCAM integrated assessment model
Iñigo Capellán-Pérez, Mikel González-Eguino, Iñaki Arto, Alberto Ansuategi, Kishore Dhavala, Pralit Patel, Anil Markandya

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This report has various objectives: (i) to provide an overview of the climate Integrated Assessment approach; (ii) to describe the Global Climate Assessment Model (GCAM); (iii) to outline the new IPCC scenario framework represented by the Shared Socio-economic Pathways (SSPs) and the Representative Concentration Pathways (RCPs); and (iv) to document the implementation of the new scenario framework in version 3.1 of the GCAM. The GCAM baseline is thus calibrated to the “Middle of the Road” or SSP2 scenario using the data calculated by the OECD. The implications of this scenario are important because it will probably become a standard scenario among the research community. The exogenous variables, the implications for income convergence and the results in terms of energy mix, emissions, temperature and radiative forcing of SSP2 implementation in the GCAM are presented at both global and regional levels. These results are also compared with the GCAM-Reference baseline and the IPCC SRES representative scenarios. Then the feasibility, cost and implications of a climate policy that seeks to stabilize temperature at 2ºC (2.6 W/m2 RCP) using a global uniform carbon tax are analyzed. The study is completed by a decomposition analysis that enables the main driving factors of CO2 variation to be identified, including population, affluence, energy intensity, carbon intensity and fossil-fuel share of the energy mix. Finally we draw some conclusions and highlight points for further research.
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[2014-03] How are Italian and Spanish cities tackling climate change? A local comparative study
Marta Olazabal, Sonia De Gregorio Hurtado, Eduardo Olazabal, Filomena Pietrapertosa, Monica Salvia, Davide Geneletti, Valentina D’Alonzo, Efrén Feliú, Senatro Di Leo and Diana Reckien

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Cities are widely recognised as being pivotal to fight climate change.
They magnify the drivers of climate change, experience the impacts and also concentrate the highest room for action. Although urban areas are broadly claimed to be climate leaders, there is no archetype of right actions given the highly contextual differences among them. Yet, the how and why cities respond to global environmental challenges in the context of increasingly competitive economies needs further research. In this paper we aim at advancing in this regard by assessing the state of the art on urban climate actions in two European Mediterranean Countries:
Spain and Italy that face similar climate change challenges. Based on an extensive review of documents, we analyse mitigation and adaptation plans of 26 Spanish and 32 Italian Urban Audit cities, as representative samples. Our results show relevant differences between Spanish and Italian cities in terms of the starting time of their climate actions as well their implementation. We concur with existing literature in that mitigation is more advanced than adaptation actions and take evidence in both countries and we also demonstrate that international and national networking initiatives are being instrumental in engaging cities in climate action.
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[2014-02] Implications of governance structures on urban climate action: evidence from Italy and Spain
Sonia De Gregorio Hurtado, Marta Olazabal, Monica Salvia, Filomena Pietrapertosa, Eduardo Olazabal, Davide Geneletti, Valentina D’Alonzo, Efrén Feliú, Senatro Di Leo and Diana Reckien

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Cities are widely recognised as being pivotal to fight climate change.
Cities magnify the drivers of climate change, experience the impacts and also concentrate the highest room for action. Given the 70% of the global emissions that cities are responsible for, national governments are unable to meet their international commitments for addressing mitigation and adaptation without the action and cooperation of cities.
In turn, the capacity of local governments to address climate change is largely determined by the institutional architecture within which they are integrated. As a result, the relationship between the different arenas of authority and the integration of cities in national and international networks is considered critical in shaping the global capacity to govern climate change. This work aims to understand how multi-level climate governance and alliances of cities (national and
international) are influencing the climate change capacity and performance of municipalities. This has been done by focusing on two national contexts of the European Union, Italy and Spain, in which climate policy, multi-level governance frameworks, the effects of the national and international networks of cities, and the climate response of cities are analysed through an extensive review of scientific and grey literature, and institutional documents. The results concur with existing literature on the importance of constructing collaborative multi-level climate frameworks at the national scale, that fully integrate the local level, in order to support cities to develop consistent climate action and raise awareness of the responsibility they have in this policy field.
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