Ambitious climate mitigation policies face social and political resistance. One reason is that existing policies insufficiently capture the diversity of relevant insights from the social sciences about potential policy outcomes. We argue that agent-based models can serve as a powerful tool for integration of elements from different disciplines. Having such a common platform will enable a more complete assessment of climate policies, in terms of criteria like effectiveness, equity and public support.
2021 / Pavanello, F., E. De Cian, M. Davide, M. Mistry, T. Cruz, P. Bezerra, D. Jagu, S. Renner, R. Schaeffer, A.F.P. Lucena
Air-conditioning and the adaptation cooling deficit in emerging economies
Public acceptability of carbon taxation depends on its revenue use. Which single or mixed revenue use is most appropriate, and which perceptions of policy effectiveness and fairness explain this, remains unclear. It is, moreover, uncertain how people’s prior knowledge about carbon taxation affects policy acceptability. Here we conduct a survey experiment to test how distinct revenue uses, prior knowledge, and information provision about the functioning of carbon taxation affect policy perceptions and acceptability. We show that spending revenues on climate projects maximises acceptability as well as perceived fairness and effectiveness. A mix of different revenue uses is also popular, notably compensating low-income households and funding climate projects. In addition, we find that providing information about carbon taxation increases acceptability for unspecified revenue use and for people with more prior tax knowledge. Furthermore, policy acceptability is more strongly related to perceived fairness than to perceived effectiveness.
2021 / van den Bergh, J., and I. Savin
Impact of carbon pricing on low‑carbon innovation and deep decarbonisation: Controversies and path forward
There is an ongoing discussion about the effectiveness of carbon pricing, with a strong division between optimists and pessimists. A recent review study by Lilliestam, Patt and Bersalli (2021) of the impact of carbon pricing on low-carbon innovation and deep carbonization concludes that there is no evidence for such an impact. We evaluate this study and identify various shortcomings of it, which together cast strong doubts on its main conclusion. Instead, we conclude, based on the studies reviewed by the authors and additional, overlooked literature, that carbon pricing has had a small but positive and significant effect on low-carbon innovation. Our evaluation provides lessons for undertaking a systematic and objective review of research on this topic. Since the main goal of carbon pricing is changing choices by firms and consumers that affect carbon emissions, we also point the reader towards recent evidence for the broader effectiveness of carbon pricing.
2021 / Foramitti, J., I. Savin, and J. van den Bergh
Regulation at the source? Comparing upstream and downstream climate policies
Technological Forecasting & Social Change, 172, 121060
Climate policies can be applied either upstream, where fossil fuels are extracted, or downstream, where emissions are generated. Specific policy instruments can be defined for either level, and can take the form of a price signal such as through a tax, or a quantity limit such as through direct regulation or a permit market. In this study, we present an agent-based model to compare the performance of these different instruments and regulation levels. Since policy coverage is often limited, i.e. not all firms being under the regulator’s control, we also examine the impact of incomplete coverage on relative policy performance. Our analysis shows that only upstream regulation leads to an increase in fossil fuel prices, which is benefitial under limited coverage as it also affects firms not directly affected by the policy instruments; that prices under quantity-based regulation can decline after an initial peak, stabilizing at a lower level than under the tax; and that direct regulation is more efficient when applied upstream.
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