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The aim of this paper is to describe and discuss the weak and strong sustainability approach of assessing climate change and to show reasonable applications, weaknesses, possible improvements and linkages of both approaches. Main features of “weak” and “strong” sustainability approaches are characterised. Damage cost studies of global warming representing weak sustainability indicators are discussed. Further, the examples of the “inverse scenario” approach of the German Advisory Council on Global Change (WBGU) and the environmental space concept of the Dutch Advisory Council for Research on Nature and Environment (RMNO) are described and discussed for illustrating advantages and weaknesses of strong sustainability indicators. Finally, the integration of damage cost modules into a broader methodological framework of strong sustainability is recommended.

This paper assesses the economic impacts of linking the EU emissions trading scheme (ETS) to emerging schemes beyond Europe in the presence of a post-Kyoto agreement in 2020. Numerical simulations with a multi-country equilibrium model of the global carbon market show that linking the European ETS induces only minor economic benefits. As trading is restricted to energy-intensive companies that are assigned high initial emissions, the major compliance burden is carried by the non-trading industries excluded from the linked ETS. In the presence of parallel government trading under a post-Kyoto Protocol, the burden of the excluded sectors can be substantially alleviated by international permit trade at the country level. However, the parallel carbon markets of linked ETS companies and post-Kyoto governments are still separated here. From an efficiency perspective, the most desirable future climate policy regime is thus represented by a joint trading system facilitating international emissions trading between ETS companies and post-Kyoto governments. While the Clean Development Mechanism is not able to attenuate the inefficiencies within linked ETS, in a parallel or joint trading regime the economy-wide access to project-based abatement options in developing countries induces large additional cost-savings.

We present a novel data set of subnational economic output, Gross Regional Product (GRP), for more than 1500 regions in 77 countries that allows us to empirically estimate historic climate impacts at different time scales. Employing annual panel models, long-difference regressions and cross-sectional regressions, we identify effects on productivity levels and productivity growth. We do not find evidence for permanent growth rate impacts but we find robust evidence that temperature affects productivity levels considerably. An increase in global mean surface temperature by about 3.5°C until the end of the century would reduce global output by 7–14% in 2100, with even higher damages in tropical and poor regions. Updating the DICE damage function with our estimates suggests that the social cost of carbon from temperature-induced productivity losses is on the order of 73–142$/tCO2 in 2020, rising to 92–181$/tCO2 in 2030. These numbers exclude non-market damages and damages from extreme weather events or sea-level rise. © 2020 The Authors

We investigate the effect of the physical presence of wind turbines on residential well-being in Germany, using panel data from the German Socio-Economic Panel (SOEP) and a unique novel panel data set on more than 20,000 wind turbines for the time period between 2000 and 2012. Using a Geographical Information System (GIS), we calculate the proximity between households and the nearest wind turbine as the most important determinant of their disamenities, e.g. visual interference into landscape aesthetics. Our unique novel panel data set on wind turbines, which was collected at the regional level, includes their exact geographical coordinates and construction dates. This allows estimating the causal effect of the physical presence of wind turbines on residential well-being, using a difference-in-differences design. To ensure comparability of the treatment and control group, we apply propensity-score and novel spatial matching techniques based on exogenous weather data and geographical locations of residence, respectively. We show that the construction of a wind turbine within a treatment radius of 4,000 metres around households has a significantly negative effect on life satisfaction. For larger treatment radii, no negative externalities can be detected. Moreover, the effect is transitory, vanishing after five years at the latest. As wind turbines are addressed at avoiding negative externalities of local pollutant and global greenhouse gas emissions, they fulfill an important role in the de-carbonization of electricity systems world-wide. Comparing the imposed spatially and temporally limited externalities with the avoided externalities from emissions, the positive impact of wind turbines is by several magnitudes higher than the negative.

This paper analyzes the determinants of alternative automobile fuel regulation and development support with a particular focus on methanol fuel. We find that embedded interests, bureaucratic reforms, and political circumstances in the Chinese national, provincial, and municipal governments have all shaped policy outcomes in this area. The paper seeks to explain why at, the national level, support for alternative fuels has waned and finds that the concerns of state oil majors and disorganization during the process of national bureaucratic restructuring have been the deciding factors. Interestingly, at the sub-national level promotion of methanol continues unabated in some places. At the local level, business relationships as well as the embedded economic and personal interests of local leaders help to explain managerial local government behavior and sheds light on why government officials actively create and manage methanol fuel business opportunities through local standardization, subsidies, and hands-on management of SOE opposition. The switch towards methanol fuel was more successful in localities where individuals, either government officials or enterprise managers, formed an alliance and made this their ‘pet projects’. The analysis draws on 55 interviews conducted between June and October 2010 in Shanxi, a major coal-producing province which has supported methanol fuel-switching programs for over ten years. The findings contribute to debates about the condition of the local state in China. The argument put forward in this paper is that because of limited state capacity at the central level and insufficient concerns for the development of alternative fuels in the short-term, some sub-national governments with strong embedded interests promote certain alternative fuels by taking on active managerial roles, adopting creative and ad-hoc strategies to fill in the national level policy gap at the local level.

In the face of increasingly frequent extreme weather events, the need to manage climate risk becomes more urgent, especially for the most vulnerable countries and communities. With the aim of reducing vulnerability, climate risk transfer in the form of climate risk insurance (CRI) has been gaining attention in climate policy discussions. When properly designed, CRI acts as a safety net against climate change impacts by providing financial support after an extreme weather event. Two main types of insurance enable payouts: indemnity (traditional) insurance or predefined parameters (index-based) insurance. Individuals, groups, or even governments may take out policies with either type of insurance and receive payouts directly (insurer to beneficiary payout) or indirectly (insurer to aggregator to beneficiary payout). Direct insurance is usually implemented at the micro-level with individual policyholders. Indirect insurance is usually implemented through group contracts at the meso-level through risk aggregators and at the macro-level through the state. While promising, risk transfer in the form of CRI also has its share of challenges. Within the United Nations Framework Convention on Climate Change, the lack of accessibility and affordability of CRI for poor and vulnerable groups have been identified as barriers to uptake. In light of climate justice, asking the poor and climate-vulnerable groups - most of whom do not contribute substantially to anthropogenic climate change - to solely carry the financial burden of risk transfer is anything but just. Employing a human rights-based approach to CRI may ensure that the resilience of poor and climate-vulnerable groups is enhanced in a climate-just manner. Indigenous peoples are some of the poorest and most climate vulnerable groups. Often marginalised, they rarely have access to social protection. The strong communal relationship of indigenous peoples facilitates their participation in community-based organisations (CBOs). CBOs are a suitable vehicle for meso-insurance, in which risk is aggregated and an insurance policy belongs to a group. In this way, CBOs can facilitate service provision that would otherwise be beyond the reach of individuals. Conclusions of this briefing paper draw on a conceptual analysis of meso-insurance and the results of field research conducted in March 2018 with indigenous Palaw’ans in the Philippines. We find that CRI needs to be attuned to the differential vulnerabilities and capacities of its beneficiaries. This is particularly true for poor and vulnerable people, for whom issues of accessibility and affordability need to be managed, and human rights and pro-poor approaches need to be ensured. In this context, meso-insurance is a promising approach when it provides accessibility and affordability and promotes a pro-poor and human rights-based approach of risk transfer by: Properly identifying and involving target beneficiaries and duty-bearers by employing pro-poor and human rights principles. Employing measures to improve the financial literacy of target beneficiaries. Designing insurance models from the bottom up. Briefing Paper

This study investigates how information and communication technology (ICT) complements globalisation in order to influence CO2 emissions in 44 Sub-Saharan African countries over the period 2000-2012. ICT is measured with internet penetration and mobile phone penetration whereas globalisation is designated in terms of trade and financial openness. The empirical evidence is based on the generalised method of moments. The findings broadly show that ICT can be employed to dampen the potentially negative effect of globalisation on environmental degradation like CO2 emissions. Practical, policy and theoretical implications are discussed.