• Energy Research

Unidad de excelencia María de Maeztu CEX2019-000940-M Studies on socio-economic impacts of climate and energy policies tend to focus on income and expenditure effects. For analyses that go beyond monetary dimensions, time-diary data have proven to be useful. Here we investigate how work time relates to leisure activity structures and associated energy use for different types of employees. To this end, an analysis of time-use data is undertaken for Finland and France. Novel elements are (1) a differentiation between part-time and full-time employees, (2) the use of distinct energy intensities of different activities by household type instead of average energy intensities, and (3) allowing for non-linear relationships between work time and the allocation of other activities. Our results suggest that the effects of work time on energy use are rather homogeneous in Finland, whereas we find more differences between employee types in France. In both countries, adjustment of leisure-activity duration is sometimes strong initially but flattening for longer work hours. This relates to another finding, namely that the composition of leisure activities differs between people with distinct work hours. Our study suggests that analysis of disaggregated time-use data can add relevant insights for evaluation, and possibly design, of energy, climate and labour-market policies.

Unidad de excelencia María de Maeztu CEX2019-000940-M Studies on socio-economic impacts of climate and energy policies tend to focus on income and expenditure effects. For analyses that go beyond monetary dimensions, time-diary data have proven to be useful. Here we investigate how work time relates to leisure activity structures and associated energy use for different types of employees. To this end, an analysis of time-use data is undertaken for Finland and France. Novel elements are (1) a differentiation between part-time and full-time employees, (2) the use of distinct energy intensities of different activities by household type instead of average energy intensities, and (3) allowing for non-linear relationships between work time and the allocation of other activities. Our results suggest that the effects of work time on energy use are rather homogeneous in Finland, whereas we find more differences between employee types in France. In both countries, adjustment of leisure-activity duration is sometimes strong initially but flattening for longer work hours. This relates to another finding, namely that the composition of leisure activities differs between people with distinct work hours. Our study suggests that analysis of disaggregated time-use data can add relevant insights for evaluation, and possibly design, of energy, climate and labour-market policies.

It has been long debated whether environmental tax reform (ETR), i.e. a revenue-neutral shift of the tax burden from labour to carbon emissions, can have a double dividend, in terms of climate and economic goals. So far this question has been addressed in public finance and environmental economics using models with rational and representative agents. Here we examine the relevance of deviating from these standard behavioural assumptions. Our motivation is that research from other fields indicates that impacts of both environmental and income taxation on households are sensitive to behavioural biases, such as habits, imitation or status seeking. A related feature is that consumers and firms are heterogeneous with respect to many characteristics, some of which are crucial for the distributional effects of a tax reform. We combine insights from social psychology and behavioural, evolutionary and labour economics to identify behavioural cases in which the impacts of an ETR is likely to differ significantly from those in the traditional framework. Our findings show that households' time use patterns and the distinction between extensive and intensive labour supply are relevant and deserve more attention.

It has been long debated whether environmental tax reform (ETR), i.e. a revenue-neutral shift of the tax burden from labour to carbon emissions, can have a double dividend, in terms of climate and economic goals. So far this question has been addressed in public finance and environmental economics using models with rational and representative agents. Here we examine the relevance of deviating from these standard behavioural assumptions. Our motivation is that research from other fields indicates that impacts of both environmental and income taxation on households are sensitive to behavioural biases, such as habits, imitation or status seeking. A related feature is that consumers and firms are heterogeneous with respect to many characteristics, some of which are crucial for the distributional effects of a tax reform. We combine insights from social psychology and behavioural, evolutionary and labour economics to identify behavioural cases in which the impacts of an ETR is likely to differ significantly from those in the traditional framework. Our findings show that households' time use patterns and the distinction between extensive and intensive labour supply are relevant and deserve more attention.

Environmental tax reform (ETR), a shift from labour to carbon taxes, has been mostly modelled using general equilibrium (GE) analysis. Since a low-carbon transition will require deep transformations, one will also have to address out-of-equilibrium dynamics and increased agent heterogeneity. Unlike GE models, agent-based models (ABMs) are well equipped to deal with this. We therefore replicate a recent GE model for ETR using an agent-based approach. This process, known as "agentization", allows assessing similarities as well as differences in policy impacts between the two modelling approaches, in turn providing a test of the robustness of the GE results. We find that the agent-based model is able to replicate many results of the general equilibrium analysis, while revealing strengths and weaknesses of both model types. We discuss concrete implementation steps and difficulties experienced in the GE-ABM translation process. We illustrate the potential of ABM by extending the model in several directions. We show that heterogeneous subsistence consumption can increase the space for combining a double dividend with an equity goal, and that overall macro-economic results can conceal important distributional impacts when green preferences and labour supply elasticities vary.

Environmental tax reform (ETR), a shift from labour to carbon taxes, has been mostly modelled using general equilibrium (GE) analysis. Since a low-carbon transition will require deep transformations, one will also have to address out-of-equilibrium dynamics and increased agent heterogeneity. Unlike GE models, agent-based models (ABMs) are well equipped to deal with this. We therefore replicate a recent GE model for ETR using an agent-based approach. This process, known as "agentization", allows assessing similarities as well as differences in policy impacts between the two modelling approaches, in turn providing a test of the robustness of the GE results. We find that the agent-based model is able to replicate many results of the general equilibrium analysis, while revealing strengths and weaknesses of both model types. We discuss concrete implementation steps and difficulties experienced in the GE-ABM translation process. We illustrate the potential of ABM by extending the model in several directions. We show that heterogeneous subsistence consumption can increase the space for combining a double dividend with an equity goal, and that overall macro-economic results can conceal important distributional impacts when green preferences and labour supply elasticities vary.