• Energy Research

Choosing appropriate policy instruments is an important part of successful regulation. Once objectives are agreed and suitable targets adopted, policy-makers can employ command-and-control regulation and/or economic instruments, and choose between fixing a price or a quantity. This paper examines the relative advantages of price, quantity, and hybrid instruments according to: their efficiency under uncertainty; the trade-off between credible commitment and flexibility; implementation; international considerations; and political economy. Various illustrations of the theory are provided, with two detailed applications to climate change and transport policy, specifically congestion and ‘safety pricing’.

China's 14th Five-Year Plan, for the period 2021-25, presents a real opportunity for China to link its long-term climate goals with its short-to medium-term social and economic development plans. China's recent commitment to achieving carbon neutrality by 2060 has set a clear direction for its economy, but requires ratcheting up ambition on its near-term climate policy. Against this background, this paper discusses major action areas for China's 14th Five-Year Plan after COVID-19, especially focusing on three aspects: the energy transition, a new type of sustainable urban development, and investment priorities. China's role in the world is now of a magnitude that makes its actions in the immediate future critical to how the world goes forward. This decade, 2021-2030, is of fundamental importance to human history. If society locks in dirty and high-carbon capital, it raises profound risks of irreversible damage to the world's climate. It is crucial for China to peak its emissions in the 14th Five-Year Plan (by 2025), making the transition earlier and cheaper, enhancing its international competitiveness in growing new markets and setting a strong example for the world. The benefits for China and the world as a whole could be immense.

Conventional benefit-cost analysis incorporates the normally reasonable assumption that the policy or project under examination is marginal. Among the assumptions this entails is that the policy or project is small, so the underlying growth rate of the economy does not change. However, this assumption may be inappropriate in some important circumstances, including in climate-change and energy policy. One example is global targets for carbon emissions, while another is a large renewable energy project in a small economy, such as a hydropower dam. This paper develops some theory on the evaluation of non-marginal projects, with empirical applications to climate change and energy. We examine the conditions under which evaluation of a non-marginal project using marginal methods may be wrong, and in our empirical examples we show that both qualitative and large quantitative errors are plausible

Summary The integration of renewable generation and the electrification of heating and transportation are critical for the sustainable energy transition toward net-zero greenhouse gas emissions. These changes require the large-scale adoption of distributed energy resources (DERs). Peer-to-peer (P2P) energy trading has gained attention as a new approach for incentivizing the uptake and coordination of DERs, with advantages for computational scalability, prosumer autonomy, and market competitiveness. However, major unresolved challenges remain for scaling out P2P trading, including enforcing network constraints, managing uncertainty, and mediating transmission and distribution conflicts. Here, we propose a novel multiscale design framework for P2P trading, with inter-platform coordination mechanisms to align local transactions with system-level requirements, and analytical tools to enhance long-term planning and investment decisions by accounting for forecast real-time operation. By integrating P2P trading into planning and operation across spatial and temporal scales, the adoption of large-scale DERs is tenable and can create economic, environmental, and social co-benefits.

This paper defines the ‘2°C capital stock’ as the global stock of infrastructure which, if operated to the end of its normal economic life, implies global mean temperature increases of 2°C or more (with 50% probability). Using IPCC carbon budgets and the IPCC’s AR5 scenario database, and assuming future emissions from other sectors are compatible with a 2°C pathway, we calculate that the 2°C capital stock for electricity will be reached by 2017 based on current trends. In other words, even under the very optimistic assumption that other sectors reduce emissions in line with a 2°C target, no new emitting electricity infrastructure can be built after 2017 for this target to be met, unless other electricity infrastructure is retired early or retrofitted with carbon capture technologies. Policymakers and investors should question the economics of new long-lived energy infrastructure involving positive net emissions.

La fréquence des catastrophes naturelles intenses (définies ici comme des événements déclenchés par des dangers de la nature et causant au moins 100 décès ou affectant les besoins de survie d'au moins 1 000 personnes) a augmenté au cours des 40 dernières années. Cela est particulièrement vrai pour l'Asie et le Pacifique, où de telles catastrophes sont depuis longtemps relativement fréquentes. Une question cruciale est de savoir dans quelle mesure la fréquence de ces catastrophes est liée à l'augmentation du nombre de personnes exposées aux dangers, à l'évolution de la vulnérabilité des personnes aux dangers et aux anomalies de température et de précipitations. Cet article aborde cette question avec une analyse économétrique de la détermination des risques de catastrophe pour les pays d'Asie et du Pacifique au cours de la période 1971–2010. L'objectif est de déterminer le rôle (le cas échéant) d'une plus grande probabilité de catastrophes naturelles liées au climat, parallèlement aux changements dans l'exposition des personnes aux dangers et à leur plus grande vulnérabilité, dans l'explication de la fréquence annuelle des catastrophes liées au climat. Les résultats indiquent que les catastrophes hydrométéorologiques sont fortement associées à l'augmentation de l'exposition de la population ainsi qu'aux anomalies des précipitations, tandis que les catastrophes climatologiques sont fortement associées aux changements de température. Pris ensemble avec les preuves de la littérature qu'il est « très probable » que l'incidence croissante des émissions de gaz à effet de serre dans l'atmosphère modifie le système climatique, les résultats suggèrent un lien entre la fréquence des catastrophes naturelles intenses observées dans la région et le changement climatique d'origine humaine. La frecuencia de desastres naturales intensos (definidos aquí como eventos desencadenados por peligros de la naturaleza y que causan al menos 100 muertes o afectan las necesidades de supervivencia de al menos 1.000 personas) ha ido en aumento en los últimos 40 años. Esto es especialmente cierto en Asia y el Pacífico, donde tales desastres han sido relativamente frecuentes durante mucho tiempo. Una pregunta crucial es en qué medida la frecuencia de tales desastres está relacionada con el aumento en el número de personas expuestas a los peligros, los cambios en la vulnerabilidad de las personas a los peligros y las anomalías de temperatura y precipitación. Este documento aborda esta cuestión con un análisis econométrico de la determinación del riesgo de desastres para los países de Asia y el Pacífico durante 1971–2010. El objetivo es determinar el papel (si lo hay) de una mayor probabilidad de desastres naturales relacionados con el clima, junto con los cambios en la exposición de las personas a los peligros y su mayor vulnerabilidad, para explicar la frecuencia anual de los desastres relacionados con el clima. Los resultados indican que los desastres hidrometeorológicos están fuertemente asociados con el aumento de la exposición de la población, así como con anomalías en las precipitaciones, mientras que los desastres climatológicos están fuertemente asociados con el cambio de temperaturas. Junto con la evidencia de la literatura de que es "muy probable" que la creciente incidencia de emisiones de gases de efecto invernadero en la atmósfera esté alterando el sistema climático, los hallazgos sugieren una conexión entre la frecuencia de los desastres naturales intensos observados en la región y el cambio climático provocado por el hombre. The frequency of intense natural disasters (defined here as events triggered by hazards of nature and causing at least 100 deaths or affecting the survival needs of at least 1,000 people) has been on the rise over the past 40 years. This is especially true for Asia and the Pacific, where such disasters have long been relatively frequent. A crucial question is the extent to which the frequency of such disasters is related to increases in the number of people exposed to hazards, changes in people's vulnerability to hazards, and temperature and precipitation anomalies. This paper addresses this question with an econometric analysis of disaster risk determination for countries of Asia and the Pacific during 1971–2010. The objective is to determine the role (if any) of greater likelihood of climate-related natural hazards, alongside changes in exposure of people to the hazards and their greater vulnerability, in explaining the annual frequency of climate-related disasters. Results indicate that hydrometeorological disasters are strongly associated with rising population exposure as well as precipitation anomalies, while climatological disasters are strongly associated with changing temperatures. Taken together with the evidence from literature that it is "very likely" that the rising incidence of greenhouse gas emissions in the atmosphere is altering the climate system, the findings suggest a connection between the frequency of intense natural disasters observed in the region and man-made climate change. كان تواتر الكوارث الطبيعية الشديدة (المعرفة هنا على أنها أحداث ناجمة عن مخاطر الطبيعة وتسبب ما لا يقل عن 100 حالة وفاة أو تؤثر على احتياجات البقاء على قيد الحياة لما لا يقل عن 1000 شخص) في ارتفاع على مدى السنوات الأربعين الماضية. وينطبق هذا بشكل خاص على آسيا والمحيط الهادئ، حيث كانت هذه الكوارث متكررة نسبيًا منذ فترة طويلة. والسؤال الحاسم هو مدى ارتباط تواتر مثل هذه الكوارث بالزيادات في عدد الأشخاص المعرضين للمخاطر، والتغيرات في تعرض الناس للمخاطر، والشذوذ في درجات الحرارة وهطول الأمطار. تتناول هذه الورقة هذه المسألة بتحليل اقتصادي قياسي لتحديد مخاطر الكوارث لبلدان آسيا والمحيط الهادئ خلال الفترة 1971–2010. والهدف من ذلك هو تحديد دور (إن وجد) احتمال أكبر للمخاطر الطبيعية المرتبطة بالمناخ، إلى جانب التغيرات في تعرض الناس للمخاطر وزيادة ضعفهم، في شرح التواتر السنوي للكوارث المرتبطة بالمناخ. تشير النتائج إلى أن كوارث الأرصاد الجوية المائية ترتبط ارتباطًا وثيقًا بارتفاع تعرض السكان وكذلك حالات هطول الأمطار الشاذة، في حين ترتبط الكوارث المناخية ارتباطًا وثيقًا بتغير درجات الحرارة. تشير النتائج، جنبًا إلى جنب مع الأدلة المستقاة من الأدبيات التي تشير إلى أنه "من المحتمل جدًا" أن يؤدي ارتفاع معدل انبعاثات غازات الدفيئة في الغلاف الجوي إلى تغيير النظام المناخي، إلى وجود صلة بين تواتر الكوارث الطبيعية الشديدة التي لوحظت في المنطقة وتغير المناخ من صنع الإنسان.

Climate change is increasingly seen to raise difficult normative issues. To date, cumulative emissions have been disproportionately from the developed world, while the consequences of climate change are anticipated to hit poorer countries hardest. For this reason, amongst others, it is suggested that more economically developed countries with high greenhouse gas emissions ought to transfer resources to less economically developed, lower emissions countries. Some proponents would justify these resource transfers by ethical or justice-based arguments, often based on some function of the emissions per capita of each country, such that rights of some sort are created and those nations which are emitting more (per capita) than some amount are to compensate those who are emitting less. In this letter we show that national emissions per capita, scaled by economic output, show a systematic negative correlation with state corruption. We discuss this result in the context of justice-based arguments for per capita climate mitigation transfers, and suggest that it would be beneficial for the climate mitigation community to consider state corruption as a relevant factor in the development of mitigation policy.

The three Kyoto flexible mechanisms—emissions trading, the clean development mechanism (CDM), and Joint Implementation (JI)—have always been controversial. Proponents saw the mechanisms as clever tools to ensure environmental outcomes were achieved at least cost. Reducing the costs of compliance, they argued, would make tighter environmental targets possible, and certainly more politically feasible. Detractors have argued that the flexible mechanisms commoditize Earth's atmosphere in a manner that will allow dubious projects and the exchange of “hot air” to substitute for serious engagement on climate change. This chapter reviews the Kyoto flexible mechanisms, which will become fully operative during the period 2008 to 2012. The review assesses their progress and success to date, examines the problems that have emerged, and considers suggestions for future developments in climate policy.