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KOF Working Papers, 327

Purpose This paper aims to propose a liquidity management solution for Islamic financial institutions (IFIs) that concurs with sustainable development and financial stability. Design/methodology/approach The study is a qualitative research. It uses the exploratory research methodology, specifically the content analysis approach, to gather primary data and identify and interpret relevant secondary data and Sharīʿah concepts. The purpose is to develop a liquidity management solution for IFIs. The proposal is based on the Unleveraged Green Investment Trust (UGIT) model, which is consistent with Basel III regulatory requirements. In developing the UGIT model, the exploratory research was complemented by a case study to examine the UGIT solution for the particular case of renewable energy. Findings The model demonstrates how financial innovation can meet both financial stability and sustainable development objectives, thereby achieving the spirit of Islamic finance. The structure further highlights the importance of regulatory and fiscal frameworks to enhance liquidity management and investor appeal for green financial instruments. Originality/value This study suggests a structure of UGIT to enable IFIs to meet their liquidity management needs while promoting sustainable development.

Der internationale Vergleich von Förderinstrumenten für die Erhöhung des Stromanteils aus erneuerbaren Energiequellen zeigt einen Einsatz unterschiedlichster hoheitlicher Instrumente auf. Die national unterschiedlichen Ausbaustände alternativer Erzeugungstechnologien lassen sich durch spezifische nationale Besonderheiten, aber auch durch den Einsatz unterschiedlicher Förderinstrumente begründen. Der vorliegende Aufsatz fasst die wesentlichen Aussagen einer umfassenden ordnungspolitischen Analyse (Springmann, 2005) unterschiedlicher Typen von Förderinstrumenten zusammen. So zeigt die Untersuchung, dass sich umweltschutz- und forschungspolitische Zielsetzungen einer solchen Förderpolitik problemlos begründen und legitimieren lassen. Die Analyse kommt zu dem Ergebnis, dass mengenorientierte Förderinstrumente in Form von Quotenmodellen mit handelbaren Zertifikaten aus ordnungspolitischer Sicht ideale Förderinstrumente darstellen und Festpreissysteme, trotz ihrer bisherigen Erfolge in der Praxis, mit ordnungspolitischen Bedenken verbunden sind. TUC working papers in economics

Improvements in energy efficiency can help facing the on-going climate and energy crises, yet the energy intensity of economic activities at the global level in recent years has decreased more slowly than it is required to achieve climate goals. Based on this premise, the paper builds a macroeconomic agent-based K+S model to study the effects of different policies on energy efficiency. In the model, energy efficiency of capital goods improves as the outcome of endogenous, bottom-up technical change. Public policies analysed range from indirect policies based on taxes, incentives, and subsidies, rooted in the traditional role of the State as fixing market failures, to direct technological policies, akin to the entrepreneurial state approach, in which a public research laboratory invests in R&D with the aim to establish a new technological paradigm on energy efficiency. Simulation results show that while most policies tested are effective in reducing energy intensity, the public research lab is extremely effective in promoting energy efficiency without deteriorating macroeconomic and public finance conditions. The superiority of the national lab policy, however, emerges on a relatively long time-horizon, highlighting the importance of governments that are patient enough to wait for the returns of that policy and the necessity to complement this strategy with more ''ready to use'' indirect measures. Additionally, results indicate that the macroeconomic rebound effect induced by most of the policies is rather small. Concerns about macroeconomic rebound effects are, therefore, most likely often overstated.

The unprecedented deterioration of our global environment has increased the necessity of relying upon Green Economic policies as critical and effective environmental management tools. The current s ...

AbstractA small open economy produces a consumer good as well as renewable (green) and fossil fuel based (brown) energy. It imports fossil fuel at an uncertain price and suffers from carbon emission damages. Unregulated competitive markets are shown to be inefficient. The implied market failures are due to the agents' attitudes toward risk, to risk shifting, and the uniform price for both types of energy. Under the plausible assumptions that consumers are prudent and at least as risk‐averse as the producers of brown energy, the risk can be efficiently managed by placing a tariff on fuel imports (which is equivalent to taxing carbon emissions in the model at hand) and taxing green energy. The need to tax green energy contradicts the widespread view that subsidization of green energy is an appropriate means to enhance energy security in countries depending on risky fossil fuel imports.

This paper presents estimates of the economic benefit of air quality improvements in Europe that occur as a side effect of GHG emission reductions. We consider three climate policy scenarios that reach radiative forcing levels in 2100 of three Representative Concentration Pathways (RCPs). These targets are achieved by introducing a global uniform tax on all GHG emissions in the Integrated Assessment Model WITCH, assuming both full as well as limited technological flexibility. The resulting consumption patterns of fossil fuels are used to estimate the physical impacts and the economic benefits of pollution reductions on human health and on key assets by implementing the most advanced version of the ExternE methodology with its Impact Pathway Analysis. We find that the mitigation scenario compatible with 2°C reduces total pollution costs in Europe by 76%. Discounted ancillary benefits are more than €2.5 trillion between 2015 and 2100. The monetary value of reduced pollution is equal to €22 per abated ton of CO2 in Europe. Less strict climate policy scenarios generate overall smaller, but still considerable, local benefits (14 € or 18 € per abated ton of CO2). Without discounting, the ancillary benefits are in a range of €36 to €50 per ton of CO2 abated. Cumulative ancillary benefits exceed the cumulative additional cost of electricity generation in Europe. Each European country alone would be better off if the mitigation policy was implemented, although the local benefits in absolute terms vary significantly across the countries. We can identify the relative losers and winners of ancillary benefits in Europe. In particular, we find that large European countries contribute to as much as they benefit from ancillary benefits. The scenarios with limited technology flexibility do deliver results that are similar to the full technology flexibility scenario.

This paper answers two rarely considered questions: How well do German regions exploit their potential to produce renewable energy and which factors impact on this exploitation efficiency? By applying the new quantitative-empirical concept of exploitation efficiency, we measure the degree, to which regions have exploited their natural and socio-economic potentials of producing energy from renewable source at a specific point in time. This approach allows, with respect to wind power, solar power and biogas energy, a relative comparison of regions, monitoring their performance over time as well as the identification of best-practice regions. Applying our innovative method, we compare German districts in the time period 2000-2014. We use a robust, non-parametric efficiency analysis and validate its results by qualitative expert interviews in selected counties in Lower Saxony. The results show strong disparities in terms of the exploitation efficiency between districts and federal states. This exploitation efficiency moreover varies significantly for different types of renewable energy. We also observe specialization tendencies in this context. Our empirical results are very detailed both from a spatial and from a temporal perspective and therefore allow for drawing several conclusions for local and federal state policies. For instance, those districts (and federal states) with currently rather low exploitation efficiencies need to learn from those with high efficiencies. Such learning effects may sustainably contribute to a successful turnaround in energy policy.