Latest INNOPATHS publications

The role of intermediate trade in the change of carbon flows within China

In recent years, evaluating the emissions embodied in trade (EEIT) has become an important area of policy and research. Multiregional input-output (MRIO) analysis, which links producers and final consumers, is a widely-used method for quantifying the EEIT. However, the role of intermediate trade in driving changes in the EEIT is still not fully incorporated in MRIO analysis and as a result poorly understood. Here, we present a framework that separately identifies the drivers of the emissions embodied in the trade of final and intermediate products. We implement this framework in a case study in which we analyse the changes in CO2 emissions embodied in interprovincial trade in China from 2007 to 2012. We find that the largest changes are a rising final demand, which is associated with increased emissions that are to some extent offset by decreasing emissions intensity and changing interregional dependency. Regionally, the rising imports and the growth in final demand in less developed regions in the north and central (e.g., Hebei and Henan) reduced the CO2 emissions outsourced by central coastal regions and drove the traded embodied CO2 flows between the central and western regions. The framework enriches our understanding of the role played by intermediate trade in the relocation of emissions.

Written by Jing Meng, Zengkai Zhang, Zhifu Mi, Laura Diaz Anadon, Heran Zheng, Bo Zhang, Yuli Shan and Dabo Guan.

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A dynamic analysis of financing conditions for renewable energy technologies

Renewable energy technologies often face high upfront costs, making financing conditions highly relevant. Thus far, the dynamics of financing conditions are poorly understood. Here, we provide empirical data covering 133 representative utility-scale photovoltaic and onshore wind projects in Germany over the last 18 years. These data reveal that financing conditions have strongly improved. As drivers, we identify macroeconomic conditions (general interest rate) and experience effects within the renewable energy finance industry. For the latter, we estimate experience rates. These two effects contribute 5% (photovoltaic) and 24% (wind) to the observed reductions in levelized costs of electricity (LCOEs). Our results imply that extant studies may overestimate technological learning and that increases in the general interest rate may increase renewable energies’ LCOEs, casting doubt on the efficacy of plans to phase out policy support.

Written by Florian Egli, Bjarne Steffen and Tobias S. Schmidt

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Dr Elena Verdolini explains decarbonising the energy sector

CMCC and EIEE senior researcher Elena Verdolini explains how the energy sector, the largest producer of greenhouse gases, is surprisingly one of the easiest areas to decarbonise.

Electrification is growing fast as it becomes increasingly low-carbon or carbon-free entirely. Dr Verdolini explains how variability is a major obstacle to increasing the use of renewables and goes on to talk about the best ways to tackle the increasingly difficult obstacles this sector faces.

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Job losses and political acceptability of climate policies: why the ‘job-killing’ argument is so persistent and how to overturn it

Political acceptability is an essential issue in choosing appropriate climate policies. Sociologists and behavioural scientists recognize the importance of selecting environmental policies that have broad political support, while economists tend to compare different instruments first on the basis of their efficiency, and then by assessing their distributional impacts and thus their political acceptability. This paper examines case-study and empirical evidence that the job losses ascribed (correctly or incorrectly) to climate policies have substantial impacts on the willingness of affected workers to support these policies. In aggregate, the costs of these losses are significantly smaller than the benefits, both in terms of health and, probably, of labour market outcomes, but the losses are concentrated in specific areas, sectors and social groups that have been hit hard by the great recession and international competition. Localized contextual effects, such as peer group pressure, and politico-economic factors, such as weakened unions and tightened government budgets, amplify the strength and the persistence of the ‘job-killing’ argument. Compensating for the effects of climate policies on ‘left-behind’ workers appears to be the key priority to increase the political acceptability of such policies, but the design of compensatory policies poses serious challenges.

Written by Francesco Vona

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The demographics of decarbonizing transport: The influence of gender, education, occupation, age, and household size on electric mobility preferences in the Nordic region

Many researchers, policymakers and other stakeholders have explored and supported efforts to transition towards more sustainable forms of low-carbon mobility. Often, discussion will flow from a narrow view of consumer perceptions surrounding passenger vehicles—presuming that users act in rationalist, instrumental, and predictable patterns. In this paper, we hold that a better understanding of the social and demographic perceptions of electric vehicles (compared to other forms of mobility, including conventional cars) is needed. We provide a comparative and mixed methods assessment of the demographics of electric mobility and stated preferences for electric vehicles, drawing primarily on a survey distributed to more than 5000 respondents across Denmark, Finland, Iceland, Norway and Sweden. We examine how gender influences preferences; how experience in the form of education and occupation shape preferences; and how aging and household size impact preferences. In doing so we hope to reveal the more complex social dynamics behind how potential adopters consider and calculate various aspects of conventional mobility, electric mobility, and vehicle-to-grid (V2G) systems. In particular, our results suggest that predominantly men, those with higher levels of education in full time employment, especially with occupations in civil society or academia, and below middle age (30–45), are the most likely to buy them. However, our analysis also reveals other market segments where electric vehicles may take root, e.g. among higher income females and retirees/pensioners. Moreover, few respondents were orientated towards V2G, independent of their demographic attributes. Our empirical results can inform ongoing discussions about energy and transport policy, the drivers of environmental change, and deliberations over sustainability transitions.

Written by Benjamin K. Sovacool, Johannes Kester, Lance Noel and Gerardo Zaraua de Rubens

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Dismissive and deceptive car dealerships create barriers to electric vehicle adoption at the point of sale

As most consumers do not have pre-existing knowledge of electric vehicles (EVs), and current market conditions favour petrol and diesel vehicles, car dealership experiences may strongly influence EV purchasing decisions. Here, we show that car dealer- ships pose a significant barrier at the point of sale due to a perceived lack of business case viability in relation to petrol and diesel vehicles. In 126 shopping experiences at 82 car dealerships across Denmark, Finland, Iceland, Norway and Sweden, wfind that dealers were dismissive of EVs, misinformed shoppers on vehicle specifications, omitted EVs from the sales conversation and strongly oriented customers towards petrol and diesel vehicle options. Dealers’ technological orientation, willingness to sell and displayed knowledge of EVs were the main contributors to likely purchase intentions. These findings combined with expert interviews suggest that government and industry signalling affect sales strategies and purchasing trends. Policy and business strategies that address barriers at the point of sale are needed to accelerate EV adoption.
Written by Gerarado Zarazua de Rubens, Lance Noel and Benjamin K. Sovacool

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Time to get ready: Conceptualizing the temporal and spatial dynamics of formative phases for energy technologies

Implementing the Paris agreement to prevent dangerous climate change requires energy system transformation and rapid diffusion of low-carbon innovations. In this paper we investigate both the temporal and spatial dynamics of formative phases by which energy technologies prepare for growth. Drawing on a review of diverse literatures, we offer a definition of the formative phase which clarifies its scope and duration, and identifies its main technological and economic determinants. We use parametric hazard models to assess the relative strengths of these determinants on formative phase durations for a sample of 15 energy technologies diffusing over time in their respective initial markets. We find that substitutability has stronger effects in accelerating the end of formative phases than installed capacity and prices. We extend our analysis using nonparametric models to analyze the spatial diffusion of formative phase durations from initial to follower markets. We find that formative phase durations are long outside initial markets as well, showing only signs of acceleration in latecomer regions. Our results imply risks for policies trying to accelerate the diffusion of large innovations without ready markets in both initial and follower markets.

Nuno Bento, Charlie Wilson and Laura Diaz Anadon

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Threshold policy effects and directed technical change in energy innovation

This paper analyzes the effect of environmental policies on the direction of energy innovation across countries over the period 1990-2012. Our novelty is to use threshold regression models to allow for discontinuities in policy effectiveness depending on a country’s relative competencies in renewable and fossil fuel technologies. We show that the dynamic incentives of environmental policies become effective just above the median level of relative competencies. In this critical second regime, market-based policies are moderately effective in promoting renewable innovation, while command-and-control policies depress fossil based innovation. Finally, market-based policies are more effective to consolidate a green comparative advantage in the last regime. We illustrate how our approach can be used for policy design in laggard countries.

Written by Lionel Nesta, Elena Verdolini and Francesco Vona

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How much energy will buildings consume in 2100? A global perspective within a scenario framework

The demand for energy in buildings varies strongly across countries and climatic zones. These differences result from manifold factors, whose future evolution is uncertain. In order to assess buildings’ energy demand across the 21st century, we develop an energy demand model — EDGE — and apply it in an analytical scenario framework — the shared socio-economic pathways (SSPs) — to take socio-economic uncertainty into consideration. EDGE projects energy demand for five energy services, four fuel categories, and eleven regions covering the world.

The analysis shows that, without further climate policies, global final energy demand from buildings could increase from 116 EJ/yr in 2010 to a range of 120–378 EJ/yr in 2100. Our results show a paradigm shift in buildings’ energy demand: appliances, lighting and space cooling dominate demand, while the weight of space heating and cooking declines. The importance of developing countries increases and electricity becomes the main energy carrier.

Our results are of high relevance for climate mitigation studies as they create detailed baselines that define the mitigation challenge: the stress on the energy supply system stemming from buildings will grow, though mainly in the form of electricity for which a number of options to decrease GHG emissions exist.

Written by Antoine Levesque, Robert C. Pietzcker, Lavinia Baumstark, Simon De Stercke, Arnulf Grübler and Gunnar Luderer

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Future prospects for energy technologies: insights from expert elicitations

Expert elicitation is a structured approach for obtaining judgments from experts about items of interest to decision makers. This method has been increasingly applied in the energy domain to collect information on the future cost, technical performance, and associated uncertainty of specific energy technologies. This article has two main objectives: (1) to introduce the basics of expert elicitations, including their design and implementation, highlighting their advantages and disadvantages and their potential to inform policymaking and energy system decisions; and (2) to discuss and compare the results of a subset of the most recent expert elicitations on energy technologies, with a focus on future cost trajectories and implied cost reduction rates. We argue that the data on future energy costs provided by expert elicitations allows for more transparent and robust analyses that incorporate technical uncertainty, which can then be used to support the design and assessment of energy and climate change mitigation policies.

Written by Elena Verdolini, Laura Díaz Anadón, Erin Baker, Valentina Bosetti, and Lara Aleluia Reis

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