Research

How can technology significantly contribute to climate change mitigation?

Published in Applied Economics, 2023

With Gilbert Cette, Valérie Chouard and Rémy Lecat

This paper highlights how technology can contribute to reaching the 2015 Paris Agreement goals of net zero carbon dioxide (CO2) emissions and global warming below 2°C in 2100. It uses the Advanced Climate Change Long-term model (ACCL), particularly adapted to quantify the consequences of energy price and technology shocks on CO2 emissions, temperature, climate damage and Gross Domestic Product (GDP). The simulations show that without climate policies the warming may be +5°C in 2100, with considerable climate damage. An acceleration in ‘usual’ technical progress not targeted at reducing CO2- even worsens global warming and climate damage. According to our estimates, the world does not achieve climate goals in 2100 without ‘green’ technologies. Intervening only via energy prices, e.g. a carbon tax, requires challenging hypotheses of international coordination and price increase for polluting energies. We assess a multi-lever climate strategy combining energy efficiency gains, carbon sequestration, and a decrease of 3% per year in the relative price of ‘clean’ electricity with a 1 to 1.5% annual rise in the relative price of polluting energy sources. None of these components alone is sufficient to reach climate objectives. Our last and most important finding is that our composite scenario achieves the climate goals.

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Growth impact of climate change and response policies: The advanced climate change long-term (ACCL) model.

Published in Journal of Policy Modeling, 2022

With Gilbert Cette, Valérie Chouard and Rémy Lecat

This paper provides a tool to build climate change scenarios to forecast Gross Domestic Product (GDP), modelling both GDP damage due to climate change and the GDP impact of mitigating measures. It adopts a supply-side, long-term view, with 2060 and 2100 horizons. It is a global projection tool (30 countries/regions), with assumptions and results both at the world and the country/regional level. Five different types of energy inputs are taken into account according to their CO2 emission factors. Full calibration is possible at each stage, with estimated or literature-based default parameters. Compared to other models, it provides a comprehensive modelisation of Total Factor Productivity (TFP), which is the most significant determinant of the GDP projected path. We present simulation results of different energy policy scenarios. They illustrate both the ‘tragedy of the horizon’ and the ‘tragedy of the commons’, which call for a policy framework that adequately integrates a long run perspective, through a low-enough discount rate and an effective intergenerational solidarity as well as international cooperation.

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Does economic convergence challenge global climate goals?

Published: October 18, 2024

With Gilbert Cette, Valérie Chouard and Rémy Lecat

We employ the ACCL model for climate policy simulation to investigate the feasibility of achieving climate targets in the context of global economic convergence. Our findings indicate that, in a scenario with moderate economic convergence, the world does not reach these targets solely with ambitious, although realistic, energy price policies. Our estimates underscore the importance of combining global carbon taxation with the widespread deployment of green technologies to help reconcile economic convergence and climate objectives. Hence, initiatives that focus on accelerating the global energy transition and supporting its implementation in low- and middle-income countries are crucial with regard to this challenge.

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Powering down nuclear, a multidimensional impact evaluation of the German case.

Single-authored, Job Market Paper

Following the Fukushima nuclear accident, Germany has adopted the 2011 Atomic Energy Act, which plans the phase-out of nuclear power by 2022. It establishes the immediate and permanent shutdown of half of the country’s nuclear reactors and the gradual closure of the remaining ones. Using German Socio-Economic Panel (2022) data at the district scale and the Difference-in-Difference approach, this paper aims to evaluate the overlooked local effects of this exogenous policy on socio-economic indicators. Employment and health estimates indicate a trade-off between a positive ‘direct’ effect of the phase-out on energy workers and a negative ‘induced’ effect on the other local economic activities revolving around the nuclear power plants. The dismantling of these plants and the adjustments required to compensate for the change in electricity supply might explain the ‘direct’ impact. A possible channel for the ‘induced’ effect is adaptive behaviours to economic uncertainty, reflecting concerns for the future district’s dynamism following the sudden shutdown. I find no evidence for real-estate outcomes. This study aspires to help fill the gap in empirical work assessing the effects of large-scale nuclear shutdowns, a policy considered by other countries, and to contribute to the discussion on the consequences of ambitious energy policies.

One day at a time: heterogeneous impact evaluation of air pollution peaks.

With Tarik Benmarhnia

We develop a novel approach to assess the heterogeneity of air pollution peaks and how their impact on mortality varies depending on their characteristics. Combining the Generalised Synthetic Control Method and a two-stage staggered design, we construct a synthetic control group to estimate average treatment effects for each peak, one by one, and conduct a meta-analysis on pooled results. We exploit daily data on pollution, weather and health in 18 French urban areas between 2008 and 2015. We find that both air pollution peaks and their mortality effects are highly heterogeneous. We identify policy threshold, seasonality, weather and pollutant concentrations as drivers of this variability. We believe this study can help address the ‘One size (does not) fit(s) all’ issue: the potential mismatch between these homogeneous policies, triggered by a binary criterion on pollutant concentrations, and the heterogeneous pollution peaks they target. More broadly, this methodology can study the heterogeneity of any extreme weather events, help understand the conditions for effective counter-measures, and thus contribute to policy fine-tuning.

Modelling electricity demand scenarios for France on the road to net-zero

With Thomas Le Gallic, Julien Lefèvre

Facing the urgency of climate change, France defined its National Low-Carbon Strategy in 2020, committing to achieve carbon neutrality by 2050, notably through energy sobriety measures. Mitigating the rise in electricity demand is all the more complex as the evolution of this demand, which is bound to change with lifestyles in a society that is becoming electrified and digitalised, is uncertain. This paper develops new tools for modelling household electricity demand scenarios for France on the road to net zero by 2050. This forward-looking, multi-sector approach to electricity demand focuses on its socio-economic and demographic determinants, particularly the mobility-residential nexus. Thus, it enables us to explore the interplay between equity and the effectiveness of decarbonisation measures. Indeed, this paper incorporates the synthetic population method of multi-agent models into energy-economy scenario models like IMACLIM (IMpact Assessment of CLIMate policies). This approach enables us to study aggregate decarbonisation trajectories and their macroeconomic feedback effects, accounting for population heterogeneity in age, income, housing or transport conditions. This dynamic representation of the population distribution is more flexible and realistic than the usual static assumption of representative household classes.