Papers by Karsten Neuhoff
Review of European, Comparative & International Environmental Law
Climate Policy
Most policy instruments to reduce greenhouse gas (GHG) emissions have focused on producers, and o... more Most policy instruments to reduce greenhouse gas (GHG) emissions have focused on producers, and on the energy efficiency of buildings, vehicles and other products. Behavioural changes related to climate change also impact 'in-use' emissions, and potentially, emissions both 'upstream' (including from imported goods) and 'downstream' (eg disposal). Consumption-oriented policies may provide avenues to additional and cost-effective emission reductions, but are less prevalent, in part because of political sensitivities around government efforts to shape individual-level mitigation behaviour. In this paper, we explore policy instruments for encouraging low carbon behaviour in the EU context. Drawing on a literature survey and interviews, as part of the EU Carbon-CAP project, we develop a list of 33 potential instruments, present a systematic methodology for assessing their potential impact and feasibility, and apply this to rank instruments of most interest. Most instruments involve a clear trade-off between their potential impact and feasibility; about half feature in the top three scoring categories, many being voluntary approaches, which may be easier to implement, but with limited or highly uncertain impact. However, we identify a handful of top-scoring instruments that deserve far more policy attention. The complexity of consumer and corporate motivations and behaviours suggests that instruments should be trialled and monitored (e.g. in regions / individual States) before widespread introduction. Most would also be most effective when nested within wider policy packages, to address the varied behavioural motivations and stages of supply chains. Key policy insights. Influencing consumer behaviour has been little used in climate policy and is politically sensitive and complex, but can address emissions that have largely escaped influence to date.. A few instruments stand out as particularly promising, including: technology lists; supply chain procurement by leading retail companies; a carbon-intensive materials consumption charge; and key infrastructure improvements.. A common trade-off between potential impact and likely feasibility points to the importance of government-business collaboration to secure support and impact.. More ambitious transformation would require a mix of production and consumption-oriented policy instruments.
Climate Policy
The production of basic materials accounts for around 25% of global greenhouse gas emissions. Exi... more The production of basic materials accounts for around 25% of global greenhouse gas emissions. Existing measures to reduce emissions from industry are limited due to a combination of competitiveness concerns and a lack of technological options available to producers. In this paper, we assess the possibility of implementing a materials charge to reduce demand for basic industrial products and, hence, also reduce industrial emission levels. The modelling shows that a charge equivalent to around €80/tCO 2 could reduce the EU's total (energy plus process) CO 2 emissions by up to 10% by 2050, depending on the substitution options available. The materials charge could lead to small GDP increases and a minor reduction in overall employment levels. Key policy insights. Full carbon price pass through along the materials value chain creates incentives for resource efficiency and substitution in the value chain of material use.. Most macroeconomic models ignore mitigation opportunities in the value chain, as do carbon pricing mechanisms for industrial emitters, which largely mute incentives for mitigation opportunities with free allowance allocation.. Including consumption at a benchmark level in emission trading systems reinstates a full carbon price incentive for all mitigation opportunities while avoiding competitive distortions and carbon leakage risks.. Macroeconomic modelling shows that this allows for an additional 10% emission reduction accompanied by a slight GDP increase and employment reduction. Long-term clarity on carbon leakage protection furthermore strengthens lowcarbon investment frameworks.
Journal of Cleaner Production
The production of heavy industry commodities is responsible for 1/3 of annual global GHG emission... more The production of heavy industry commodities is responsible for 1/3 of annual global GHG emissions. The Paris Agreement goals of +1.5-2°C require global emissions reach net-zero and possibly negative somewhere between 2060 and 2080. Given the normal timetable for retirement or retrofit of industrial facilities (>=20 years) all new equipment must be net-zero or negative carbon by the early 2040s. In this article we demonstrate to policymakers and modellers that industrial decarbonization is technically possible and how it might be achieved. First, we synthesize sectoral lab-bench and near-commercial technology options for reducing emissions to net-zero within 1-2 investment cycles, pathways more or less appropriate given regional resources (i.e. access to biomass, renewable electricity, or geological storage of CO 2) and political circumstances. Second, we synthesize policy options, focussing on those that encourage a managed transition from today's industry to net-zero emissions with a minimum of stranded assets, unemployment and social trauma.
List Forum für Wirtschafts- und Finanzpolitik, 2016
Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch ge... more Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence.
Industrial Agglomeration and New Technologies, 2007
Online Proceedings of the …, 2003
... emerge independent of geographic proximity is the possibility to establish, maintain and veri... more ... emerge independent of geographic proximity is the possibility to establish, maintain and verify brand reputation and trust in cyberspace. In this section we will argue that ... For example, a study of Sylicon Valley by Annelie Saxenian (1994) discuss how ...
SSRN Electronic Journal, 2000
In Germany and beyond, various capacity mechanisms are currently being discussed with a view to i... more In Germany and beyond, various capacity mechanisms are currently being discussed with a view to improving the security of electricity supply. One of these mechanisms is a strategic reserve that retains generation capacity for use in times of critical supply shortage. We argue that strategic reserves have specific advantages compared to other capacity mechanisms in the context of the European energy transition. To date, however, the debate on capacity mechanisms has largely been restricted to national contexts. Against this background, we discuss the feasibility and potential benefits of coordinated cross-border strategic reserves to safeguard electricity supply and aid the energy transition in Germany and neighboring countries at large. Setting aside strategic reserve capacity which is deployed only in the event of extreme supply shortages could improve the security of electricity supply without distorting the EU's internal electricity market. In addition, overall costs may decrease when reserve procurement and activation are coordinated among countries, particularly if combined with flow-based market coupling.
Climate Policy
Policy to reduce the European Union's (EU) carbon footprint needs to be grounded in an understand... more Policy to reduce the European Union's (EU) carbon footprint needs to be grounded in an understanding of the structure and drivers of both the domestic and internationally traded components. Here we analyse consumption-based emission accounts (for the main greenhouse gases (GHGs)) for the EU, focusing on understanding sectoral contributions and what changes have been observed over the last two decades, including the role of trade. The EU28 has reduced its overall GHG footprint by 8% over the two decades, mainly due to the use of more efficient technology, both at home and abroad. Emissions embodied in imports, which make up one-third of the EU28 GHG footprint, grew strongly until 2008 but have stabilized in volume since. Foreign production has been more emissions intensive than if goods were produced in the EU. However, the overall contribution of this effect is small, offset by much larger (global) technological improvements and growths in consumption. Hence the focus should now be on accounting and responsibility for enacting change, not the global impact of trade. Finally, the inclusion of non-CO 2 GHGs in the analysis shows their importance in the traded element, particularly for the mining and agricultural sectors. Key policy insights. The total EU carbon footprint has reduced since 2007, but at a slower rate than production-based emissions, and rarely faster than GDP growth.. Consumption growth has had a much greater impact on the EU carbon footprint than the offshoring of production.. Trade in both directions (imports and exports) is important for the manufacturing sector. The data does not support claims of wholesale 'de-industrialisation' but rather reflects increased trade intensity related to specialization.. Several (but not all) of the major sources of net embodied imports are largely unavoidable consequences of European consumption because the primary production activities (e.g. mining and significant shares of agricultural) could not realistically occur within the EU.
SSRN Electronic Journal
Greenhouse gas emission benchmarks are widely implemented as a policy tool, as more countries mov... more Greenhouse gas emission benchmarks are widely implemented as a policy tool, as more countries move to implement carbon pricing mechanisms for industrial emissions. In particular, benchmarks are used to determine the level of free allowance allocation in emission trading schemes, which are distributed as a measure to prevent carbon leakage. This paper analyses how benchmark designs impact firms' production and business model decisions, particularly focusing on the coverage of direct and indirect emissions in the benchmark scope. We develop an analytical model and use the example of a steel mill to analyze and quantify how scope of indirect emissions coverage affect incentives. We seek to clarify generalized principles for efficient benchmark design, that provide a predictable policy framework for innovation and investment to decarbonize energy intensive industry.
Nature Climate Change
China recently announced its national emissions trading scheme, advancing market-based approaches... more China recently announced its national emissions trading scheme, advancing market-based approaches to cutting greenhouse gas emissions. Its evolution over coming years will determine whether it becomes an effective part of China's portfolio of climate policies.
SSRN Electronic Journal
A world of unequal carbon prices requires measures aimed at preventing carbon leakage. Climate po... more A world of unequal carbon prices requires measures aimed at preventing carbon leakage. Climate policy imperatives demand that such measures must be compatible with the goal of sending a carbon price signal down the value chain. For carbon intensive materials, the combination of dynamic free allocation combined with Inclusion of Consumption (IoC) into emissions trading systems such as the European Union Emissions Trading Scheme (EU ETS) arguably fulfils both the aims of preventing carbon leakage and of sending the price signal. The paper presents concrete proposals regarding the legal design and practical administration of this mechanism. It argues that the IoC is, provided appropriate choices are made, ripe for implementation.
SSRN Electronic Journal, 2000
Cambridge Working Papers in Economics, Feb 1, 2004
Numerical models for electricity markets are frequently used to inform and support decisions. How... more Numerical models for electricity markets are frequently used to inform and support decisions. How robust are the results? Three research groups used the same, realistic data set for generators, demand and transmission network as input for their numerical models. The results coincide when predicting competitive market results. In the strategic case in which large generators can exercise market power, the predicted prices differed significantly. The results are highly sensitive to assumptions about market design, timing of the market and assumptions about constraints on the rationality of generators. Given the same assumptions the results coincide. We provide a checklist for users to understand the implications of different modelling assumptions.
Vierteljahrshefte Zur Wirtschaftsforschung, 2010
Diw Economic Bulletin, 2015
Diw Wochenbericht, 2013
Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch ge... more Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence.
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Papers by Karsten Neuhoff