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Author: Laurent Millischer
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 46
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Book Description
This study investigates the relationship between the adoption of renewable energy and the sensitivity of inflation to changes in fossil energy prices across 69 countries over a 50-year period from 1973 to 2022. In the wake of recently increased oil and gas prices leading to a surge in inflation, the notion of a “divine coincidence” suggests that higher levels of renewable energy adoption, in addition to fighting climate change, could mitigate fossil fuel price-induced inflation volatility. Confirming the divine coincidence hypothesis could be an argument in favor of greening monetary policy. However, our empirical results are inconsistent with the hypothesis as we find no evidence that increased renewable energy adoption reduces the impact of fossil fuel price changes on energy inflation rates. This counter-intuitive result may be attributed to idiosyncratic national energy policies, potential threshold effects, or trade linkage spillovers. As the world continues transitioning towards a low-carbon economy, understanding the implications of this shift on inflation dynamics is crucial.
Author: Laurent Millischer
Publisher: International Monetary Fund
ISBN:
Category : Business & Economics
Languages : en
Pages : 46
Get Book Here
Book Description
This study investigates the relationship between the adoption of renewable energy and the sensitivity of inflation to changes in fossil energy prices across 69 countries over a 50-year period from 1973 to 2022. In the wake of recently increased oil and gas prices leading to a surge in inflation, the notion of a “divine coincidence” suggests that higher levels of renewable energy adoption, in addition to fighting climate change, could mitigate fossil fuel price-induced inflation volatility. Confirming the divine coincidence hypothesis could be an argument in favor of greening monetary policy. However, our empirical results are inconsistent with the hypothesis as we find no evidence that increased renewable energy adoption reduces the impact of fossil fuel price changes on energy inflation rates. This counter-intuitive result may be attributed to idiosyncratic national energy policies, potential threshold effects, or trade linkage spillovers. As the world continues transitioning towards a low-carbon economy, understanding the implications of this shift on inflation dynamics is crucial.
Author: Mr. JaeBin Ahn
Publisher: International Monetary Fund
ISBN:
Category :
Languages : en
Pages : 36
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Book Description
Can a carbon tax reduce inflation volatility? Focusing on fuel excise taxes, this paper provides systematic evidence on their role as a shock absorber that helps mitigating the impact of global oil price shocks on domestic inflation. Exploiting substantial variation in fuel tax rates across 28 OECD countries over the period from 2014 to 2021, a simple idea that a per-unit, specific tax takes up a portion of the product price immune to cost shocks goes a long way toward explaining heterogeneity in the degree of oil price pass-through into domestic inflation across countries. A back-of-the-envelope calculation from the estimation results supports its quantitative significance---differences in fuel tax rates could explain about 30% of the variation in annual headline CPI inflation rates observed between the U.S. and U.K. during the 2021 inflation surge.
Author: Grzegorz Peszko
Publisher: World Bank Publications
ISBN: 1464813418
Category : Nature
Languages : en
Pages : 160
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Book Description
This book is the first stocktaking of what the decarbonization of the world economy means for fossil fuel†“dependent countries. These countries are the most exposed to the impacts of global climate policies and, at the same time, are often unprepared to manage them. They depend on the export of oil, gas, or coal; the use of carbon-intensive infrastructure (for example, refineries, petrochemicals, and coal power plants); or both. Fossil fuel†“dependent countries face financial, fiscal, and macro-structural risks from the transition of the global economy away from carbon-intensive fuels and the value chains based on them. This book focuses on managing these transition risks and harnessing related opportunities. Diversification and Cooperation in a Decarbonizing World identifies multiple strategies that fossil fuel†“dependent countries can pursue to navigate the turbulent waters of a low-carbon transition. The policy and investment choices to be made in the next decade will determine these countries’ degree of exposure and overall resilience. Abandoning their comfort zones and developing completely new skills and capabilities in a time frame consistent with the Paris Agreement on climate change is a daunting challenge and requires long-term revenue visibility and consistent policy leadership. This book proposes a constructive framework for climate strategies for fossil fuel†“dependent countries based on new approaches to diversification and international climate cooperation. Climate policy leaders share responsibility for creating room for all countries to contribute to the goals of the Paris Agreement, taking into account the specific vulnerabilities and opportunities each country faces.
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1513574469
Category : Business & Economics
Languages : en
Pages : 47
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Book Description
This paper provides estimates of output multipliers for spending in clean energy and biodiversity conservation, as well as for spending on non-ecofriendly energy and land use activities. Using a new international dataset, we find that every dollar spent on key carbon-neutral or carbon-sink activities can generate more than a dollar’s worth of economic activity. Although not all green and non-ecofriendly expenditures in the dataset are strictly comparable due to data limitations, estimated multipliers associated with spending on renewable and fossil fuel energy investment are comparable, and the former (1.1-1.5) are larger than the latter (0.5-0.6) with over 90 percent probability. These findings survive several robustness checks and lend support to bottom-up analyses arguing that stabilizing climate and reversing biodiversity loss are not at odds with continuing economic advances.
Author: International Renewable Energy Agency IRENA
Publisher: International Renewable Energy Agency (IRENA)
ISBN: 9292602667
Category : Technology & Engineering
Languages : en
Pages : 96
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Book Description
The sixth edition of the series highlights employment trends in renewables worldwide, noting increasing diversification of the supply chain.
Author: International Monetary Fund. Fiscal Affairs Dept.
Publisher: International Monetary Fund
ISBN: 1513548794
Category : Business & Economics
Languages : en
Pages : 70
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Book Description
Tonga is one of the world’s most exposed countries to climate change and natural disasters. It suffered the highest loss from natural disasters in the world (as a ratio to GDP) in 2018 and is among the top five over the last decade (Table 1). Climate change will make this worse. Cyclones will become more intense, with more damage from wind and sea surges. Rising sea levels will cause more flooding, coastal erosion and contaminate fresh water. Daily high temperatures will become more extreme, with more severe floods and drought.
Author: Great Britain: Department of Energy and Climate Change
Publisher: The Stationery Office
ISBN: 9780101846622
Category : Political Science
Languages : en
Pages : 78
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Book Description
Dated November 2012
Author: Mr. Johannes Wiegand
Publisher: International Monetary Fund
ISBN: 1616354852
Category : Business & Economics
Languages : en
Pages : 20
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Book Description
Climate financing and compensation have emerged as key themes in the international climate mitigtion debate. According to one argument in support of compensation, advanced economies (AEs) have used up much of the atmosphere’s absorptive capacity, thus causing global warming and blocking a similar, fossil-fuel driven development path for emerging markets and developing economies (EMDEs). This paper develops a simple model of a sequential, fossil-fuel driven development process to discuss these issues systematically. The results suggest: (i) AEs have typically a stronger interest in climate change mitigation than EMDEs, (ii) from an equity perspective, compensation is called for only if EMDEs are relatively small; (iii) there can also be an efficiency case for compensation, however, with AEs buying EMDEs out of some of their GHG emissions; (iv) ultimately, a superior option—for both the world’s climate and growth prospects—is the development of clean energy technologies by AEs and their transfer to EMDEs. The latter requires strong mitigation efforts by AEs even if EMDEs fail to play along initially.
Author: Gabriela Elizondo Azuela
Publisher: World Bank Publications
ISBN: 0821396021
Category : Business & Economics
Languages : en
Pages : 85
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Book Description
Renewable energy plays an important role in contributing to the transition toward low-carbon development growth, in enhancing technology diversification and hedging against fuel price volatility, in strengthening economic growth, and in facilitating access to electricity. The global trends indicate a growing commitment to renewable energy development from developed and developing countries in both the introduction of specific policy levers and investment flows. Developing countries have now a long history of designing and implementing specific policy and regulatory instruments to promote renewable energy. Today, feed-in tariff policies are being implemented in about 25 developing countries and quantity based instruments, most notably auction mechanisms, are increasingly being adopted by upper middle income countries. This paper summarizes the results of a recent review of the emerging experience with the design and implementation of price and quota based instruments to promote renewable energy in a sample of six representative developing countries and transition economies. The paper discusses the importance of a tailor-made approach to policy design and identifies the basic elements that have proven instrumental to policy effectiveness, including adequate tariff levels, long term policy or contractual commitments, mandatory access to the grid and incremental cost pass-through. Ultimately, a low carbon development growth in the developing world depends on the availability of resources to finance the solutions that exhibit incremental costs. Policies introduced to support renewable energy development should be designed and introduced in combination with strategies that clearly identify sources of finance and establish a sustainable incremental cost recovery mechanism (for example, using concessional financial flows from developed countries to leverage private financing, strengthening the performance of utilities and distribution companies, or allowing the partial pass-through of incremental costs to consumer tariffs with a differentiated burden sharing that protects the poor). Without question, policy makers will have to ensure that the design of different policy mechanisms and the policy mix per se deliver renewable energy targets with the lowest possible incremental costs and volume of subsidies.
Author: International Monetary Fund. Asia and Pacific Dept
Publisher: International Monetary Fund
ISBN: 1484346173
Category : Business & Economics
Languages : en
Pages : 25
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Book Description
This Selected Issues paper sets out options to demonstrate how the authorities could supplement their cash balance target and public debt limit with an anchor to help discipline annual budget decisions. The paper introduces the current fiscal framework and effective fiscal rules based on international experiences, including the characteristics of each rule. It also discusses the need for a new fiscal anchor, given high revenue volatility, high infrastructure needs, and the country’s exposure and vulnerability to natural disasters. Contingency warrants for unforeseen expenditures, including from natural disasters, should be included in the budget in line with international best practices. Furthermore, if a disaster does not occur, this allocation could be saved in a contingency fund for natural disasters, which would enable swift disbursement in the aftermath of the disaster. The fund would be set up once fiscal buffers have been rebuilt. The IMF Staff suggests a target for the overall fiscal deficit of 1.5 percent of gross domestic product as a possible fiscal anchor, which would strike a balance between safeguarding debt sustainability and addressing the severe infrastructure gap.
