Toward Risk-Opportunity Assessment in Climate-Friendly Finance

This is the author accepted manuscript. The final version is available from Elsevier via the DOI in this recordFossil-fuel divestment might not offer the climate-change solution many are hoping for because it merely re-brands financial assets with higher risks but does not make them disappear. Making climate-policy decisions on the basis of assessing financial risks and business opportunities could improve our ability to govern a smooth sustainability transition.Natural Environment Research Council (NERC)Economic and Social Research Council (ESRC

Systems Innovation, Inertia and Pliability: A mathematical exploration with implications for climate change abatement

This paper develops a stylised mathematical interpretation of innovation and inertia in economic systems, characteristics which feature in economics literature traceable back at least to Schumpeter and other economic theorists of innovation, as well as economic historians. Such characteristics are particularly important in energy systems and their potential response to climate change, where it is important to distinguish operational/fuel substitution from investment because the latter necessarily embodies both inertia and innovation, in systems as well as technologies. We argue that integrated assessments of climate abatement need to focus on investment, including the associated characteristics of both learning and inertia, and derive in detail the mathematical basis for incorporating these factors through marginal investment cost curves. From this we also introduce the concept of �pliability� as an expression of the ratio between costs which are significant but transitional (including learning investments, infrastructure and overcoming inertia), as compared to the enduring costs implied by purely exogenous technology assumptions. We then incorporate these features in a global model of optimal climate mitigation and show that they can generate a very different profile and pattern of results from traditional �integrated assessment� models, pinpointing the key sensitivities. We conclude that alongside all the attention devoted to evaluating climate change impacts and technology scenarios, far more effort should be devoted to understanding the structural characteristics of how the global energy system may respond to climate change mitigation

Assessing the effectiveness of South Africa’s emissions based purchase tax for private passenger vehicles: a consumer choice modelling approach.

South Africa is an important economy in terms of global greenhouse gas emissions and it has made progressive policy steps to address its national emissions. One significant national fiscal policy is the emissions based purchase tax for private passenger vehicles, implemented in September 2010. There has, however, been little attempt to assess the effect that this key mitigation policy has had on the emissions of new passenger vehicle fleets. This study uses a discrete consumer choice model to assess the effectiveness of this tax policy in changing consumer behaviour and reducing fleet emissions. It finds that the emissions reduction achieved by the tax were negligible compared to the increases in fleet emissions associated with the growing vehicle market. It is demonstrated that the structure of the tax policy does not suit the dynamics of the South African vehicle market and the policy would require restructuring if it is to more effectively reduce fleet emissions. In addition, for the tax policy to effect significant fleet emissions reductions in the future it will require the emergence of low- and zero-carbon vehicle technologies in the lowest price brackets of the market, possibly via subsidy policies

The impacts of the trade liberalization of environmental goods on power system and CO2 emissions

The trade liberalization of Environmental Goods (EG), through as Environmental Goods Agreement (EGA), is crucial in low carbon electricity technology diffusion. However, there is a big gap of the EG definition lists and the integrated effectiveness analysis of EGA. This paper analyses the effects of the trade liberalization of EG based on macroeconomic and electricity sector models and attempts to find a more efficient EG trade policy by comparing different EG lists, considering end-use control and combining the EG policy with a carbon tax. The results show that the trade liberalization of EG does not necessarily benefit the environment without other policies, as the effects of the multiple end-uses of EG on conventional energy might result in environmental damage. We find that merging an EGA into a global carbon tax system would enhance the effects of carbon tax on CO2 reduction by 33%, and simultaneously lower the GDP loss due to the carbon tax by 75%. The economic benefits from the EGA could offset the costs of other environmental policies. Thus, end-use control and other environmental policies should be considered at both the global and regional levels in the setting of international trade agreements that target EG

Which policy mixes are best for decarbonising passenger cars? Simulating interactions among taxes, subsidies and regulations for the United Kingdom, the United States, Japan, China, and India

This is the author accepted manuscript. The final version is available from Elsevier via the DOI in this record Reducing transport emissions, in particular CO2 emissions from passenger vehicles, is a key element in mitigating the risk of climate change. Conventional welfare economics recommends the use of comprehensive pricing of carbon emissions, which may not necessarily be the most effective approach in transport systems. This paper uses an evolutionary technology diffusion model to simulate the impact of climate policies on passenger car emissions in the US, UK, Japan, China and India up to 2050, seeking to understand policy interaction. We analyse six commonly seen policy instruments and explore systematically the impact of combining each of these policies by developing 63 scenarios for the US, UK, China, Japan, and India. We assess both the policies’ effectiveness in achieving emissions reductions and their cost-effectiveness in doing so. We show how the diffusion dynamics of the system can lead to interaction of policy levers, generating synergies in some cases (combined effectiveness more than the sum of its parts), and mutual impediment effects in others (combined effectiveness less than the sum of its parts). The paper identifies particular combinations of regulatory, procurement and fiscal policies that are particularly effective at generating rapid change without needing the use of very high fuel taxes or carbon pricing. Notably, combining electric vehicle mandates with taxes and regulations on combustion vehicles is highly effective, as it simultaneously improves the availability of low-carbon options while penalising high carbon options. Simple principles for policymaking can be inferred

Evidence for a global electric vehicle tipping point

This is the final version. Available from the Global Systems Institute, University of Exeter via the link in this recordGSI scientific working paper series number 2022/01Electric vehicles (EVs) can reduce road transport emissions and have recently seen rapid innovation, decline in cost and a rise in popularity. Achieving a transition to EVs hinges upon their accessibility to current users of internal combustion engine vehicles (ICEV). Here we show with historical evidence that globally, an irreversible private passenger EV diffusion tipping point may have been crossed, where sales of ICEVs decline in leading markets, as preferences fo r and access to EVs rise, in a selfreinforcing manner. We analyse the structure and dynamics between 2016 and 2021 of four leading car markets comprehensively. The pandemic has drastically affected ICEV sales: many models are now planned to be discontinue d, while EVs see unaffected rapid growth and achieve cost parity within a few years. We suggest that coordinated policy incorporating EV mandates in the leading car markets could induce an EV transition in the rest of the world

The neurobiology of speech perception decline in aging

Speech perception difficulties are common amongst elderlies; yet the underlying neural mechanisms are still poorly understood. New empirical evidence suggesting that brain senescence may be an important contributor to these difficulties have challenged the traditional view that peripheral hearing loss was the main factor in the aetiology of these difficulties. Here we investigated the relationship between structural and functional brain senescence and speech perception skills in aging. Following audiometric evaluations, participants underwent MRI while performing a speech perception task at different intelligibility levels. As expected, with age speech perception declined, even after controlling for hearing sensitivity using an audiological measure (pure tone averages), and a bioacoustical measure (DPOAEs recordings). Our results reveal that the core speech network, centered on the supratemporal cortex and ventral motor areas bilaterally, decreased in spatial extent in older adults. Importantly, our results also show that speech skills in aging are affected by changes in cortical thickness and in brain functioning. Age-independent intelligibility effects were found in several motor and premotor areas, including the left ventral premotor cortex and the right SMA. Agedependent intelligibility effects were also found, mainly in sensorimotor cortical areas, and in the left dorsal anterior insula. In this region, changes in BOLD signal had an effect on the relationship of age to speech perception skills suggesting a role for this region in maintaining speech perception in older ages perhaps by. These results provide important new insights into the neurobiology of speech perception in aging