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This study investigates the within-country heterogeneity of material footprints implied by households' consumption in Germany. Material footprints are defined as the amount of biomass, minerals, and fossil fuels extracted to produce the goods that households consume. Combining input-output data with households' consumption expenditures from the German sample survey of income and expenditure (EVS), we present the first comprehensive study on the distribution of material footprints among households, highlighting hot spots of unsustainable consumption patterns by household groups. Households in the quartile with the highest consumption expenditures have material footprints three times as large as those in the quartile with the lowest expenditures. Results of a microeconomic model of household's consumption behaviour estimated on the EVS data suggest that price-based instruments can reduce material footprints of luxury consumption such as leisure and private transport without imposing large burdens on low-affluence households. The material footprints caused by energy consumption do not react sensitively to price changes, suggesting that non-price policies are more effective to reduce them.

We investigate why governments restrict exports of exotic raw materials taking rare earth elements as a case study. Trade restrictions on exotic materials do not have immediate macroeconomic effects. Relocating rare earth intensive industries is found to be the main reason behind China's export barriers. They are part of a more extensive strategy aiming at creating comparative advantages in these sectors and at overcoming path dependencies. Moreover, export barriers serve as a second-best instrument to reduce pollution and to slow down the depletion of exhaustible resources. Growing domestic rare earth consumption renders those increasingly ineffective. Rising reliance on mine-site regulation indicates that this fact is taken into account. Rare earth extraction is dominated by a few large companies; the demand side is dispersed. That speaks against successful lobbying for export restrictions. It appears as if the export barriers are set up to compensate mining firms.

One of the most promising ways of meeting climate policy targets is improving energy efficiency, i.e. reducing the amount of scarce and polluting resources needed to produce a given quantity of output. This study undertakes an empirical exercise using the World Input-Output Database (WIOD), a harmonized dataset comprising time-series of input-output tables along with environmental satellite accounts and socioeconomic information. The paper consists of two parts. In the first part we begin with an aggregated picture of EU27 energy intensity and its evolution between 1995 and 2009. Then we dig deeper and introduce sectoral detail to identify the economic changes that occurred during the same period. Finally, we disaggregate the EU27 into countries for regional analysis and perform a sectoral disaggregation for a fine-grained picture of energy intensity in Europe. In the second part of the study we take our findings from index decomposition analysis and subject them to panel estimations. The objective is to control for factors that may have shaped the evolution of energy intensity in the European Union. In particular, we investigate the impact of technological change, structural change, trade, environmental regulation and country-specific characteristics.

Der deutsche Strommarkt ist im Umbruch. Strom aus erneuerbaren Quellen verdrangt solchen aus konventioneller Erzeugung. Gleichzeitig wird immer mehr Elektrizitat im Norden Deutschlands produziert und muss zu den Verbrauchern im Suden transportiert werden. Die bestehende Marktordung fordert zwar e ektiv den Ausbau erneuerbarer Elektrizitatserzeugung, geht aber mit hohen Kosten einher. Zudem entstehen regionale Ungleichgewichte zwischen Elektrizitatserzeugung und -nachfrage. Einerseits durch den Ausbau erneuerbarer Stromerzeugung vor allem im Norden, anderseits durch den Ruckgang konventioneller Kapazitaten im Suden. Es verwundert nicht, dass momentan zahlreiche Vorschlage zur Reform des Erneuerbaren-Energien-Gesetzes und des Netzausbaus entwickelt und diskutiert werden. Die meisten bestehenden Vorschlage betrachten entweder den Ausbau der Erneuerbaren oder der Netze, gehen aber nicht auf die Interaktion zwischen beiden ein. Wir skizzieren eine neue Marktordung fur den deutschen Strommarkt, die einen kostene zienten Ausbau der Erneuerbaren und die Stabilitat der Netze gemeinsam berucksichtigt. Eine Pramie auf den Borsenstrompreis fordert die Erneuerbaren, wahrend die Aufteilung des deutschen Strommarktes in mehrere Preiszonen hilft, e zient mit regionalen Kapazitats- und Netzengpassen umzugehen. Durch die gezielte Starkung von zeit- und regionalspezi schen Preissignalen erwarten wir eine deutliche Kostensenkung, sowohl im Vergleich zum bisherigen System als auch zu Vorschlagen, die den Ausbau der erneuerbaren Energien nicht mit Netzausbau und Ruckgang an konventionellen Kapazitaten integrieren.The German electricity market changes elementarily these days. Renewable energy replaces such from conventional sources. At the same time, more and more electricity is produced in northern Germany and needs to be transmitted to the consumers in the south. While e effectively supporting the development of renewable energy, the current market design implies high costs.Simultaneously, regional imbalances between generation and consumption appear. These are caused both by the soaring feed-in of renewables in the north and by declining conventional capacities in the south. Unsurprisingly, numerous proposals for reforms of either the current feed-in tari system for renewables (Erneuerbare-Energien-Gesetz, EEG) or for investments in the electricity grid have been presented. Most of those proposals neglect, however, the interaction between both aspects.We sketch a new market design for the German electricity market jointly taking into account an efficient expansion of renewables and the grid's stability. A premium paid in addition to the spot market price promotes renewable electricity. The market premium reveals the scarcity of electricity both in the regional and temporal dimension to operators of renewables through its connection to market prices. This reduces distortions in the electricity market and yields scarcity prices to conventional and renewable electricity generators. At the same time, it yields reliable revenues reflecting avoided externalities.Furthermore we propose to split the German electricity market into a small number of price zones to cope with insufficient transmission capacities. When capacities are not adequate to transmit electricity, prices in the zones diverge. This yields endogenous information about needs for investment in generation and transmission capacities.By systematically strengthening regional and temporal price signals we expect to achieve a notable cost reduction, both compared to the current market design and compared to approaches not taking into account the promotion of renewables and the stability of the grid jointly.

A diverse set of tools has been developed in Industrial Ecology to tackle the problems caused by human economic activity. These instruments include Life Cycle Assessment (LCA) and Material Flow Analysis (MFA). Especially LCA is now increasingly used in policy making. Design and Evaluation of policy measures necessitates careful weighing of costs and benefits. One has to consider the complex economic effects imposed by regulation, like costs for the industries affected by regulation, indirect effects on other industries and ecologically important rebound effects. This article discusses to what extent this evaluation is possible within LCA and MFA models. It is found that these models do not sufficiently incorporate the overall consequences of regulation and hence are not very suitable to measure the advantages or disadvantages of regulations. Therefore, adding economic aspects to Industrial Ecology models seems promising. In policy making, the effects imposed on the whole economy have to be captured, which calls for a general equilibrium framework. A Life Cycle based Computable General Equilibrium Model is proposed as a tool to assess the economic effects of regulation while remaining in life cycle thinking.