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This paper investigates monetary-fiscal interactions in resource-rich emerging economies using an estimated Dynamic Stochastic General Equilibrium model. We find evidence of an active monetary and passive fiscal policy but confirm the presence of revenue substitution; a phenomenon that alters the automatic stabilizer's role of fiscal policy. Once the response of fiscal policy to oil-related flows is muted, the revenue substitution effect is neutralized, taxes respond positively to debt, and the stagflationary impacts of negative oil price shocks are ameliorated. Our findings highlight the need for dynamic tax policies that are less sensitive to receipts from resource rent as a strategy for achieving debt sustainability and overall macroeconomic stability in resource-rich countries. [ABSTRACT FROM AUTHOR]

This paper examines the role of China's factors in international commodity price fluctuations from a perspective of monetary-fiscal policy interaction. We employ a nonlinear Interacted-VAR model to investigate whether the impact of China's monetary policy shocks on international commodity prices is conditional on its fiscal policy stances. Using several measures of China's fiscal policy stance, we estimate their interaction with monetary policy identified through Interacted-VAR analysis. We find that the response of international commodity prices to China's monetary policy is much stronger and more persistent in the presence of its active fiscal policy stance. The empirical findings are very consistent when using several alternative model specifications. Moreover, our analysis suggests that failing to take into account the interaction of monetary-fiscal policies in the model might lead to incorrectly assessing the impact of monetary policy on commodity price fluctuations. In addition, our results reveal the substantial heterogeneity in the impact of China's factors on commodity prices across sectors. These empirical findings offer insights into the interaction of monetary-fiscal policies, as well as the role of China's factors in the international commodity markets. [ABSTRACT FROM AUTHOR]

This article explores Europe's external migration mix, considering three policy instruments which form part of the EU's remote control of borders: (1) visa regulations managing entry and cross-border mobility, (2) readmission agreements facilitating assisted and forced return of migrants without legal right to remain, and (3) resettlement of refugees with refugee status via formalised programmes. The article explores the degree and nature of these policies co-evolution. Based on a collation of migration policy data for 31 European countries between 1990 and 2020, we disentangle spatial, temporal, and categorical policy patterns and interactions. We find strong evidence for spatial policy dependence across European countries for all three policy areas, but particularly visa policy; evidence for some categorical dependence between selected external policies within countries, but also between external policy instruments and other migration-relevant policies; and only weak or no evidence for temporal sequencing of external policy change. The external migration policy mix appears heterogenous across different European states, but also within single European states, and vis-a-vis third country states, with whom various migration-relevant and externally oriented policies are negotiated. As a result, and perhaps surprisingly, the role of specific migration-relevant policies seems to be underestimated in strategic and overarching migration policymaking. [ABSTRACT FROM AUTHOR]

The urban passenger transportation plays a pivotal role in achieving ambitious climate targets. Exploring its opportunities for decarbonization requires a comprehensive understanding of the impacts of different policy designs. This study develops an integrated model for simulating the effectiveness and interactions of various policy designs aimed at decarbonizing urban passenger transportation. It distinguishes itself from previous studies by considering a broad range of criteria, including mitigation effectiveness, cost effectiveness, and transition effectiveness. It also assesses the overall performance of various policy options based on these effectiveness criteria. In an urban case study, we have identified the complementary nature of the majority of policy mixes and also revealed conflicting effects when implementing a supplementary policy, such as carbon tax and fuel economy regulation. The concurrent implementation of multiple policies can yield synergistic effects or trade-offs, with the former being widely acknowledged in the context of energy transition, while the latter is more commonly observed in relation to emissions reductions and cost savings. This study also reveals a trade-off effect across various effectiveness criteria, underscoring the significance of formulating well-balanced policy packages to promote sustainable urban passenger transport. • Policy effectiveness and interactions are evaluated based on three criteria. • An urban-level integrated model encompassing three modules is developed. • Complementation, synergy, and conflicts among different policies are identified. • There exist trade-off effects among various effectiveness criteria. [ABSTRACT FROM AUTHOR]

China announced the launch of a national emissions trading scheme (ETS) in December 2017 for the regulation of its carbon dioxides emissions. In emissions trading, China is likely to encounter issues different from those encountered by the European Union and other developed countries. This study first identifies the contextual factors that influence the design of China’s national ETS and affect its performance. After an overview of the design of China’s national ETS, this study focuses on two key features: (1) ex-post adjustment of the initial allowance allocation in proportion to the actual output levels, and (2) treatment of the power sector. Finally, the study analyzes the interaction between China’s national ETS and some overlapping policies such as those on air pollution control. The study’s key findings are that China’s ETS cannot fully achieve cost-effectiveness because of its design, the price behavior of China’s ETS will be different from that of a cap-and-trade ETS, and overlapping policies such as the command-and-control regulations for energy conservation and/or air quality improvement will decrease the demand for allowances and limit the opportunity for allowance trading. These findings are based on existing theoretical studies and relevant global ETS experience.

Hydropower contributes to a higher share of renewables but is also in conflict with environmental legislation aiming to protect natural habitats, wildlife and endangered species. Analysing two neighbouring European countries with similar topographical and hydromporphological characteristics, Austria and Slovenia, allows assessing to what extent a policies’ national context steers possible policy conflicts of EU legislation. The paper shows that hydropower expansion in examined countries is strongly shaped by factors such as financial concerns of investors, diverging opinions of involved stakeholders, available hydro potential and the role of hydropower in national energy strategies. Addressing issues that lead to a lower effectiveness of national policies already at the level of EU policy design or engaging countries to broadening their national energy portfolio by considering emerging technologies such as PV and wind will enable future energy and climate strategies that are more consistent with other environmental goals.

China announced the launch of a national emissions trading scheme (ETS) in December 2017 for the regulation of its carbon dioxides emissions. In emissions trading, China is likely to encounter issues different from those encountered by the European Union and other developed countries. This study first identifies the contextual factors that influence the design of China's national ETS and affect its performance. After an overview of the design of China's national ETS, this study focuses on two key features: (1) ex-post adjustment of the initial allowance allocation in proportion to the actual output levels, and (2) treatment of the power sector. Finally, the study analyzes the interaction between China's national ETS and some overlapping policies such as those on air pollution control. The study's key findings are that China's ETS cannot fully achieve cost-effectiveness because of its design, the price behavior of China's ETS will be different from that of a cap-and-trade ETS, and overlapping policies such as the command-and-control regulations for energy conservation and/or air quality improvement will decrease the demand for allowances and limit the opportunity for allowance trading. These findings are based on existing theoretical studies and relevant global ETS experience. [ABSTRACT FROM AUTHOR]

Climate policies such as carbon tax and green finance policy are critical measures to promote low-carbon transition worldwide. These policies are, however, likely to interact with each other and create unintentional consequences. This paper adopts a stock-flow consistent model to theoretically explore the effects of policy interactions. Specifically, commercial banks, as the key credit creators and critical players in providing source of finance, are included. Based on the numerical simulations of the dynamic model, we find that both carbon tax and green finance policies render positive impacts on low-carbon transition. In addition, green credit incentives, if imposed simultaneously with carbon tax, can enhance the positive effects. Although low-carbon transition could generate higher net government revenues, our results show that banking sector tends to expose to higher financial risks when firms' debt-equity ratio rises. Further analysis shows that subsidies on green loans can support green transition and bring positive consequences to debt rollover and social welfare, indicating the needs for active government intervention to improve policy effectiveness. The framework proposed in this paper provides a useful way to understand policy dilemmas in pursuing low-carbon transition and give important implications to form optimal policy mix. • A stock-flow consistent model is developed to examine climate policy interactions. • We show that climate policy-mix can generate both positive and negative effects. • Green finance policies can enhance green investment and induce higher financial risks. • Active government intervention such as green subsidies can ease financial distress and improve policy effectiveness. [ABSTRACT FROM AUTHOR]

We study how European climate and energy policy targets affect different member states and households of different income quintiles within the member states. We find that renewable energy targets in power generation, by reducing EU ETS permit prices, may make net permit exporters worse off and net permit importers better off. This effect appears to dominate the efficiency cost of increasing the share of energy provided by renewable energy sources in the countries that adopt such targets. While an increase in prices for energy commodities, which is entailed by the policies in question, affects households in low income quintiles the most, recycling revenues from climate policy allows governments to compensate them for the losses. If renewable targets reduce the revenues from ETS permit auctions, member states with large allocations of auctionable permits will lose some of the ability to do so. [ABSTRACT FROM AUTHOR]

We study the interactions between a CO2 emissions trading system (ETS) and renewable energy subsidies under uncertainty over electricity demand and energy costs. We develop an analytical model and a numerical model applied to the European Union electricity market in which renewable energy subsidies are justified only by CO2 abatement. We confirm that in this context, when uncertainty is small, renewable energy subsidies are not welfare-improving, but we show that when uncertainty is large enough, these subsidies increase expected welfare because they provide CO2 abatement even in the case of over-allocation, i.e. when the cap is higher than the emissions which would have occurred without the ETS. The source of uncertainty is important when comparing the various types of renewable energy subsidies. Under uncertainty over electricity demand, renewable energy costs or gas prices, a feed-in tariff brings higher expected welfare than a feed-in premium because it provides a higher subsidy when it is actually needed i.e. when the electricity price is low. Under uncertainty over coal prices, the opposite result holds true. Key policy insights Due to the possibility of over-allocation in an ETS, subsidies to renewable energies can increase expected welfare, even when climate change mitigation is the only benefit from renewables taken into account. In most cases studied, a feed-in tariff brings a higher expected welfare than a feed-in premium. The European Commission guidelines on State aid for energy, which incentivize member States to replace feed-in tariffs by feed-in premiums, should be reconsidered based on these results. [ABSTRACT FROM AUTHOR]

The objective of this paper is to examine the innovation impacts of renewable energy support policies, and their interaction in the empirical context of solar photovoltaics (PV) technology. This is achieved using data on patent applications for 13 countries over the period 1978–2008, and unconditional negative binomial estimators. The analysis addresses one technology-push instrument, public R&D support, and two demand-pull instruments, feed-in tariffs (FIT), and renewable energy certificate (REC) schemes. The results indicate that: (a) both FIT and REC schemes induce solar PV patenting activity, but the impact of the former policy appears to be more profound; (b) public R&D support has overall been more influential than FIT and REC schemes in encouraging solar PV innovation; (c) policy interaction exists in that the impact of public R&D support on innovation is greater at the margin if it is accompanied by the use of FIT schemes for solar PV. A corresponding interaction effect is harder to detect for public R&D support and REC schemes, possibly due to the stronger technology selection pressure under the latter policy. The results following several robustness tests support the existence of a positive interaction effect between public R&D and FIT schemes. [ABSTRACT FROM AUTHOR]

Hydropower contributes to a higher share of renewables but is also in conflict with environmental legislation aiming to protect natural habitats, wildlife and endangered species. Analysing two neighbouring European countries with similar topographical and hydromporphological characteristics, Austria and Slovenia, allows assessing to what extent a policies’ national context steers possible policy conflicts of EU legislation. The paper shows that hydropower expansion in examined countries is strongly shaped by factors such as financial concerns of investors, diverging opinions of involved stakeholders, available hydro potential and the role of hydropower in national energy strategies. Addressing issues that lead to a lower effectiveness of national policies already at the level of EU policy design or engaging countries to broadening their national energy portfolio by considering emerging technologies such as PV and wind will enable future energy and climate strategies that are more consistent with other environmental goals. [ABSTRACT FROM AUTHOR]

In this paper, we evaluate the bonus-malus schemes proposed by governmental investigation in Sweden in 2014. The objective was to reach the target of maximum 95 g/km of average emissions for new car sales by 2020. Two bonus-malus schemes along with several other policies were introduced in different scenarios as measures to reach the target. The scenarios differ in design regarding bonus-malus schemes, vehicle circulation tax, clean car premiums, company car benefits tax, and fuel tax. Both private and company car segments are targeted in these scenarios. We use a nested logit model for car type choice to predict the effects of the proposed policy scenarios on Swedish new car sales. Moreover, we introduce a methodology to predict the future of car supply. Our model results show that none of the three proposed policy scenarios is successful enough to meet the average emissions target. Furthermore, although the number of electric, plug-in hybrid, and alternative fuel cars will increase, new car sales will still be dominated by fossil-fueled cars in all scenarios. The average emissions in the scenarios containing bonus-malus schemes are not lower than that of the business-as-usual scenario. However, introducing bonus-malus schemes on its own would reduce emissions showing that interacting with other non--differentiated policies counteracts their effects. Moreover, bonus-malus schemes are predicted to give a budget surplus effect. [ABSTRACT FROM AUTHOR]

The notion of merit-aid is not a new development in higher education. Although previous researchers have demonstrated the impact of state-adopted merit-aid funding on student decision-making, fewer studies have examined institutional pricing responses to broad-based merit-aid policies. Using a generalized difference-in-difference approach, we extend previous empirical work by examining the impact of merit-aid on institutional pricing strategies while considering both the institution’s tuition-setting authority and the relative strength of the merit-aid program. In this study, we find that colleges and universities with the authority to set their own tuition increased their in-state tuition and fees following broad-based merit-aid policy adoption; however, institutions with state-controlled tuition-setting authority respond to broad-based merit-aid policies by lowering their in-state tuition and fees. Our findings suggest that the incentives and dynamics of each state’s policy environment are significant determinants of institutional responses to state-level policy adoptions. [ABSTRACT FROM AUTHOR]

Expanding the analysis unit from a single action situation to networks of action situations (NAS) is a theoretical development in response to complex systemic issues. However, the methodology of this emerging field is still in its infancy. This article develops an agent-situation-based model to evaluate the interaction effects of targeted policies by translating a NAS into an agent-based model (ABM). This paper applies this NAS–ABM method to China's top-down land planning control system to evaluate the performance of two cap-and-trade (CAT) policies, implemented simultaneously, which aim to preserve cultivated land and restrict land expansion for construction. The results show that either CAT policy can improve land allocation efficiency and reduce income gaps in different regions but is not Pareto-improving. Furthermore, if implemented jointly, the two CAT policies expand the income gap between urban and rural areas and are not conducive to protecting soil quality and the environment. • We develop an agent-situation-based model for networked action situations (NAS). • The model simulates well the interaction of two cap-and-trade (CAT) land policies. • Neither CAT is environment-friendly due to spatial heterogeneity reason. • The interaction of two CATs improves efficiency but enlarges the income gap. • The interaction of two CATs worsens the environmental goal of each CAT. [ABSTRACT FROM AUTHOR]

This paper evaluates the critical contribution of the industry sector to long-term decarbonisation, efficiency and renewable energy policy targets. Its methodological novelty is the incorporation of a process-oriented modelling approach based on a comprehensive technology database for the industry sector in a national energy system model for the UK (UKTM), allowing quantification of the role of both decarbonisation of upstream energy vectors and of mitigation options in the industrial sub-categories. This enhanced model is then applied in a comparative policy scenario analysis that explores various target dimensions on emission mitigation, renewable energy and energy efficiency at both a national and European level. The results show that ambitious emission cuts in the industry sector of up to 77% until 2050 compared to 2010 can be achieved. Moreover, with a reduction in industrial energy demand of up to 31% between 2010 and 2050, the sector is essential for achieving the overall efficiency commitments. The industry sector also makes a moderate contribution to the expansion of renewable energies mostly through the use of biomass for low-temperature heating services. However, additional sub-targets on renewable sources and energy efficiency need to be assessed critically, as they can significantly distort the cost-efficiency of the long-term mitigation pathway. [ABSTRACT FROM AUTHOR]

The coordination of agricultural, environmental and energy policies requires a thorough understanding of the interactions between crop, food and energy markets. This paper develops a general equilibrium model to analyze the interactions and to evaluate the price and welfare effect of biofuel mandates and subsidies. Results suggest that biofuel mandates are a primary cause of some of the major concerns associated with crop-based biofuel production, including higher food prices and lower consumer welfare. The price and welfare effects of biofuel subsidies depend on the level of the biofuel mandate. When the mandate is weak or not binding, a biofuel subsidy becomes a transfer from consumers to biofuel producers, which tends to reduce food and fuel prices because of the negative income effect. However, with a strong mandate, a biofuel subsidy will increase the prices of crops, food, and fuel when crops account for a large share of production cost and when the supply of crops is inelastic. Using parameter values consistent with empirical evidence found in the U.S., we calculated the price and welfare effects of the biofuel mandates and subsidies specified in the Energy Independence and Security Act of 2007. Results suggest that the biofuel mandates and subsidies increased the price of corn by 25-40 %, increased the price of food by 1.5-2.5 %, and lowered the price of gasoline by 5-10 %. Overall, the biofuel policies had only a small effect on consumer utility. [ABSTRACT FROM AUTHOR]

In a two-country open economy model, Bencivenga, Huybens, and Smith [2002, What to Stabilize in the Open Economy, International Economic Review 43, 1289-1307] investigate three policy regimes and find that a fixed exchange rate regime, where the country with the lowest reserve-to-deposit ratio is charged with maintaining the fixed rate, and a price-level targeting regime are both more prone to price-level instability than a constant money growth rate regime. This paper, by replacing their "helicopter drops" assumption with an open market operations assumption, shows that the two rules of fixing the money growth rate and targeting the time path of the price level work equally well. Additionally, under a regime of fixed exchange rates, it does not matter which country is charged with keeping the fixed exchange rate. [ABSTRACT FROM AUTHOR]

The Energy Modeling Forum 24 study included a set of policy scenarios designed to compare economy wide market-based and sectoral regulatory approaches of potential U.S. climate policy. Models from seven teams participated in this part of the study assessing economy-wide cap-and-trade climate policy and sectoral policies in the transportation and electric sector in terms of potential greenhouse gas emissions reductions, economic cost, and energy systems implications. This paper presents an overview of the results from the U.S. policy scenarios, and provides insights into the comparison of results from the participating models. In particular, various metrics were used to compare the model results including allowance price, the efficient frontier, consumption loss, GDP loss, and equivalent variation. We find that the choice of economic metric is an important factor in the comparison of model results. Among the insights, we note that the carbon price should cautiously be considered when other non-cap sectoral policies affecting emissions are assumed in tandem. We also find that a transportation sector policy is consistently shown to be inefficient compared to an economy-wide capand-trade policy with a comparable level of emissions reductions. [ABSTRACT FROM AUTHOR]

Abstract: Policy-makers apply multiple policy instruments simultaneously in the climate and energy policy field at both EU and Member State levels. This creates interactions between instruments that can be complementary and synergistic but also conflicting. This article focuses on the interactions of climate policy instruments and their impact on biomass use. The objectives are to examine interactions of the EU Emissions Trading System (EU ETS) with the main national climate policy instruments and to identify the influence of these on biomass use. The work draws experiences from seven EU countries (Austria, Finland, Germany, the Netherlands, Poland, Sweden and the United Kingdom), with a special focus on Finland and Sweden. The analysis explores the effects of policy interactions and is based on an examination of literature, and interviews with biomass experts in research, industry and policy spheres. Results indicate that the combined effects of climate policy instruments have a tangible impact on biomass use, whereas the causal links to the EU ETS are difficult to assess separately. Policy impacts found include increased competition for biomass resources, changes in fuel mixes and a contribution to upward pressure on wood prices. Differences in these effects are linked to differing national policy mixes and energy-carrier portfolios – an example being the relative differences in the importance of peat to the energy mix in Finland and Sweden. Analysis and comparison of the effects in the selected countries can yield insight on how to improve the design of policy interventions that impact biomass use. This study confirms the importance of identifying interactions between policy instruments so as to recognise – and manage – synergies and conflicts. The development of more synergistic and coordinated policy instrument mixes would also be beneficial for the bioenergy field. [Copyright &y& Elsevier]

Using a unique 10-year dataset of all 458 Dutch municipalities, we apply a differences-in-differences approach to estimate the effect of unit-based pricing on household waste quantities and recycling. Community-level studies of unit-based pricing typically do not include fixed effects at the local level. We find that failure to do so may substantially inflate the estimated price effect. We also find that unit-based pricing may be endogenous, and use instrumental variables to account for this. Our analysis shows that user fees depend on user fees in neighboring jurisdictions (policy interaction). Our estimate of the garbage reduction per $1 user fee is lower than any previous estimate bar one. The price effect depends on the pricing system: weight-based systems reduce garbage quantities more than volume-based systems. User fees increase recycling, especially of paper, but not nearly as much as they reduce garbage quantities. We find no evidence for waste tourism or illegal dumping. [ABSTRACT FROM AUTHOR]

In this paper we analyze the concept of interactions between policy instruments addressing environmental, energy and climate change issues. Although discussion on such policies has been taking place for almost two decades, their interactions are not so sufficiently explored. Initially, we refer to literature on various types of interactions and we classify them. Furthermore, we construct a qualitative method that can assist policymakers in selecting an optimal policy mix. This method breaks down into numerous components, the areas where different policies interact, and facilitates the unveiling of potential overlaps and complementarities. These areas consist of categories as measure identification, objectives, scope, market arrangements, market flexibility, financing, technological parameters, timing, compliance parameters and institutional setup. In addition, it renders the possibility of combining different options and design elements of policies. Furthermore, a list of various criteria serves as an assessment tool for interactions, where a weighing factor and uncertainty parameters have been added, in order to produce an aggregate indicator of the ex-ante analysis of the policy mix selected. Through this method, we present a complete framework of discernment of diverse forms of environmental policy instruments. [ABSTRACT FROM AUTHOR]

In this paper we analyze policy interactions between two innovative climate and energy policy instruments, namely White Certificates (WhC) and Joint Implementation (JI) that target at energy efficiency improvement and reductions of Greenhouse Gas (GHG) emissions. We have selected The Netherlands and Bulgaria as a case study given that the former has a cumulated experience in energy efficiency policies and the latter for a growing potential in JI projects as a host country. Based on a method of analyzing policy interactions, we demonstrate how a possible design of such a scheme can take place and how it should function. A couple of parameters that deserve attention are a baseline definition and a conversion rate for credits. Our basic finding is that an integrated scheme is complementary and can assist substantially in achieving Dutch national United Nations Framework Convention on Climate Change (UNFCCC) Kyoto Protocol targets. Dutch electricity and gas suppliers (parties that receive energy efficiency obligations) can implement energy efficiency projects domestically and in other countries, hence reducing total abatement costs. Furthermore, such a scheme can stimulate further energy efficiency actions from other stakeholders participating in energy markets. Based on an ex-ante assessment, a carefully designed hybrid WhC and JI scheme appears to be effective in terms of targets, efficient, generating positive impacts on markets and society, while uncertain in stimulating innovation. [ABSTRACT FROM AUTHOR]

Increasing attention has been paid to the potential for demand-side policies to stimulate use of broadband networks. Such policies form part of the increasing digitalisation of the economy and wider society. This is an area where governments are also facing challenges in their efforts to maximise the efficiency and effectiveness of their policies. The paper sheds light on the impact that the transition towards digital has had on demand-side policies supporting the adoption of broadband and digital technologies by SMEs, and draws out the implications for policy, using a case study of Wales in the UK over a ten-year period. It shows that digitalisation has seen policy mechanisms and messages evolving as policy makers have created a more integrated and multi-channel approach to the delivery of advisory support to SMEs, but that the emergence of multiple types of actors (large digital platform businesses) and ongoing digitalisation are adding complexity to policies and their interaction with other forms of public and private business support. • Examines demand-side advisory policies for SMEs through a longitudinal case-study of Wales. • Develops a novel framework to study policy mechanisms, messages, actors and digital transition in SME advisory policies. • Identifies the emergence of greater complexity in demand-side policy design and delivery, and SME needs. • Shows the emergence of blended models of online and offline SME advisory policies and the emergence of new policy messages. • Provides policy implications focusing on how policymakers might respond to digital transition in demand-side policies. [ABSTRACT FROM AUTHOR]

The EU is pioneering the development of greenhouse gas emissions trading, but there is a tension between the ‘top-down’ and ‘bottom-up’ evolution of trading schemes. While the Commission is introducing a European emissions trading scheme (EU ETS) in 2005, several member states have already introduced negotiated agreements that include trading arrangements. Typically, these national schemes have a wider scope than the proposed EU directive and allow firms to use relative rather than absolute targets. The coexistence of ‘top-down’ and ‘bottom-up’ trading schemes may create some complex problems of policy interaction. This paper explores the potential interactions between the EU ETS and the negotiated agreements in France and UK and uses these to illustrate some important generic issues. The paper first describes the proposed EU directive, outlines the UK and French policies and compares their main features to the EU ETS. It then discusses how the national and European policies may interact in practice. Four issues are highlighted, namely, double regulation, double counting of emission reductions, equivalence of effort and linking trading schemes. The paper concludes with some recommendations for the future development of UK and French climate policy. [Copyright &y& Elsevier]