Nicola Comincioli

Amidst the escalating impact of climate change, the agricultural sector faces the challenge of maintaining productive capacity while conserving increasingly scarce water resources. Modernizing irrigation systems by replacing inefficient open‐channel distribution infrastructures is crucial to address this challenge. Cost–benefit analysis (CBA) offers a valuable tool to assess the effectiveness of such actions, in terms of both financial and socio‐environmental impacts. CBA is also valuable for optimizing the allocation of limited financial resources to the most impactful measures and addressing trade‐offs within the water‐energy‐food (WEF) nexus. This study applies CBA to two modernization projects in the ‘Villalar de los Comuneros’ irrigation district in the Duero River Basin, located in northern Spain. The first project focuses on enhancing energy efficiency by installing a photovoltaic system to power irrigation pumps, while the second promotes climate‐smart agriculture through the use of soil moisture sensors to improve irrigation precision and facilitate the transition to higher value crops. The results of the CBA demonstrate the financial and economic viability of both projects, highlighting the social and environmental benefits generated, and providing policymakers with a valuable framework for guiding similar future interventions.

We examine the optimal behavior of carbon-emitting companies operating under the European Union Emission Trading System (EU ETS), under which firms are obliged to purchase emission permits on the secondary market if their emissions exceed their allowance. Specifically, we consider the scenario where firms are endowed with the (real) option to undertake a “green” investment to cut their emissions and, thus, permit expenditures. The central challenge is the determination of the optimal time for investment within a stochastic framework characterized by uncertainty in EU ETS permit prices. We address the problem for a heterogeneous group of companies with diverse technological capabilities across industrial sectors. Furthermore, we incorporate a price floor for permit prices to mirror policy efforts aimed at promoting green transition by elevating emission costs. We solve this problem analytically and through numerical simulations calibrated to real market data. In addition to offering insights into individual firm behavior, our findings can support regulators in refining environmental policies, particularly regarding the role of permits price floor and its potential to expedite the green transition.

The systematic use of landfills as a method of waste disposal is leaving a heavy legacy in terms of environmental pollution, especially in the case of illegal or non‐compliant disposal sites. When no environmental precaution is adopted, harmful substances' release imposes relevant health risk to the surrounding population. This risk is also reflected on the value of nearby assets. To mitigate this pressing problem, the European Union is planning and financing the remediation of thousands of contaminated sites on its territory. Cost–benefit analysis (CBA) is used for assessing the priority of individual projects and for accessing European funding, evaluating the effectiveness of an investment considering the externalities generated. In this paper, we apply CBA to two emergency securing interventions of contaminated sites in Southern Italy. We execute a financial analysis and an economic evaluation of four environmental and social spillovers (reduction of mortality, recovery of real estate and land assets values and landscape enhancement). This study contributes to the literature of CBA applied to environmental projects, proposing a systematic and replicable method for evaluating externalities generated by contaminated sites' emergency securing. Being based on two real case studies, this work allows to compare similar interventions, highlighting the most effective action strategy.

In this paper, we study the change of Australian electricity price dynamics that was observed before, during and after the two-year period in which a Carbon Pricing Mechanism was in force. We fit a two-states Markov Switching Model, representing a high- and a low-volatility state of the world. To avoid the interference due to periodic patterns, a deseasonalization process accounting for short- and long-term seasonality is carried out prior to the study of volatility. Estimation results highlight that, during the period when the carbon tax applies, the volatility level is lower for both the states of the world. Furthermore, the persistence in the low-volatility state is increased in the presence of the carbon tax. This conclusion is particularly relevant for macroeconomic and investment considerations because the increased uncertainty in electricity prices can significantly influence firms’ investment decisions and shape inflation expectations.