Nicole Andréa Mathys

To effectively mitigate climate change, it is crucial to better understand the reaction of fossil-fuel demand to price and tax changes, and more precisely to climate policy instruments such as a carbon levy. The Swiss CO₂ levy on heating fuels was introduced in 2008 at CHF 12/tCO₂eq, and was increased steadily up to CHF 84/tCO₂eq during the period of 2016/2017. This paper investigated the effectiveness of the levy as an instrument to reduce heating fuel demand, and hence carbon emissions, of private real estate owners. The Swiss Household Budget Survey 2006–2017 constituted the main data source. Before–after and pseudo-panel regressions were used to capture the CO₂ levy’s effects, and a large set of household characteristics, as well as climatic conditions, were controlled for. No significant effects in the first two policy periods of 2008–2013 were found. Over the period of 2014–2017, a significant reduction in house owners’ heating fuel demand of up to 14% with respect to 2006–2007 was detected. The effect was less significant and smaller in magnitude for flat owners. A significant CO₂ levy semielasticity of heating fuel demand of −1.3% for house owners was further estimated. Hence, the results confirmed the effectiveness of the CO₂ levy under the conditions that the levy was sufficiently high, as during the years of 2014–2017, and households directly paid the levy and were responsible for decisions concerning heating and insulation, as was the case for house owners.

The amount of CO₂ embodied in trade has substantially increased over the last decades. We contribute to understanding the reasons for this evolution by studying the trends and some drivers of the carbon intensity of trade over the period 1995–2009 in 41 countries and 35 sectors. Our empirical analysis relies on the World Input-Output Database (WIOD) to compute embodied carbon emissions. Our main findings are the following. First, average emission intensity of traded goods is higher than average emission intensity of final demand. Second, relatively “dirty” countries tend to specialize in emission-intensive sectors. Third, the share of goods produced in emission-intensive countries is rising. Finally, we find that coal abundance (measured as fuel rent and controlling for reverse causality) leads both to a specialization in “dirty” sectors and to an increase in emissions per output when controlling for sector structure, which amounts to a fossil fuel endowment effect. These findings suggest trade liberalization may increase global emissions and therefore highlight the importance of considering trade when designing CO₂ reduction strategies.

We construct the world's centres of gravity for human population, GDP and CO₂emissions by taking the best out of five recognised data sources covering the last two centuries. On the basis of a novel distortion‐free representation of these centres of gravity, we find a radical Western shift of GDP and CO₂emission centres in the nineteenth century, in sharp contrast with the stability of the demographic centre of gravity. Both GDP and emissions trends are reversed in the first half of the twentieth century, after World War I for CO₂emissions, after World War II for GDP. Since then, both centres are moving eastward at an accelerating speed. These patterns are perfectly consistent with the lead of Western countries starting the industrial revolution, the gradual replacement of coal by oil and gas as alternative sources of energy and the progressive catch‐up of Asian countries in the recent past.

Do countries with large energy endowments have larger energy-intensive sectors? We answer this question empirically using a panel with 14 high-income countries from Europe, America and Asia and 10 broad sectors, from 1970 to 1997. Energy-abundant countries have 7 to 10 percent higher employment and 13 to 17 percent higher net exports per value added in energy-intensive sectors vis-a-vis otherwise comparable countries. Conversely, energy-scarce countries specialize in non-energy-intensive sectors.