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Carbon-based import tariffs are proposed as a policy measure to reduce carbon leakage and increase the global cost-effectiveness of unilateral CO2 emission pricing. We investigate the case for carbon tariffs. For our assessment, we combine multi-region input–output and computable general equilibrium analyses based on data from the World Input–Output Database for the period 2000–2014. The multi-region input–output analysis confirms that carbon embodied in trade has increased during this period, but trade flows from Non-OECD to OECD countries became less important in relative terms since the 2007–2008 financial crisis. The computable general equilibrium analysis suggests that carbon tariffs’ efficacy in combating leakage increases in periods when trade in carbon increases. However, its potential to improve the global-cost effectiveness of unilateral emission pricing remains modest. On the other hand, we find that the potential of carbon tariffs to shift the economic burden of CO2 emission reduction from abating developed regions to non-abating developing regions increases sharply between 2000 and 2007, but declines after the financial crisis.

In this paper, we revisit the empirical observation that prices rise like rockets when input costs increase but fall like feathers when input costs decrease. The analysis draws on a novel data set that includes daily retail prices of gasoline from 12,804 stations in Germany from January 1, 2014 to December 31, 2018. Our findings based on pooled-panel asymmetric error correction models indicate that the pattern of rockets and feathers is the norm rather than the exception. Our results further show that temporal aggregation of station-level price data leads to inaccurate inferences and could account for the inconclusive findings in the literature.

In a theoretical analysis, we use a common agency model to show that lobbying by energy-intensive sectors covered under an emissions trading scheme (ETS) shifts the regulatory burden of an economy-wide emission constraint to sectors outside the ETS. The emission tax on the latter becomes inefficiently high such that lobbying does not only induce burden shifting but also efficiency losses. A complementary empirical analysis for a cross section of German firms under the EU emissions trading scheme supports our theoretical result on the role of lobbying on allowance allocation.

This paper examines the impact of energy poverty on life satisfaction, drawing on data from the German Socio-Economic Panel (2010-2021). The findings show that energy poverty significantly diminishes life satisfaction, particularly through subjective perceptions of household energy inadequacy. The paper highlights the importance of multidimensional strategies to tackle energy poverty and its profound impact on well-being.

Besides temporal and spatial aggregation issues in the analysis of asymmetric response of retail gasoline prices, previous studies have also largely ignored parameter heterogeneity across fuel stations. This paper addresses the aggregation issues and the parameter homogeneity assumption by examining the responsiveness of stations to input cost changes using daily station-specific retail and wholesale gasoline prices for 12,613 geographically diverse stations. Based on individual station analysis using asymmetric error correction models, we find that 48% of stations engage in competitive pricing while the remaining 52% exhibit the rockets and feathers pricing pattern. Our findings suggest that the rockets and feathers phenomenon is a feature of individual stations and local market characteristics are important determinants. We also show that pooled panel regression techniques obscure the actual pricing pattern observed from station-level time series analysis.

In this paper, we revisit the empirical observation that prices rise like rockets when input costs increase but fall like feathers when input costs decrease. The analysis draws on a novel dataset that include daily retail prices of gasoline and diesel from virtually all fuel stations in Germany over the period from January 1, 2014 to December 31, 2018. Our findings from the national, state-specific and station-level analyses based on an asymmetric error correction model indicate that asymmetric pricing is the norm rather than exception. Specifically, we find empirical evidence that points to a pervasive rockets-and-feathers pattern. We also find that asymmetric pricing in the German retail fuel market might partly be the consequence of tacit collusion among competitors as well as disparate search intensity on the part of consumers. We further show that temporal aggregation of station-level price data might lead to inaccurate inferences and could account for the contradictory findings in the extant literature.

Feed-in tariffs under the Renewable Energy Sources Act, the so-called Erneuerbare-Energien-Gesetz (EEG), have triggered a massive expansion of electricity from renewable energy sources in Germany over the last decade. The increase in non-competitive renewable power generation though went hand in hand with a substantial rise in electricity prices with consumers paying for the renewable energy subsidies. The high cost burden has provoked an intense public debate on the benefits of renewable energy promotion. In this paper, we assess one popular justification for feed-in tariffs, i.e., induced innovation as a positive spillover externality. Based on regressions with a time-technology fixed effect negative binomial model, we find that innovation impacts of feed-in tariffs under the EEG are insignificant.