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There is a growing interest in using carbon taxes to reduce greenhouse gas emissions, not only in industrialized economies but also in developing economies. Many countries have considered carbon pricing, including carbon taxes, as policy instruments to meet their emission reduction targets set under the Paris Climate Agreement. However, policy makers, particularly from developing countries, are seeking clarity on several issues—particularly the impacts of carbon taxes on the economy, the distribution of these impacts across households, carbon tax design architectures, the effects of carbon taxes on the competitiveness of carbon-intensive industries, and comparison of carbon taxes with other policy instruments for climate change mitigation. This paper aims to offer insights on these issues by synthesizing the literature available since the 1970s, when the concept of carbon tax was first introduced. This paper also identifies the areas where further investigations are needed.

Climate change adaptation is one of the main strategies to address global climate change. The least developed countries and the small island states that lack financial resources to adapt to climate change are the most vulnerable nations to climate change. Although it would be more economical to adapt to climate change compared to the anticipated damage of not doing so, the demand for capital is estimated to range to hundreds of billions. The crucial question is how to manage investments to adapt to climate change globally. This study provides an overview of existing international provisions on climate finance for adaptation. It includes provisions through international financial institutions, United Nations agencies, bilateral and multilateral channels, and the private sector. It also explores how private sector finance can be further attracted to invest in climate change adaptation.

Various policy instruments along with increasing oil prices have contributed to a sixfold increase in global biofuels production over the last decade (2000–2010). This rapid growth has proved controversial, however, and has raised concerns over potential conflicts with global food security and climate change mitigation. To address these concerns, policy support is now focused on advanced or second-generation biofuels instead of crop-based first-generation biofuels. This policy shift, together with the global financial crisis, has slowed the growth of biofuels production, which has remained stagnant since 2010. Based upon a review of the literature, this paper examines the potential long-run contribution of biofuels to the global energy mix, particularly for transportation. We find that the contribution of biofuels to global transportation fuel demand is likely to be limited to around 5% over the next 10–15 years. However, a number of studies suggest that biofuels could contribute up to a quarter of global transportation fuel demand by 2050, provided technological breakthroughs reduce the costs of sustainably produced advanced biofuels to a level where they can compete with petroleum fuels.

This paper summarizes the main findings of alternative lines of research on the relationship between the food and fuel markets and identifies gaps and quandaries that warrant further research. This is not meant to be a complete survey, and it emphasizes several of our studies within the broader literature. The paper distinguishes between two bodies of literature: one on the relationship between food and fuel prices and another on the impact of the introduction of biofuel on commodity food prices. While biofuel prices do not seem to affect food-commodity prices, we explain why the introduction of biofuel does. Moreover, biofuels have not been the most dominant contributor to the recent food-price inflation and different biofuels have different impacts. Reprinted by permission of the American Agricultural Economics Association

More than two decades have passed since the start of the worldwide marketoriented electricity sector reforms. The reforms have varied in terms of structure, market mechanisms, and regulation. However, the passage of time calls for taking stock of the performance of the reforms in developing countries. This paper surveys the empirical literature on electricity sector reforms and draws some conclusions with a view to the future. Overall, the reforms have tended to improve the technical efficiency of the sector. The macroeconomic benefits of reforms are less clear and remain difficult to identify. Also, the gains from the reforms have often not trickled down to consumers because of institutional and regulatory weaknesses. In order to achieve lasting benefits, reforms need to adopt measures that align their pursuit of economic efficiency with those of equity and provision of access. Reforms can deliver more economic benefits and alleviate poverty when the poor have access to electricity. New technologies and institutional capacity building can help improve the performance of reforms.

Infrastructure development is a major factor of interstate inequality in India’s economic development; however, much less is known about the causes of unequal infrastructure development. Using 11 parameters, this study develops three separate indices: physical, social, and financial infrastructures. It also examines the differential determinants using the system generalized method of moments model for 18 major states in India from 2005 to 2019. The results show that economic factors such as economic performance, financial development, investment, and economic structure have a pivotal impact on physical infrastructure. In addition to economic factors, fiscal (investment, capital expenditure, and internal debt) and demographic (urbanization, agglomeration, and scheduled caste and scheduled tribe population) factors emerge as more relevant in the case of social infrastructure. Political factors play an equally important role in all three types of infrastructure development. The magnitude and significance of drivers vary across the type of infrastructure considered.

We use contingent valuation to estimate the willingness to pay (WTP) for improved electricity service in Nepal following the end of the country’s load-shedding crisis of 2007–2016. Using a nationally representative survey of grid-connected Nepali households, we calculate the WTP per outage-day avoided and the value of lost load (VoLL) for residential customers and analyze their key drivers, including income, education, and investments in own generation or electricity storage equipment. Households are willing to pay, on average, 123 NR ($1.11) per month for improved quality of power supply. In other words, they would be prepared to see a 65% increase in their monthly bill to avoid outages. Our preferred estimates of the VoLL range from 5 to 15 NR/kWh (¢4.7–¢14/kWh). These estimates are below the marginal cost of avoided load shedding, and are virtually the same as valuations at the beginning of the load-shedding crisis.

Climate change is posing risks for human and natural systems, and one of the most important questions faced by policy makers is to reduce such risks and impacts through adaption and mitigation actions. As the country with the highest CO2 emissions, China is facing unprecedented challenges: climate change, energy structure transformation and socio-economic development all pose complex dilemmas for policy makers. The Chinese government has introduced energy policy and emission reduction measures to achieve its climate change mitigation targets. However, overlap between these measures may generate great uncertainty about their performance. By using a multi-regional computable general equilibrium (CGE) model, this study examines the economic impacts of implementing a nationwide carbon market and a renewable energy subsidy in the power sector in China. The study finds that a renewable energy policy would increase the economic cost of reducing greenhouse gas emissions and lead to a lower carbon price level if a carbon pricing mechanism were in place. However, the combination of the two policies indeed shows advantages in achieving emission reduction targets and renewable energy promotion targets. While an emission trading scheme is necessary for reducing emissions effectively, a renewable energy policy could promote the large-scale use of renewable energy in the electricity sector. In addition, the adoption of a renewable energy policy could yield substantial inter-regional capital inflow to central and western regions. This would improve low-carbon investment in less developed regions, and thus an appropriately designed policy mix would be sensible.

In response to growing environmental concerns, governments have encouraged innovation and adoption of green or clean technologies through various policy measures. At present more than half a trillion US$ is being invested annually in clean technologies. This study analyzes if investments in clean technologies increase productivity and reduce production costs based on the existing literature. The findings are, however, mixed. Most ex-post studies show a positive relationship between clean investments and energy-intensive manufacturing firms' productivity. In transportation, buildings, and power sectors, empirical evidence between the adoption of clean technologies and the cost of energy services is highly limited. Ex-ante studies find cleaner vehicles that use electricity or hydrogen are still more expensive than gasoline and diesel vehicles, while in the buildings sector, clean technologies reduce the cost of energy services. In the power sector, increased investments in renewable energy have not yet decreased the average costs of grid electricity supply.