Documents Ghersi, Frédéric 3 results

"In this paper, we examine how to trigger a wave of low-carbon investments compatible with the well-below 2°C target of the Paris Agreement in the current post-pandemic context of increasing private and public debt. We argue that one major obstacle to catalysing global excess savings at sufficient scale and speed on climate mitigation, and to ‘greening' economic recovery packages, lies in the up-front risks of low-carbon investment. We then explain why public guarantees should be the preferred risk-sharing instrument to overcome that obstacle. We outline the basic principles of a multilateral sovereign guarantee mechanism able to maximize the leverage effect of public funds and massively redirect global savings towards low-carbon investments, with the double benefit of bridging the infrastructure investment gap in developing countries and reducing tension between developed and developing countries around accelerated funding for low-carbon transitions. We carry out numerical simulations demonstrating how the use of guarantees from AAA-rated sovereigns, calibrated on an agreed-upon ‘social value of carbon', is compatible with public-budget constraints of developed countries. In summary, the use of such guarantee mechanisms provides a new form of ‘where flexibility', which could turn real-world heterogeneity into a source of reciprocal gains for both developed and developing countries, and contribute to meeting the USD 100 billion + pledge of the Paris Agreement."

"The distributional consequences of environmental policies are a major issue for the public acceptability of energy transitions, as the Yellow-vest demonstrations highlighted. Our research objective is to assess the short and mid-term distributional impacts of policy packages on firms and households – rather than of single policy instruments - including carbon taxing, technology adoption subsidies and compensating lump-sum transfers. We offer insights on the fair transition promoted by the EU Fit-for-55 proposal with a case-study on two successive versions of the French low-carbon strategy.
To that end, we develop an innovative numerical method that combines micro-simulation and macroeconomic modelling techniques. We explicitly model the heterogeneity of households' behaviour and the role of the distribution of energy-efficient durable technologies — electric vehicles, energy-efficient housing — among consumers.
Focusing technology adoptions on the largest energy consumers to maximise emission reductions reduces the discrepancy of impacts between rural and urban households. However, it aggravates the regressivity of carbon taxation if households are not rebated their carbon tax payments. Recycling schemes favouring poorer households are powerful means to offset the regressivity of carbon taxation in the short term. In parallel, policies supporting electric vehicles and thermal renovation are effective in reducing households' tax payments at further horizons"