Center for European Economic Research

Gummersbach, Germany

Center for European Economic Research

Gummersbach, Germany
SEARCH FILTERS
Time filter
Source Type

Toole A.A.,U.S. Department of Agriculture | Toole A.A.,Center for European Economic Research
Research Policy | Year: 2012

While most economists believe that public scientific research fuels industry innovation and economic growth, systematic evidence supporting this relationship is surprisingly limited. In a recent study, Acemoglu and Linn (2004) identified market size as a significant driver of drug innovation in the pharmaceutical industry, but they did not find any evidence supporting science-driven innovation from publicly funded research. This paper uses new data on biomedical research investments by the U.S. National Institutes of Health (NIH) to examine the contribution of public research to pharmaceutical innovation. The empirical analysis finds that both market size and NIH funded basic research have economically and statistically significant effects on the entry of new drugs with the contribution of public basic research coming in the earliest stage of pharmaceutical drug discovery. The analysis also finds a positive return to public investment in basic biomedical research. © 2011 Elsevier B.V. All rights reserved.


News Article | November 9, 2016
Site: www.theenergycollective.com

As the European Union contemplates new policies aimed at meeting its emissions-reduction commitments under last year’s Paris Agreement on climate change, a new study by researchers at MIT and elsewhere could provide some valuable guidance on the most effective strategy. Rather than adopt a standard for automotive gas-mileage ratings, as the United States has done with its CAFE (corporate average fuel economy) standards for many years, the EU could achieve the same results for CO emission reduction, at far lower cost to the economy, by simply extending their existing emissions-trading system to encompass transportation rather than just electricity generation and energy intensive industry, the researchers found. Switching from the automotive standards to the trading scheme could save as much as 63 billion Euros, says the study’s lead author Sergey Paltsev, deputy director at MIT’s Joint Program on the Science and Policy of Global Change and senior research scientist at the MIT Energy Initiative. The results have just been published in the journal Transportation, in a paper co-authored by Joint Program researchers Valerie Karplus, Henry Chen, Paul Kishimoto, and John Reilly, and three others. “There are many ways to do policies” to try to reduce greenhouse gas emissions, Paltsev says, “and sometimes political reality doesn’t allow you to do things the best way.” But as the EU seeks ways to implement the 40 percent emissions reduction by 2030 that it agreed to at last year’s Conference of the Parties meeting in Paris, policymakers may be well-positioned to use this agreement as an impetus to adopt such an expansion of their emissions trading system. The existing emissions trading system in Europe has not worked well, Paltsev says, partly because its price on carbon is quite low, and partly because it does not encompass enough different emissions-producing sectors of the economy. However, “the system can be fixed, and this is a great opportunity to fix it,” he says. The new analysis, Paltsev says, clearly shows that instead of imposing mileage efficiency standards, “there is a much better way to achieve the relevant targets” for cutting emissions from the transportation sector. He points out that because of high fuel taxes and the resulting high cost of gasoline in Europe, the existing fleet of passenger cars there is already more efficient than the U.S. fleet, so implementing stringent fuel efficiency standards would be more costly for Europe. From an economic point of view, “emissions trading or a carbon tax is going to achieve their emissions goals at the lowest possible cost to society,” says Paltsev, who is an economist and an engineer by training. And the emissions trading system is already established in the EU, he says, even though in its present form the system is flawed because of over-allocation of emission permits and interaction with renewable energy requirements. In addition, it only addresses the most energy-intensive sectors, primarily power generation. However, the trading system could easily be expanded to encompass private vehicles as well, according to Paltsev. Since the goal is to achieve a given amount of reduction in the EU’s overall greenhouse gas emissions, expanding the program to include transportation could achieve the same amount of reduction, according to the new study, “and save money for taxpayers and the European economy — and those savings can be quite substantial,” Paltsev says. The team used a computer model developed at the Joint Program that encompasses the scenarios’ interactive effects on all aspects of the economy, rather than just the transportation sector as most analyses do. For example, the interactive model includes secondary effects such as how manufacturing or service industries may respond to policy changes that affect transportation costs, which can in turn influence the cost of goods. Using this model, the study found that using the emissions trading system instead of a mileage standard could save between 24 and 63 billion Euros in 2025, he says, and “achieve exactly the same goal.” He adds, “I’m an economist, and if I see 63 billion lying on the floor, I say pick it up!” The modeling team also benefited from having access to detailed data from the U.S. Environmental Protection Agency about the costs of meeting fuel standards in this country, whereas analysts in Europe who studied these tradeoffs “didn’t have that luxury,” he says. As a result, their studies were much simpler and “didn’t provide the richness of data the EPA has been able to achieve.” He says the team presented their findings to EU officials in Brussels, and the initial response there was “very receptive, and that’s a good sign.” The approach used by this team is one that they hope will be replicated in analyzing other proposed policy measures and other regions of the world. “It shows you need to have this kind of overarching view, to look at all sectors at the same time,” in order to derive useful policy recommendations. Andreas Schafer, Professor of Energy and Transport at University College London, who was not involved in the analysis, noted that “this study, for the first time, quantifies the vast economic costs of that policy using a general equilibrium framework. Although the figures should be considered with caution (as also suggested by the authors), the extra costs of separate emission standards between 2015 and 2020 compare to roughly half the EU Framework Programme for Research and Innovation Horizon 2020 [spending] of around 80 billion Euros over nearly the same period.” The research team also included Andreas Löschel of the University of Münster, in Germany; Kathrine von Graevenitz of the Center for European Economic Research, in Germany; and Simon Koesler of the Center for Energy Policy at the University of Strathclyde, in Glasgow, U.K. The research was supported by the U.S. Department of Energy, Office of Science, the U.S. Environmental Protection Agency, and other sponsors from government, industry, and foundations, through the Joint Program on the Science and Policy of Global Change.


News Article | August 22, 2016
Site: news.mit.edu

Recognizing the substantial costs involved in addressing climate change through both mitigation and adaptation measures, the 2015 Paris Agreement stipulates that developed countries provide at least $100 billion a year in climate financing to developing countries, and support their transition to lower-carbon economies through international cooperation. One avenue for such cooperation is to link carbon markets — emissions trading systems that put a cap on carbon — in developed and developing regions. This arrangement could boost the price of carbon in developing countries and thereby accelerate their efforts to shift away from carbon-intensive fuels. But studies show that it could also sharply reduce the carbon price in developed countries, thus shifting abatement from developed to developing countries. While linking carbon markets would lower the costs of reducing emissions in developed countries, and developing countries would be compensated for undertaking additional abatement via revenue from selling emissions rights, the practice would ultimately stifle energy-efficiency improvements and development of low-carbon technologies in developed countries. This outcome could be prevented, however, if carbon-trading nations fine-tune the terms of engagement, according to a new MIT Joint Program on the Science and Policy of Global Change study in Energy Economics. By setting a limit on the number of emissions permits a developed country can import from a developing country, steep decreases in the carbon price in developed countries can be avoided, says Niven Winchester, a principal research scientist at the Joint Program and co-author of the study. “If the U.S. trades with a developing country that has a lower carbon price, then our carbon price will come down — eventually matching the lower carbon price — and so will our incentive to decarbonize,” Winchester explains. “With the goal of restricting the carbon price reduction in the developed country, we examined the impact of imposing a limit on the volume of permits exported from the developing country.” Using the Joint Program’s Economic Projection and Policy Analysis (EPPA) model, Winchester and his collaborators — lead author Claire Gavard, now an environmental economist at the Center for European Economic Research in Germany, who conducted part of her doctoral research at the Joint Program, and Joint Program Deputy Director Sergey Paltsev — estimated the carbon-price and emissions-reduction impacts of a range of permit volume limits on emissions trading between the U.S. and China, the European Union and China, and among all three regions in the year 2030. The limit was defined as a percentage of the total amount of emissions allowed in the developed country. The researchers projected that meeting recently-pledged national emissions targets at the Paris climate talks through unlimited emissions trading between the U.S. and electricity and energy-intensive sectors in China would result in a common carbon price of $24 per ton* of carbon dioxide, a 70 percent price decrease in the U.S. (down from $80/ton, the estimated U.S. carbon price without international trading of emissions permits). When imported emissions were limited to 10 percent of the U.S. emissions cap, the U.S. carbon price fell to $51/ton, a 37 percent decrease, and the carbon price in China rose from $17/ton to $19/ton. In the E.U.-China case, the European carbon price fell by 59 percent under unlimited carbon trading, and 31 percent when a 10 percent emissions permit import limit was imposed. These results, along with others produced in the study, suggest that linking carbon markets could be a win-win proposition for developing and developed countries. “The opportunity to buy permits in China for $19 and sell them for $51 to the U.S. would present a strong financial incentive for China to link emissions trading markets with the U.S.,” says Winchester. “The U.S. would also benefit by taking advantage of low-cost emissions reductions elsewhere while still maintaining incentives to reduce emissions domestically.” The EPPA model used in the study is supported by the Department of Energy, Environmental Protection Agency and other government, foundation and industrial sponsors of the Joint Program. *In the study, the word “ton” refers to a metric ton, or 2,240 pounds.


News Article | November 8, 2016
Site: news.mit.edu

As the European Union contemplates new policies aimed at meeting its emissions-reduction commitments under last year’s Paris Agreement on climate change, a new study by researchers at MIT and elsewhere could provide some valuable guidance on the most effective strategy. Rather than adopt a standard for automotive gas-mileage ratings, as the United States has done with its CAFE (corporate average fuel economy) standards for many years, the EU could achieve the same results for CO emission reduction, at far lower cost to the economy, by simply extending their existing emissions-trading system to encompass transportation rather than just electricity generation and energy intensive industry, the researchers found. Switching from the automotive standards to the trading scheme could save as much as 63 billion Euros, says the study’s lead author Sergey Paltsev, deputy director at MIT’s Joint Program on the Science and Policy of Global Change and senior research scientist at the MIT Energy Initiative. The results have just been published in the journal Transportation, in a paper co-authored by Joint Program researchers Valerie Karplus, Henry Chen, Paul Kishimoto, and John Reilly, and three others. “There are many ways to do policies” to try to reduce greenhouse gas emissions, Paltsev says, “and sometimes political reality doesn’t allow you to do things the best way.” But as the EU seeks ways to implement the 40 percent emissions reduction by 2030 that it agreed to at last year’s Conference of the Parties meeting in Paris, policymakers may be well-positioned to use this agreement as an impetus to adopt such an expansion of their emissions trading system. The existing emissions trading system in Europe has not worked well, Paltsev says, partly because its price on carbon is quite low, and partly because it does not encompass enough different emissions-producing sectors of the economy. However, “the system can be fixed, and this is a great opportunity to fix it,” he says. The new analysis, Paltsev says, clearly shows that instead of imposing mileage efficiency standards, “there is a much better way to achieve the relevant targets” for cutting emissions from the transportation sector. He points out that because of high fuel taxes and the resulting high cost of gasoline in Europe, the existing fleet of passenger cars there is already more efficient than the U.S. fleet, so implementing stringent fuel efficiency standards would be more costly for Europe. From an economic point of view, “emissions trading or a carbon tax is going to achieve their emissions goals at the lowest possible cost to society,” says Paltsev, who is an economist and an engineer by training. And the emissions trading system is already established in the EU, he says, even though in its present form the system is flawed because of over-allocation of emission permits and interaction with renewable energy requirements. In addition, it only addresses the most energy-intensive sectors, primarily power generation. However, the trading system could easily be expanded to encompass private vehicles as well, according to Paltsev. Since the goal is to achieve a given amount of reduction in the EU’s overall greenhouse gas emissions, expanding the program to include transportation could achieve the same amount of reduction, according to the new study, “and save money for taxpayers and the European economy — and those savings can be quite substantial,” Paltsev says. The team used a computer model developed at the Joint Program that encompasses the scenarios’ interactive effects on all aspects of the economy, rather than just the transportation sector as most analyses do. For example, the interactive model includes secondary effects such as how manufacturing or service industries may respond to policy changes that affect transportation costs, which can in turn influence the cost of goods. Using this model, the study found that using the emissions trading system instead of a mileage standard could save between 24 and 63 billion Euros in 2025, he says, and “achieve exactly the same goal.” He adds, “I’m an economist, and if I see 63 billion lying on the floor, I say pick it up!” The modeling team also benefited from having access to detailed data from the U.S. Environmental Protection Agency about the costs of meeting fuel standards in this country, whereas analysts in Europe who studied these tradeoffs “didn’t have that luxury,” he says. As a result, their studies were much simpler and “didn’t provide the richness of data the EPA has been able to achieve.” He says the team presented their findings to EU officials in Brussels, and the initial response there was “very receptive, and that’s a good sign.” The approach used by this team is one that they hope will be replicated in analyzing other proposed policy measures and other regions of the world. “It shows you need to have this kind of overarching view, to look at all sectors at the same time,” in order to derive useful policy recommendations. Andreas Schafer, Professor of Energy and Transport at University College London, who was not involved in the analysis, noted that “this study, for the first time, quantifies the vast economic costs of that policy using a general equilibrium framework. Although the figures should be considered with caution (as also suggested by the authors), the extra costs of separate emission standards between 2015 and 2020 compare to roughly half the EU Framework Programme for Research and Innovation Horizon 2020 [spending] of around 80 billion Euros over nearly the same period.” The research team also included Andreas Löschel of the University of Münster, in Germany; Kathrine von Graevenitz of the Center for European Economic Research, in Germany; and Simon Koesler of the Center for Energy Policy at the University of Strathclyde, in Glasgow, U.K. The research was supported by the U.S. Department of Energy, Office of Science, the U.S. Environmental Protection Agency, and other sponsors from government, industry, and foundations, through the Joint Program on the Science and Policy of Global Change.


Ghisetti C.,University of Bologna | Rennings K.,Center for European Economic Research
Journal of Cleaner Production | Year: 2014

Much of the empirical literature analysing the relation between environmental innovation and competitiveness has focused on the question whether "it pays to be green". We differentiate between different types of environmental innovations, which will be disentangled in those aiming at reducing the negative externalities and those allowing for efficiency increases and cost savings. What we analyse is at first the extent to which these two typologies have impacts on firms' profitability with opposite signs, and, secondly, whether the motivations driving the adoption of those innovations make the difference in terms of economic gains. We find empirical evidence that both the typology of Environmental Innovation and the driver of their adoption affect the sign of the relationship between competitiveness and environmental performance. Innovations leading to a reduction in the use of energy or materials per unit of output positively affect firms' competitiveness. Contrarily, externality reducing innovations hamper firms' competitiveness. The empirical strategy is based on a sample of German firms and makes use of a merge of two waves of the Mannheim Innovation Panel in 2011 and 2009 that allow overcoming some endogeneity issues which may arise in a cross-section setting. © 2014 Elsevier Ltd. All rights reserved.


Horbach J.,FH Augsburg | Rammer C.,Center for European Economic Research | Rennings K.,Center for European Economic Research
Ecological Economics | Year: 2012

Empirical analyses of eco-innovation determinants have rarely been able to distinguish between different areas of environmental impact. The present paper tries to close this gap by employing a new and unique dataset based on the German Community Innovation Survey, conducted in 2009. The main purpose of this paper is to test whether different types of eco-innovation (according to their environmental impacts) are driven by different factors. Beside a complex set of different supply, firm-specific, and demand factors, the literature on determinants of eco-innovation accentuates the important role of regulation, cost savings and customer benefits. We find that current and expected government regulation is particularly important with regard to pushing firms to reduce air (e.g. CO 2, SO 2 or NO x) as well as water or noise emissions, avoid hazardous substances, and increase recyclability of products. Cost savings are an important motivation for reducing energy and material use, pointing to the role of energy and raw material prices as well as taxation as drivers for eco-innovation. Customer requirements are another important source of eco-innovations, particularly with regard to products with improved environmental performance and process innovations that increase material efficiency, and reduce energy consumption, waste and the use of dangerous substances. Firms confirm a high importance of expected future regulations for all environmental product innovations. © 2012 Elsevier B.V.


Alexeeva-Talebi V.,Center for European Economic Research
Energy Economics | Year: 2011

This paper explores the ability of European refineries to pass-through costs associated with the introduction of the EU Emissions Trading Scheme (EU ETS). A sequence of vector error correction models (VECM) has been estimated within a multinational setting which covers 14 EU Member States. Using weekly data at the country level, this paper finds an influence of prices for European Union Allowances (EUAs) on unleaded petrol retail prices during the trial phase of the EU ETS from 2005 to 2007. The country-specific long-run elasticities of petrol prices with respect to the EUA prices are between 0.01 and 0.09. Given that these elasticities are of the same order of magnitude as the share of carbon allowances costs in total production costs in the refining industry, the estimates are consistent with the full pass-through potential. The variance decomposition analysis shows furthermore that a significant fraction of petrol price changes in Austria, Germany, France and Spain can be explained by changes in allowances prices (between 10% and 20%). © 2011 Elsevier B.V.


Achtnicht M.,Center for European Economic Research
Ecological Economics | Year: 2011

Residential buildings strongly contribute to global CO2 emissions due to the high energy demand for electricity and heating, particularly in industrialised countries. Within the EU, decentralised heat generation is of particular relevance for future climate policy, as its emissions are not covered by the EU ETS. We conducted a choice experiment concerning energy retrofits for existing houses in Germany. In the experiment, the approximately 400 sampled house owners could either choose a modern heating system or an improved thermal insulation for their home. We used standard and mixed logit specifications to analyse the choice data. We found environmental benefits to have a significant impact on choices of heating systems. However, they played no role in terms of insulation choices. Based on the estimated mixed logit model, we further obtained willingness-to-pay (WTP) measures for CO2 savings. © 2011 Elsevier B.V.


Muller K.,Center for European Economic Research
Research Policy | Year: 2010

For academic spin-offs I analyze the length of the time period between the founder's leaving of academia and the establishment of her firm. A duration analysis reveals that a longer time-lag is caused by the necessity of assembling complementary skills, either by acquisition by a single founder or by searching for suitable team members. Furthermore, new ventures are established faster if there has been high-level technology transfer, if the founders have access to university infrastructure, or if they receive informal support by former colleagues. © 2009 Elsevier B.V. All rights reserved.


Achtnicht M.,Center for European Economic Research
Climatic Change | Year: 2012

Motorized individual transport strongly contributes to global CO 2 emissions, due to its intensive usage of fossil fuels. Current political efforts addressing this issue (i. e. emission performance standards in the EU) are directed towards car manufacturers. This paper focuses on the demand side. It examines whether CO 2 emissions per kilometer is a relevant attribute in car choices. Based on a choice experiment among potential car buyers from Germany, a mixed logit specification is estimated. In addition, distributions of willingness-to-pay measures for an abatement of CO 2 emissions are obtained. The results suggest that the emissions performance of a car matters substantially, but its consideration varies heavily across the sampled population. In particular, some evidence on gender, age and education effects on climate concerns is provided. © 2011 Springer Science+Business Media B.V.

Loading Center for European Economic Research collaborators
Loading Center for European Economic Research collaborators