Environment

Davide Consoli, Giovanni Marin, David Popp, Francesco Vona, 22 May 2015

The greening of the economy brings with it changes in the demand for certain skills in the labour market. Understanding these changes has important implications for policy aiming to support sustainable industry. This column uses US data to identify key green jobs and the skills of import for them. Environmental sustainability regulations are shown to affect the demand for green skills in the labour market. Labour market policies should target labour supply, for instance through education, to avoid potential skill gaps down the line.

Peter Debaere, Amanda Kurzendoerfer, 12 May 2015

Water management is a major challenge today. To guide efficient water allocation, it is essential to understand the drivers of water use. This column sheds light on this issue using US data from the 1950s until today. The findings show that US water withdrawal has stabilised, and has even decreased in the past decades. Technological improvements have been crucial towards that end. However, the shifting demand from agriculture and manufacturing to less-water intensive sectors has been just as important.

Arik Levinson, James O'Brien, 11 March 2015

Rich countries pollute less partly because people in richer countries consume a less pollution-intensive bundle of goods. This column investigates whether this results from consumer preferences or economy-wide changes. Within a country, the environmental Engel curve is concave – meaning that richer households, while polluting more, consume a less pollution-intensive bundle. Over time, this accounts for half of the decrease in rich household pollution, with the remainder being due to price changes and environmental regulations.

Karsten Neuhoff, 07 March 2015

The European Commission proposed the implementation of a Market Stability Reserve as a response to a surplus of allowances in the Emissions Trading System. This column discusses how the Reserve should be designed and whether it could improve the emissions trading. Insight from several models indicates that the Stability Reserve corrects for a number of market failures in the emissions trading.  

Jason Furman, Ron Shadbegian, Jim Stock, 25 February 2015

The cost of delaying climate action has been studied extensively. This column discusses new findings based on a meta-analysis of published model runs. A one-decade delay in addressing climate change would lead to about a 40% increase in the net present value cost of addressing climate change. If anything, the methodology used in this analysis could understate the cost of delay. Uncertainty and the possibility of tipping points provide a motivation for more action as a form of insurance against worse outcomes.

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