In this solo episode, I tell the story of William Nordhaus and the development of the DICE model, one of the foundational models in climate economics.

We trace the journey from Nordhaus’s early work on energy models, through his first attempts to connect the economy and the climate, to the breakthrough that eventually became DICE: the Dynamic Integrated model of Climate and the Economy.

Along the way, I discuss:

• why Nordhaus became interested in climate change
• how his early energy models evolved into integrated assessment models
• why moving from partial to general equilibrium mattered
• how he simplified the climate system enough to make it usable in an economic model
• how damage functions closed the loop between climate and the economy
• and why this framework made the social cost of carbon possible

The episode also tells some of the less-known parts of the story, including the fact that the work behind one of the most influential models in climate economics was initially rejected by economics journals before being published in Science.

More than 30 years later, DICE remains a benchmark in climate economics and a central part of the intellectual history of putting a price on carbon.

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

In this episode, I speak with Frank Venmans about his paper “Policing Carbon Markets”, which studies compliance and enforcement in the EU Emissions Trading System.

The headline result is striking: compliance is extremely high, at around 99%. But the standard economic explanation — firms comply because they fear fines and enforcement — only explains a small part of what is happening.

We discuss:

• how high compliance is in the EU ETS
• why the first phase of the system looked very different
• the gap between theoretical fines and the fines actually collected
• how the paper tests whether firms are reporting emissions truthfully
• the role of verifiers, inspections, naming and shaming, and legal penalties
• the “Harrington paradox” of high compliance despite relatively limited enforcement
• why long-term relationships between firms and regulators may matter
• what newer carbon markets can learn from the European experience

The paper also highlights a less glamorous but very important lesson: carbon markets are technically complex. Registries, reporting systems, verification, financial regulation, and data management all matter enormously for whether the system works in practice.

Transcript: [TBD]

Paper: https://www.tandfonline.com/doi/full/10.1080/14693062.2025.2464699 , and 

Frank Venmans: https://www.fvenmans.com/

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

In this episode, I speak with professor Frances Moore about her paper synthesizing nearly 150 studies on the social cost of carbon.

We discuss how the literature has evolved, why the distribution of estimates has such a long right tail, and why experts often underestimate the average value found across published studies.

Fran also explains how the paper combines a large literature review, an expert survey, and a machine-learning model to construct a new “synthetic” social cost of carbon distribution.

The result is striking: while the raw literature has a median estimate of around $40 per ton and a mean of roughly $130, the synthetic distribution shifts those figures to around $180 and $280 per ton.

We also discuss:

• the difference between level damages and growth-rate damages
• why discounting remains so important
• how tipping points and other structural modeling choices affect estimates
• the influence of models such as DICE
• why assigning climate damages a value of zero is inconsistent with the evidence

A useful conversation for anyone interested in climate economics, cost-benefit analysis, or how policymakers should value the damages caused by carbon emissions.

Links:

Transcript: https://www.climateeconomicswitharvid.com/p/33-dr-frances-moore-dr-frances-moore

F.C. Moore, M.A. Drupp, J. Rising, S. Dietz, I. Rudik, & G. Wagner, Synthesis of evidence yields high social cost of carbon due to structural model variation and uncertainties, Proc. Natl. Acad. Sci. U.S.A. 121 (52) e2410733121, https://doi.org/10.1073/pnas.2410733121 (2024). 

Frances’ site: https://franmoore.faculty.ucdavis.edu/

Related episodes:

·      #6 From $0 to $190: How U.S. Presidents Have Priced a Ton of CO₂: https://www.buzzsprout.com/2412056/episodes/17723637

·      #21 Dr. Richard Tol on FUND, Climate Damages and Why Adaptation Matters: https://www.buzzsprout.com/2412056/episodes/19410124

·      #32 Dr. Gernot Wagner: Why Tipping Points Matter: https://www.buzzsprout.com/2412056/episodes/19410124

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

In this episode, I speak with Dr. Gernot Wagner, a climate economist at Columbia Business School and faculty director of the Climate Knowledge Initiative. Gernot has written widely on climate risk, policy, and technology, including books such as Climate Shock and Geoengineering: The Gamble. 

We discuss Gernot’s research on how tipping points can be incorporated into climate-economic models. These include ice sheet collapse, permafrost carbon release, Arctic sea ice loss, AMOC slowdown, and Amazon rainforest dieback. 

A central result from the paper is that tipping points can raise the social cost of carbon by roughly 25% to 50%, with a large right tail: there is a meaningful chance that tipping points could double or even triple the estimated social cost of carbon. 

We also discuss why tipping-point damages are uneven across regions, why some effects are difficult to model, how the literature has evolved since the paper, and why tipping points should not distract us from the “slow burn” damages of climate change such as heat, productivity losses, mortality, and morbidity. 

In this episode

• What climate tipping points are and why they matter for economics
• Examples: Greenland and West Antarctic ice sheets, permafrost, Arctic sea ice, AMOC, and Amazon dieback
• How tipping points can be incorporated into integrated assessment models
• Why tipping points increase the social cost of carbon
• Why tail risks matter as much as central estimates
• Why some tipping-point impacts are highly regional
• How methane and faster warming affect tipping-point risks
• Why “slow burn” damages are still central to climate economics

If you want to understand why climate risk is not just about gradual warming, but also about uncertainty, irreversibility, and tail risks, this episode is for you.

Paper: S. Dietz, J. Rising, T. Stoerk, & G. Wagner, Economic impacts of tipping points in the climate system, Proc. Natl. Acad. Sci. U.S.A. 118 (34) e2103081118, https://doi.org/10.1073/pnas.2103081118 (2021). https://www.pnas.org/doi/10.1073/pnas.2103081118

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

This episode is based on the World Bank Report "State and Trends of Carbon Pricing 2026", available at https://www.worldbank.org/en/publication/state-and-trends-of-carbon-pricing

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

We discuss why politicians often bundle together very different claims when talking about climate policy, presenting it as either good for both the environment and the economy or bad for both, even when those effects are factually separate.

Adam explains how he and Luis Garicano study this using speeches from the European Parliament, classified with large language models, and how Russia’s invasion of Ukraine provides a real-world test of what happens when the economic costs of climate policy suddenly become more salient.

We talk about:

• what “narrative entanglement” means
• why politicians often avoid talking about trade-offs
• how voter psychology and motivated reasoning shape climate narratives
• what changed in European climate discourse after the energy shock of 2022
• how shifts in narratives relate to actual voting on climate policy

This is a fascinating conversation about the politics behind climate policy and why the stories politicians tell can matter just as much as the policies themselves.

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

In this episode, I’m joined (again) by Professor Joe Shapiro (UC Berkeley) to discuss his paper “The Environmental Bias of Trade Policy” (QJE, 2021). Joe’s core finding is striking: dirty industries tend to face lower trade protection, while cleaner industries face higher trade protection—a pattern that appears across countries, years, and even non-tariff barriers. 

Joe then translates that pattern into an intuitive metric: if you interpret existing trade policy as a carbon tariff, it looks like an implicit carbon subsidy of around -$100 per ton of CO₂ (roughly -$85 to -$120/tCO₂) or  $550 to $800 billion dollars per year. In other words, goods with higher embedded emissions often face less trade protection—trade policy gets the magnitude “about right,” but the sign wrong. 

We unpack what drives this: tariff escalation linked to “upstreamness” (upstream, commodity-like inputs tend to be dirtier and receive lower protection; downstream consumer goods are cleaner and receive higher protection). 
Finally, Joe walks through his model-based simulations showing that harmonizing protection between clean and dirty goods could modestly raise GDP while meaningfully reducing global emissions. 

In this episode

• The key empirical fact: dirty industries have low tariffs; clean industries have high tariffs 
• The implied magnitude: ~-$100/tCO₂ “implicit carbon tax” embedded in trade policy 
• The mechanism: upstreamness → tariff escalation → environmental bias 
• What the simulations show when you “flatten” the bias across sectors 
• A surprising map result: countries with strong climate reputations can still have trade policy that tilts toward dirtier goods 

If you care about CBAM, industrial policy, or the political economy of decarbonization, this episode is a powerful reminder: trade policy can be climate policy—even when nobody intended it.

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

In this episode, I’m joined by Dr. Lily Hsueh to discuss her book Corporations at Climate Crossroads: Multi-Level Governance, Public Policy, and Global Climate Action. Lily argues that corporate climate behavior is shaped by a nested structure of governance: what happens inside the firm (leadership, incentives, organizational capabilities) interacts with domestic public policy and top-down global norms. 

We talk about how to distinguish symbolic climate action from substantive emissions reductions, why managerial authority matters (data collection is not the same as decision power), and how domestic policy signals can change firm behavior. Lily also explains how she uses the Clean Power Plan as a quasi-experimental shock to identify mechanisms—and why “disclosure” isn’t enough without verification and accountability. 

What we cover

• Why it’s misleading to treat firms as “unitary actors” (internal politics and incentives matter) 
• How managerial capacity and complementary capabilities shape real climate outcomes 
• The difference between pledges, disclosure, and measurable emissions reductions 
• How domestic regulation and global norms influence corporate strategy 
• Why corporations can engage and obstruct at the same time
• Why the next step is disclosure → verification → accountability

Links

Dr. Lily Hsueh’s website: https://www.lilyhsueh.com

Open-access book (MIT Press): https://direct.mit.edu/books/oa-monograph/6016/C

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

If you listened to the two-part EU ETS primer with Professor Edwin Woerdman, this episode is the real-time application: what’s actually happening inside EU climate policy right now. 

My guest is Jos Cozijnsen, a Dutch lawyer and long-time expert on carbon markets and international climate policy. He has worked on emissions trading since the 1990s, including the Kyoto era, and remains closely involved in today’s debates on ETS design, Article 6, and carbon markets. 

In this episode we discuss:

• What an “EU ETS review” really means—and why geopolitics is changing the context 
• The EU’s recent climate amendment and what it implies for the 2040 target package
• The MSR and why proposed changes are controversial (and detail-dependent) 
• Why price controls like a corridor are politically tempting—and technically complicated 
• Flexibility on the path forward: free allocation, removals, and possible Article 6 credits 
• Why Jos calls the ETS a “docking station” for linking mechanisms over time 

If you want a clear sense of what is substance versus signaling in the ETS debate—and what the next phase of EU carbon markets could look like—this episode is for you.

You can find many informative blog posts from Jos here:  https://www.emissierechten.nl/ 

One such article is exonerating effects of hte EU ETS https://www.emissierechten.nl/column/ex-lege-libertas-de-vrijwarende-werking-van-het-eu-emissiehandels-systeem/

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

In Part 2, we tackle the moving part that keeps returning to headlines whenever prices move: the Market Stability Reserve (MSR)—which Edwin calls the ETS “vacuum cleaner.” We discuss why it was created, how it changes auction supply, why its cancellation rules matter, and why the Commission is now reconsidering parts of it in the current energy and geopolitical context. 

We also go beyond “ETS 101” and talk about where real design frictions show up:

• How the MSR works, and why it can affect expectations and price dynamics 
• Why a positive carbon price can persist even with a surplus (forward-looking firms) 
• Why free allocation is not a problem in economic theory (opportunity costs) 
• Where the EU ETS deviates from the economic “first best,” including output-based free allocation and administrative burden 
• What kinds of tweaks might realistically appear in the 2026 review (and why many changes are incremental) 

Note that Professor Woerdman recently published a paper explaining a lot of what we cover in more detail. You can find the paper here: Woerdman, E. and Kotzampasakis, M., 'EU Emissions Trading System' (April 01, 2026), EU Climate Mitigation Law, Cheltenham: Edward Elgar Publishing, forthcoming 2027. Available at SSRN: https://ssrn.com/abstract=6633238 or http://dx.doi.org/10.2139/ssrn.6633238

Up next: if you want to apply this toolkit to what’s happening right now in EU policy, the next episode with Jos Cozijnsen digs into current discussions, the 2040 targets, the MSR reform, and proposals around price controls. 

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

In this episode, I’m joined by Professor Edwin Woerdman (University of Groningen), a specialist in carbon market regulation and EU climate law and economics. 

This is Part 1 of a series on the EU ETS. We cover the fundamentals:

• What emissions and sectors the EU ETS covers today 
• The two “efficiencies” of emissions trading: effectiveness vs cost savings 
• How allowances are allocated: auctioning vs free allocation, and why carbon leakage matters 
• Why the ETS moved from grandfathering to benchmarking (and what benchmarks do) 
• The cross-sectoral correction factor (“the cheese slicer”) 
• How auction revenues are supposed to be used 
• Why the EU ETS has been effective at cutting emissions—and how targets tightened over time 
• The linear reduction factor, and why “2039” shows up in the debate (it’s an arithmetic implication, not a symbolic target) 

Next week (Part 2): we dive into the Market Stability Reserve, price volatility, and why the ETS is being tweaked in 2026. 

Note that Professor Woerdman recently published a paper explaining a lot of what we cover in more detail. You can find the paper here: Woerdman, E. and Kotzampasakis, M., 'EU Emissions Trading System' (April 01, 2026), EU Climate Mitigation Law, Cheltenham: Edward Elgar Publishing, forthcoming 2027. Available at SSRN: https://ssrn.com/abstract=6633238 or http://dx.doi.org/10.2139/ssrn.6633238

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

In this episode, I’m joined by Dr. Luis Garicano (LSE professor; former Member of the European Parliament), who argues for a more honest climate policy conversation—one that keeps the strengths of price-based tools like the ETS and CBAM, while being more cautious with mandates and target-driven rule stacks. 

What you’ll learn

• Why “win-win” climate narratives can backfire when households face higher energy prices 
• Carbon pricing vs mandates: where each works, and where mandates can create backlash with limited climate gains 
• How EU institutions and political incentives shape policy design—and make course-correction hard 
• Why “public support” is a core climate policy input, not an afterthought 

Guest
Dr. Luis Garicano is a professor at the London School of Economics and a former Member of the European Parliament (2019–2022), where he worked on major economic policy issues and helped shape early CBAM thinking. 

(If you enjoyed the EU policy arc on this show, this episode pairs naturally with the CBAM episodes and EU ETS history episodes.)

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

A common example is the home energy report: a letter that tells households how their electricity use compares with that of their neighbours. These reports have been widely used by energy providers and have repeatedly been shown to reduce energy use in the short run.

But there has been a puzzle in the literature. In energy and water conservation, much of the effect seems to remain even after the letters stop. That is very different from other settings—such as voting, charitable giving, or exercise—where nudge effects tend to fade much faster.

Alec Brandon explains the core idea of the paper: persistent effects may come not only from habits, but from technology adoption. If a nudge leads a household to install something more efficient, the savings can remain with the home even after the original resident leaves.

That insight leads to a clever empirical test. Because utilities stop sending the reports when a household moves, the authors can compare what stays with the person and what stays with the property. In their sample, the initial effect is about 2.1%, and roughly 1.1% remains after the original resident moves—suggesting that a substantial share of persistence comes through durable changes to the home. Renters, by contrast, show persistence while they live there, but little that remains once they leave. 

We also discuss:

• why the usual habit-formation story may be too simple
• why renters and homeowners respond differently
• why “persistent” does not mean “costless”
• how behavioural tools can complement pricing and technology policy
• what this implies for climate policy more broadly

This is a really useful episode for thinking more clearly about what nudges do well, where they fall short, and how behavioural policy can be paired with more durable structural change. The transcript frames this as a broader question for climate policy: not just whether a nudge works today, but why it works and whether that mechanism can last.

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

We discuss the social cost of carbon, how the Obama-era EPA worked with FUND, DICE, and PAGE, and why Tol thinks the process of understanding a model matters as much as running it. We also talk about why integrated assessment models are often misunderstood, why debates around damage functions get so heated, and what this reveals about the boundary between economics and politics.

The second half of the episode turns to Europe: why cap-and-trade won out over a carbon tax, why cost-benefit analysis is often awkward in real policy settings, and what Tol is working on now at the frontier of climate economics.

This is Part 2 of a two-part conversation.

In this episode:

• why a single social cost of carbon estimate can be misleading
• how the EPA used FUND in practice
• why misunderstood models are dangerous
• damage-function debates and the politics around IAMs
• EU climate policy, cap-and-trade, and cost-benefit analysis
• Tol’s current work on transfers, population, and welfare

These descriptions fit the show’s “paper to policy” framing and your economist/policy audience.

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

We start with the basic question: what is an integrated assessment model actually for? From there, Richard explains how FUND was built in the early 1990s, why it took a different path from models like DICE and PAGE, and why sector-by-sector damages, public goods, demography, and adaptation all matter if you want to say something useful about climate damages.

A central theme in this conversation is that climate impacts are not just a simple function of temperature. Vulnerability changes with income, public health, infrastructure, and technological change. That has big implications for how economists should think about damages, development, and policy design.

This is Part 1 of a two-part conversation.

In this episode:

• what integrated assessment models do
• how Richard Tol got started building FUND
• why FUND differs from DICE and PAGE
• adaptation, public goods, and sectoral damages
• malaria, heat, and technological change
• how FUND was calibrated from the literature

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

My guest is Matthias Rodemeier (Assistant Professor of Finance, Bocconi University), co-author of the paper “Willingness to Pay for Carbon Mitigation: Field Evidence from the Market for Carbon Offsets.” Using a large-scale field experiment with a German online supermarket, the team randomised the price and impact of a delivery-offset option across ~250,000 consumers. 

We unpack a striking result: consumers are price elastic (lower price → more take-up) but initially impact inelastic(higher CO₂ mitigation → no change in demand). Then we dig into what changes that—learning over repeated exposure and, importantly, firm participation (subsidies vs matching contributions). 

What we cover

• The checkout experiment: what exactly was randomised, and why this design identifies willingness to pay from revealed preferences 
• Price elastic, impact inelastic: why “more mitigation for the same price” doesn’t move demand (at first) 
• Warm glow vs valuation under frictions: how scope insensitivity can be about preferences and comprehension 
• Learning effects: repeated exposure helps consumers map “kg of CO₂” into meaningful comparisons 
• Converting results into the policy unit: ~€13–€16 per ton of CO₂ (with learning and firm participation) 
• Subsidy vs match: why matching can be more cost-effective than simply making offsets cheaper 
• Survey vs real choices: hypothetical willingness to pay can exceed revealed willingness to pay by an order of magnitude 
• Policy implications: voluntary markets as complements, not substitutes, for regulation—and what this implies for greenwashing incentives 

Related episodes: If you want the supply-side backdrop on offsets, see Episode 4 (Ben Probst) and Episode 17 (Beatriz Granziera). 

About the guest
Matthias Rodemeier is Assistant Professor of Finance at Bocconi University. His research sits at the intersection of behavioural economics and public finance, with a focus on environmental policy, taxation, and household finance—often using field experiments with private and public organisations. 

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

In Episode #19, I’m joined by Pauline Miquel, a policy expert who has been tracking CBAM’s fast-moving details and its implications for importers.

We discuss:

• What CBAM covers first (cement, steel, aluminium, hydrogen, electricity, fertilizers—and even some downstream products) 
• Why the end of 2025 brought major last-minute changes—especially around default values that can materially raise expected costs 
• The “ETS logic,” but globally: how third-party verification is supposed to work when emissions are embedded across fragmented supply chains 
• Key uncertainties for importers: timing, predictability of liability, and the shift from quarterly to annual reporting 
• A technical detail that matters: the benchmark (reflecting remaining free allocations under the ETS) and why it can move costs substantially 
• Why CBAM is ultimately a procurement + finance + contracting problem—not just a sustainability reporting line item 

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

In this episode, I’m joined by Kimberly Clausing to discuss her paper on the global effects of CBAM, with a focus on steel and aluminium — two sectors that are both highly traded and emissions intensive. Using detailed plant-level data, the analysis quantifies impacts on welfare, competitiveness, leakage, and distribution across firms and countries. 

We cover:

• Why CBAM is an answer to the free-rider / leakage / competitiveness triad — and what it can and can’t solve (domestic vs third-market competition). 
• A key empirical surprise: emissions intensity is not tightly correlated with income per capita, which changes how we think about impacts on lower-income countries. 
• “Two types of firms” logic: clean producers may benefit from access to a higher-price market, while dirtier producers may be pushed toward unregulated markets (with price effects abroad). 
• Quantitative results: why welfare effects can be modest in magnitude, why CBAM shifts some burden from producers to consumers, and why CBAM revenue may be smaller than expected due to reallocation. 
• Emissions outcomes: carbon pricing drives substantial reductions; CBAM can add incremental reductions and reduce leakage — especially when only one large jurisdiction acts. 
• The “climate club” logic: how CBAM can make carbon pricing more politically feasible at home and more attractive abroad over time. 

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

But “offsets” are a loaded term for a reason: past systems created large volumes of credits, and a recurring critique is that too many didn’t represent real, additional emissions cuts.

So what is Article 6, what’s genuinely different under Paris, and what still isn’t settled?

In Episode #17, I’m joined by Beatriz Granziera (Senior Policy Advisor at The Nature Conservancy), who works on Article 6 negotiations and implementation, including supporting developing countries on domestic Article 6 policy.

We cover:

• What Article 6 is trying to do—and the difference between 6.2 (bilateral/decentralized) and 6.4 (UN-governed centralized mechanism)
• Why Paris differs from Kyoto: every country has an NDC, so accounting rules matter—and how corresponding adjustments aim to prevent double counting
• A market reality check: many agreements, but very little actual trading so far—and why countries may be cautious about selling reductions they might need for their own targets
• The EU angle: why EU demand could reshape standards (and why details matter more than slogans)
• Transitioning old Kyoto/CDM projects into Article 6.4: what “flooding” risks look like in practice and why host-country approval becomes pivotal
• The core tension ahead: quality vs scale—rules can be strong on paper, but too stringent rules can leave a mechanism that can’t generate meaningful supply

Article 6 Explainer by the Nature Conservancy: https://www.nature.org/content/dam/tnc/nature/en/documents/TNC_Article_6_Explainer.pdf

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

For Episode 16, I’m joined by Jeroen van den Bergh (ICREA Research Professor at ICTA-UAB Barcelona) to unpack why carbon markets (ETS / cap-and-trade) may outperform carbon taxes, especially once you take bounded rationality seriously.

We discuss:

• Why the EU ETS scales across borders more easily than taxes
• How cap-and-trade can be politically more resilient (and sometimes “hidden”)
• Why markets can deliver higher carbon prices—and why that matters
• How a cap-and-trade system can self-correct when firms/people under-react to price signals
• What to do with the revenues (rebates, climate projects, innovation—what’s actually smart?)
• The potential progressiveness of Cap-and-Trade or Carbon taxes
• CBAM and Climate Clubs

Paper discussed: Pricing Instruments in Environmental and Climate Policy when Polluters are Boundedly Rational:  https://www.nature.com/articles/s44168-025-00284-9

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

I present lessons and takeaways from each and discuss some upcoming episodes.

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

Today’s episode asks three concrete questions:

1. When a place experiences unusually extreme heat, does it measurably shift votes?
2. Do local green and brown jobs shape climate politics in predictable ways?
3. And crucially: when voters move, do politicians follow… or do they sometimes move the other way?

My guest is Professor Matilde Bombardini, and we’re discussing her working paper “Climate Politics in the United States.” What makes this research stand out is the data: precinct-level election results—so we can compare neighborhoods within the same congressional district—and detailed measures of candidates’ environmental policy positions. 
You’ll hear the headline results, how to interpret the magnitudes, and what their framework implies for the future probability of something like a carbon-pricing bill passing in the U.S. 

Matilde Bombardini holds the Oliver E. and Dolores W. Williamson Chair in the Economics of Organizations and is Professor of Business and Public Policy at UC Berkeley Haas, affiliated with NBER, the BFI’s IOG group, CEPR, and CESifo. 

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

In this episode, I’m joined by Dr. Joseph Shapiro (UC Berkeley, NBER, Energy Institute at Haas) to discuss his recent research using 40 pollution offset markets under the U.S. Clean Air Act. By looking at how much firms actually pay for emission reductions, Joe and his co-authors back out marginal abatement cost curves and compare them to the health and welfare benefits of cleaner air.

We talk about:

• How pollution offset markets work in practice, and why they exist at all
• Using market prices (instead of just engineering models) to estimate the costs of cutting emissions
• Comparing those costs with the benefits of avoided mortality and morbidity
• Why, in most markets, benefits still exceed costs by a wide margin
• The outlier case of Houston’s VOC market – the “Taylor Swift of offsets” – where fracking-driven demand pushed prices through the roof
• What all this means for debates on whether air regulations are “too strict” or still too lax

If you’re interested in how economics, regulation, and air pollution intersect – and in actually quantifying the trade-offs – this episode is for you.

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

This episode looks at 20 years of the EU Emissions Trading System (EU ETS): how it started, the challenges, the lessons, and where it’s going next. The ETS is the world’s first major carbon market, and it has helped drive CO₂ emissions in covered sectors down by more than 50% since 2005. 

My guest is Professor Jos Delbeke. Jos is the former Director-General for Climate Action at the European Commission and one of the key architects of the EU ETS. He now holds the EIB Chair on Climate Policy and International Carbon Markets and served as the Commission’s lead climate negotiator in the run-up to the Paris Agreement. 

We cover:
• Why the EU chose cap-and-trade over a carbon tax — and why that wasn’t just an economic choice, but a political one. Taxation in the EU requires unanimity, and that was never going to happen, while industry was more open to a trading system than to a tax. 
• Phase 1 as a “pilot”: building the monitoring, reporting, and verification (MRV) system so anyone could actually trust the emissions data. That early data work is what let the system mature. 
• The early overallocation problem and the first carbon price crash — and why that was a necessary wake-up call. 
• Windfall profits in the power sector, the political fight over free allocation, and why auctioning allowances to power producers became the rule. That shift also created revenue streams for things like the Innovation Fund and Modernisation Fund. 
• The 2008–09 crisis, the flood of international credits, and the massive oversupply that pushed prices down. We talk through how the Commission responded by tightening access to external credits and designing the Market Stability Reserve (MSR) to effectively “put surplus allowances in the fridge.” Prices moved from ~€5–6 to €25–30 in a matter of months once that reform landed. 
• How repeated reforms gradually “Europeanised” the ETS: from nationally driven allocation and fragmented rules to a more harmonised, EU-wide carbon market with common auctioning rules and a single registry. 
• The psychology of carbon pricing: once CEOs realised pollution had a cost, they started planning around a carbon price — sometimes even using internal shadow prices of €50–100/ton to guide long-lived investment decisions. 
• The next 20 years: ETS2, decarbonising heavy industry instead of just shutting it down, CBAM (the Carbon Border Adjustment Mechanism, due to enter into force in 2026), and whether the MSR is ready for a world of higher prices, tighter caps, and more volatile geopolitics. 

If you want to understand how real climate policy gets made — not on a whiteboard, but in actual law, markets, and boardrooms — this is the episode.

If you have any advice on how to improve the podcast or advice on future guests or episodes or ideas, please let me know. I’d love to hear from you.

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

In this episode:

• The global picture (Dr. Christa Hasenkopf, EPIC – UChicago): Why fine particulate matter (PM2.5) quietly shaves ~2 years off global life expectancy—and how microscopic particles damage organs far beyond the lungs. 
• China’s “war on pollution” (Dr. Christa Hasenkopf & Prof. Lorenzo Trimarchi): From “beyond index” days in Beijing to a ~40% drop in pollution in ~10 years, powered by political will, strict enforcement, and transparent monitoring—plus how the US–China trade war unexpectedly loosened local environmental regulation. 
• India’s market innovation (Dr. Kaushik Deb): Inside Gujarat’s groundbreaking particulate-matter cap-and-trade pilot: near-100% compliance vs. ~64% under command-and-control, 20–30% lower emissions, and 11–12% lower compliance costs—with expansion underway to SO₂, industrial effluents, and new state programs. 

Why it matters: China shows what rapid national action can achieve; India shows how markets + measurement deliver cleaner air at lower cost—an approach now scaling across states and sectors. 

Guests:
Dr. Christa Hasenkopf • Dr. Kaushik Deb(b) • Dr. Lorenzo Trimarchi.
Keywords: air pollution, PM2.5, life expectancy, China, India, cap-and-trade, environmental regulation, EPIC, J-PAL, SO₂, public health, climate co-benefits. 

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

Could market forces be the key to solving one of the world's most pressing public health crises? The evidence from India's groundbreaking air pollution markets suggests a resounding yes.

Air pollution in India has reached catastrophic levels. With 74 of the world's 100 most polluted cities located there, the average Indian loses 3.5 years of life expectancy to dirty air. In Delhi, that number climbs to a staggering 8 years. As the country pursues ambitious economic growth targets, balancing development with environmental sustainability has become its central challenge.

In this enlightening conversation with Dr, Kaushik Deb, Executive Director of EPIC India at the University of Chicago, we explore how emissions trading systems are transforming environmental regulation in unexpected ways. The world's first particulate pollution market in Surat, Gujarat has produced remarkable results: nearly 100% compliance (versus 64% under traditional regulation), 20-30% lower emissions, and 11-12% cost savings for participating industries.

What makes these markets so effective? Modern technology enables continuous emissions monitoring rather than sporadic inspections. Industries that reduce pollution below standards can sell their excess permits, creating financial incentives for environmental stewardship. Perhaps most surprisingly, the market transforms traditionally adversarial relationships between regulators and industry into cooperative partnerships.

The success has sparked rapid expansion throughout India. While the initial market took nearly 15 years to implement, new markets are now being developed in just 18 months. Combined SO2 trading programs across multiple Indian states could soon constitute the world's largest cap-and-trade system. The upcoming Emissions Market Accelerator initiative aims to make these proven solutions available globally as "plug-and-play" systems deployable within months.

Listen to discover how market-based approaches are demonstrating that environmental protection and economic growth can go hand in hand—and how solutions pioneered in the Global South are challenging assumptions about environmental governance worldwide.

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

What we cover

• From Reagan-era cost-benefit rules to a 2007 court case that rejected “carbon = $0”
• The Obama team’s Interagency Working Group and a unified SCC built from leading IAMs
• Trump’s shift to domestic-only damages and 7% discount-rate sensitivities — and what that does to the math
• Biden’s restoration and EPA’s 2023 update: modern damage modules, mortality, and a ~2% near-term discount rate
• Trump's second term executive order which essentially put the SCC at zero.
• The discount-rate intuition: how $1,000 of damage in 100 years becomes $52 (3%), $138 (2%), or $370 (1%) today
• What a better SCC means for agencies, investors, and reciprocity in global climate policy

#ClimateEconomics #Regulation #SCC #PublicPolicy #Podcast

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

We start from 2023 anchors (≈4.7 tCO₂ per person; ≈38 GtCO₂ worldwide), explain SCC and how U.S. administrations have used very different values, and compare with recent EU carbon-permit prices. 

Using a €100/ton example, we translate emissions into ~€500 per person per year and ~3.8% of global GDP, then show how the result scales if you think the SCC is higher or lower. 

We also touch on non-CO₂ gases (raising the average to ~6.7 t CO₂-e per person), big regional differences (China, U.S., India, EU, Africa, South America), and the long view (~1.8 trillion tons emitted to date).

Sources:

* Emission statistics obtained from https://ourworldindata.org/co2-emissions . See the graphs on Annual CO2 emissions,  share of global CO2 emissions and cumulative emissions.

* Population statistics from https://www.worldometers.info/world-population/world-population-by-year/

* World GDP of a 100 trillion https://www.macrotrends.net/global-metrics/countries/wld/world/gdp-gross-domestic-product with a conversion of around 1 dollar to 1 euro in 2023

* SCC: Obama administration’s value used from the reinstatement by Biden adjusted for inflation: https://www.rff.org/publications/explainers/social-cost-carbon-101/

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

We discuss what his research says, why less than 16% of credits were found to be effective, and what this means for future climate policy, especially as the EU considers offsets in its 2040 targets.

Content includes:

01:08 – What are carbon credit offsets? Definitions and categories

04:15 – A brief history of offsets: Kyoto, voluntary markets, and compliance systems

10:40 – The meta-study: what Dr. Probst and his co-authors did, and why

15:58 – Key result: only 16% of credits represented actual emission reductions

18:02 – Wind projects had a 0% effectiveness: they look good on paper but perform poorly on additionality

23:50 – Forest management projects and “adverse selection”

26:24 – Cookstoves: lessons in behavioral assumptions

30:22 – Chemical gas destruction: high efficiency but with potential perverse incentives

33:39 – Policy risks: how offsets could potentially undermine EU goals

37:10 – Article 6.2 vs. 6.4 of the Paris Agreement: Potential and pitfalls

Sources:

* The paper: Probst, B.S., Toetzke, M., Kontoleon, A. et al. Systematic assessment of the achieved emission reductions of carbon crediting projects. Nat Commun 15, 9562 (2024). https://doi.org/10.1038/s41467-024-53645-z. https://www.nature.com/articles/s41467-024-53645-z (free to download)

* Dr. Probst’s website:  https://www.netzerolab.science/

* Politico article providing information on the Commission's proposal to meet up to 3 percentage points of the new target with international carbon credits: https://www.politico.eu/article/eu-comission-climate-target-2036-plan/

#ClimateEconomics #CarbonMarkets #Offsets #ClimatePolicy #Sustainability #ClimateScience #Podcast

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

In this episode, Dr. Christa Hasenkopf breaks down why air pollution is such a silent but devastating force—especially in the Global South—and what can be done to fight it. From real-time data sharing in Mongolia to clean air markets in India, she explains how small interventions can catalyze big change.

Dr. Christa Hasenkopf is the Director of the Clean Air Program at the Energy Policy Institute (EPIC) at the University of Chicago.

We discuss:

• Why PM2.5 (fine particulate matter) is so harmful—and so under-recognized
• How Christa went from studying other planets to helping reduce pollution here on Earth
• The story behind founding OpenAQ, the world’s largest open air quality database
• How publicly accessible data changed the political narrative in places like Beijing and Ulaanbaatar
• EPIC’s Air Quality Life Index (AQLI) and how it connects pollution to life expectancy
• Why countries like Gambia are seeing rapid progress from low-cost, high-impact initiatives
• How philanthropy and global investment are often misaligned in this area with where the need is greatest
• The surprising success of India’s clean air market experiment—and its potential to scale

We also touch on the relationship between air pollution and climate change, how policy can bridge that gap, and why building local trust and capacity is key to long-term success.

This is a wide-ranging, hopeful, and data-driven conversation about one of the most overlooked issues in global health and climate.

🔗 Learn more about EPIC’s Clean Air Program: 

https://epic.uchicago.edu/area-of-focus/clean-air-program/

https://aqfund.energyandpolicy.org

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

We discuss why trade barriers matter for climate adaptation, what makes agricultural labor patterns persistent, and how economic development intersects with environmental vulnerability.

Dr. Nath's site : https://www.ishannath.com/

His paper "Climate Change, the Food Problem, and the Challenge of Adaptation through Sectoral Reallocation" can be downloaded here: 

What We Cover in This Episode:

• The research question: Can farms move toward more temperate regions as the world warms? And what does that mean for global adaptation?
• Threshold temperatures: Why extreme heat—above 29°C (~84°F)—is especially damaging for agricultural productivity.
• Why the Global South is most at risk: We explore how countries that are already hot, poor, and heavily dependent on agriculture are hit hardest by climate change.
• The “food problem”: A key concept explaining why low-income countries remain stuck with large agricultural labor forces despite low productivity.
• Trade limitations: Ishan shares findings on why poor countries import very little food—and why that severely limits their ability to adapt.
• Counterfactual simulations: What happens when trade barriers like tariffs and regulatory frictions are reduced? The results show substantial reductions in climate-related economic losses.
• Why trade matters for adaptation: The conversation highlights how better trade integration could significantly soften the blow of climate change in vulnerable regions.
• Heterogeneous climate impacts: From Northern Europe to India, we discuss how temperature changes affect countries differently, and why wealth and infrastructure matter.
• Policy implications: Beyond emissions reductions, what role should global trade policy play in climate adaptation strategies?

💡 Key Takeaway:

Climate change isn't just an environmental issue—it’s a structural development challenge. If global trade systems remain as they are, many low-income countries may be pushed further into vulnerable, low-productivity sectors like agriculture. But if trade barriers are eased, international markets could play a powerful role in helping these countries adapt.

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

Direct and indirect emissions in Agriculture are responsible for up to 30% of global man-made emissions, yet it's often left out of the climate conversation. Why? Because measuring these emissions accurately is really hard. Dr. Deconinck walks us through the fascinating and complex world of emissions data—from cows burping methane to fertilizer releasing nitrous oxide—and why product-level averages are not sufficient.

We dive into:

• Why farm-level variation in emissions matters way more than most people realize
• The challenges (and importance) of moving beyond averages to granular, farm-specific data
• The rapid rise of tools, databases, and labeling schemes—and the chaos that comes with them
• How programs like Origin Green in Ireland succeeded in gathering farm-level data at scale
• The two biggest gaps: harmonizing reporting standards and improving farm-level tools
• Why getting the measurement right is critical—not just for better policies, but also for businesses and consumers who want to make more sustainable choices

Koen also shares behind-the-scenes insights from his work on the OECD report “Measuring Carbon Footprints of Agri-Food Products: Eight Building Blocks” and why the pace of development in this field has become—yes—fast and furious.

🔗 Link to the report:
Measuring Carbon Footprints of Agri-Food Products

🔬 Also cited:
Poore & Nemecek (2018) – Reducing food’s environmental impacts through producers and consumers, Science, DOI: 10.1126/science.aaq0216

If you’re interested in climate policy, sustainable food systems, or just curious about what it really means when we talk about a product’s "carbon footprint"—this one’s for you.

Thanks for listening,
— Arvid

#agriculture #emissions #carbonfootprint #sustainability #foodsystems #OECD #KoenDeconinck #farmdata #reportingstandards #climatepolicy #greenwashing #OriginGreen #methane #FastAndFurious #climateeconomics

For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com