The economics of energy transitions, climate policy and the cost of (in)action

Climate change has the potential to severely impact the quality of life of people, animals, vegetations and ocean life in the near future. To face these challenges, societies need to adopt a justifiable mix of mitigation, adaptation, and development policies. The ENR group applies the concepts of environmental and resource economics to study the economic and climate impacts of policy responses to climate change.

The Environmental Economics and Natural Resources Group (ENR) aims to contribute to a better understanding of the economic problems related to reducing greenhouse gas emissions, and the economic trade-offs on the pathway towards low-carbon and well-adapted societies. In order to do so, we perform institutional and economic analyses on four specific topics. We use extended neoclassical micro and macroeconomic models to study the decoupling of fossil fuels and economic growth. We additionally use micro-economics, game theory and econometrics for the analysis of climate policy designs and the assessment of its climate and welfare impacts. The application and development of concepts of circular economy and socio-ecological systems help to further develop integrated environmental-economic models that are used to study the impacts of climate change on global food security. Lastly, there is a specific focus on developing methods for the estimation of appropriate social  discount rates that are fundamental in the application of social cost-benefit analysis.


Key publications

  • Indrajaya, Y., E. van der Werf, H.P. Weikard, F. Mohren, and E.C. van Ierland, 2016. The Potential of REDD+ for Carbon Sequestration in Tropical Forests: Supply Curves for Carbon Storage for Kalimantan, Indonesia. Forest Policy and Economics
  • Zhu, X., M. Moriondo, E.C. van Ierland, G. Trombi, and M. Bindi, 2016. A model-based assessment of adaptation options for Chianti wine production in Tuscany (Italy) under climate change. Regional Environmental Change 16:85-96
  • Weikard, H.P. and R. Dellink, 2014. Sticks and Carrots for the design of international climate agreements with renegotiations. Annals of Operations Research 220(1):49-68