Work In Progress

An Optimal Distribution of Polluting Activities Across Space

Job Market Paper (5min Video)

Should air quality policies target industries within the largest cities? On the one hand, we should seek to reduce atmospheric pollutants’ emissions in places where most of the population is concentrated. On the other hand, more stringent policies can hurt local industries and targeting the cities that contribute the most economically may decrease welfare. Extending recent quantitative spatial economics models, I analyze these counteracting forces. I find that when the local damages from pollution are not internalized by the industry and workers react to low air quality through migration, the largest cities can be too small. As a result, an optimal set of policies imposes higher emission taxes in these locations relative to the rest of the country. I estimate the model using French data and find that current policies impose higher costs of emissions in larger cities but raising them even higher could achieve welfare gains.

Estimating the Effects of Incomplete Regulation on Regulated Firms and their Competitors: An Application to the EU ETS

Co-authored with Geoffrey Barrows, Raphael Calel & Hélène Ollivier

Shocks to demand and supply often apply unevenly across firms within an industry. When evaluating the impacts of such shocks, researchers often rely on statistical methods that compare directly affected firms to “control” firms in the same industry, but in many cases, these “control” firms are affected by the shock itself via competition on the output market with directly-affected firms. While this point is widely acknowledged, there has been little effort to address it empirically. In this paper, we develop a new method for estimating both the direct effect and the indirect effect of a shock to marginal cost on some firms in an industry when products are differentiated, and firms behave strategically. We apply our method to French manufacturers under the EU ETS regulation. We find that this regulation tended to increase sales of regulated firms and reduce CO2 emission intensity. The results are consistent with the Porter hypothesis: regulation induced cost-saving investments which both lowered emission intensity and increased sales.

Impact of Atmospheric Pollution on Production: Evidence from French Manufacturing Firms

Co-authored with Geoffrey Barrows & Hélène Ollivier

Local atmospheric pollution has adverse effects on workers’ individual health and productivity. However, little is known about the aggregated consequences on the economic performances of the firms where these people work. In this paper we seek to identify such firm and plant-level effects from local pollution episodes. Such estimates may be important from a policy perspective to the extent that they could reveal that economic benefits from air quality policies are larger if economy-wide impacts on production are considered in addition the pollution impact on health. Our approach relies on very disaggregated geographic information on local air quality and plant-level economic outcomes.

Journal Articles

Biomass for energy in the EU – The support framework - Energy Policy, 2019

Co-authored with Manjola Banja, Richard Sikkema, Vincenzo Motola & Jean-François Dallemand

This paper aims to produce a quantitative approach on the overall measures and on public support framework for biomass for energy, based on the EU countries reports under RED and existing literature. The way in which the support for biomass is implemented in the EU energy sector is not similar across EU countries. Feed-in tariffs and feed-in-premiums are still the dominant support schemes for the deployment of bioelectricity, whereas subsidies remain the main support for bioheat. Furthermore, a vast number of EU countries apply mandatory blending quotas for biofuels for transport. The paper shows that biomass for energy has a key role within the EU policy support for RES, in which targets are the main drivers, together with overarching biomass guidelines to anticipate any environmental constraints. Stable support showed the highest effectiveness in the past and remains the key factor for biomass deployment beyond 2020. The renewed targets need to be accompanied by long-term support measures and a commonly shared policy vision. A further harmonization of public bioenergy support towards a single EU cleaner energy market is recommended. This implies four policy actions for all EU countries: in-depth efficiency review, integration with RED-2, compatible sustainability guidelines and local impact assessments.

Support for biogas in the EU electricity sector – A comparative analysis - Biomass and Bioenergy, 2019

Co-authored with Manjola Banja, Richard Sikkema & Vincenzo Motola

This paper aims to present a comparative analysis of biogas electricity deployment in EU countries over the period of 2010–2017. The analysis shows that the deployment of biogas electricity is mainly linked to the moment of the shift in the support framework, the maturity of tenders and the feasibility of long-term objectives. With 200 incentives in place the EU has created favourable conditions to support biogas electricity. Manure and waste are the main feedstocks of biogas electricity in the EU that receive the highest incentives. However, the recent shift towards capacity market mechanism has had an adverse effect in the deployment of biogas electricity. The way in which the biogas is currently valorised, has not been very effective in some EU countries. We found that the EU average growth rate of biogas electricity over 2016–2017 dropped 4 times compared with 2014–2016. Plans/targets have been very supportive in the fast deployment of biogas electricity. Nevertheless, a clear post 2020 picture for renewables is still missing in several EU countries that are risking lagging in biogas electricity deployment. The future of biogas is been seen promising on the upgrade to biomethane as a sustainable input for environment and economy.

An Analysis of Capacity Market Mechanism for Solar Photovoltaics in France - IJSG, 2019

Co-authored with Manjola Banja

The energy policy in France that focuses on energy transition and reduction of greenhouse gases, has provided favourable conditions for the deployment of solar photovoltaics. In September 2018 more than 80% of the expected plan of solar photovoltaics capacity for this year was reached. After 2010 the support for solar photovoltaics in France took the form of capacity market mechanism. This paper aims to provide insight to this shift that brought the highest additional installed capacity of solar photovoltaics in France. The objective of this paper is to provide an indicative analysis on how the capacity market mechanism for solar photovoltaics in France has changed over years and how administrative procedures related to this mechanism have been improved. The analysis shows that this system has been favourable to small scale producers even that lately a tendency is seen to move towards large-scale projects. The system has seen a high level of competition, especially between ground-mounted projects, oversubscribing the required volume with more than 12 times. For each MW solar photovoltaics required through calls for tender, 3.5 MW were offered by the submitted dossiers. We found that in 2017 the average price of tenders for solar photovoltaics almost halved compared with the level this indicator had in 2011. For ground mounted solar photovoltaics projects, the prices decreased by 72%. For rooftop installations the decrease accounted for 60%. Despite the improvements done in administrative procedures, still some barriers are in place influencing the speed of the deployment of solar photovoltaics technology in France.