Pub Date : 2025-12-23DOI: 10.1016/j.eneco.2025.109095
Gian Luca Vriz , Luigi Grossi
Climate change has emerged as a significant global concern that is attracting increasing attention worldwide. Although green bubbles may be examined through a social bubble hypothesis, it is essential not to neglect a “Climate Minsky” moment triggered by sudden asset price changes. The significant increase in green investments highlights the urgent need for a comprehensive understanding of these market dynamics. Therefore, the present paper introduces a novel paradigm for studying such phenomena.
Focusing on the renewable energy sector, change point detection models are employed to identify green bubbles within time series data. Furthermore, search volume indexes and social factors are incorporated into established econometric models to reveal potential implications for the financial system. Inspired by Joseph Schumpeter’s perspectives on business cycles, this study recognizes green bubbles as a “necessary evil” for facilitating a successful transition towards a more sustainable future.
{"title":"Green bubbles: A four-stage paradigm for detection and propagation","authors":"Gian Luca Vriz , Luigi Grossi","doi":"10.1016/j.eneco.2025.109095","DOIUrl":"10.1016/j.eneco.2025.109095","url":null,"abstract":"<div><div>Climate change has emerged as a significant global concern that is attracting increasing attention worldwide. Although green bubbles may be examined through a social bubble hypothesis, it is essential not to neglect a <em>“Climate Minsky”</em> moment triggered by sudden asset price changes. The significant increase in green investments highlights the urgent need for a comprehensive understanding of these market dynamics. Therefore, the present paper introduces a novel paradigm for studying such phenomena.</div><div>Focusing on the renewable energy sector, change point detection models are employed to identify green bubbles within time series data. Furthermore, search volume indexes and social factors are incorporated into established econometric models to reveal potential implications for the financial system. Inspired by Joseph Schumpeter’s perspectives on business cycles, this study recognizes green bubbles as a <em>“necessary evil”</em> for facilitating a successful transition towards a more sustainable future.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"154 ","pages":"Article 109095"},"PeriodicalIF":14.2,"publicationDate":"2025-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145823830","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-23DOI: 10.1016/j.eneco.2025.109097
Prachi Srivastava , Nicholas Bloom , Philip Bunn , Paul Mizen , Gregory Thwaites , Ivan Yotzov
The green transition will require large investments from firms, yet little is known about the scale and drivers of climate-related capital expenditure across the UK economy. To address this gap, we draw on a large, representative survey of UK firms to quantify how businesses expect to adjust their medium-term investment in response to climate change. Over 2023-2026, firms expect climate-related investments to account for 5.5% of total capital expenditure. These investments will be driven by larger firms as well as those in more energy-intensive sectors. The main channels for these investments are switching to green energy sources and improving energy efficiency, and firms plan to finance them primarily using internal cash reserves. Overall, although firms are expecting to invest more resources in adapting to climate change, under reasonable assumptions, these investments are still not sufficient to meet the estimated targets implied by the UK Net Zero Pathway.
{"title":"Firm climate investment: A glass half-full","authors":"Prachi Srivastava , Nicholas Bloom , Philip Bunn , Paul Mizen , Gregory Thwaites , Ivan Yotzov","doi":"10.1016/j.eneco.2025.109097","DOIUrl":"10.1016/j.eneco.2025.109097","url":null,"abstract":"<div><div>The green transition will require large investments from firms, yet little is known about the scale and drivers of climate-related capital expenditure across the UK economy. To address this gap, we draw on a large, representative survey of UK firms to quantify how businesses expect to adjust their medium-term investment in response to climate change. Over 2023-2026, firms expect climate-related investments to account for 5.5% of total capital expenditure. These investments will be driven by larger firms as well as those in more energy-intensive sectors. The main channels for these investments are switching to green energy sources and improving energy efficiency, and firms plan to finance them primarily using internal cash reserves. Overall, although firms are expecting to invest more resources in adapting to climate change, under reasonable assumptions, these investments are still not sufficient to meet the estimated targets implied by the UK Net Zero Pathway.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"154 ","pages":"Article 109097"},"PeriodicalIF":14.2,"publicationDate":"2025-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145822780","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-23DOI: 10.1016/j.eneco.2025.109111
Rohan Best , Madeline Taylor , Raúl Gutiérrez-Alvarez , David Parra
Energy bill pressure likely motivates household investment intentions, but influences could vary based on socioeconomic characteristics. A first possibility is that low-income households, who are more likely to be affected by energy bill pressure, may be more motivated than high-income households to make energy investments. A second possibility is that low-income households may be less likely to intend to invest due to barriers such as perceived unaffordability. We use Australian household survey data from 2017 to 2023 to assess influences of energy bill pressure on intentions for four investments: home batteries, electric vehicles, solar photovoltaic panels, and solar hot water systems. While the first possibility above is commonly mentioned, we instead find that energy bill pressure has a consistently lower influence on intentions for investments by households with a lower socioeconomic status. This finding is consistent across the four investment types. It is also consistent across a range of socioeconomic variables. Our results suggest that policy design should change to give disadvantaged households enhanced opportunities for investments while being responsive to variances in state and territory policies. Our results especially align with policy enhancements helping renters and households with low levels of assets.
{"title":"Energy bill pressure stimulates investment intentions primarily for high-socioeconomic households in Australia","authors":"Rohan Best , Madeline Taylor , Raúl Gutiérrez-Alvarez , David Parra","doi":"10.1016/j.eneco.2025.109111","DOIUrl":"10.1016/j.eneco.2025.109111","url":null,"abstract":"<div><div>Energy bill pressure likely motivates household investment intentions, but influences could vary based on socioeconomic characteristics. A first possibility is that low-income households, who are more likely to be affected by energy bill pressure, may be more motivated than high-income households to make energy investments. A second possibility is that low-income households may be less likely to intend to invest due to barriers such as perceived unaffordability. We use Australian household survey data from 2017 to 2023 to assess influences of energy bill pressure on intentions for four investments: home batteries, electric vehicles, solar photovoltaic panels, and solar hot water systems. While the first possibility above is commonly mentioned, we instead find that energy bill pressure has a consistently lower influence on intentions for investments by households with a lower socioeconomic status. This finding is consistent across the four investment types. It is also consistent across a range of socioeconomic variables. Our results suggest that policy design should change to give disadvantaged households enhanced opportunities for investments while being responsive to variances in state and territory policies. Our results especially align with policy enhancements helping renters and households with low levels of assets.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"154 ","pages":"Article 109111"},"PeriodicalIF":14.2,"publicationDate":"2025-12-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145823831","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-22DOI: 10.1016/j.eneco.2025.109091
Mara Sabina Bernardi , Andrea Cerasa , Luigi Grossi , Fany Nan
This paper introduces a novel methodological framework to detect potentially manipulative behaviors in deregulated electricity markets using robust statistical tools. The work focuses on identifying outlying bidding patterns in daily auction microdata by modeling the shape of supply curves, rather than relying solely on price data, to better capture strategic market behavior. The approach is grounded in robust Functional Principal Component Analysis (FPCA), which enables the detection of anomalies in supply curve shapes while being resilient to outliers. A key innovation lies in applying the skewness-adjusted boxplot of Hubert and Vandervieren (2008) to the residuals from robust FPCA, enhancing sensitivity to asymmetric and extreme behaviors. Crucially, it is shown that the anomalies detected via robust FPCA differ significantly from those identified by classical outlier detection methods applied directly to price series, as the suggested method captures deviations in the underlying strategic behavior of market participants that are reflected in the structure of the supply curves, not necessarily in prices. Applied to the Italian day-ahead market, the method detects supply-curve anomalies that differ substantially from those identified by classical price-based techniques. A comparison with the LTSts and rolling-window filtering approaches confirms the distinct contribution of the proposed method, which identifies a complementary set of suspicious events potentially linked to strategic bidding behavior. The findings provide new tools for regulators to support market integrity and ensure compliance with transparency regulations such as the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT).
{"title":"Robust functional principal component analysis for detecting anomalous behaviors in electricity markets","authors":"Mara Sabina Bernardi , Andrea Cerasa , Luigi Grossi , Fany Nan","doi":"10.1016/j.eneco.2025.109091","DOIUrl":"10.1016/j.eneco.2025.109091","url":null,"abstract":"<div><div>This paper introduces a novel methodological framework to detect potentially manipulative behaviors in deregulated electricity markets using robust statistical tools. The work focuses on identifying outlying bidding patterns in daily auction microdata by modeling the shape of supply curves, rather than relying solely on price data, to better capture strategic market behavior. The approach is grounded in robust Functional Principal Component Analysis (FPCA), which enables the detection of anomalies in supply curve shapes while being resilient to outliers. A key innovation lies in applying the skewness-adjusted boxplot of Hubert and Vandervieren (2008) to the residuals from robust FPCA, enhancing sensitivity to asymmetric and extreme behaviors. Crucially, it is shown that the anomalies detected via robust FPCA differ significantly from those identified by classical outlier detection methods applied directly to price series, as the suggested method captures deviations in the underlying strategic behavior of market participants that are reflected in the structure of the supply curves, not necessarily in prices. Applied to the Italian day-ahead market, the method detects supply-curve anomalies that differ substantially from those identified by classical price-based techniques. A comparison with the LTSts and rolling-window filtering approaches confirms the distinct contribution of the proposed method, which identifies a complementary set of suspicious events potentially linked to strategic bidding behavior. The findings provide new tools for regulators to support market integrity and ensure compliance with transparency regulations such as the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT).</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"154 ","pages":"Article 109091"},"PeriodicalIF":14.2,"publicationDate":"2025-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145813745","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-22DOI: 10.1016/j.eneco.2025.109107
Yudou Yang, Le Wen, Basil Sharp, Sholeh Maani
The design of an emission trading scheme (ETS) critically influences its efficacy in reducing carbon emissions. This study enhances the international discourse by analyzing carbon price volatility in the New Zealand Emission Trading Scheme (NZ ETS), a system distinct for its greenhouse gas emissions targets, direct trade of forestry entitlements by forestry participants in the secondary market, and the allowance for unlimited surrender of these entitlements to meet emission obligations. Utilizing daily time series data from 1 July 2010 to 31 December 2022, we apply ARIMA (p, d, q)-EGARCH (m, n)-X models to evaluate the effects of supply-side, demand-side, and regulatory factors on carbon price volatility in the NZ ETS. The findings reveal: (1) Entitlements exert significant long-term effects on volatility, initially positive due to increased supply followed by negative impacts, consistent with mean reversion theory; (2) Demand-side factors influence carbon price volatility only in the short term due to the stable demand for allowances; (3) Successful auctions and policy announcements related to the supply and demand of tradeable units significantly affect volatility; and (4) Regulatory adjustments to entitlement supply notably alter price dynamics in the NZ ETS. These insights assist policymakers in managing ETSs with substantial potential supplies of carbon credits, helping mitigate volatility risks. The evidence-based conclusions also serve as a valuable reference for Southeast Asian countries and those with abundant forest resources establishing or operating ETSs to meet their climate goals.
{"title":"Carbon price volatility in the New Zealand Emission Trading Scheme","authors":"Yudou Yang, Le Wen, Basil Sharp, Sholeh Maani","doi":"10.1016/j.eneco.2025.109107","DOIUrl":"10.1016/j.eneco.2025.109107","url":null,"abstract":"<div><div>The design of an emission trading scheme (ETS) critically influences its efficacy in reducing carbon emissions. This study enhances the international discourse by analyzing carbon price volatility in the New Zealand Emission Trading Scheme (NZ ETS), a system distinct for its greenhouse gas emissions targets, direct trade of forestry entitlements by forestry participants in the secondary market, and the allowance for unlimited surrender of these entitlements to meet emission obligations. Utilizing daily time series data from 1 July 2010 to 31 December 2022, we apply ARIMA (p, d, q)-EGARCH (m, n)-X models to evaluate the effects of supply-side, demand-side, and regulatory factors on carbon price volatility in the NZ ETS. The findings reveal: (1) Entitlements exert significant long-term effects on volatility, initially positive due to increased supply followed by negative impacts, consistent with mean reversion theory; (2) Demand-side factors influence carbon price volatility only in the short term due to the stable demand for allowances; (3) Successful auctions and policy announcements related to the supply and demand of tradeable units significantly affect volatility; and (4) Regulatory adjustments to entitlement supply notably alter price dynamics in the NZ ETS. These insights assist policymakers in managing ETSs with substantial potential supplies of carbon credits, helping mitigate volatility risks. The evidence-based conclusions also serve as a valuable reference for Southeast Asian countries and those with abundant forest resources establishing or operating ETSs to meet their climate goals.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"153 ","pages":"Article 109107"},"PeriodicalIF":14.2,"publicationDate":"2025-12-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145823833","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-20DOI: 10.1016/j.eneco.2025.109105
Xiaobin Wang , Abudureheman Kadeer , Huanying He
Facing dual pressures from sluggish consumer demand and the “dual‑carbon” goals, this study constructs a synergistic policy framework that integrates carbon quota trading and trade-in subsidies, while innovatively incorporating the dynamic effects of online reputation. Based on game theory and complex systems theory, we establish a manufacturer-led Stackelberg game model and a multi-period dynamic recursive model to unravel the coupling mechanisms through which policies and digital reputation influence supply chain decision-making. Our findings reveal that differentiated pricing strategies are a key driver of complex system dynamics: when traditional fuel vehicles (TFV) adopt conservative pricing while new energy electric vehicles (NEEV) implement aggressive strategies, the system exhibits asymmetric profit oscillations, with the Largest Lyapunov Exponent of 0.48, and the volatility of NEEV direct sales prices far exceeds that of retail channels. To address this, we propose a time-delayed feedback control method, which effectively suppresses chaotic phenomena and enhances the robustness of the supply chain system. These findings provide crucial theoretical foundation and practical insights for policy coordination, dynamic pricing, and stability management in automotive supply chains under the dual‑carbon targets.
{"title":"Complexity analysis of automotive supply chains considering online reputation under dual policies","authors":"Xiaobin Wang , Abudureheman Kadeer , Huanying He","doi":"10.1016/j.eneco.2025.109105","DOIUrl":"10.1016/j.eneco.2025.109105","url":null,"abstract":"<div><div>Facing dual pressures from sluggish consumer demand and the “dual‑carbon” goals, this study constructs a synergistic policy framework that integrates carbon quota trading and trade-in subsidies, while innovatively incorporating the dynamic effects of online reputation. Based on game theory and complex systems theory, we establish a manufacturer-led Stackelberg game model and a multi-period dynamic recursive model to unravel the coupling mechanisms through which policies and digital reputation influence supply chain decision-making. Our findings reveal that differentiated pricing strategies are a key driver of complex system dynamics: when traditional fuel vehicles (TFV) adopt conservative pricing <span><math><mfenced><mrow><msub><mi>v</mi><mn>1</mn></msub><mo><</mo><mn>0.02</mn></mrow></mfenced></math></span> while new energy electric vehicles (NEEV) implement aggressive strategies<span><math><mspace></mspace><mfenced><mrow><msub><mi>v</mi><mn>3</mn></msub><mo>></mo><mn>0.16</mn></mrow></mfenced></math></span>, the system exhibits asymmetric profit oscillations, with the Largest Lyapunov Exponent of 0.48, and the volatility of NEEV direct sales prices far exceeds that of retail channels. To address this, we propose a time-delayed feedback control method, which effectively suppresses chaotic phenomena and enhances the robustness of the supply chain system. These findings provide crucial theoretical foundation and practical insights for policy coordination, dynamic pricing, and stability management in automotive supply chains under the dual‑carbon targets.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"153 ","pages":"Article 109105"},"PeriodicalIF":14.2,"publicationDate":"2025-12-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145796063","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-18DOI: 10.1016/j.eneco.2025.109102
Magnus Merkle , Geoffroy Dolphin
We analyse the impact of carbon price heterogeneity on households in the EU from 2010 to 2020 using a novel dataset that combines carbon pricing policies with household budget survey data and a global multiregional input-output framework. Accounting for both heterogeneity in carbon pricing across emission sources and the indirect effects from inter-industry linkages, we obtain two key findings. First, due to incomplete carbon pricing coverage, household burdens have been lower than previously estimated. Second, carbon pricing incidence across income groups differs not only due to varying carbon intensities of demand but also due to differing expenditure shares on products that benefit from exemptions. In the majority of EU countries, low-income households have on average paid higher prices for the carbon embodied in their consumption than high-income households. Closing the carbon pricing gaps, particularly with regard to emissions embodied in imports, can help equalise burdens.
{"title":"Distributional impacts of heterogenous carbon prices in the EU","authors":"Magnus Merkle , Geoffroy Dolphin","doi":"10.1016/j.eneco.2025.109102","DOIUrl":"10.1016/j.eneco.2025.109102","url":null,"abstract":"<div><div>We analyse the impact of carbon price heterogeneity on households in the EU from 2010 to 2020 using a novel dataset that combines carbon pricing policies with household budget survey data and a global multiregional input-output framework. Accounting for both heterogeneity in carbon pricing across emission sources and the indirect effects from inter-industry linkages, we obtain two key findings. First, due to incomplete carbon pricing coverage, household burdens have been lower than previously estimated. Second, carbon pricing incidence across income groups differs not only due to varying carbon intensities of demand but also due to differing expenditure shares on products that benefit from exemptions. In the majority of EU countries, low-income households have on average paid higher prices for the carbon embodied in their consumption than high-income households. Closing the carbon pricing gaps, particularly with regard to emissions embodied in imports, can help equalise burdens.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"154 ","pages":"Article 109102"},"PeriodicalIF":14.2,"publicationDate":"2025-12-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145784428","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-18DOI: 10.1016/j.eneco.2025.109103
An Pan , Puyu Mi , Xunpeng Shi
The synergy between carbon emission reduction and green expansion (CERGE) serves as a strategic orientation for firms to achieve green transformation. As environmental regulations are increasingly employed to promote such green growth, an important question arises as to how these policies can foster CERGE synergy—particularly by extending their influence from large enterprises to the vast number of smaller firms through supply chain linkages. This study aims to examine how the T10000P, as a command-and-control environmental regulation, influences the synergy between CERGE in the context of China's dual carbon goals and green transition. Using a sample of China's A-share listed companies from 2008 to 2020, this paper examines the impact of the top 10,000 enterprise energy saving program (T10000P) on the synergy between CERGE, measured through a coupling coordination model and assessed with a difference-in-differences approach. Results show that T10000P significantly enhances firms' synergy between CERGE, with stronger effects observed in high-tech and non-heavy-pollution industries. Financing constraints negatively moderate this impact, while alleviation of such constraints strengthens the synergy. Additionally, the supply chain spillover effect of T10000P is asymmetric: upstream firms' participation significantly improves downstream firms' synergy between CERGE, whereas downstream participation does not significantly affect upstream firms. This one-way spillover effect is more pronounced when upstream firms have greater bargaining power and closer ties with downstream firms. The findings provide valuable insights for leveraging key enterprises' leading role in supply chains and optimizing environmental regulations to promote industrial green transformation and sustainable development.
{"title":"From synergy to spread: How environmental regulation is helping Chinese firms achieve low-carbon expansion — and take their supply chains with them","authors":"An Pan , Puyu Mi , Xunpeng Shi","doi":"10.1016/j.eneco.2025.109103","DOIUrl":"10.1016/j.eneco.2025.109103","url":null,"abstract":"<div><div>The synergy between carbon emission reduction and green expansion (CERGE) serves as a strategic orientation for firms to achieve green transformation. As environmental regulations are increasingly employed to promote such green growth, an important question arises as to how these policies can foster CERGE synergy—particularly by extending their influence from large enterprises to the vast number of smaller firms through supply chain linkages. This study aims to examine how the T10000P, as a command-and-control environmental regulation, influences the synergy between CERGE in the context of China's dual carbon goals and green transition. Using a sample of China's A-share listed companies from 2008 to 2020, this paper examines the impact of the top 10,000 enterprise energy saving program (T10000P) on the synergy between CERGE, measured through a coupling coordination model and assessed with a difference-in-differences approach. Results show that T10000P significantly enhances firms' synergy between CERGE, with stronger effects observed in high-tech and non-heavy-pollution industries. Financing constraints negatively moderate this impact, while alleviation of such constraints strengthens the synergy. Additionally, the supply chain spillover effect of T10000P is asymmetric: upstream firms' participation significantly improves downstream firms' synergy between CERGE, whereas downstream participation does not significantly affect upstream firms. This one-way spillover effect is more pronounced when upstream firms have greater bargaining power and closer ties with downstream firms. The findings provide valuable insights for leveraging key enterprises' leading role in supply chains and optimizing environmental regulations to promote industrial green transformation and sustainable development.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"153 ","pages":"Article 109103"},"PeriodicalIF":14.2,"publicationDate":"2025-12-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145836855","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-17DOI: 10.1016/j.eneco.2025.109086
Nima Rafizadeh
Understanding how renewable energy integration affects electricity market efficiency and price formation is an important challenge in energy economics and environmental policy. Negative electricity prices, where generators pay to produce power, now occur with increasing frequency across wholesale markets, yet their economic drivers require better understanding. This paper addresses this gap by developing a theoretical framework linking generator behavior to market outcomes, then testing it empirically using over 14 million observations from New York’s wholesale markets (2010–2022). The theoretical analysis demonstrates that negative prices can achieve welfare-maximizing allocations under operational constraints and production subsidies. The empirical analysis, using binary response and count data models with high-frequency data, identifies a clear hierarchy of drivers: renewable energy integration emerges as primary, with solar energy reducing negative price occurrences while wind energy increases them. Weather conditions rank second in importance, while grid constraints show limited influence, contrary to policy focus on transmission expansion. These findings can inform policy discussions by suggesting that rather than suppressing negative prices through regulatory constraints, policymakers should preserve these efficient price signals while prioritizing technology-specific renewable policies and weather-responsive mechanisms over transmission expansion to enhance investment signals and market stability.
{"title":"The economics of negative price phenomenon in renewable-integrated electricity markets","authors":"Nima Rafizadeh","doi":"10.1016/j.eneco.2025.109086","DOIUrl":"10.1016/j.eneco.2025.109086","url":null,"abstract":"<div><div>Understanding how renewable energy integration affects electricity market efficiency and price formation is an important challenge in energy economics and environmental policy. Negative electricity prices, where generators pay to produce power, now occur with increasing frequency across wholesale markets, yet their economic drivers require better understanding. This paper addresses this gap by developing a theoretical framework linking generator behavior to market outcomes, then testing it empirically using over 14 million observations from New York’s wholesale markets (2010–2022). The theoretical analysis demonstrates that negative prices can achieve welfare-maximizing allocations under operational constraints and production subsidies. The empirical analysis, using binary response and count data models with high-frequency data, identifies a clear hierarchy of drivers: renewable energy integration emerges as primary, with solar energy reducing negative price occurrences while wind energy increases them. Weather conditions rank second in importance, while grid constraints show limited influence, contrary to policy focus on transmission expansion. These findings can inform policy discussions by suggesting that rather than suppressing negative prices through regulatory constraints, policymakers should preserve these efficient price signals while prioritizing technology-specific renewable policies and weather-responsive mechanisms over transmission expansion to enhance investment signals and market stability.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"153 ","pages":"Article 109086"},"PeriodicalIF":14.2,"publicationDate":"2025-12-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145785810","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-12-17DOI: 10.1016/j.eneco.2025.109096
Wei Wan , Chien-Chiang Lee , Hao Liu
By estimating the covariance between bond returns and carbon emission rights returns—referred to as the carbon beta—this paper examines whether and how carbon price risk is incorporated into bond pricing. The findings reveal a negative carbon beta premium in the Chinese bond market. This negative premium becomes more pronounced during periods of rising carbon returns and heightened climate-related attention, providing empirical support for the intertemporal hedging theory. Moreover, the negative pricing effect is stronger for bonds with longer maturities and for firms with better environmental performance, offering a clear basis for selecting target bonds for intertemporal hedging. These results provide new insights into the carbon beta premium and its transmission mechanism in fixed-income markets.
{"title":"Intertemporal hedging and the carbon beta premium: Insights from Chinese corporate bonds","authors":"Wei Wan , Chien-Chiang Lee , Hao Liu","doi":"10.1016/j.eneco.2025.109096","DOIUrl":"10.1016/j.eneco.2025.109096","url":null,"abstract":"<div><div>By estimating the covariance between bond returns and carbon emission rights returns—referred to as the carbon beta—this paper examines whether and how carbon price risk is incorporated into bond pricing. The findings reveal a negative carbon beta premium in the Chinese bond market. This negative premium becomes more pronounced during periods of rising carbon returns and heightened climate-related attention, providing empirical support for the intertemporal hedging theory. Moreover, the negative pricing effect is stronger for bonds with longer maturities and for firms with better environmental performance, offering a clear basis for selecting target bonds for intertemporal hedging. These results provide new insights into the carbon beta premium and its transmission mechanism in fixed-income markets.</div></div>","PeriodicalId":11665,"journal":{"name":"Energy Economics","volume":"153 ","pages":"Article 109096"},"PeriodicalIF":14.2,"publicationDate":"2025-12-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145836853","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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