Environmental economics

Impact of Climate Change and adaptation measures

Climate change is expected to increase the frequency of disasters (sturm surge, inundation, heavy rain, heat waves). Therefore adaptation measures will become more important. We study adaptation measures to reduce the impact of river or coastal flooding in cities in a spatial computable general equilibrium model (SCGE). A major result is the curve of the negative relation between costs of investment and the reduction of damages (benefits) measured in welfare terms. We add the results of over 100 cost-benefit studies from all over the world. These confirm our finding of a negative benefit-to-cost curve of adaptation measures.

Hirte G, Nitzsche E, Tscharaktschiew S (2018): Optimal adaptation in cities  Land Use Policy, 73, 147--169.

Climate change is expected to lower output in a mainly rain fed agriculture environment that can be find in many Least Developed Countries like Ethiopia. We study the expected impact of climate change on the Ethiopian Economy and the economy-wide effects of public adaptation measures in a computable general equilibrium (CGE) study for Ethiopia that is linked with findings of two crop-growth models.  These results in pressure on the public budget, impacts manufacturing and services, as well as urban economies.

Yalew AW, Hirte G, Lotze-Campen H, Tscharaktschiew S (2018): Climate Change, agriculture, and economic development in Ethiopia  Sustainability, 10(10), 3464.

Fees for reducing CO₂-Emissions

There are different possibilities to determine fees for the reduction of CO2-emissions. We discuss these fees. CO2-emissions can be reduced by 1 to 11 % when urban traffic is taxed by a Pigouvian tax. If congestion costs are considered, the effect can be even higher.

Tscharaktschiew, S. and G. Hirte (2010): The Drawbacks and Opportunities of Carbon Charges in Metropolitan Areas - A Spatial General Equilibrium Approach, Ecological Economics, 70(2), pp. 339-357.

Optimal gasoline tax

Taxes on gasoline seldom lead to an efficient allocation in the market of motorized individual traffic. This article looks at the effect of e-mobility on this allocation. A gasoline toll which is too low leads, together with governmental incentives to buy e-mobiles, to a decreasing difference between optimal tax and current tax.

Tscharaktschiew, S., (2015): How much should gasoline be taxed when electric vehicles conquer the market? An analysis of the mismatch between efficient and existing gasoline taxes under emerging electric mobility. Transportation Research Part D: Transport and Environment 39, S. 89-113.

However, American cities are heterogeneous there is a low divergence of gasoline taxes. We examine if this low difference emerges because of efficiency reasons. The results show that the tax is generally too low and a greater divergence could lead to a higher corporate wealth.

Hirte, G. and S. Tscharaktschiew (2015): Optimal Fuel Taxes and Heterogeneity of Cities. Review of Regional Research 35, pp. 173-209.

Optimal electricity subventions

This article deals with the question if electricity subventions for promoting e-mobility are reasonable. We use a regional equilibrium model to calculate the level of electricity taxes. The results show that electricity for e-mobility should be taxed instead of subsidised, independent of varying input parameters.

Hirte, G. and S. Tscharaktschiew (2013): The optimal subsidy on electric vehicles in German metropolitan areas, Energy Economics, 40, pp. 515-528.