Research
Working Papers
The Distributional Effects of Carbon Pricing: A Global View of Common but Differentiated Responsibilities
M. Le Moigne, S. Lepot, D. Simon, M. Ritel, 2024
Abstract: We use a quantitative international trade model with climate policies to explore the idea of Common but Differentiated Responsibilities (CBDR), a leading principle of climate action. The principle recognizes that low- and middle-income countries are most affected by climate change despite their lower contributions to its causes. We ask what are the consequences for global equity of policies that ignore CBDR and explore the efficiency and feasibility of various policy schemes that comply with it. Our analysis delivers three main results. First, we document that efficient climate policies that ignore CBDR strongly exacerbate between-country inequality. Second, we show that equity can still be achieved with efficient climate policies when they are paired with realistic international transfers that either equalize the costs of carbon taxation or account for historical emission patterns with both types having a modest impact on the population of high- income countries. Third, we show that carbon taxation schemes that rely on heterogeneous pricing with lower taxes for low and middle-income countries do not necessarily lead to fairer outcomes.
To Beef or Not To Beef: Trade, Meat, and the Environment
D. Simon, 2023
Abstract: The agricultural sector is the second largest contributor to greenhouse gas emissions. How can food consumption choices reduce emissions? I estimate a model of meat demand using purchasing data of meat and other protein rich products from a European retailer. I combine the purchasing data with data on production and transport emissions. In several counterfactual exercises, I analyze the reaction of consumers to some popular, supposedly eco-friendly food consumption policies. Contrary to popular belief, I find that buying local increases emissions by around 5% compared to the status quo. While vegetarianism decreases emissions by around 17%, consuming no beef and cheese yields the highest decrease in emissions of around 34%. My results show that consumer behavior can have a large impact on the emissions of food consumption.
Consumption Slowdown after the Great Recession
D. Simon, V. Sulaja, 2022
Abstract: The consumption growth in the US has considerably decreased since the last financial crisis. We argue that this happened due to controls imposed on banks that were facing foreclosure issues. Those banks that faced foreclosure issues have faced controls by government institutions, which increased their costs and decreased their supply of mortgage loans. As a result, counties more exposed to controlled banks faced a slower recovery of house prices and therefore wealth. Using data on employment and consumption we argue that it is the wealth effect originating from bank controls that decreased consumption growth. Banks decrease their mortgage loan origination by issuing lower number of loans and not by decreasing the average amount of loan.
Work in Progress
A Quantitative Analysis of Sustainable Globalization
M. Le Moigne, S. Lepot, R. Ossa, M. Ritel, D. Simon, 2024
Abstract: We analyze the economic effects of optimal climate action induced by a worldwide tax on greenhouse gas (GHG) emissions. We conduct this analysis in the context of a modern quantitative trade model, with which we introduce the concept of environmental comparative advantage. We find that the environmental gains from trade account for 40% of the overall emissions reductions brought about by a worldwide carbon tax. This result is surprisingly robust to limiting carbon taxes to a subset of sectors and regions.