ifo Center for Energy, Climate, and Resources

Climate and Resources

The Center’s research in the area climate and resources focuses on the analysis of the intertemporal allocation of natural resources and the effectiveness of climate policy instruments. Its analysis focuses on incentives to reduce emissions and developments in technology. Technological and economic barriers to adjustments to climate change and its prevention in the form of the international repercussions of climate policy measures, path-dependencies and uncertainty are taken into account. However, analysis of climate and resource policy measures also takes into account reactions seen in resource supply. In recent years the center’s theoretical work has also focused on the emergence of seemingly paradoxical reactions to climate policy measures. There are plans to also pursue this line of research from an empirical point of view in the future. It will also focus more on the strategic and political economy aspects of stranded assets.

The center’s research therefore draws on both control theory and simulation-based methods and econometric approaches. The results of its research serve as a basis for providing decision-makers with information on the effectiveness of climate policy instruments.

The Center has built up a database on resources and energy-related topics, which it plans to continue to expand. Furthermore, the already existing comparative database on international institutions and economic regulation (DICE) is constantly being expanded to include data on climate change and energy policy.

Energy

The energy research area is thematically closely connected to climate and resources, since anthropogenic emissions of pollutants mainly result from the use of fossil fuels. At the core of this research lies the empirical analysis of the transformation of energy systems, energy markets and the energy industry, as well as the efficient design of energy policy. In its research the Center measures the success of energy policy not only in terms of the reduction in CO₂ emissions achieved, but also in terms of economic feasibility, acceptance, environmental compatibility in general, as well as energy supply security. The characteristics of energy supply, as well as behavioural and acceptance aspects on the part of citizens, companies and state institutions create a tension between regionalisation and centralization, which is investigated with a focus on policy implications at a national and regional level. One of the focal points of research is the analysis of electricity markets, but cross-sectoral aspects, and especially the reduction of emissions in the transport sector, are also taken into account.

German energy policy and its impact must be understood in the context of European developments as a whole. The center’s research consequently also focuses on the interaction of national and international policies, developments in technology and CO2 emissions targets at a European level. To further its work in this field, the center uses a model of the European electricity market that provides detailed information on the integration of renewable wind and solar power. To deepen our understanding of transformation processes in the energy system, the model is being continuously developed in cooperation with other universities and research institutes. A key research area in the years ahead will be the improved modelling of technology developments and the flexibilisation of demand. The scenario analyses conducted aim to deepen understanding and improve estimates of the impact of transformational process on the energy sector, and thus make an important contribution to policy advisory work.

Environment

This research area primarily focuses on current issues in environmental economics. The ifo Institute has years of experience in this field and has performed in-depth analyses of suppliers of equipment and services related to the use of renewable energy, of boosting energy efficiency and increasing energy savings in recent years. The Center’s activities in this field overlap with its research into energy.

Other core topics in the field of the environment include the traditional economic implications of climate change, as well as research into issues of water usage and management. These key issues are complemented by the development of methods and indicators to improve the monitoring of the bio-economy.

The FoReSee research project (Fossil Resource Markets and Climate Policy: Stranded Assets, Expectations and the Political Economy of Climate Change) analyzes the interplay between policies to mitigate global climate change and the behavior of various participants in financial and fossil fuel markets.

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Prof. Dr. Christian Traeger, Associate Professor, Department of Economics, University Oslo, Norway

Prof. Maximilian Auffhammer Ph.D., University of California, Berkeley

Prof. Dr. Wolfgang Buchholz, University of Regensburg

Prof. Dr. Cees Withagen, VU University Amsterdam

Dr. Marc Gronwald, Xi’an Jiaotong-Liverpool University

CESifo Area on Energy and Climate Economics