MEASURING ECONOMIC POLICY UNCERTAINTY BAKER, SCOTT R.; BLOOM, NICHOLAS; DAVIS, STEVEN J.
The Quarterly journal of economics,
11/2016, Letnik:
131, Številka:
4
Journal Article
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We develop a new index of economic policy uncertainty (EPU) based on newspaper coverage frequency. Several types of evidence—including human readings of 12,000 newspaper articles—indicate that our ...index proxies for movements in policy-related economic uncertainty. Our U.S. index spikes near tight presidential elections, Gulf Wars I and II, the 9/11 attacks, the failure of Lehman Brothers, the 2011 debt ceiling dispute, and other major battles over fiscal policy. Using firm-level data, we find that policy uncertainty is associated with greater stock price volatility and reduced investment and employment in policy-sensitive sectors like defense, health care, finance, and infrastructure construction. At the macro level, innovations in policy uncertainty foreshadow declines in investment, output, and employment in the United States and, in a panel vector autoregressive setting, for 12 major economies. Extending our U.S. index back to 1900, EPU rose dramatically in the 1930s (from late 1931) and has drifted upward since the 1960s.
Consumption-based accounting of CO₂ emissions Davis, Steven J; Caldeira, Ken
Proceedings of the National Academy of Sciences - PNAS,
03/2010, Letnik:
107, Številka:
12
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CO₂ emissions from the burning of fossil fuels are the primary cause of global warming. Much attention has been focused on the CO₂ directly emitted by each country, but relatively little attention ...has been paid to the amount of emissions associated with the consumption of goods and services in each country. Consumption-based accounting of CO₂ emissions differs from traditional, production-based inventories because of imports and exports of goods and services that, either directly or indirectly, involve CO₂ emissions. Here, using the latest available data, we present a global consumption-based CO₂ emissions inventory and calculations of associated consumption-based energy and carbon intensities. We find that, in 2004, 23% of global CO₂ emissions, or 6.2 gigatonnes CO₂, were traded internationally, primarily as exports from China and other emerging markets to consumers in developed countries. In some wealthy countries, including Switzerland, Sweden, Austria, the United Kingdom, and France, >30% of consumption-based emissions were imported, with net imports to many Europeans of >4 tons CO₂ per person in 2004. Net import of emissions to the United States in the same year was somewhat less: 10.8% of total consumption-based emissions and 2.4 tons CO₂ per person. In contrast, 22.5% of the emissions produced in China in 2004 were exported, on net, to consumers elsewhere. Consumption-based accounting of CO₂ emissions demonstrates the potential for international carbon leakage. Sharing responsibility for emissions among producers and consumers could facilitate international agreement on global climate policy that is now hindered by concerns over the regional and historical inequity of emissions.
Net anthropogenic emissions of carbon dioxide (CO
) must approach zero by mid-century (2050) in order to stabilize the global mean temperature at the level targeted by international efforts
. Yet ...continued expansion of fossil-fuel-burning energy infrastructure implies already 'committed' future CO
emissions
. Here we use detailed datasets of existing fossil-fuel energy infrastructure in 2018 to estimate regional and sectoral patterns of committed CO
emissions, the sensitivity of such emissions to assumed operating lifetimes and schedules, and the economic value of the associated infrastructure. We estimate that, if operated as historically, existing infrastructure will cumulatively emit about 658 gigatonnes of CO
(with a range of 226 to 1,479 gigatonnes CO
, depending on the lifetimes and utilization rates assumed). More than half of these emissions are predicted to come from the electricity sector; infrastructure in China, the USA and the 28 member states of the European Union represents approximately 41 per cent, 9 per cent and 7 per cent of the total, respectively. If built, proposed power plants (planned, permitted or under construction) would emit roughly an extra 188 (range 37-427) gigatonnes CO
. Committed emissions from existing and proposed energy infrastructure (about 846 gigatonnes CO
) thus represent more than the entire carbon budget that remains if mean warming is to be limited to 1.5 degrees Celsius (°C) with a probability of 66 to 50 per cent (420-580 gigatonnes CO
)
, and perhaps two-thirds of the remaining carbon budget if mean warming is to be limited to less than 2 °C (1,170-1,500 gigatonnes CO
)
. The remaining carbon budget estimates are varied and nuanced
, and depend on the climate target and the availability of large-scale negative emissions
. Nevertheless, our estimates suggest that little or no new CO
-emitting infrastructure can be commissioned, and that existing infrastructure may need to be retired early (or be retrofitted with carbon capture and storage technology) in order to meet the Paris Agreement climate goals
. Given the asset value per tonne of committed emissions, we suggest that the most cost-effective premature infrastructure retirements will be in the electricity and industry sectors, if non-emitting alternatives are available and affordable
.
We consider several economic uncertainty indicators for the US and UK before and during the COVID-19 pandemic: implied stock market volatility, newspaper-based policy uncertainty, Twitter chatter ...about economic uncertainty, subjective uncertainty about business growth, forecaster disagreement about future GDP growth, and a model-based measure of macro uncertainty. Four results emerge. First, all indicators show huge uncertainty jumps in reaction to the pandemic and its economic fallout. Indeed, most indicators reach their highest values on record. Second, peak amplitudes differ greatly – from a 35% rise for the model-based measure of US economic uncertainty (relative to January 2020) to a 20-fold rise in forecaster disagreement about UK growth. Third, time paths also differ: Implied volatility rose rapidly from late February, peaked in mid-March, and fell back by late March as stock prices began to recover. In contrast, broader measures of uncertainty peaked later and then plateaued, as job losses mounted, highlighting differences between Wall Street and Main Street uncertainty measures. Fourth, in Cholesky-identified VAR models fit to monthly U.S. data, a COVID-size uncertainty shock foreshadows peak drops in industrial production of 12–19%.
Drivers of the US CO2 emissions 1997-2013 Feng, Kuishuang; Davis, Steven J; Sun, Laixiang ...
Nature communications,
07/2015, Letnik:
6, Številka:
1
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Fossil fuel CO2 emissions in the United States decreased by ∼11% between 2007 and 2013, from 6,023 to 5,377 Mt. This decline has been widely attributed to a shift from the use of coal to natural gas ...in US electricity production. However, the factors driving the decline have not been quantitatively evaluated; the role of natural gas in the decline therefore remains speculative. Here we analyse the factors affecting US emissions from 1997 to 2013. Before 2007, rising emissions were primarily driven by economic growth. After 2007, decreasing emissions were largely a result of economic recession with changes in fuel mix (for example, substitution of natural gas for coal) playing a comparatively minor role. Energy-climate policies may, therefore, be necessary to lock-in the recent emissions reductions and drive further decarbonization of the energy system as the US economy recovers and grows.
Accounting for carbon fluxes from land use and land cover change (LULCC) generally requires choosing from multiple options of how to attribute the fluxes to regions and to LULCC activities. Applying ...a newly developed and spatially explicit bookkeeping model BLUE (bookkeeping of land use emissions), we quantify LULCC fluxes and attribute them to land use activities and countries by a range of different accounting methods. We present results with respect to a Kyoto Protocol‐like “commitment” accounting period, using land use emissions of 2008–2012 as an example scenario. We assess the effect of accounting methods that vary (1) the temporal evolution of carbon stocks, (2) the state of the carbon stocks at the beginning of the period, (3) the temporal attribution of carbon fluxes during the period, and (4) treatment of LULCC fluxes that occurred prior to the beginning of the period. We show that the methodological choices result in grossly different estimates of carbon fluxes for the different attribution definitions.
Key Points
We use a spatially explicit model to attribute C fluxes to land use activities
We compare several accounting options for a post‐Kyoto climate agreement
The different choices result in grossly different estimates of carbon fluxes
Abstract
No previous infectious disease outbreak, including the Spanish Flu, has affected the stock market as forcefully as the COVID-19 pandemic. In fact, previous pandemics left only mild traces on ...the U.S. stock market. We use text-based methods to develop these points with respect to large daily stock market moves back to 1900 and with respect to overall stock market volatility back to 1985. We also evaluate potential explanations for the unprecedented stock market reaction to the COVID-19 pandemic. The evidence we amass suggests that government restrictions on commercial activity and voluntary social distancing, operating with powerful effects in a service-oriented economy, are the main reasons the U.S. stock market reacted so much more forcefully to COVID-19 than to previous pandemics in 1918–1919, 1957–1958, and 1968.
Abstract
Achieving net-zero CO
2
emissions has become the explicitgoal of many climate-energy policies around the world. Although many studies have assessed net-zero emissions pathways, the common ...features and tradeoffs of energy systems across global scenarios at the point of net-zero CO
2
emissions have not yet been evaluated. Here, we examine the energy systems of 177 net-zero scenarios and discuss their long-term technological and regional characteristics in the context of current energy policies. We find that, on average, renewable energy sources account for 60% of primary energy at net-zero (compared to ∼14% today), with slightly less than half of that renewable energy derived from biomass. Meanwhile, electricity makes up approximately half of final energy consumed (compared to ∼20% today), highlighting the extent to which solid, liquid, and gaseous fuels remain prevalent in the scenarios even when emissions reach net-zero. Finally, residual emissions and offsetting negative emissions are not evenly distributed across world regions, which may have important implications for negotiations on burden-sharing, human development, and equity.
Increases in the severity and frequency of drought in a warming climate may negatively impact agricultural production and food security. Unlike previous studies that have estimated agricultural ...impacts of climate condition using single‐crop yield distributions, we develop a multivariate probabilistic model that uses projected climatic conditions (e.g., precipitation amount or soil moisture) throughout a growing season to estimate the probability distribution of crop yields. We demonstrate the model by an analysis of the historical period 1980–2012, including the Millennium Drought in Australia (2001–2009). We find that precipitation and soil moisture deficit in dry growing seasons reduced the average annual yield of the five largest crops in Australia (wheat, broad beans, canola, lupine, and barley) by 25–45% relative to the wet growing seasons. Our model can thus produce region‐ and crop‐specific agricultural sensitivities to climate conditions and variability. Probabilistic estimates of yield may help decision‐makers in government and business to quantitatively assess the vulnerability of agriculture to climate variations. We develop a multivariate probabilistic model that uses precipitation to estimate the probability distribution of crop yields. The proposed model shows how the probability distribution of crop yield changes in response to droughts. During Australia's Millennium Drought precipitation and soil moisture deficit reduced the average annual yield of the five largest crops.
Key Points
We develop a multivariate probabilistic model that uses precipitation to estimate the probability distribution of crop yields
The proposed model shows how the probability distribution of crop yield changes in response to droughts
During Australia's Millennium Drought precipitation and soil moisture deficit reduced the average annual yield of the five largest crops
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