Young Scholars, New Thinking
Posted Oct 27, 2017 | Blog PostBlog Post
Hello Turning a New Leaf readers! This week we are taking a mini-detour away from nutrition so that I can share with you some exciting research in the clean energy and green tech industry! Last week, I had the amazing opportunity to travel to Edinburgh, Scotland, and attend The Festival for New Economic Thinking, an event hosted by the Young Scholar’s Initiative (YSI), an extension of the Institute for New Economic Thinking (INET). YSI aims to bring organizations and individuals together that seek to improve the way economics is taught, studied and practiced. I got to attend the festival and share some of my research on global water risk, and what I got in return was some excellent and innovative research from fellow young scholars that I just had to share! It’s up to all of us to make the world a greener and cleaner place, and it looks like young scholars are up to the task. Let’s dive in!
Carbon Taxes and Inequality
The first paper I want to share is called, “The Impact of a Carbon Tax on Inequality in the United States,” by Mark Paul and Anders Fremstad. This paper looks at carbon taxes in the US and its impact on household wealth and inequality across the country. Although most are in agreement that carbon taxes curb greenhouse gas emissions, these taxes exasperate inequality in low-income households because a greater share of their total income is spent on carbon-intensive goods. Hence, the tax is deemed regressive in nature. However, this paper modelled that by providing all people with an equal carbon dividend from the carbon tax revenue, the carbon tax actually becomes progressive in nature, minimizes redistribution among households of similar means, mitigates group-based inequalities, and increases welfare for 55 percent of individuals with 84 percent in the bottom half of the distribution. Policy recommendations and ideas from this paper have been used to influence policymakers in California, New York, Maryland and Massachusetts to adopt innovative practices. This is the purest example of exciting work to combat inequality while promoting the protection of the environment!
Carbon Emissions and Missing the 2°C Mark
The next paper that I found fascinating was by Alexander Pfeiffer et al. called “The 2°C Capital Stock for Electricity Generation: Cumulative Committed Carbon Emissions and Climate Change.” The message of his paper is clear, we are waaaaaay passed the 2°C cap for carbon emissions and even a necessary complete decarbonisation of the electricity sector, is not sufficient enough to limit the 2°C increase. The authors argue that even under very optimistic assumptions, where other sectors reduce emissions in line with the 2°C target, no new carbon emitting electricity-producing plants can be built after 2017 for this target to be met. Currently, that is not the case, with some 100 gigawatts of new coal-fired energy capacity expected to be built in Southeast Asia by 2040. Have a look at the paper’s projections and remember that although a 1.5°C rise in global temperature forecasts potential coral reef adaptability to climate, a 9 percent decrease in fresh water around the Mediterranean, and an increase in soy and wheat production; a 2°C increase virtually wipes out tropical coral reefs, doubles the water deficit in the Mediterranean, and plummets the soy and wheat growth advantage by 700 percent. It’s time to be realistic about our current carbon emissions.
Social Farming in Germany
Coming back to agriculture research, Moritz Gallei, a Masters student from Ghent University presented his work on an “Analysis of cross-sectoral cooperation in social farming in Germany.” Social farming in Germany is an initiative that connects individuals who have disabilities and are under government care, with small family farms so that they can work and contribute to the economy, while gaining a sense of fulfillment and ownership over their own lives. These individuals in Germany live within a government-run social service program called ‘sheltered workshops’, and these workshops are connected to small farmers to provide a form of labour for the benefit of both sides. Unfortunately, I could not find Mortiz’s published paper online but I encourage you all to have a look at the different social farming programs throughout the EU and their varied implementation.
The Green Bond and Corporate Borrowing
To finish off on a business and finance note, for the those interested in corporate investment, there was a paper by Micol Chiesa, Suborna Barua, Karin Merle, and Holf Yuen examining “The Surge of Impact Borrowing: A study of magnitude and determinants of the Green Bond supply and its Heterogeneity Across Markets.” The paper unfortunately is in the process of publication and cannot be linked, however, the authors have linked their Festival presentation here. The premise of the paper is to examine the disruption caused by impact investing, specifically examining Green Bonds, a new kind of corporate ‘impact borrowing’. Impact borrowing is a strategy used by corporations to raise their debt finance with the intention of using the proceeds to generate measurable social or environmental impact alongside a financial return. The paper examined Bloomberg corporate data across 8 years from 2010-2017 to look at corporate green bond issuing in an attempt to identify factors that may have accounted for changes in the borrowing size across issuers. I suggest that if you have interest in corporate finance moving forward, this paper and topic is, and will continue to be, an even hotter topic moving forward.
As always, feel free to start a conversation on TruLeaf Twitter or Facebook, and feel free to contact these young scholars directly if you would like to know more about their research!