Climate Economics with Arvid Viaene

How much can farmers adapt to climate change? In this episode, I speak with professor Andy Hultgren about his Science paper on the impacts of climate change on global agriculture, with a particular focus on adaptation. The paper uses a massive global dataset to estimate how farmers actually respond to climate, rather than assuming they adapt optimally. The results are both encouraging and worrying...

What is actually happening in Brussels right now on the EU ETS and CBAM? In this episode, I speak with climate reporter Rebecca Gualandi about the live political process behind some of Europe’s most important climate policies. We discuss the current revision of the EU Emissions Trading System, the expansion of CBAM, and the different political and economic pressures shaping both files. Rebecca exp...

Solar power has become dramatically cheaper. So why is renewable energy still expanding much more slowly in some countries than in others? In this episode, I speak with Nicholas Ryan about his paper Holding Up Green Energy: Counterparty Risk in the Indian Solar Power Market . The paper studies a simple but important problem: investors may be reluctant to build solar projects if they are not confid...

How did economists learn to put a price on climate change? In this solo episode, I tell the story of William Nordhaus and the development of the DICE model, one of the foundational models in climate economics. We trace the journey from Nordhaus’s early work on energy models, through his first attempts to connect the economy and the climate, to the breakthrough that eventually became DICE: the Dyna...

What happens if firms simply do not comply with a carbon market? In this episode, I speak with Frank Venmans about his paper “Policing Carbon Markets” , which studies compliance and enforcement in the EU Emissions Trading System. The headline result is striking: compliance is extremely high, at around 99%. But the standard economic explanation — firms comply because they fear fines and enforcement...

What is the social cost of carbon, and why do estimates vary so widely? In this episode, I speak with professor Frances Moore about her paper synthesizing nearly 150 studies on the social cost of carbon. We discuss how the literature has evolved, why the distribution of estimates has such a long right tail, and why experts often underestimate the average value found across published studies. Fran...

When economists model climate change, they often focus on how rising greenhouse gas emissions increase global temperatures and create economic damages. But the climate system is not always smooth or linear. Some systems may cross tipping points : thresholds beyond which change becomes abrupt, irreversible, or self-reinforcing.  In this episode, I speak with Dr. Gernot Wagner , a climate economist...

In this episode, I cover why you can likely be a bit more optimistic about climate change than you currently because of three reasons: increase in the coverage of emissions by carbon pricing, the increase in average carbon price, and developments like CBAM. This episode is based on the World Bank Report "State and Trends of Carbon Pricing 2026", available at https://www.worldbank.org/en/...

In this episode, I speak with Adam Brzezinski about his paper on narrative entanglement and what it reveals about climate politics. We discuss why politicians often bundle together very different claims when talking about climate policy, presenting it as either good for both the environment and the economy or bad for both, even when those effects are factually separate. Adam explains how he and Lu...

Sometimes you hear: “we should stop subsidizing dirty industries.” But are we actually doing that—and how big is it? In this episode, I’m joined (again) by Professor Joe Shapiro (UC Berkeley) to discuss his paper “The Environmental Bias of Trade Policy” (QJE, 2021). Joe’s core finding is striking: dirty industries tend to face lower trade protection, while cleaner industries face higher trade prot...

A lot of climate economics focuses on carbon pricing and carbon markets. But what happens when firms don’t face an explicit cap on emissions? Why do some companies make real operational changes, while others focus on pledges and disclosure? In this episode, I’m joined by Dr. Lily Hsueh to discuss her book Corporations at Climate Crossroads: Multi-Level Governance, Public Policy, and Global Climate...

The EU ETS is up for review again in 2026, but the debate is noisy: volatile permit prices, politically sensitive energy costs, and lots of claims about whether the system is being “weakened” or “strengthened.”  If you listened to the two-part EU ETS primer with Professor Edwin Woerdman, this episode is the real-time application : what’s actually happening inside EU climate policy right now.  My g...

This is Part 2 of my conversation with Professor Edwin Woerdman on the EU ETS. In Part 1, we covered the core mechanics of cap-and-trade—and why “2039” is an arithmetic consequence of the linear reduction factor.  In Part 2, we tackle the moving part that keeps returning to headlines whenever prices move: the Market Stability Reserve (MSR) —which Edwin calls the ETS “vacuum cleaner.” We discuss wh...

The EU Emissions Trading System is back in the spotlight. Permit prices have moved, energy prices are politically sensitive, and in 2026 the ETS is up for review. But in the public debate, a lot of the confusion comes from the basics: what does the ETS cover, how does it work, and what are the key building blocks? In this episode, I’m joined by Professor Edwin Woerdman (University of Groningen), a...

Europe has pioneered carbon pricing through the EU ETS—and now through CBAM. But even the best-designed climate policy runs into a hard constraint: trade-offs are real , and public support can evaporate if the costs are hidden or moralized.  In this episode, I’m joined by Dr. Luis Garicano (LSE professor; former Member of the European Parliament), who argues for a more honest climate policy conver...

In this episode, I speak with Dr. Alec Brandon of Johns Hopkins Carey Business School about one of the most interesting questions in behavioural economics and climate policy: when do nudges actually persist? A common example is the home energy report: a letter that tells households how their electricity use compares with that of their neighbours. These reports have been widely used by energy provi...

In Part 2 of my conversation with Richard Tol, we move from model structure to policy use. We discuss the social cost of carbon, how the Obama-era EPA worked with FUND, DICE, and PAGE, and why Tol thinks the process of understanding a model matters as much as running it. We also talk about why integrated assessment models are often misunderstood, why debates around damage functions get so heated,...

In this episode, I speak with Richard Tol about the origins of the FUND integrated assessment model and why its structure matters for climate economics. We start with the basic question: what is an integrated assessment model actually for? From there, Richard explains how FUND was built in the early 1990s, why it took a different path from models like DICE and PAGE, and why sector-by-sector damage...

Voluntary carbon offsets are often discussed on the supply side —quality, additionality, adverse selection. In this episode, we go to the demand side : what do people actually pay for carbon mitigation when it shows up as a real choice at checkout?   My guest is Matthias Rodemeier (Assistant Professor of Finance, Bocconi University), co-author of the paper “Willingness to Pay for Carbon Mitigation...

CBAM is simple conceptually, but very hard to put into practice. Turning CBAM into a working system requires something the EU doesn’t naturally have for global supply chains: credible, product-level emissions data , verified across jurisdictions. In Episode #19 , I’m joined by Pauline Miquel , a policy expert who has been tracking CBAM’s fast-moving details and its implications for importers. We d...

Climate policy faces a built-in incentive problem: countries bear the costs of domestic regulation, while the benefits of lower CO₂ are shared globally. One proposed solution is a Carbon Border Adjustment Mechanism (CBAM) — charging imports a carbon cost comparable to domestic producers (with credits for carbon prices already paid abroad).  In this episode, I’m joined by Kimberly Clausing to discu...

International carbon credits are back in the policy conversation—especially after the EU’s new 2040 proposal reopened the question of whether (and how) Paris Agreement Article 6 credits might play a role. But “offsets” are a loaded term for a reason: past systems created large volumes of credits, and a recurring critique is that too many didn’t represent real, additional emissions cuts. So what is...

If you think carbon taxes and cap-and-trade are basically the same thing, this episode might change your mind. For Episode 16, I’m joined by Jeroen van den Bergh (ICREA Research Professor at ICTA-UAB Barcelona) to unpack why carbon markets (ETS / cap-and-trade) may outperform carbon taxes, especially once you take bounded rationality seriously. We discuss: Why the EU ETS scales across borders more...

With the end of the year approaching, it is time to take stock and reflect on the past 14 episodes. I present lessons and takeaways from each and discuss some upcoming episodes. For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

 We talk a lot about the “right” climate policies—carbon pricing, clean investment, regulation. But there’s a step before all of that: politics. Who wins elections. What voters actually do—not just what they say in surveys. And how politicians reposition when the climate gets hotter and the economy starts to transition. Today’s episode asks three concrete questions: When a place experiences unusua...