Climate Economics with Arvid Viaene

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...

In this episode, Berkeley professor Reed Walker discusses his American Economic Review paper with Joe Shapiro on the costs and benefits of U.S. air-pollution regulation—using Clean Air Act offset markets to infer marginal abatement costs —and why the results suggest regulation is often too lenient on the margin . We also touch on his Journal of Political Economy paper on the long-run consequences...

Is U.S. air pollution policy still too lenient – even after decades of regulation? In this episode, I’m joined by Dr. Joseph Shapiro (UC Berkeley, NBER, Energy Institute at Haas) to discuss his recent research using 40 pollution offset markets under the U.S. Clean Air Act. By looking at how much firms actually pay for emission reductions, Joe and his co-authors back out marginal abatement cost cur...

On paper, climate policy sounds simple: you put a price on carbon. Either you tax it, or you cap it and let firms trade. In practice, doing that for one of the world’s biggest economies — as the first mover — is anything but simple. This episode looks at 20 years of the EU Emissions Trading System (EU ETS): how it started, the challenges, the lessons, and where it’s going next. The ETS is the worl...

Air pollution isn’t just a climate co-benefit—it’s the number one threat to human health . In this best-of compilation, we revisit three standout conversations to trace the arc from global impacts to two of the world’s most important case studies: China and India. Both tackled air pollution, but one  In this episode: The global picture (Dr. Christa Hasenkopf, EPIC – UChicago): Why fine particulate...

Marion Kruger, co-founder of Remove, explains how carbon removal technologies are essential for achieving net zero targets by compensating for emissions that are impossible or extremely expensive to eliminate. Carbon removal is what puts the "net" in net zero, and by 2050, we'll need to remove 5-10 gigatons of CO2 annually—creating an industry comparable in size to today's oil...

Did the 2018 US–China trade war make China’s air dirtier and increase its CO2 emissions? This question is not easy ex-ante. On the one hand you have a decrease in production which decreases emissions and pollution. On the other hand, there is more pressure on politicians to relax environmental standards. Notice any similarities with recent events?   In my latest episode, I therefore sit down with...

Find the clean transcripts on my Substack: https://substack.com/@climateeconomicswitharvid Could market forces be the key to solving one of the world's most pressing public health crises? The evidence from India's groundbreaking air pollution markets suggests a resounding yes. Air pollution in India has reached catastrophic levels. With 74 of the world's 100 most polluted cities loc...

Pricing carbon is the backbone of climate cost-benefit analysis in the U.S. If the price is high, stronger environmental rules pay for themselves; if it’s low, they don’t. In this episode, I trace how the social cost of carbon entered federal policy and why the number has shifted between administrations. What we cover From Reagan-era cost-benefit rules to a 2007 court case that rejected “carbon =...