The Energy, Environment and Exhaustible Resources Department conducts research and policy advisory work that focuses on:
The research activities of the department are determined by the main challenges following from the protection of the environment, climate change and the scarcity of natural resources as well as environmental goods and services.
The focus of the department’s research in the area climate and exhaustible resources is on the supply-side analysis of the inter-temporal allocation of natural resources. Beginning with Hans-Werner Sinn’s (2008) work on the Green Paradox, the essential role of resource suppliers for the effectiveness of climate policy has become apparent. Theoretical and empirical instruments will be developed that can be used to describe the strategic behaviour of resource owners and resource extracting countries. This behaviour is decisive for the success of climate policy measures. In this context it is also planned to analyse the role that assumptions about, for example, extraction costs, technological progress and substitutability play for extraction decisions and the effectiveness of climate policy. Based on the results of empirical and theoretical research, new political instruments should be developed and policy decision-makers should be provided with quality information on the effectiveness of climate policy instruments.
The department also plans to build up a database on extraction costs and reserves as well as climate policy targets and fundamental energy data. Furthermore, the already existing comparative data base on international institutions and economic regulation (DICE) will be expanded to include data on climate change and energy policy.
In the area of environmental economics, the department’s research mainly focuses on current topics from the environmental sector. Ifo has long-standing experience in the analysis of the environmental sector and has put the emphasis of recent studies on the suppliers of equipment and services in the field of renewable energies, the improvement of energy efficiency and energy saving, creating an intersection with the main research area of energy.
As far as such intersections are concerned, environmental research is focusing more strongly on innovation in the energy sector. Beyond these research activities, the department deals with the consequences of climate change, the analysis of international environmental agreements, as well as research into the topic of water.
This research area is closely related to the research area on climate and exhaustible resources. It mainly deals with the reduction of emissions from the burning of fossil fuels. Another focus is the analysis of energy markets and the energy sector, the evaluation of existing climate policy measures and the development of new climate policy instruments.
In its research the department measures the success of the turnaround in 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 power supply security. For the energy turnaround cannot be assessed from a microeconomic point of view, but calls for a macroeconomic approach.
Another strand of research in the energy area is the analysis of tradable emissions certificates. The European certificate trading scheme ETS represents not only the most important climate policy instrument, but is also the most important energy policy instrument at a European level. The key questions in this case are the success of emissions trading as a policy instrument to date and whether emissions trading alone offers sufficient incentives for restructuring the energy system.
Prof. Dr. Karen Pittel (dept. head)
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