Promotie C. Baccianti

This dissertation consists of four chapters on the intersection between macroeconomics and environmental and energy economics.

The first chapter offers a theoretical and empirical analysis of the mechanisms determining the macroeconomic cost of reducing greenhouse gas emissions for a country. Using an endogenous growth model with multiple and complementary energy end-uses, I show that the diversity in carbon intensity across demands lowers the economy-wide degree of substitution and raises the cost of climate change mitigation. The analysis also highlights a side effect of narrow policy interventions targeting a few sectors. By making the economy less flexible in switching between low-carbon energy and fossil fuels, they make future interventions to limit climate change more costly.

The second chapter is a study on the role of firms’ market power in determining carbon leakage when countries carry out unilateral climate policies in a globalized world. In a two-regions general equilibrium model with heterogeneous product varieties and Cournot competition, non-regulated foreign competitors respond to the unilateral policy by increasing their markups rather than output. This effect, jointly with the exit of the least productive firms, can provoke a reduction of emissions in the non-regulating region and thus increase the effectiveness of unilateral emission regulations.

The third chapter investigates the determinants of aggregate productivity growth in Europe, providing new evidence on the effectiveness of structural reforms. The methodology adopted, combining panel factor modelling with Bayesian model averaging, deals with two issues commonly encountered in this kind of analysis: model uncertainty and the cross-sectional dependence of observations. In a sample of European countries over 1990-2016, the decentralization of collective wage bargaining stands out as a robust determinant of aggregate productivity growth, while real estate investment is associated with weaker productivity dynamics.

The fourth chapter is an empirical analysis of the interaction between electricity self-generation and energy efficiency, using a manufacturing firm-level database for India. As the diffusion of distributed power generation and energy-saving technologies are two key pillars of climate change mitigation worldwide, investigating potential conflicts between the two is warranted. The empirical strategy uses an IV approach that exploits the exogenous change in fuel prices introduced with the 2003-2008 value added tax reform in India. Results suggest that fostering small-scale self-generation of electricity worsens plant-level energy efficiency.

Claudio Baccianti (Florence, Italy, 1985) has a BSc in Economics from the University of Florence and an MSc in Economics from the University of Siena and also graduated with Distinction at the University of Essex receiving a Master degree in Economics and Econometrics. In 2011, he started working on climate policy at the Leibniz Centre for European Economic Research (ZEW), where he specialized in the impact assessment of energy and innovation policies. During this time, he joined the Professional PhD program in Economics at Tilburg University. He was Intern at the International Monetary Fund in the Summer of 2017 and PhD Trainee at the European Central Bank between 2018 and 2019. After working for more than a year as an Economist for a macro hedge fund, he joined the think tank Agora Energiewende as Project Manager EU Sustainable Finance in February 2021.

• Locatie: Cobbenhagen building, Aula
• Promotores: prof. dr. J.A. Smulders, prof. dr. A. Löschel