Econometric Models to Evaluate Environmental and Spatial Effects of Long-Lasting Policies

Project Information

SPACETIME

Grant agreement ID: 101077168

DOI

10.3030/101077168

EC signature date 10 July 2023

Start date 1 September 2023

End date 31 August 2028

Funded under

• European Research Council (ERC)

Total cost

€ 1 413 500,00

EU contribution

€ 1 413 500,00

Coordinated by

FONDATION JEAN JACQUES LAFFONT,TOULOUSE SCIENCES ECONOMIQUES
France

Periodic Reporting for period 1 - SPACETIME (Econometric Models to Evaluate Environmental and Spatial Effects of Long-Lasting Policies)

Reporting period: 2023-09-01 to 2026-02-28

Summary of the context and overall objectives of the project

Public policies shape how citizens consume energy, use land, and adopt new technologies. The SPACETIME project studies how environmental and spatial policies interact with market forces and individual behaviour. It develops empirical models that combine micro data on choices with general-equilibrium mechanisms to understand how policy affects welfare, emissions, and land use across regions. The research focuses on three main domains. First, the electrification of transport and its link to electricity markets, analysing how electric-vehicle (EV) charging affects power prices, generation costs, and emissions. Second, the functioning of land-protection policies in Europe, assessing whether they effectively preserve vegetation and biodiversity. Third, the role of information in consumer and firm decisions, developing new econometric tools to recover preferences when agents hold different private information. Together, these studies quantify how environmental policies propagate through markets and space, providing scientific foundations for EU strategies on climate neutrality, biodiversity conservation, and sustainable mobility.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

Three major research papers have been completed.
(1) When Will Electric Vehicles Connect to the Grid? builds the first structural equilibrium model linking vehicle and electricity markets. Using German data on hourly power prices, driving behaviour, and charging-station demand, it quantifies how EV charging shifts electricity loads and how time-varying tariffs can lower generation costs and emissions. The study shows that dynamic pricing reduces peak-hour pressure and increases EV adoption with limited environmental side-effects.
(2) Choices and Information develops new econometric methods to estimate decision models when agents rely on heterogeneous and partially unobserved information. These methods improve inference on expectations and uncertainty in applied work, enhancing the credibility of policy evaluation in markets where individuals face incomplete information.
(3) An Evaluation of Protected Area Policies in the European Union provides the first causal assessment of the EU’s large-scale land-protection network over four decades. Using satellite data on vegetation and nightlights with modern difference-in-differences estimators, the paper finds that protection often targets already green, low-density land and has little measurable effect on vegetation or economic activity. The results highlight the role of local political economy and design choices in determining environmental effectiveness.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

SPACETIME integrates detailed behavioural models with large-scale spatial data and modern inference. It links policy design to individual choices and to market-wide feedbacks that shape environmental outcomes. The EV–electricity analysis provides a quantitative benchmark for evaluating transport electrification under time-varying electricity prices, informing regulators on how tariff design can balance grid stability, consumer welfare, and emissions. The information-heterogeneity framework generalises discrete-choice modelling, allowing researchers to estimate how expectations and information gaps affect behaviour in egulated markets. The EU land-protection study establishes new evidence for advanced economies, showing that ambitious conservation targets can deliver minimal ecological gains when local implementation misaligns with central objectives.

Future work extends these models to evaluate how EU climate and biodiversity policies interact across sectors and regions.