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Climate cHange mitigAtioN poliCies and Equality: distributional implications for different socio-economic groups

Periodic Reporting for period 1 - CHANCE (Climate cHange mitigAtioN poliCies and Equality: distributional implications for different socio-economic groups)

Reporting period: 2019-01-13 to 2021-01-12

The overarching goal of CHANCE is to contribute to bridging the gap between economic and social goals, through enhancing our understanding of how to foster socially fair and economically efficient climate mitigation policies. CHANCE reduces this gap through relevant multi-regional studies in settings where climate and energy policies are at the core of the current political debate. Through these analyses, identifying the factors which induce regressive policies, CHANCE could guide improvements in the design of policies.
Next, I list the five specific sub-objectives formulated in CHANCE and how they have been undertaken during the reporting period:
(i) to analyse the distributional implications of climate change mitigation policies from a multi-country perspective; I have developed a multiregional distributional impacts between the USA and Spain in the paper: “Distributional Impacts of Low-Carbon Policies in USA and Spain: Does One Size Fit All?” already submitted to a top journal. Also the modelling work I have done is focus to achieve this objective.
(ii) to identify, through analysis of household typologies, which groups are vulnerable to these policies, that is, most prone to bearing the costs of climate protection; In the papers “Distributional Impacts of Low-Carbon Policies in US and Spain: Does One Size Fit All?” and “Who bear the burden of greening electricity?” I have analysed the impacts on different climate protection measures on different household’s typologies.
(iii) to develop databases and methods to link multi-sectoral and multi-regional CGE and MS models; I have been working on the MIT U.S. Regional Energy Policy (USREP) model and on the MIT Emissions Prediction and Policy Analysis (EPPA) model to introduce household microdata in both models. Also I have worked on a Spanish Computable General Equilibrium (CGE) and Microsimulation (MS) model and I have started a European CGE model with multi-households in collaboration with the prof. Christoph Böhringer (Oldenburg University).
(iv) to conduct multi-country distributional analysis in the US-Mexico context; Due to the pandemic, I hadn´t the opportunity to develop the Mexican analysis, but I have developed different analysis for the US and Spain. However, the work developed on the EPPA has been undertaken in a flexible way to be able to introduce Mexican microdata during the return phase.
(v) to extend the tools and approaches developed for the US-Mexico case study to the 28 EU Member States. As I could not progress on the Mexican data, I have tried to progress on the European analysis and tasks programmed for the last year of CHANCE.
Next, I show a summary of the work performed according with the tasks of the different Work Packages (WPs).

WP1: Linking of multi-MIT EPPA and MS models and data
Task 1.1. MIT EPPA modelling. I have been able to work and develop new features in the USREP model and the EPPA model.
Task 1.2. MS modelling. I have worked with US household microdata, as for example data from the Consumer Expenditure Survey (CEX), and also implement micro models in GAMS using this data source.
Task 1.3. Link EPPA and MS model: I have linked the microdata and microsimulation modelling in the USREP model and in a static version of the EPPA model.

WP 2: U.S.-Mexico case study
Task 2.1. Include micro data from Mexico and the U.S. in the macro-micro model. Due to the COVID-19 pandemic and the travel restrictions, I had to postpone the Mexican work on the EPPA model. However, I have introduced U.S. microdata in USREP and EPPA models. Also, I have worked with the Spanish microdata.
Task 2.2. Analyse the interconnected distributional impacts in the U.S. and Mexico. Due to the COVID-19 pandemic and the travel restrictions, I had to postpone the Mexican work on the EPPA model. However, I have developed a multiregional distributional analysis between the U.S. and Spain in the paper: “Distributional Impacts of Low-Carbon Policies in USA and Spain: Does One Size Fit All?”

WP3: Development of methodology in Europe
Task 3.1. Disaggregate the MIT EPPA model to the 28 Member States. In the current version of EPPA model the EU countries are aggregated into a single region. To solve part of this limitation and to be able to develop distributional impacts between European regions, I have started to work on a European CGE model integrating micro household data with the help of the prof. Christoph Böhringer (Oldenburg University).
Task 3.2. Adapt the methodology developed in WP1 to Europe. I have used a similar methodology for a Spanish CGE model and in a European CGE model.

WP 4: EU Case study
Task 4.1. Include European micro data in the macro-micro model. I have integrated the Spanish household microdata into the macro-micro model and also I have been working on the European HBS and EU-SILC data to integrate them into the European CGE.
Task 4.2. Analyse the interconnected distributional impacts in Europe. I have developed a distributional analysis for Spain: “Who Bears the Burden of Greening Electricity?”.

WP 5: Project management
Task 5.1. Screen for ethical issues. I have already reported the possible ethical issues related to the project.
Task 5.2. Draft reports on administrative and resource management. The Periodic Technical Report is part of this Task.

WP 6: Dissemination, communication and exploitation
Task 6.1. Implement dissemination and exploitation activities defined in Section 2.2 of the (DoA). I have been quite active disseminating the activities related to my research. Also the data management plan already submitted is part of this Task.
Task 6.2. Implement communication activities defined in Section 2.3 of the DoA. I have performed several communication activities related with CHANCE.

WP 7: Training and career development
Task 7.1. Elaborate a career development action plan. At the beginning of the outgoing phase I have developed my career action plan.
Task 7.2. Implement training activities. I have performed several training activities I have developed during the outgoing phase.
CHANCE contributes towards some of the most relevant policy objectives that the European Union (EU) and other regions have in the coming years. In the analysis, “Distributional Impacts of Low-Carbon Policies in USA and Spain: Does One Size Fit All?”, we analyse, in the context of the Paris Agreement, the distributional impacts of several climate mitigation policies for the U.S. and Spain. Also in the analysis “Who Bears the Burden of Greening Electricity?” we found that alternative options to finance renewables could have attenuated the regressive impacts of renewable promotion on Spanish households. Finally, CHANCE can contribute to understand the impacts of the EU Green Deal, since I have programmed develop at least one study on the distributional impact of European policies related with the EU Green Deal.
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