In this paper, a dependence-switching copula model is used for the first time to analyse the dependence structure between sectoral equity markets and crude oil prices for India, one of the largest oil importing countries. Specifically, we investigate the dependence and tail dependence for four distinctive states of the market, i.e. rising oil prices—rising equity markets, declining oil prices—declining equity markets, rising oil prices—declining equity markets, and declining oil prices—rising equity markets. Our results reveal that the tail dependence is symmetric (asymmetric) in positive (negative) correlation regimes. Based on the copula results, we estimate the systemic crude oil price risk to different sectors using CoVaR and delta CoVaR. A fleeting positive sectoral CoVaR and delta CoVaR across all sectors implies a time-varying oil price systemic risk. Yet, little difference between CoVaR and VaR across the sectors reveals that a bearish oil market does not add additional systemic risk to a bearish sectoral equity market. The carbon sector is found to be the safe haven investment when both the equity and the oil markets are in a downward phase.

Which renewable energy (RE) policy instrument is most effective in expanding the international diffusion of RE and what is the role of innovation? We consider rich policy and patent data for 189 countries and territories to investigate these diversely debated questions for wind and solar photovoltaic capacities. This allows us, firstly, to contribute to the limited evidence on the effect of RE innovation on RE diffusion and its interrelated influence with RE support policies. Secondly, we can evaluate the disentangled individual policies' effectiveness in a broad instrument-country context. Thirdly, we control for the inherent endogeneity of policy instruments and innovation. We find that RE innovation, which appears to be largely policy-induced, is among the most promising ways to increase RE capacities. The most effective policy instruments tend to be quotas with certificate trading, tendering, and fiscal instruments that provide specific investment support, i.e. investment tax credits and capital subsidies. Less tangible and projectable measures, such as the most commonly implemented sales-related tax reductions and RE targets, are least effective. While interactions between instruments influence the composition of a well-designed policy mix, there are also differences in the policies' effectiveness and role of innovation depending on the countries' level of development.

We examine the energy-food nexus using the dependence-switching copula model. Specifically, we look at the dependence for four distinct market states, such as, increasing oil–increasing commodity, declining oil–declining commodity, increasing oil–declining commodity, as well as declining oil–increasing commodity markets. Our results support the argument that the crash of oil markets and agricultural commodities happen at the same time, especially during crisis period. However, the same is not true during times of normal economic conditions, implying that investors cannot make excess profits in both agricultural and oil markets at once. Furthermore, our analysis suggests that the return chasing effect dominates for all commodities on maximum occasions. The CoVaR and ΔCoVaR results indicate important risk spillover from oil to agricultural markets, especially around the financial crisis.

We examine how different renewable energy support policies affect innovation in solar and wind power technologies. The analysis uses policy and patent data for a large sample of 194 countries and territories. The policy data enables distinguishing between two dimensions of regulation, i.e. design and intensity, and their effects on innovation. The patent data is based on the new Y02E system and covers the period 1990 to 2016, with the more recent years revealing both strong increases and declines in patenting activity. The results show that, firstly, more comprehensive portfolios of renewable energy support policies increase patenting in solar- and wind-power-related technologies. Secondly, this inducement effect is strongest for public RD&D programs, targets, and fiscal incentives. In contrast to previous studies, this paper finds a consistently positive impact of feed-in tariffs and does not detect technology-specific differences in the effectiveness of this policy instrument. Thirdly, the positive effect on patenting activity increases significantly over time, with an increase in duration of the implemented RD&D programs and targets.

We analyze the growth-energy use nexus for South Korea, considering province-level consumption data for both total energy use and the five main energy carriers from 2002 to 2017. Given the importance in the country's environmental initiatives and lack of Korea-specific empirical evidence, our focus lies on the role of technological change in reducing the corresponding energy intensities and related changes induced by the National Strategy for Green Growth launched in 2009. While we decompose the growth effect into technique and composition effects and treat income as endogenous, three additional indicators are used to measure innovation activity. We find that not only the income-induced technique effect, but also trade openness, government environmental expenditures, and in part innovation, reduce the total energy intensity. Interestingly, the effects of innovation and government expenditures have been significantly stronger since 2009, whereas the total energy intensity has not improved during the same period. At the energy carrier level, the importance of the drivers is heterogeneous. The technique effect reduces the oil and electricity consumption intensity in particular, and increases the renewables consumption intensity. Reductions in the coal consumption intensity are driven by increases in government expenditures, innovation activity, and trade openness. Decreasing the natural gas consumption intensity appears difficult to achieve.

This paper analyzes the energy price-employment nexus and contributes to the literature by showing that it is important to decompose the regulatory effect into demand, cost, and factor-shift effects. This is done by means of a cross-country multi-sectoral dataset. The results show that both rising energy prices and shadow prices of energy have no significant effect on net employment when the manufacturing sectors only are analyzed. While finding significant variations across countries, the average employment effects become significantly positive once jobs in the economy as a whole are considered. This change is driven mainly by larger positive cost effects, which more than offset the negative demand effects and reductions in the positive factor-shift effects. Moreover, the paper reveals that the often implemented approach of using a simple regulation regressor, instead of decomposing the employment effect, can result in biased estimates.

International trade and economic development affect air emissions. Previous studies have decomposed their effects into scale, composition, and technique effects. While the scale and composition effects occur through market responses, the technique effect is a policy-stringency influence through the mix of eironmental policies. This study analyzes whether the market or policy-stringency effects are more prominent. Previous studies have been unable to adequately separate the market and policy-stringency effects. To independently measure the technique effect, we use two indicators of policy stringency, i.e. shadow prices of energy and industrial energy prices. These policy stringency measures are treated as endogenous. The effects on six types of air emissions are estimated utilizing a sector-specific, international panel dataset that includes newly industrialized and former transition economies. The empirical results show that the major source of emissions reductions is the policy-stringency effect through carbon-related policies. Pollution offshoring to countries with weaker carbon-related regulation has a minor role in the reduction of air emissions. Keywords: Air pollution, policy stringency, pollution offshoring, energy prices

Can FDI help to reduce regional air pollution emissions in Korea? Given the proclamation of a far-reaching national green growth strategy that requires a shift in public and private iestments, this paper addresses the need for empirical estimates on the eironmental consequences of FDI inflows into Korea. Using a simultaneous equations model the impacts of FDI inflows are decomposed into direct as well as indirect scale, composition, and technique effects. Thereby, the analysis utilizes panel data on six air pollutants in 16 Korean provinces and self-governing cities for the period 2000 to 2011. The estimation results show that FDI inflows concurrently stimulate regional economic growth and reduce air pollution intensities. However, the total level of air emissions mostly remains unchanged. While confirming the findings of the existing national level research on the FDI-growth relationship in Korea, the results are partly contrary to the respective earlier findings on the FDI-eironment nexus. Given Korea's high level of development paired with the aforementioned impact on economic growth and air pollution intensities, foreign iestments are, therefore, regarded as one potential pillar to achieve the goals of the green growth strategy. Keywords:Foreign direct iestments, air pollution, green growth, decomposition analysis, Republic of Korea

Given the ambiguous empirical results of previous research, this paper tests whether support for a climate policy-induced pollution haven effect and the pollution haven hypothesis can be found. Unlike the majority of previous studies, the analysis is based on international panel data and includes several methodological novelties: By arguing that trade flows of dirty goods to less dirty sectors may also be influenced by changes in policy stringency, trade information on primary, secondary, and tertiary sectors are included. In order to clearly differentiate between dirty sectors and sectors with high pollution abatement costs, separate measures for pollution intensity and policy stringency are implemented. For the former, two intensities, namely the sectors’ carbon dioxide emission intensity and the emission relevant energy intensity, are used to identify dirty sectors. For the latter, an internationally comparable, sector-specific measure of climate policy stringency is derived by applying a shadow price approach. Potential endogeneity between climate policy stringency, trade openness and the trade balance is controlled for by employing a dynamic panel generalized method of moments estimator. The results provide evidence for a pollution haven effect that is also present for non-dirty sectors, i.e., a sector’s net imports rise in general if the sector faces an increase in climate policy stringency. Moreover, a stronger pollution haven effect regarding carbon dioxide intensive and emission relevant energy-intensive sectors is revealed. However, no support for the stronger pollution haven hypothesis can be found. Keywords: International trade, pollution havens, carbon leakage, global pollution, eironmental policy stringency, shadow prices

Can FDI help to reduce regional air pollution emissions in Korea? Given the proclamation of a far-reaching national green growth strategy that requires a shift in both public and private iestments, this paper addresses the need for empirical estimates on the eironmental consequences of FDI inflows into Korea. Using a simultaneous equations model the impacts of FDI inflows are decomposed into direct as well as indirect scale, composition, and technique effects. Thereby, the analysis utilizes panel data on six air pollutants in 16 Korean provinces and self-governing cities for the time period 2000 to 2011. The estimation results show that FDI inflows concurrently stimulate regional economic growth and reduce air pollution intensities. However, the total level of air pollution emissions mostly remains unchanged. While confirming the findings of the existing national level research on the FDI growth relationship in Korea, the results are partly contrary to the respective earlier findings on the FDI eironment nexus. Given Korea’s high level of development paired with the aforementioned impact on economic growth and air pollution intensities, foreign iestments are, therefore, regarded as one potential pillar to achieve the goals of the green growth strategy.