Climate Economics with Arvid Viaene

Arvid Viaene

A research-focused podcast on the economics of climate change and air pollution. Episodes are released every two weeks on Tuesday at 6 am CET.  Episodes will be either expert interviews or solo explorations of key issues. Hosted by Dr. Arvid Viaene, a climate economist with a PhD from the University of Chicago. He has done research on the impacts of climate change on agriculture and mortality. His research on climate-related mortality has been published in The Quarterly Journal of Economics, and he has advised the European Commission on the impacts of climate policy on firm competitiveness.

  1. 3d ago

    #33 Dr. Frances Moore – From $130 to $280 per Ton: Rethinking the Social Cost of Carbon

    What is the social cost of carbon, and why do estimates vary so widely? In this episode, I speak with professor Frances Moore about her paper synthesizing nearly 150 studies on the social cost of carbon. We discuss how the literature has evolved, why the distribution of estimates has such a long right tail, and why experts often underestimate the average value found across published studies. Fran also explains how the paper combines a large literature review, an expert survey, and a machine-learning model to construct a new “synthetic” social cost of carbon distribution. The result is striking: while the raw literature has a median estimate of around $40 per ton and a mean of roughly $130, the synthetic distribution shifts those figures to around $180 and $280 per ton. We also discuss: the difference between level damages and growth-rate damageswhy discounting remains so importanthow tipping points and other structural modeling choices affect estimatesthe influence of models such as DICEwhy assigning climate damages a value of zero is inconsistent with the evidenceA useful conversation for anyone interested in climate economics, cost-benefit analysis, or how policymakers should value the damages caused by carbon emissions. Links: Transcript: https://www.climateeconomicswitharvid.com/p/33-dr-frances-moore-dr-frances-moore F.C. Moore, M.A. Drupp, J. Rising, S. Dietz, I. Rudik, & G. Wagner, Synthesis of evidence yields high social cost of carbon due to structural model variation and uncertainties, Proc. Natl. Acad. Sci. U.S.A. 121 (52) e2410733121, https://doi.org/10.1073/pnas.2410733121 (2024).  Frances’ site: https://franmoore.faculty.ucdavis.edu/ Related episodes: ·      #6 From $0 to $190: How U.S. Presidents Have Priced a Ton of CO₂: https://www.buzzsprout.com/2412056/episodes/17723637 ·      #21 Dr. Richard Tol on FUND, Climate Damages and Why Adaptation Matters: https://www.buzzsprout.com/2412056/episodes/19410124 ·      #32 Dr. Gernot Wagner: Why Tipping Points Matter: https://www.buzzsprout.com/2412056/episodes/19410124 For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

    #33 Dr. Frances Moore – From $130 to $280 per Ton: Rethinking the Social Cost of Carbon

  2. Jul 28

    #32 Dr. Gernot Wagner — Why Tipping Points Matter in Climate Economics

    When economists model climate change, they often focus on how rising greenhouse gas emissions increase global temperatures and create economic damages. But the climate system is not always smooth or linear. Some systems may cross tipping points: thresholds beyond which change becomes abrupt, irreversible, or self-reinforcing.  In this episode, I speak with Dr. Gernot Wagner, a climate economist at Columbia Business School and faculty director of the Climate Knowledge Initiative. Gernot has written widely on climate risk, policy, and technology, including books such as Climate Shock and Geoengineering: The Gamble.  We discuss Gernot’s research on how tipping points can be incorporated into climate-economic models. These include ice sheet collapse, permafrost carbon release, Arctic sea ice loss, AMOC slowdown, and Amazon rainforest dieback.  A central result from the paper is that tipping points can raise the social cost of carbon by roughly 25% to 50%, with a large right tail: there is a meaningful chance that tipping points could double or even triple the estimated social cost of carbon.  We also discuss why tipping-point damages are uneven across regions, why some effects are difficult to model, how the literature has evolved since the paper, and why tipping points should not distract us from the “slow burn” damages of climate change such as heat, productivity losses, mortality, and morbidity.  In this episode What climate tipping points are and why they matter for economicsExamples: Greenland and West Antarctic ice sheets, permafrost, Arctic sea ice, AMOC, and Amazon diebackHow tipping points can be incorporated into integrated assessment modelsWhy tipping points increase the social cost of carbonWhy tail risks matter as much as central estimatesWhy some tipping-point impacts are highly regionalHow methane and faster warming affect tipping-point risksWhy “slow burn” damages are still central to climate economicsIf you want to understand why climate risk is not just about gradual warming, but also about uncertainty, irreversibility, and tail risks, this episode is for you. Paper: S. Dietz, J. Rising, T. Stoerk, & G. Wagner, Economic impacts of tipping points in the climate system, Proc. Natl. Acad. Sci. U.S.A. 118 (34) e2103081118, https://doi.org/10.1073/pnas.2103081118 (2021). https://www.pnas.org/doi/10.1073/pnas.2103081118 For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

    #32 Dr. Gernot Wagner — Why Tipping Points Matter in Climate Economics

  3. Jul 14

    #31 A Cautious Case for Climate Optimism: The Increase in Carbon Pricing

    In this episode, I cover why you can likely be a bit more optimistic about climate change than you currently because of three reasons: increase in the coverage of emissions by carbon pricing, the increase in average carbon price, and developments like CBAM. This episode is based on the World Bank Report "State and Trends of Carbon Pricing 2026", available at https://www.worldbank.org/en/publication/state-and-trends-of-carbon-pricing For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

    #31 A Cautious Case for Climate Optimism: The Increase in Carbon Pricing

  4. Jun 30

    #30 Dr. Adam Brzezinski –How Narratives Shape EU Climate Policy: Trade-offs, Voters, and the Politics of the Green Deal

    In this episode, I speak with Adam Brzezinski about his paper on narrative entanglement and what it reveals about climate politics. We discuss why politicians often bundle together very different claims when talking about climate policy, presenting it as either good for both the environment and the economy or bad for both, even when those effects are factually separate. Adam explains how he and Luis Garicano study this using speeches from the European Parliament, classified with large language models, and how Russia’s invasion of Ukraine provides a real-world test of what happens when the economic costs of climate policy suddenly become more salient. We talk about: what “narrative entanglement” meanswhy politicians often avoid talking about trade-offshow voter psychology and motivated reasoning shape climate narrativeswhat changed in European climate discourse after the energy shock of 2022how shifts in narratives relate to actual voting on climate policyThis is a fascinating conversation about the politics behind climate policy and why the stories politicians tell can matter just as much as the policies themselves. For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

    #30 Dr. Adam Brzezinski –How Narratives Shape EU Climate Policy: Trade-offs, Voters, and the Politics of the Green Deal

  5. Jun 16

    #29: Dr. Joseph Shapiro – The $800 billion Implicit Subsidy for Dirty Industries Due to Trade Policy

    Sometimes you hear: “we should stop subsidizing dirty industries.” But are we actually doing that—and how big is it? In this episode, I’m joined (again) by Professor Joe Shapiro (UC Berkeley) to discuss his paper “The Environmental Bias of Trade Policy” (QJE, 2021). Joe’s core finding is striking: dirty industries tend to face lower trade protection, while cleaner industries face higher trade protection—a pattern that appears across countries, years, and even non-tariff barriers.  Joe then translates that pattern into an intuitive metric: if you interpret existing trade policy as a carbon tariff, it looks like an implicit carbon subsidy of around -$100 per ton of CO₂ (roughly -$85 to -$120/tCO₂) or  $550 to $800 billion dollars per year. In other words, goods with higher embedded emissions often face less trade protection—trade policy gets the magnitude “about right,” but the sign wrong.  We unpack what drives this: tariff escalation linked to “upstreamness” (upstream, commodity-like inputs tend to be dirtier and receive lower protection; downstream consumer goods are cleaner and receive higher protection).  Finally, Joe walks through his model-based simulations showing that harmonizing protection between clean and dirty goods could modestly raise GDP while meaningfully reducing global emissions.  In this episode The key empirical fact: dirty industries have low tariffs; clean industries have high tariffs The implied magnitude: ~-$100/tCO₂ “implicit carbon tax” embedded in trade policy The mechanism: upstreamness → tariff escalation → environmental bias What the simulations show when you “flatten” the bias across sectors A surprising map result: countries with strong climate reputations can still have trade policy that tilts toward dirtier goods If you care about CBAM, industrial policy, or the political economy of decarbonization, this episode is a powerful reminder: trade policy can be climate policy—even when nobody intended it. For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

    #29: Dr. Joseph Shapiro – The $800 billion Implicit Subsidy for Dirty Industries Due to Trade Policy

  6. Jun 2

    #28: Dr. Lily Hsueh - Corporations at Climate Crossroads: What Drives Real Emissions Cuts

    A lot of climate economics focuses on carbon pricing and carbon markets. But what happens when firms don’t face an explicit cap on emissions? Why do some companies make real operational changes, while others focus on pledges and disclosure? In this episode, I’m joined by Dr. Lily Hsueh to discuss her book Corporations at Climate Crossroads: Multi-Level Governance, Public Policy, and Global Climate Action. Lily argues that corporate climate behavior is shaped by a nested structure of governance: what happens inside the firm (leadership, incentives, organizational capabilities) interacts with domestic public policy and top-down global norms.  We talk about how to distinguish symbolic climate action from substantive emissions reductions, why managerial authority matters (data collection is not the same as decision power), and how domestic policy signals can change firm behavior. Lily also explains how she uses the Clean Power Plan as a quasi-experimental shock to identify mechanisms—and why “disclosure” isn’t enough without verification and accountability.  What we cover Why it’s misleading to treat firms as “unitary actors” (internal politics and incentives matter) How managerial capacity and complementary capabilities shape real climate outcomes The difference between pledges, disclosure, and measurable emissions reductions How domestic regulation and global norms influence corporate strategy Why corporations can engage and obstruct at the same timeWhy the next step is disclosure → verification → accountabilityLinks Dr. Lily Hsueh’s website: https://www.lilyhsueh.com Open-access book (MIT Press): https://direct.mit.edu/books/oa-monograph/6016/C For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

    #28: Dr. Lily Hsueh - Corporations at Climate Crossroads: What Drives Real Emissions Cuts

  7. May 19

    # 27 Jos Cozijnsen - The EU ETS Is Here to Stay: The MSR Debate, Price Controls, and the 2040 Package

    The EU ETS is up for review again in 2026, but the debate is noisy: volatile permit prices, politically sensitive energy costs, and lots of claims about whether the system is being “weakened” or “strengthened.”  If you listened to the two-part EU ETS primer with Professor Edwin Woerdman, this episode is the real-time application: what’s actually happening inside EU climate policy right now.  My guest is Jos Cozijnsen, a Dutch lawyer and long-time expert on carbon markets and international climate policy. He has worked on emissions trading since the 1990s, including the Kyoto era, and remains closely involved in today’s debates on ETS design, Article 6, and carbon markets.  In this episode we discuss: What an “EU ETS review” really means—and why geopolitics is changing the context The EU’s recent climate amendment and what it implies for the 2040 target packageThe MSR and why proposed changes are controversial (and detail-dependent) Why price controls like a corridor are politically tempting—and technically complicated Flexibility on the path forward: free allocation, removals, and possible Article 6 credits Why Jos calls the ETS a “docking station” for linking mechanisms over time If you want a clear sense of what is substance versus signaling in the ETS debate—and what the next phase of EU carbon markets could look like—this episode is for you. You can find many informative blog posts from Jos here:  https://www.emissierechten.nl/  One such article is exonerating effects of hte EU ETS https://www.emissierechten.nl/column/ex-lege-libertas-de-vrijwarende-werking-van-het-eu-emissiehandels-systeem/ For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

    # 27 Jos Cozijnsen - The EU ETS Is Here to Stay: The MSR Debate, Price Controls, and the 2040 Package

  8. May 12

    #26 Dr. Edwin Woerdman - The EU ETS in 2026: MSR, Economic (In-)Efficiencies and What Might Change

    This is Part 2 of my conversation with Professor Edwin Woerdman on the EU ETS. In Part 1, we covered the core mechanics of cap-and-trade—and why “2039” is an arithmetic consequence of the linear reduction factor.  In Part 2, we tackle the moving part that keeps returning to headlines whenever prices move: the Market Stability Reserve (MSR)—which Edwin calls the ETS “vacuum cleaner.” We discuss why it was created, how it changes auction supply, why its cancellation rules matter, and why the Commission is now reconsidering parts of it in the current energy and geopolitical context.  We also go beyond “ETS 101” and talk about where real design frictions show up: How the MSR works, and why it can affect expectations and price dynamics Why a positive carbon price can persist even with a surplus (forward-looking firms) Why free allocation is not a problem in economic theory (opportunity costs) Where the EU ETS deviates from the economic “first best,” including output-based free allocation and administrative burden What kinds of tweaks might realistically appear in the 2026 review (and why many changes are incremental) Note that Professor Woerdman recently published a paper explaining a lot of what we cover in more detail. You can find the paper here: Woerdman, E. and Kotzampasakis, M., 'EU Emissions Trading System' (April 01, 2026), EU Climate Mitigation Law, Cheltenham: Edward Elgar Publishing, forthcoming 2027. Available at SSRN: https://ssrn.com/abstract=6633238 or http://dx.doi.org/10.2139/ssrn.6633238 Up next: if you want to apply this toolkit to what’s happening right now in EU policy, the next episode with Jos Cozijnsen digs into current discussions, the 2040 targets, the MSR reform, and proposals around price controls.  For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

    #26 Dr. Edwin Woerdman - The EU ETS in 2026: MSR, Economic (In-)Efficiencies and What Might Change
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About

A research-focused podcast on the economics of climate change and air pollution. Episodes are released every two weeks on Tuesday at 6 am CET.  Episodes will be either expert interviews or solo explorations of key issues. Hosted by Dr. Arvid Viaene, a climate economist with a PhD from the University of Chicago. He has done research on the impacts of climate change on agriculture and mortality. His research on climate-related mortality has been published in The Quarterly Journal of Economics, and he has advised the European Commission on the impacts of climate policy on firm competitiveness.

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