Climate Economics with Arvid Viaene

Arvid Viaene
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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. 6h ago

    #36 What Prevents The Adoption of Solar Energy? Dr. Nicholas Ryan on the Hold-up Problem

    Solar power has become dramatically cheaper. So why is renewable energy still expanding much more slowly in some countries than in others? In this episode, I speak with Nicholas Ryan about his paper Holding Up Green Energy: Counterparty Risk in the Indian Solar Power Market. The paper studies a simple but important problem: investors may be reluctant to build solar projects if they are not confident that the buyer of the electricity will actually pay them. Using detailed auction data from India, Nick shows that riskier states pay substantially more for solar power. When those same states procure through the more creditworthy central government, the price gap largely disappears. We discuss: the hold-up problem in renewable energy investmentwhy counterparty risk creates a solar risk premiumhow India’s auction system provides a clean empirical testwhy risky states pay around 17% morehow that premium is comparable to roughly two years of solar cost declineswhy some firms can reduce risk through bargaining leveragehow price ceilings affect the amount of solar actually procuredwhy central-government intermediation can help de-risk investmentand whether similar institutions could help accelerate renewable deployment elsewhereA fascinating conversation on the interaction between institutions, finance, and the green energy transition. For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

    #36 What Prevents The Adoption of Solar Energy? Dr. Nicholas Ryan on the Hold-up Problem

  2. Sep 8

    #35 From Rejection to Nobel Prize: The Work of William Nordhaus

    How did economists learn to put a price on climate change? In this solo episode, I tell the story of William Nordhaus and the development of the DICE model, one of the foundational models in climate economics. We trace the journey from Nordhaus’s early work on energy models, through his first attempts to connect the economy and the climate, to the breakthrough that eventually became DICE: the Dynamic Integrated model of Climate and the Economy. Along the way, I discuss: why Nordhaus became interested in climate changehow his early energy models evolved into integrated assessment modelswhy moving from partial to general equilibrium matteredhow he simplified the climate system enough to make it usable in an economic modelhow damage functions closed the loop between climate and the economyand why this framework made the social cost of carbon possibleThe episode also tells some of the less-known parts of the story, including the fact that the work behind one of the most influential models in climate economics was initially rejected by economics journals before being published in Science. More than 30 years later, DICE remains a benchmark in climate economics and a central part of the intellectual history of putting a price on carbon. For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

    #35 From Rejection to Nobel Prize: The Work of William Nordhaus

  3. Aug 25

    #34 Dr. Frank Venmans - The EU ETS Compliance Puzzle: High Compliance, Low Enforcement

    What happens if firms simply do not comply with a carbon market? In this episode, I speak with Frank Venmans about his paper “Policing Carbon Markets”, which studies compliance and enforcement in the EU Emissions Trading System. The headline result is striking: compliance is extremely high, at around 99%. But the standard economic explanation — firms comply because they fear fines and enforcement — only explains a small part of what is happening. We discuss: how high compliance is in the EU ETSwhy the first phase of the system looked very differentthe gap between theoretical fines and the fines actually collectedhow the paper tests whether firms are reporting emissions truthfullythe role of verifiers, inspections, naming and shaming, and legal penaltiesthe “Harrington paradox” of high compliance despite relatively limited enforcementwhy long-term relationships between firms and regulators may matterwhat newer carbon markets can learn from the European experienceThe paper also highlights a less glamorous but very important lesson: carbon markets are technically complex. Registries, reporting systems, verification, financial regulation, and data management all matter enormously for whether the system works in practice. Transcript: [TBD] Paper: https://www.tandfonline.com/doi/full/10.1080/14693062.2025.2464699 , and  Frank Venmans: https://www.fvenmans.com/ For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

    #34 Dr. Frank Venmans - The EU ETS Compliance Puzzle: High Compliance, Low Enforcement

  4. Aug 11

    #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

  5. 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

  6. 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

  7. 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

  8. 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
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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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