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. #19 Pauline Miquel - The Surprising Complexity of Implementing CBAM: Monitoring, Verification, and Real Costs

    FEB 24

    #19 Pauline Miquel - The Surprising Complexity of Implementing CBAM: Monitoring, Verification, and Real Costs

    CBAM is simple conceptually, but very hard to put into practice. Turning CBAM into a working system requires something the EU doesn’t naturally have for global supply chains: credible, product-level emissions data, verified across jurisdictions. In Episode #19, I’m joined by Pauline Miquel, a policy expert who has been tracking CBAM’s fast-moving details and its implications for importers. We discuss: What CBAM covers first (cement, steel, aluminium, hydrogen, electricity, fertilizers—and even some downstream products) Why the end of 2025 brought major last-minute changes—especially around default values that can materially raise expected costs The “ETS logic,” but globally: how third-party verification is supposed to work when emissions are embedded across fragmented supply chains Key uncertainties for importers: timing, predictability of liability, and the shift from quarterly to annual reporting A technical detail that matters: the benchmark (reflecting remaining free allocations under the ETS) and why it can move costs substantially Why CBAM is ultimately a procurement + finance + contracting problem—not just a sustainability reporting line item For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

    50 min
  2. #18 Kimberly Clausing - The Global Effects of CBAM: Quantifying Benefits, Costs, and Leakage

    FEB 10

    #18 Kimberly Clausing - The Global Effects of CBAM: Quantifying Benefits, Costs, and Leakage

    Climate policy faces a built-in incentive problem: countries bear the costs of domestic regulation, while the benefits of lower CO₂ are shared globally. One proposed solution is a Carbon Border Adjustment Mechanism (CBAM) — charging imports a carbon cost comparable to domestic producers (with credits for carbon prices already paid abroad).  In this episode, I’m joined by Kimberly Clausing to discuss her paper on the global effects of CBAM, with a focus on steel and aluminium — two sectors that are both highly traded and emissions intensive. Using detailed plant-level data, the analysis quantifies impacts on welfare, competitiveness, leakage, and distribution across firms and countries.  We cover: Why CBAM is an answer to the free-rider / leakage / competitiveness triad — and what it can and can’t solve (domestic vs third-market competition). A key empirical surprise: emissions intensity is not tightly correlated with income per capita, which changes how we think about impacts on lower-income countries. “Two types of firms” logic: clean producers may benefit from access to a higher-price market, while dirtier producers may be pushed toward unregulated markets (with price effects abroad). Quantitative results: why welfare effects can be modest in magnitude, why CBAM shifts some burden from producers to consumers, and why CBAM revenue may be smaller than expected due to reallocation. Emissions outcomes: carbon pricing drives substantial reductions; CBAM can add incremental reductions and reduce leakage — especially when only one large jurisdiction acts. The “climate club” logic: how CBAM can make carbon pricing more politically feasible at home and more attractive abroad over time. For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

    33 min
  3. #17 Beatriz Granziera - Carbon Offsets and Paris Article 6: The History, Recent Developments and Possible Future

    JAN 27

    #17 Beatriz Granziera - Carbon Offsets and Paris Article 6: The History, Recent Developments and Possible Future

    International carbon credits are back in the policy conversation—especially after the EU’s new 2040 proposal reopened the question of whether (and how) Paris Agreement Article 6 credits might play a role. But “offsets” are a loaded term for a reason: past systems created large volumes of credits, and a recurring critique is that too many didn’t represent real, additional emissions cuts. So what is Article 6, what’s genuinely different under Paris, and what still isn’t settled? In Episode #17, I’m joined by Beatriz Granziera (Senior Policy Advisor at The Nature Conservancy), who works on Article 6 negotiations and implementation, including supporting developing countries on domestic Article 6 policy. We cover: What Article 6 is trying to do—and the difference between 6.2 (bilateral/decentralized) and 6.4 (UN-governed centralized mechanism)Why Paris differs from Kyoto: every country has an NDC, so accounting rules matter—and how corresponding adjustments aim to prevent double countingA market reality check: many agreements, but very little actual trading so far—and why countries may be cautious about selling reductions they might need for their own targetsThe EU angle: why EU demand could reshape standards (and why details matter more than slogans)Transitioning old Kyoto/CDM projects into Article 6.4: what “flooding” risks look like in practice and why host-country approval becomes pivotalThe core tension ahead: quality vs scale—rules can be strong on paper, but too stringent rules can leave a mechanism that can’t generate meaningful supplyArticle 6 Explainer by the Nature Conservancy: https://www.nature.org/content/dam/tnc/nature/en/documents/TNC_Article_6_Explainer.pdf For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

    42 min
  4. #16 Dr. Jeroen van den Bergh – Cap-and-Trade vs Carbon Taxes: When Objectives and Frictions Matter (Behavioral + Political Economy)

    JAN 13

    #16 Dr. Jeroen van den Bergh – Cap-and-Trade vs Carbon Taxes: When Objectives and Frictions Matter (Behavioral + Political Economy)

    If you think carbon taxes and cap-and-trade are basically the same thing, this episode might change your mind. For Episode 16, I’m joined by Jeroen van den Bergh (ICREA Research Professor at ICTA-UAB Barcelona) to unpack why carbon markets (ETS / cap-and-trade) may outperform carbon taxes, especially once you take bounded rationality seriously. We discuss: Why the EU ETS scales across borders more easily than taxesHow cap-and-trade can be politically more resilient (and sometimes “hidden”)Why markets can deliver higher carbon prices—and why that mattersHow a cap-and-trade system can self-correct when firms/people under-react to price signalsWhat to do with the revenues (rebates, climate projects, innovation—what’s actually smart?)The potential progressiveness of Cap-and-Trade or Carbon taxesCBAM and Climate ClubsPaper discussed: Pricing Instruments in Environmental and Climate Policy when Polluters are Boundedly Rational:  https://www.nature.com/articles/s44168-025-00284-9 For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

    47 min
  5. #15 - Lessons from the First 14 Episodes

    12/30/2025

    #15 - Lessons from the First 14 Episodes

    With the end of the year approaching, it is time to take stock and reflect on the past 14 episodes. I present lessons and takeaways from each and discuss some upcoming episodes. For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

    18 min
  6. #14 Dr. Matilde Bombardini - U.S. Climate Politics

    12/16/2025

    #14 Dr. Matilde Bombardini - U.S. Climate Politics

    We talk a lot about the “right” climate policies—carbon pricing, clean investment, regulation. But there’s a step before all of that: politics. Who wins elections. What voters actually do—not just what they say in surveys. And how politicians reposition when the climate gets hotter and the economy starts to transition. Today’s episode asks three concrete questions: When a place experiences unusually extreme heat, does it measurably shift votes?Do local green and brown jobs shape climate politics in predictable ways?And crucially: when voters move, do politicians follow… or do they sometimes move the other way?My guest is Professor Matilde Bombardini, and we’re discussing her working paper “Climate Politics in the United States.” What makes this research stand out is the data: precinct-level election results—so we can compare neighborhoods within the same congressional district—and detailed measures of candidates’ environmental policy positions.  You’ll hear the headline results, how to interpret the magnitudes, and what their framework implies for the future probability of something like a carbon-pricing bill passing in the U.S.  Matilde Bombardini holds the Oliver E. and Dolores W. Williamson Chair in the Economics of Organizations and is Professor of Business and Public Policy at UC Berkeley Haas, affiliated with NBER, the BFI’s IOG group, CEPR, and CESifo.  For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

    37 min
  7. # 13 Dr. Reed Walker – Estimating the Marginal Costs and Benefits of U.S. Air Pollution Regulations

    12/02/2025

    # 13 Dr. Reed Walker – Estimating the Marginal Costs and Benefits of U.S. Air Pollution Regulations

    In this episode, Berkeley professor Reed Walker discusses his American Economic Review paper with Joe Shapiro on the costs and benefits of U.S. air-pollution regulation—using Clean Air Act offset markets to infer marginal abatement costs—and why the results suggest regulation is often too lenient on the margin. We also touch on his Journal of Political Economy paper on the long-run consequences of cleaner air for children’s adult earnings.  For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

    47 min
  8. 12 Dr. Joseph Shapiro – Is Air Pollution Regulation in the U.S. Too Lenient? Evidence from over 40 Pollution Offset Markets

    11/18/2025

    12 Dr. Joseph Shapiro – Is Air Pollution Regulation in the U.S. Too Lenient? Evidence from over 40 Pollution Offset Markets

    Is U.S. air pollution policy still too lenient – even after decades of regulation? In this episode, I’m joined by Dr. Joseph Shapiro (UC Berkeley, NBER, Energy Institute at Haas) to discuss his recent research using 40 pollution offset markets under the U.S. Clean Air Act. By looking at how much firms actually pay for emission reductions, Joe and his co-authors back out marginal abatement cost curves and compare them to the health and welfare benefits of cleaner air. We talk about: How pollution offset markets work in practice, and why they exist at allUsing market prices (instead of just engineering models) to estimate the costs of cutting emissionsComparing those costs with the benefits of avoided mortality and morbidityWhy, in most markets, benefits still exceed costs by a wide marginThe outlier case of Houston’s VOC market – the “Taylor Swift of offsets” – where fracking-driven demand pushed prices through the roofWhat all this means for debates on whether air regulations are “too strict” or still too laxIf you’re interested in how economics, regulation, and air pollution intersect – and in actually quantifying the trade-offs – this episode is for you. For questions, comments or suggestions, you can contact me at arvid.viaene.ce@gmail.com

    38 min
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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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