Research

Publications

Stefano Carattini and Matthias Roesti (2024), "Trust, Happiness, and Pro-social Behavior," Review of Economics and Statistics, forthcoming

Stefano Carattini and Julia Blasch (2024), "Nudging when the Descriptive Norm is Low: Evidence from a Carbon Offsetting Field Experiment," Journal of Behavioral and Experimental Economics, 110:102194

Stefano Carattini, Béla Figge, Alexander Gordan, and Andreas Loeschel (2024), "Municipal Building Codes and the Adoption of Solar Photovoltaics," Journal of Environmental Economics and Management, 124:102937

Stefano Carattini, Kenneth Gillingham, Xiangyu Meng, and Erez Yoeli (2024), "Peer-to-Peer Solar and Social Rewards: Evidence from a Field Experiment," Journal of Economic Behavior & Organization, 219:340-370

Stefano Carattini, Garth Heutel, and Givi Melkadze (2023), "Climate Policy, Financial Frictions, and Transition Risk," Review of Economic Dynamics, 51:778-794

Wes Austin, Stefano Carattini, John Gomez-Mahecha, and Michael Pesko (2023), "The Effects of Contemporaneous Pollution on COVID-19 Morbidity and Mortality," Journal of Environmental Economics and Management, 119:102815

Stefano Carattini, Samuel Fankhauser, Jianjian Gao, Caterina Gennaioli, and Pietro Panzarasa (2023), "What Does Network Analysis Teach Us About International Environmental Cooperation?," Ecological Economics, 205:107670

Stefano Carattini, Edgar Hertwich, Givi Melkadze, and Jeffrey Shrader (2022), "Mandatory Disclosure is Key to Address Climate Risks," Science, 378(6618):352-354

Barbara Annicchiarico, Stefano Carattini, Carolyn Fischer, and Garth Heutel (2022), "Business Cycles and Environmental Policy: A Primer", Environmental and Energy Policy and the Economy, 3:221-253

Ara Jo and Stefano Carattini (2021), "Trust and CO2 Emissions: Conditional Cooperation at a Global Scale", Journal of Economic Behavior & Organization, 190:922-937

Andrea Baranzini, Stefano Carattini, and Linda Tesauro (2021), "Designing Effective and Acceptable Road Pricing Schemes: Evidence from the Geneva Congestion Charge", Environmental and Resource Economics, 79:417-482

Stefano Carattini and Andreas Loeschel (2021), "Managing Momentum in Climate Negotiations", Environmental Research Letters, 16(5): 051001

Beatrice Petrovich, Stefano Carattini, and Rolf Wuestenhagen (2021), "The Price of Risk in Residential Solar Investments", Ecological Economics, 180: 106856

Van den Bergh et al. (2020), "A Dual-Track Transition to Global Carbon Pricing: The Glass is Half Full," Climate Policy, 20(10):1349-1354

Van den Bergh et al. (2020), "A Dual-Track Transition to Global Carbon Pricing," Climate Policy, 20(9):1057-1069

Stefano Carattini, Greer Gosnell, and Alessandro Tavoni (2020), "How Developed Countries Can Learn from Developing Countries to Tackle Climate Change", World Development, 127:104829

Suchita Srinivasan and Stefano Carattini (2020), "Adding Fuel to Fire? Social Spillovers in the Adoption of LPG in India", Ecological Economics, 167:106398

Stefano Carattini, Eli Fenichel, Alexander Gordan, and Patrick Gourley (2019), "For Want of a Chair: Teaching Price Formation Using a Cap and Trade Game", Journal of Economic Education, 51(1):52-66

Stefano Carattini, Simon Levin, and Alessandro Tavoni (2019), "Cooperation in the Climate Commons", Review of Environmental Economics and Policy, 13(2):227-247

Gwen Spencer, Stefano Carattini, and Richard B. Howarth (2019), "Short-term Interventions for Long-term Change: Spreading Stable Green Norms in Networks", Review of Behavioral Economics, 6(1):53-93

Stefano Carattini, Steffen Kallbekken, and Anton Orlov (2019), "How to Win Public Support for a Global Carbon Tax", Nature, 565: 289-291

Stefano Carattini, Maria Carvalho, and Samuel Fankhauser (2018), "Overcoming Public Resistance to Carbon Taxes", Wiley Interdisciplinary Reviews: Climate Change, 9:e531

Stefano Carattini, Andrea Baranzini, and Rafael Lalive (2018), "Is Taxing Waste a Waste of Time? Evidence from a Supreme Court Decision", Ecological Economics, 148(C):131-151

Andrea Baranzini, Nicolas Borzykowski, and Stefano Carattini (2018), "Carbon Offsets out of the Woods? Acceptability of Domestic vs. International Reforestation Programmes in the Lab", Journal of Forest Economics, 32:1-12

Kenneth Gillingham, Stefano Carattini, and Daniel Esty (2017), "Lessons from First Campus Carbon-Pricing Scheme", Nature, 551:27-29

Stefano Carattini, Andrea Baranzini, Philippe Thalmann, Frédéric Varone, and Frank Vöhringer (2017), "Green Taxes in a Post-Paris World: Are Millions of Nays Inevitable?", Environmental and Resource Economics, 68(1) 97–128

Andrea Baranzini, Jeroen van den Bergh, Stefano Carattini, Richard B. Howarth, Emilio Padilla, and Jordi Roca (2017), "Carbon Pricing in Climate Policy: Seven Reasons, Complementary Instruments, and Political-economy Considerations", Wiley Interdisciplinary Reviews: Climate Change, 8:e462

Andrea Baranzini and Stefano Carattini (2017), "Effectiveness, Earmarking and Labeling: Testing the Acceptability of Carbon Taxes with Survey Data", Environmental Economics and Policy Studies, 19(1) 197-227

Stefano Carattini and Alessandro Tavoni (2016), "How Green are Green Economists?", Economics Bulletin, 36(4) p.A224

Stefano Carattini, Andrea Baranzini, and Jordi Roca (2015), "Unconventional Determinants of Greenhouse Gas Emissions: The Role of Trust", Environmental Policy & Governance 25(4) 243-257

Andrea Baranzini and Stefano Carattini (2014), "Taxation of Emissions of Greenhouse Gases". In: Freedman B. (Ed.), Global Environmental Change, Springer

Working papers

"Carbon Taxes and Tariffs, Financial Frictions, and International Spillovers" with Giseong Kim, Givi Melkadze, and Aude Pommeret

CESifo Working Paper 10851

Ambitious climate policy, coupled with financial frictions, has the potential to create macrofinancial stability risk. Such stability risk may expand beyond the economy implementing climate policy, potentially catching other countries off guard. International spillovers may occur because of trade and financial channels. Hence, we study the design and effects of climate policies in the world economy with international trade and financial flows. We develop a two-sector, two-country, dynamic general equilibrium model with financial frctions, climate policies, including carbon tariffs, and macroprudential policies. Using the calibrated model, we evaluate spillovers from unilateral domestic carbon pricing to foreign economies and back. We also examine more ambitious climate architectures involving carbon tariffs or a global carbon price. We find that accounting for cross-border financial flows and frictions in credit markets is crucial to understand the effects of climate policies and to guide the implementation of macroprudential policies at the global scale aimed at minimizing transition risk and paving the way for ambitious climate policy.

"Business Cycles and Environmental Policy: Literature Review and Policy Implications" with Barbara Annicchiarico, Carolyn Fischer, and Garth Heutel

NBER Working Paper 29032

We study the relationship between business cycles and the design and effects of environmental policies, particularly those with economy-wide significance like climate policies. First, we provide a brief review of the literature related to this topic, from initial explorations using real business cycles models to New Keynesians extensions, open-economy variations, and issues of monetary policy and financial regulations. Next, we provide a list of the main findings that emerge from this literature that are potentially most relevant to policymakers, including the impacts of policy on volatility and how to design policy to adjust to cycles. Finally, we propose several important remaining research questions.

"Trust, Temperature Fluctuations, and Asylum Applications" with Marcella Veronesi

Grantham Research Institute on Climate Change and the Environment Working Paper 344

This paper studies the relationship between generalized trust, temperature fluctuations during the maize growing season, and international migration by asylum seekers. A priori generalized trust can be expected to have an ambiguous effect on migration. On the one hand, countries with higher trust may exhibit higher adaptive capacity to temperature fluctuations and so lower climate-induced migration. On the other hand, trust may also facilitate migration by increasing the likelihood that communities invest in risk sharing through migration and enjoy reliable networks supporting migrants. Hence, it is an empirical question whether trust mitigates the impact of weather on migration. We find that for moderate temperature fluctuations, trust mitigates the impact of weather on migration. This effect is driven by the role of trust in increasing adaptive capacity. However, for severe temperature fluctuations, communities with higher trust experience more migration. Our findings point to important policy implications concerning the role of trust in fostering adaptation by facilitating collective action, and the need for targeted interventions to support adaptation and increase resilience in low-trust societies in which collective action may be harder to achieve.

"Carbon Taxes and Stranded Assets: Evidence from Washington State" with Suphi Sen

Grantham Research Institute on Climate Change and the Environment Working Paper 323

The climate challenge requires ambitious climate policy. A sudden increase in carbon prices can lead to major shocks to the stock market. Some assets will lose part of their value, others all of it, and hence become "stranded". If the markets are not ready to absorb the shock, a financial crisis could follow. How well investors anticipate, and thus how large these shocks may be, is an empirical question. We analyze stock market reactions to the rejection of two carbon tax initiatives by voters in Washington state. We build proper counterfactuals for Washington state firms and find that these modest policy proposals with limited jurisdiction caused substantial readjustments on the stock market, especially for carbon-intensive stocks. Our results reinforce concerns about "stranded assets" and the risk of financial contagion. Our policy implications support the inclusion of transition risks in macro prudential policymaking and carbon disclosure and climate stress tests as the main policy responses.

"Social Interactions and the Adoption of Solar PV: Evidence from Cultural Borders" with Martin Péclat and Andrea Baranzini

Grantham Research Institute on Climate Change and the Environment Working Paper 305

Social spillovers are considered a key feature of technological diffusion. In presence of cultural barriers, social spillovers may, however, be hampered. In this paper, we exploit exogenous cultural borders and a policy shock to investigate the role of social spillovers in the adoption of solar photovoltaic (PV) technology. With data on about 19,000 solar PV systems, we assess whether proximity to a language border implies a lower rate of PV adoption. The results confirm that the cultural border hinders social spillovers. Following the implementation of a nationwide feed-in tariff fundamentally changing the financial profitability of solar PV, we find a divergence in the rate of adoption between municipalities located very close to the border, and others located further away. This effect is, however, moderated by the proportion of inhabitants speaking the language of the other side of the border as main language at home. The effects measured in this paper are persistent over time, and consistent with the role of locallzed social spillovers in the adoption of clean technologies. The number of "missing" PV adoptions resulting from the language border is non-negligible, as the border leads to 20% fewer PV adoptions.

"What Drives Social Contagion in the Adoption of Solar Photovoltaic Technology?" with Andrea Baranzini and Martin Péclat

Grantham Research Institute on Climate Change and the Environment Working Paper 270

Increasing the use of renewable energy is central to address climate change. Recent research has suggested the existence of social contagion in the adoption of solar panels, which may contribute to accelerate the transition to a low-carbon economy. While the existing literature has focused on residential adoption only, we extend the analysis to private firms and farms, and include solar panels with different characteristics. We exploit a unique large dataset providing detailed information on about 60,000 solar installations in Switzerland, including their specific location at the street level and details on the timing of the technological adoption, and couple it with rich socioeconomic data at the municipality level. Our detailed data allow us to adopt an empirical strategy addressing the main threats to identification associated with social contagion, including homophily and reflection. We find that households' decisions to adopt the solar technology are dependent on pre-existing adoption, and in particular on spatially close and recent installations. Firms and farms solar PV adoptions react to neighboring PV panels, although to a lesser extent than households. Furthermore, companies are more influences by panels installed by other companies, compared to panels installed by households. By distinguishing between building-integrated and building-attached PV systems and including capacity categories, we provide evidence that both learning and imitation are important components of social contagion. As a result, our findings provide new insights on the mechanisms of social contagion and how they could be leveraged with targeted interventions.