OEET organized its 9th Workshop on 14-15, December 2023 at Campus Luigi Einaudi, University of Turin, titled “Economic effects of climate change and energy transition on emerging countries”.
The Workshop aimed at analyzing the current and expected impacts of climate change on emerging countries. On the one hand, all the countries (but mainly low-income countries) are plagued by its detrimental effects on the environment, which harm their inhabitants as producers (especially in the agricultural sector through famines, so that people lose job and income), and also as consumers (through increased prices), often pushing them to internal unrests, wars or migration. On the other hand, some emerging countries (mainly higher income countries) benefit from the adoption of energy transition policies (pushed by climate change) that bolster their competitiveness or allow them to exploit the surging demand for raw materials spurred by this energy shift. Furthermore, the situation becomes more difficult as high income countries are adopting energy and industrial policies strongly based on protectionist measures, which impact and modify international markets.
This issue of the OEET newsletter collects five contributions based on presentations given at the Workshop, under the form of extended abstracts. They represent also five different examples of the various issues discussed at the Workshop.
The first contribution, by Elena Vallino, analyzes the topic of water management in a large sample of countries. It utilizes different indicators to evaluate the influence of various factors on the availability and economic exploitation of water. It finds that institutions play a larger role than country income in determining high levels of water management and governance, especially in low- and middle-income countries. The text comes from the presentation titled “Good (or bad) water governance. A macro empirical analysis of the determinants of Integrated Water Resources Management”, written by Andrea Pronti and Massimiliano Mazzanti, together with Elena Vallino.
The second contribution, by Giorgio Brosio, discusses the economic consequences (particularly at the revenue level) of the production and use of natural resources deriving from decarbonization and energy transition efforts. The analysis refers mainly to some Latin America countries, where production and exports of fossil fuels and large availability of natural resources requested by the process of decarbonization coexist, so increasing the role of the trade-off between long-term and short-term strategies. The text comes from the presentation titled “The impact of decarbonization and energy transition on fiscal revenues and their allocation. The Latin America case”, written by Juan Pablo Jimenez and Ignacio Ruelas, together with Giorgio Brosio.
The third contribution, by Andrea Pronti, faces the issue of the trade-off between the economic success of water intensive agricultural crops on the international markets and the availability of local groundwater resources, as measured by the Groundwater Sustainability Index. As such, it deals with a typical topic of natural resources economy in a climate change time, in a case study through econometric instruments. The text comes from the presentation titled “Global exports draining local water resources: land concentration, food exports and water grabbing in the Ica Valley (Peru)”, written by E. Zegarra, D. Rey Vicario, A. Graves, together with Andrea Pronti.
The fourth contribution, by Xieshu Wang, concerns the evolution of the electric vehicle in China, underlining the fact that it is the only country that has so far developed a full value chain of production, from raw materials to batteries, assembling and end-of-life recycling. It emphasizes the role of industrial policy as a tool to coordinate different solutions at different times, conducing to a product that eases the decarbonization and energy transition process, being very important from the environment point of view, for the country and for the world. The text comes from the presentation titled “The indispensable role of industrial policy: the case of the Chinese EV industry”.
The fifth contribution, by Augusto Ninni, deals with the consequences on emerging countries of the industrial policies run by USA and European Union, and on the future of the photovoltaic industry. On a strategic side, their protectionist measures are not expected to be able to weaken the leadership of the Chinese industry. However, on a developmental side, the adoption of own industrial policies by a lot of emerging countries could favour their growth, in addition to world environment. The text comes from the presentation titled “Effects of industrial policies for energy transition on emerging countries”.
