The energy transition: Policies, market design and economic implications

La transition énergétique: Politiques, conception des marchés et implications économiques

Niklas Schoch
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Niklas Schoch: ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique

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Abstract: In three chapters, this thesis explores distinct issues within the efforts to decarbonise economic activity. Chapters 1 and 2 aim to inform the design of carbon policies in the presence of market power, which is pervasive in many polluting industries. To do so, the chapters use tools from empirical industrial organisation and applied economic theory.In Chapter 1, 1 investigate how a suitable policy mix can incentivise a low-carbon transition in heavy industry sectors. I show that, since market concentration and green investment incentives are intertwined, a carbon tax alone must balance static and dynamic efficiency, and it cannot achieve a first-best outcome. However, combining a tax with an explicit technology subsidy or output-based rebating can increase welfare.In Chapter 2, together with my co-authors, we show how the market design of emissions trading systems affects market outcomes in the presence of distortions. Doing so, we can draw a clear distinction between active policy designs and demonstrate how appropriately calibrated endogenous cap adjustments can significantly reduce concerns about market power in permit markets.In Chapter 3, the focus is less on policy design and more on the implications of the low-carbon transition and policies for economic and ecological outcomes. To do so, these articles rely on applied econometric techniques. Chapter 3 examines the implications of renewable energy deployment for local economic outcomes using a continuous adaptation of the canonical propensity score.

Keywords: Emissions trading; Market power; Heavy industry; Green investment; Marchés du carbone; Pouvoir de marché; Industrie lourde; Investissement vert (search for similar items in EconPapers)
Date: 2026-06-16
Note: View the original document on HAL open archive server: https://theses.hal.science/tel-05747179v1
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Published in Economics and Finance. Institut d'études politiques de paris - Sciences Po, 2026. English. ⟨NNT : 2026IEPP0017⟩

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