Policy Instruments Research Articles

The technological transformation of the Russian energy sector forced by carbon regulation

RELEVANCE of the study lies in the assessment of the impact that various carbon regulation instruments stimulating the achievement of national climate goals have on the development scale of different electricity and heat production technologies in Russia.THE PURPOSE. To consider the change in the optimal technological structure of the electric power industry and district heating in Russia by 2050 assuming the introduction of various carbon regulation instruments in 2030.METHODS. We used the developed at ERI RAS system technological model EPOS for the optimization of the energy technology structure in the Russian energy sector according to the criterion of the minimum total discounted costs for energy supply to the economy until 2050.RESULTS. The article provides an analysis of the scale of changes in installed capacity and electricity production of various types of power plants in the UES of Russia, as well as changes in heat production of different heat supply sources by 2050 for 16 carbon regulation options and business-as-usual scenario. Also it describes the optimal technological structure in the electric power industry and district heating under the conditions of certain administrative, fiscal and economic instruments of climate policy. Carbon regulation options based on the corresponding increases in the installed capacity of power plants in the UES of Russia by 2050 are compared.CONCLUSION. Decarbonization of the electric power industry in Russia will mainly occur by expansion of nuclear energy, heat production – by deployment of electric boilers, taking into account current forecasts of scientific and technological progress. At the same time, for carbon regulation options leading to a greenhouse gas emissions reduction by 30% relative to 2019 level, nuclear power plants could become the new dominant technology in the structure of electricity production instead of gas thermal power plants. The total increase in installed capacity of power plants in the UES of Russia by 2050 may differ by almost seven times for various carbon regulation options. Among the climate policy options considered, emission quotation and carbon taxes have the strongest impact on the technological structure of the electric power industry and district heating in Russia.

The Impact of Restrictive Macroprudential Policies through Borrower-Targeted Instruments on Income Inequality: Evidence from a Bayesian Approach

This study used the panel data from 15 emerging markets to examine the impact of restrictive macroprudential policies on income inequality from 2000–2019 using Bayesian panel vector autoregression and Bayesian panel dynamics generalised method of moments models. The chosen models are suitable for addressing multiple entity dynamics, accommodating a wide range of variables, handling dense parameterisation, and optimising formativeness and heterogeneous individual-specific factors. The empirical analysis utilised various macroprudential policy proxies and income inequality measures. The results show that when the central banks tighten systems using macroprudential policy instruments to sticker debt-to-income and financial instruments for lower-income borrowers (the bottom 40% of the income distribution), they promote income inequality in these countries while reducing income inequality for high-income borrowers (the high 1 percent of the income distribution). The impact of loan-to-value ratios was found to be insignificant in these countries. Fiscal policy through government expenditure and economic development reduces income inequality, while money supply and oil-price shocks exacerbate it. The study suggests implementing a progressive debt-to-income (DTI) ratio system in emerging markets to address income inequality among lower-income borrowers. This would adjust DTI thresholds based on income brackets, allowing lenient credit access for lower-income borrowers while maintaining stricter limits for higher-income borrowers. This would improve financial stability and reduce income disparities. Additionally, targeted financial literacy programs and a petroleum-linked basic income program could be implemented to distribute oil revenue to lower-income households. A monetary supply stabilisation fund could also be established to maintain financial stability and prevent excessive inflation.

Enhancing green housing diffusion through density bonuses: An analysis using the Use-Purchase-Supply model

Green housing plays a crucial role in advancing sustainable land use and urban development. The evident paradox of the sluggish diffusion of cost-effective green housing has garnered growing attention. This study introduces a Use-Purchase-Supply (U-P-S) model to unveil the "black box" of this paradox and develops a simulation model to quantify the diffusion dynamics of green housing based on the classic "epidemic model". Using China as a case for simulation, the model identifies key drivers, with a specific focus on the impact of density bonuses. The results reveal that lower-rated green housing can proliferate independently, whereas higher-rated green housing development hinges on policy instruments for market traction. Density bonuses demonstrate to be as potent as the reduction of green incremental costs, which is the paramount driver of green housing diffusion. Furthermore, this study extends its insights globally by contrasting core parameters across countries. The U-P-S model enhances the theoretical lens of "how to diffuse sustainability" and functions as a "policy laboratory" for simulating and evaluating the effects of various policy measures on green housing diffusion.

Monetary policy transmission dynamics: evidence from Indian financial markets

ABSTRACT Our study employs a non-recursive Structural Vector Autoregressive Model (SVAR) to examine to how monetary policy signals transmit across the money, treasury bills, bonds, forex, and the stock market in India and in the process unravel the relative efficacy of various monetary policy signalling instruments on these financial market variables. This exercise is conducted for two distinct monetary policy regimes -Multiple Indicator Regime and Flexible Inflation Targeting Regime. Our results indicate that the transmission of monetary policy differs not only across various segments of the financial markets, but is also sensitive to the choice of monetary policy instruments used by the Reserve Bank of India (RBI) under different regimes. In a bid to heighten the efficacy of monetary policy signals it is hence suggestive that developing economies with high inflation should move towards an inflation targeting regime.

EFFICIENCY OF MONETARY POLICY IMPLEMENTATION AS A BASIS FOR CENTRAL BANK STABILISATION POLICY UNDER MARTIAL LAW (UKRAINIAN AND ISRAELI PRACTICES)

The purpose of the paper is to summarise and present the anti-crisis practices of a central bank during martial law in the country, based on the experience of the National Bank of Ukraine and the Bank of Israel. The research methodology is based on an analysis of reports, guidelines, statistical data, scientific articles, legislation bases, and other relevant materials. One of the methodological aspects of this study is a comparison of the knowledge acquired about the regulations implemented by the two central banks after the introduction of martial law in the countries. The objective is to identify potential lessons learned for the banking regulations of Ukraine and the State of Israel. The results of the study show that the practical implementation of stabilisation measures by central banks is crucial for achieving financial stability of the state both during and after wartime, as well as the ability to predict possible deepening of crises and minimise their consequences. The tools and methods used by these central banks differ. In particular, the NBU's main monetary policy instrument was foreign exchange interventions, while the BoI actively used the key policy rate. The proper formation of international currency reserves and the possibility of using them during a war-related crisis is critical for both countries. This fact confirms that crisis management has different types of scenarios. Each anti-crisis scenario is unique. This paper highlights the practical need for interaction between monetary and macroprudential policies of the central bank in wartime. It demonstrates various combinations of methods and instruments of the central bank's monetary policy. This study also shows the interdependence of the economies of these two countries. Practical implementation. This analysis provides insight into the anti-crisis activities of central banks during unpredictable periods in a country's life, namely, during martial law. At the present stage, banking systems do not often face the challenges of war. Therefore, studying each case is important for improving theoretical knowledge and deepening practical research. Value / Originality. The author of the study collected the experience and practices of stabilisation activities of the central banks of Ukraine and Israel during the war.

From sectoral policy change to cross-sectoral (dis)integration? A longitudinal analysis of the EU's forest and rural development policy

Policy integration (PI) is critical to address cross-cutting challenges like climate change and biodiversity loss holistically. In the European Union, forests are confronting increasingly adverse climatic conditions and numerous stressors that impact their biodiversity. Political efforts to counteract these trends are mainly channeled through funding from the rural development policy as a pivotal part of the Common Agricultural Policy (CAP). In contrast, forest policy is hardly institutionalized at EU level. This study employs process tracing using 65 EU forest and rural development policy documents, including legal acts, preparatory documents, communications, related working documents and evaluation reports, predominantly produced over the last 25 years. By doing this, it examines the development of sectoral policy changes over time and their implications for the cross-sectoral integration of EU forest policy into rural development policy as part of agricultural policy at EU level. Results suggest that the adoption of the EU Forest Strategy for 2030 represented a provisional paradigm shift in EU forest policy. This shift is characterized by a substantial reprioritization of policy objectives, transitioning from an emphasis on economic aspects to a more climate- and biodiversity-centric approach, alterations in supported policy instruments and the introduction of various new regulatory instruments. On the other hand, the CAP and its rural development policy remain characterized by a path dependent incremental change and the latest reforms hardly reflect ambitious forest policy objectives both from budgetary and content perspectives. The findings suggest that the latest seemingly decoupled developments within both policy areas have led to an emergence of forest policy fragmentation at the EU level.

The implications of the EU cohesion policy instruments and cross-border cooperation projects on social entrepreneurship in Euroregions

The current paper investigates the implications of the EU Cohesion Policy instrument Interreg through the implementation of cross-border cooperation projects on social entrepreneurship. Cross-border cooperation projects are implemented in Euroregions and invest in new knowledge and innovative solutions in policy priorities spread over social, environmental, and economic domains. Policy priorities in social and environmental domains overlap fields of play where social entrepreneurs operate. We build on the Knowledge Spillover Theory of Entrepreneurship and use a quantitative design to investigate the influence of EU-funded cross-border cooperation projects on the number of social enterprises in Luxembourg. We employed a rolling window analysis with ARIMA on a sample of 207 cross-border cooperation projects implemented between 2000 and 2020. We predicted social entrepreneurial activity in Euroregions in Luxembourg using investments through the EU Cohesion Policy in the social, environmental, and economic domains and identified a positive relationship in the social domain. The current study shows that investments in the social domain positively and significantly predict social entrepreneurial activity, supporting the critical role of the EU Cohesion Policy on social entrepreneurship. Our study discusses how social entrepreneurship can benefit from EU cross-border cooperation projects as recipients of potential knowledge spillovers.

The asymmetric nexus between energy transition and its drivers: New evidence from China

The unpredictable surge in global warming and climatic issues urges serious efforts internationally to meet the Paris Agreement to keep the global temperature below 2 °C. Therefore, a sustainable solution is necessary for the future, as most regions are still under high pollution and carbon regimes borne by traditional sources of fuels. In this context, transitioning energy resources from conventional to more clean and sustainable energy resources is a key international political agenda. This study has investigated the asymmetric relationship of energy transition and its drivers in the case of China. The study employed time series data from 1989 to 2022 and adopted the nonlinear ARDL test. Through bounds testing, this study confirmed the existence of long-run asymmetric co-integration between the policy instruments. In the long and short run, the positive shocks of environmental technology augmented the asymmetric relationship with energy transition. However, it is interesting to observe that the positive shocks of green finance and trade openness has adverse effects on energy transition in the long run. Though, in the short run, a positive shock of trade openness improves the energy transition process. This study recommends policies to help policymakers and other stakeholders attain the SDG 7 goals.

Choice architecture promotes sustainable choices in online food-delivery apps.

Greenhouse gas emissions from the food system constitute about one-third of the global total, hence mitigation in this sphere of human activity is a vital goal for research and policy. This study empirically tests the effectiveness of different interventions to reduce the carbon footprint of food choices made on food-delivery apps, using an incentive-compatible online randomized controlled trial with 4,008 participants. The experiment utilized an interactive web platform that mimics popular online food-delivery platforms (such as Just Eat) and included three treatment conditions: a sign-posted meat tax, a carbon-footprint label, and a choice-architecture intervention that changed the order of the menu so that the lowest carbon-impact restaurants and dishes were presented first. Results show that only the choice-architecture nudge significantly reduced the average meal carbon footprint-by 0.3 kg/CO2e per order (12%), driven by a 5.6 percentage point (13%) reduction in high-carbon meal choices. Moreover, we find evidence of significant health and well-being co-benefits. Menu repositioning resulted in the average meal order having greater nutritional value and fewer calories, whilst significantly increasing self-reported satisfaction with the meal choice. Simple back-of-the-envelope calculations suggest that menu repositioning would be a highly cost-effective policy instrument if implemented at scale, with the return on investment expected to be in the range of £1.28 to £3.85 per metric ton of avoided CO2 emissions, depending on implementation costs.

Transition toward a sustainable future: Exploring the role of green investment, environmental policy, and financial development in the context of load capacity factor in G‐7 countries

AbstractEnvironmental sustainability holds evident significance since it is intricately connected with attaining sustainable development. However, the pre‐requisite of ecological sustainability is the higher ratio of biodiversity to ecological footprint, called the Load Capacity Factor (LCF). Literature is quite scant on the drivers of LCF and the study in hand is the attempt to find the viable policy instruments of this important sustainability indicator. For this purpose, the study has explored the role of green investment (GI), environmental policy (EP), financial development (FD), and natural resources rent (NRR) in the context of the load capacity curve (LCC) hypothesis for G‐7 countries from 1990 to 2019. Considering the co‐dependence among economies, the study has employed a Cross‐sectional Dependence Autoregressive Distributive Lag (CS‐ARDL) technique to investigate the impact of each variable along with other econometric techniques. The observed outcomes suggest that green investment and environmental policy stringency both contribute to improving environmental quality by increasing LCF. Whereas financial development and natural resources rent significantly, reduce the LCF and enhance environmental degradation. Additionally, the findings also validate the LCC hypothesis in the G‐7 context. The study advocates the need for green investment and policy stringency to achieve ecological sustainability and adequate consideration to transform financial development toward sustainability. Finally, the study has presented in‐depth ecological solutions so that G‐7 economies can take possible action to acquire the targets set in COP26.

Harnessing the potential of public procurement for the protein transition – perceived barriers and facilitators

AbstractShifting dietary patterns from animal-based proteins to more plant-based and alternative protein sources – the protein transition – is urgently needed to improve planetary and human health. Public food procurement is considered to be an effective policy instrument to accelerate the protein transition and to be a potential game changer towards a sustainable food system. However, this potential has remained far from leveraged, and it is largely unknown which barriers and enablers exist in that context. Therefore, this study aimed to gain insight into the barriers and facilitators that are perceived by relevant stakeholders when implementing the protein transition in public food procurement. Our study was conducted in the Netherlands, because of the policy goals set by the Dutch government with regard to the protein transition (50% of the proteins consumed should include animal-based proteins and 50% plant-based proteins by 2030) and because the extent to which the protein transition has been included in the food procurement of Dutch (semi-)public organizations is still largely unknown. However, findings are also relevant for other countries. Semi-structured interviews were conducted with participants from a wide range of (semi-)public organizations (e.g., universities, hospitals, governments), in 2022. Five main themes of barriers and facilitators were identified: (1) support and motivation, (2) food availability and offerings, (3) financial considerations and incentives, (4) policies, processes, and contracts, and (5) environmental factors. The insights from this study can strengthen the scientific evidence base and can serve as a foundation for future research. Moreover, the insights can be beneficial to officials working in (semi-)public organizations to effectively design and execute their procurement process, and can help policymakers in policy development to foster (semi-)public organizations to implement the protein transition in their own contexts.

Legal Regulation, Financial Incentives and Professional Autonomy in the Prioritisation of Norwegian Specialist Health Services.

To study hospital physicians' awareness and perceptions of the legal and financial regulations, and their impact on professional discretion regarding equity in access to treatment and quality of care. A sample of 637 physicians in the Norwegian specialist healthcare services selected from a survey conducted by the Institute for Studies of the Medical Profession. The paper investigates how legal and financial policy instruments affect the application of professional discretion regarding the prioritisation of specialist health services. Descriptive statistics and regressions were conducted for the analyses. Compared with financial incentives, legal regulations (laws, priority rules and guidelines) were assessed to be less negative external interventions in the exercise of medical and professional judgement. The empirical analyses revealed a positive tendency in physicians' assessments of the impact of legal regulations on treatment equity and healthcare quality, but negative attitudes towards financial instruments. The variations revealed are attributable to various structural and epistemic features of the legal-bureaucratic and economic models of administration in this area of the welfare state. Legal and financial regulations are imposed to achieve certain social goals and values. The findings of this study can provide further insight for the health authorities in other countries concerning implementation of such regulations in the specialist healthcare services.

Opportunities and Constraints of Promoting Coffee Plantation in Southern Tigray, Ethiopia

In Ethiopia, coffee is a significant crop, but in the Tigray region, particularly southern Tigray, it receives less emphasis despite its national importance. This study investigates the status of coffee production in southern Tigray, Ethiopia, using a multistage sampling technique to gather data from 113 respondents during 2015. The goal is to identify opportunities and constraints in coffee production in the region. Data were collected using individual interviews and Focus Group Discussions, and analyzed using SPSS software and a ranking index. The study found that favorable agro ecology, fertile soils, accessibility to water, and existence of tolerant coffee varieties are the opportunities in southern Tigray, Ethiopia. However, constraints include irrigation competition, lack of training, limited input use, and shifting to khat (Catha edulis) cultivation. Additionally, most farmers do not practice pruning and rejuvenation due to lack of technical knowledge. This result in the coffee plants stand; more erect, less branched and unmanageably tall which rendering difficult to harvest berries. Hence, the study suggested that an integrated coffee production intervention is important to boost coffee production and local policy instrument is prerequisite that restrict the shifting of coffee to khat production in the study districts.

Media as an instrument of Russia's information policy

This article explores the role of the media in the implementation of the state information policy, as well as the possibility of domestic media to become a key tool in the information confrontation with unfriendly countries. Among the main threats in the Doctrine of Information Security of the Russian Federation is the increase in the use of information-psychological influence technologies by intelligence services of certain states, aimed at destabilising the internal political, social and economic situation in various regions of the world, leading to the undermining of sovereignty and violation of territorial integrity of other states. The influence of the media on mass consciousness remains, without exaggeration, extensive, despite the radical changes in the landscape of the media environment caused by the spread of the Internet. In the era of digitalisation, the information space is undergoing significant transformations, which also concern the methods of media influence on mass consciousness. The Internet, having become a global communication platform, has provided the media not only with new channels for content distribution, but also increased their influence through personalisation and algorithmic filtering of information. The author examines the methodology and principles of information flows application in the context of information warfare. The author also analyses the use of media not only as an information intermediary, but also as a conduit of values, ideology and positive image of Russia.

Modern state migration policy models: migration protectionism as a factor of migration attractiveness

The choice of the model of migration policy of a modern state depends on various aspects, both in the economic, demographic and political planes. A rationally chosen model of migration policy allows you to ensure the effectiveness of managing migration flows and achieving optimal socio-economic development of the state, minimizing risks in the field of national security. The study examines various approaches to typologizing the models of migration policy of a modern state, and also provides an author's classification of migration policy models characteristic of states receiving migrants. Migration protectionism is cited as a key criterion for the author's typology of models, which, within the framework of the migration regime of a particular state, has a significant impact on the level of its migration attractiveness, based on the norms of acts of national migration legislation and ratified international agreements. Migration protectionism is considered as a result of the activities of the authorities of the receiving state of migrants, directly forming the migration regime. At the same time, the level of preferences in relation to various categories of migrants and types of migration acts as a mechanism for differentiating external migration according to various criteria, among which one can single out the purpose of entry, the state of origin, the level of qualifications of external migrants, knowledge of the language, which makes it possible to stimulate the demanded migration and limit unwanted. The study of migration protectionism as one of the instruments of the migration policy of the state makes it possible to identify the conceptual foundations of the formed migration regime, determine the types of foreign migration in demand and predict the trends in further political and legal regulation of state migration policy.

Living lab as support for co-creation of value: application to agro-biodiversity contracting solutions

ABSTRACT In addition to providing private goods such as food, fibre and biomass, agriculture can deliver a variety of environmental public goods and ecosystem services, such as biodiversity conservation, water filtering, carbon sequestration, and landscape aesthetics for recreation. Often, however, the use of agricultural landscapes prioritises the provision of private goods, resulting in negative environmental impacts. To address this imbalance in the provision of private and public goods, targeted policy instruments (e.g. contracts) are required to ensure that public goods are provided at the level desired by society. This paper, which is written in the context of the Horizon 2020 project “Contracts 2.0 – H2020 RUR-03-2018”, aims to present a Living Lab case study in Tuscany to point out possible future scenarios of contractual solutions that could provide the right incentives for farmers and land managers to produce a specific environmental public good such as agro-biodiversity. This paper aims to evaluate the application of Living Labs in the case study, assessing what challenges might seriously hinder the collaboration process and/or the success of the participatory approach. Thanks to the participatory approach, it was possible to finalise the “dream contract” in the Living Lab case study. Contract Innovation Labs and Policy Innovation Labs members agreed on a new type of contract based on clear and measurable objectives decided together by farmers and public authorities.

The Sanctions Principles-Based Regulation: A Blueprint for a New Approach for the EU Sanctions Policy (Part I)

192 Despite the tremendous number of studies devoted to the effectiveness of economic sanctions, the unprecedented number of sanctions applied and the recent European Union (EU) reforms on sanctions, sanctions effectiveness should be still a matter of debate. More than a year after Russia’s full-scale invasion of Ukraine, but G7-led sanctions have not materially hindered Russia’s war effort. This study intends to address this problem by focusing on how to make the use and application of EU sanctions against Russia more effective. In doing so, I argue that the main impediments to EU sanctions effectiveness are systemic in nature and inherent to the EU sanctions policy framework. The piecemeal changes of the EU sanctions regulatory framework undertaken so far have not solved these systemic flaws that undermine the effectiveness of EU sanctions. A fundamental revision of the entire system of the EU sanctions policy framework is needed. This study proposes implementing a comprehensive principles-based framework for EU sanctions policy, where harmonisation and the risk-based approach are its foundations, to make sanctions more effective. The proposed sanctions principles-based framework is broader in its scope than is currently the case; it covers a broader set of principles. The proposed frame includes all the stages of the sanctions process, is addressed to a broader number of actors and its foundations are developed. I recommend that this sanctions principles-based framework should be mandatory for use. This is the first part of a two-part article. Part I of the article discusses the need for the revision of the regulatory approach to the EU sanctions policy to increase the effectiveness of sanctions. It includes the analysis of the EU sanctions as a foreign policy instrument and a comprehensive overview of the EU regulatory framework on sanctions as well as the analysis of imposition of the EU sanctions against Russia. Part I also discusses policy proposals for the effectiveness of the EU sanctions, such as harmonisation of the EU sanction policy and the application of a sanctions risk-based approach.

From death to birth: Do logistics parks help local renewals in logistics industry?

In the era of E-commerce and globalization, the logistics industry has become a new driving force for local economic development, with government-led logistics parks planned and constructed as a powerful policy instrument. Skeptical about whether logistics parks really take effect as expected, this paper investigates the local process of creative destruction in the logistics industry, focusing on how government-led logistics parks bridge between firm exit and firm entry during industrial renewal. Using firm-level data of third-party logistics firms in China from 2003 to 2021 and adopting system GMM estimator method, we verify that previous exit contributes to future entry but varies by the firm type and the city's importance in the regional transport network. Furthermore, we find two major roles of government-led logistics parks: (1) accelerating this process by providing the platform where various resources can be reused and reorganized into high-quality new logistics firms; and (2) prioritizing the rebirths from local existing firms over arrivals from other cities, though with some level of local protectionism. Government policies and planning decisions should maintain such function without inhibiting regional market integration.

Legal Regulation of Formation and Management of the “Safety Cushion” as an Instrument of the Anti-Crisis Policy of a State

Legal Regulation of Formation and Management of the “Safety Cushion” as an Instrument of the Anti-Crisis Policy of a State

What helps improve outcomes of industrial policy in developing countries? Evidence from Russia

ABSTRACT In developing countries, implementing effective industrial policies faces challenges due to capacity and governance constraints, hindering accumulation of recognised success stories. This impedes our understanding of effective industrial policy tools in countries with accountability deficits. This article explores Russia’s Industrial Development Fund (IDF) support programmes, initiated since 2014, aimed at promoting import substitution through low-interest loans to industrial firms. These IDF programmes appeared to be more effective than most of Russia’s other industrial policy instruments. The article shows that they have resulted in statistically significant sales growth for supported businesses. It highlights institutional features contributing to programme effectiveness, ensuring the integrity of beneficiary selection and project support. It offers valuable insights for organisations implementing state support programmes in challenging governance conditions. Additionally, the recent emergence of more effective industrial policy tools like the IDF may partly explain Russia’s increased economic resilience against international sanctions imposed due to the war in Ukraine.