Climate change and credit risk: The effect of carbon tax on Italian banks' business loan default rates

Climate change poses severe systemic risks to the financial sector through multiple transmission channels. In this paper, we estimate the potential impact of different carbon taxes (€50, €100, €200 and €800 per ton of CO2) on the Italian banks’ default rates at the sector level in the short term using a counterfactual analysis. We build on the micro-founded climate stress test approach proposed by Faiella et al. (2022), which estimates the energy demand of Italian firms using granular data and simulates the effects of the alternative taxes on the share of financially vulnerable agents (and their debt). Credit risks stemming from the introduction of a carbon tax - during periods of low default rates - are modest for banks: on average, over a one-year horizon, the default rates of firms increase but remain below their historical averages. The effect is heterogeneous across different sectors and rises with the tax value; however, even assuming a tax of €800 per ton of CO2, the default rates are below their historical peaks.     

Expanding social health protection in Cambodia: An assessment of the current coverage potential and gaps,and social equity considerations

The Royal Government of Cambodia recently launched its National Social Protection Policy framework to strengthen and expand social security and assistance. To inform social health protection policy, we examine socio-economic survey data and administrative coverage data to assess the coverage potential of existing coverage mechanisms and current gaps; and compare equitable contribution rates. Over 53 per cent of the population currently has no social health protection coverage mechanism, and about 16 per cent of the population who do have access to a mechanism are not yet enrolled. Current expansion efforts focus on the formal employee scheme, primarily benefiting individuals from higher income households. In addition, recent coverage expansion to some informal workers leaves significant gaps, particularly among the informal sector. We find out-of-pocket health care expenditure to be an excessive share of income among lower wealth quintile individuals and conclude they are financially vulnerable. Finally, we illustrate that an equitable approach to individual, monthly health care contributions among the lower three quintiles has a severely limited potential for revenue generation, and collection costs could exceed the amount collected. Therefore, we recommend that vulnerable groups should be exempted from contribution payments as social health protection is expanded.     

Assessing the Effects of an Asset-Building Program in Resource-Constrained Households: The Case of Sub-Saharan Africa

ABSTRACT

Using a survey that was administered individually to respondents at set locations, this study examines the effects of participation in an asset-building program in resource-constrained households in rural Ghana (n = 120 in the experimental group and n = 120 in the comparison group). Results suggest the program is effective in reaching the most economically vulnerable households. We also learned that program participation was related to ownership of social assets, as well as psychosocial and financial well-being. Program characteristics, including trust among members and time spent on program-related activities, were related to enhanced social and financial assets, respectively. A number of implications emerge from this study. Given that the program, although effective in reaching the most economically vulnerable households, did not produce significant outcomes in such households, attention may be devoted to understanding ways to enhance the welfare of vulnerable program participants. A targeted approach may be a viable option. With respect to policy, consideration could be given to incorporating microfinance models in poverty alleviation strategies. Continued research using more rigorous design is needed to explore the relationship between microfinance and the welfare of vulnerable participants.     

A new form of energy poverty is the hallmark of liberalised electricity sectors

The restructuring of electricity sectors has resulted in households paying significantly higher prices. Some European prices rose by more than 100 per cent between 2000 and 2010. NSW households experienced an 80 per cent increase during the period 2007 to 2012. Growing numbers of low‐income and vulnerable households are spending higher proportions of disposable income on energy bills and, we contend, suffer deprivation and social exclusion as a result. This phenomenon, we posit, is a new form of energy poverty driven by rapidly rising electricity prices which are directly related to electricity sector restructuring. The energy‐impoverished population is estimated at 150 million in Europe, and growing. Policy responses are ineffective and poorly targeted, while Australian policy makers rely on measures which significantly understate electricity price changes. This article explores the prevalence and consequences of the problem of energy poverty and outlines the extent of its occurrence in Australia, the country hailed as an exemplar of electricity sector liberalisation.     

Breaking the Perverse Health-debt Cycle in Sri Lanka: Policy Options

This paper proposes a finite mixture model to examine how health adversities influence indebtedness of Sri Lankan households. After accounting for unobserved heterogeneity, our empirical analysis reveals that households headed by ill-health members and those with hospitalization are inevitably more vulnerable to indebtedness. The ill-health status of other working-age members also creates milder effects on household indebtedness. We confirm that the health-debt cycle is more severe for urban households, compared to their rural counterparts. The study is testimony to re-emphasizing the role of government in providing much-needed financial protection to vulnerable households and implementing differentiated-policy packages for urban and rural sectors in order to effectively break the health-debt cycle.     

Child poverty in Taiwan during the global financial crisis: from the perspective of new social risks

The economic conditions of families with children during the 2008 financial crisis became worse. The factors affecting child poverty in Taiwan can be explained from the perspective of new social risks. This study analyzed the poverty reduction effects of public transfers and taxes in order to evaluate the government role in the economic downturn. From the viewpoint of the protection of children's rights, new policies must be created in response to new social risks and future financial crises.     

How Much Internalization of Nuclear Risk Through Liability Insurance?

An important source of conflict surrounding nuclear energy is that with a very small probability, a large-scale nuclear accident may occur. One way to internalize the associated financial risks is through mandating nuclear operators to have liability insurance. This paper presents estimates of consumers' willingness to pay for increased financial security provided by an extension of coverage, based on the 'stated choice' approach. A Swiss citizen with median characteristics may be willing to pay 0.14 US cents per kwh to increase coverage beyond the current CHF 0.7 billion (bn.) (US$ 0.47 bn.). Marginal willingness to pay declines with higher coverage but exceeds marginal cost at least up to CHF 4 bn.(US$ 2.7 bn.). An extension of nuclear liability insurance coverage therefore may be efficiency-enhancing.     

气候变化与人权：何种温室气体排放权

气候变化会对基本人权,如生命权、健康权、食物权、住房权、财产权、文化权、迁移定居权、安全权等,造成许多严重的伤害。可从生存排放权、人均排放权和发展排放权三个方面对温室气体排放权进行分析与考查。在保护人民的气候权利方面,国家和政府负有不可推托的责任。在当前的背景下,提出气候权利问题的直接目的就是保护发展中国家与弱势群体的利益,并促使发达国家和富人承担更多的减排义务。     

Reducing U.S. carbon dioxide emissions: an assessment of different instruments

The possibility that carbon dioxide emissions from fossil fuel use might lead to global warming has become a leading environmental concern. Many scientific and environmental organizations have called for immediate action to limit carbon dioxide production. For the most part, however, public debate has focused on a single policy instrument: a carbon tax applied to fossil fuels in proportion to their carbon content. We present a detailed model of the U.S. economy and use it to compare carbon taxes with two other instruments that could achieve the same reduction in carbon dioxide emissions: a tax on the energy content of fossil fuels (a BTU tax) and an ad valorem tax on fuel use. We find that carbon taxes can achieve a given reduction with the least overall effect on the economy, but with a large effect on coal mining. Energy taxes are fairly similar to carbon taxes but have slightly less impact on coal mining and slightly greater overall cost. In contrast, ad valorem taxes fall much more lightly on coal mining but have a much greater effect on the economy as a whole.     

Who Uses Alternative Financial Services? A Latent Class Analysis of Consumer Financial Knowledge and Behavior

ABSTRACT

We examine the heterogeneity of alternative financial services (AFS) use by constructing an empirically rigorous typology of financial knowledge and behaviors. Using the 2012 National Financial Capability Study, we conducted latent class analysis of financial knowledge and behaviors to identify latent classes of AFS users (N = 25,509). The proportion of the distal outcome of AFS was investigated among latent classes. The latent classes in the best fitting model were regressed on demographic variables and selected covariates using multinomial logistic regression. Results indicate that five meaningful subgroups were found. Over half of the U.S. population struggles to establish and maintain savings and position themselves for future financial security and mobility (i.e., financially precarious (25.9%), financially striving (20.5%), and financially at-risk (18.4%) classes). The financially thriving class (27.7%) has the healthiest financial behaviors and the least probability of using AFS. The financially stable (7.4%) and financially at-risk (18.4%) classes have the highest probability of using AFS. Widespread use of AFS suggests a general consumer demand for the products and services. Future research is needed to inform policy and practice efforts to shape the formal financial system to meet the long-term financial needs of the majority of consumers.     

Does Hospitalization Make Elderly Households Poor? An Examination of the Case of Kerala,India

Physical and health risks are very high among aged persons. The precise implications of population ageing for future levels of health and healthcare utilization depend on whether the increases in life expectancy experienced in general are accompanied by an increase or a decrease in health problems in later life. The health risks of the presence of an aged person in a household can result in a catastrophic shock for the family and render such households more exposed to poverty. The increased cost of medical bills means that large numbers of the elderly in the developing world are deprived of access to health and to better health treatment. This article examines this question empirically, using the largest national survey in the Indian state of Kerala, comparing elderly with non‐elderly households. We also attempt to find the impact of unhealthy lifestyles on the financial status of these households, due to hospitalization as a result of an aged person's illness.     

An alternative assessment of global climate policies

This paper analyzes alternative pricing schemes for funding investment in climate policies. This paper proposes a new policy scenario, explicitly disentangling the issue of burden sharing of financing new investments from the issue of taxation energy consumption and therefor emissions. We compare traditional allocation schemes with an optimal Ramsey pricing by applying demand elasticity values, derived from empirical estimations of household behavior for the 106 leading countries in the world, representing around 90% of total world energy consumption and carbon emissions in 2014. We calculate country-specific alternative taxation options: uniform, equitable and Ramsey pricing schemes, applied to households, assessing the related welfare effects. Our results show that the optimal pricing scheme, for a given investment need, can improve world welfare at the expenses of equitable considerations. In addition, the aggregate societal benefit outweighs the losses associated with specific group of countries, paving the way for easier political agreement, using compensation schemes to redistribute the proceeds.     

Gaps in social protection for health care and long‐term care in Europe: Are the elderly faced with financial ruin?

While public expenditure on health care and long‐term care (LTC) has been monitored for many years in European countries, far less attention has been paid to the financial consequences for older people of private out‐of‐pocket (OOP) expenditure necessary to access such care. Employing representative cross‐sectional data on the elderly populations of 11 European countries in 2004 from the Survey of Health, Ageing and Retirement in Europe (SHARE), we find that OOP payments for health care and LTC are very common among the elderly across European countries and such expenditures impact significantly on disposable income: up to 95 per cent of the elderly make OOP payments for health care and 5 per cent for LTC, resulting in income reductions of between 5 and 10 per cent, respectively. Failure to prevent financial ruin, as a consequence of excessive OOP payments, is evident in 0.7 per cent of elderly households utilizing health care and 0.5 per cent of elderly households utilizing LTC. Those particularly concerned are the poor, women and the very old.     

The Diversification Theorem Restated: Risk-pooling Without Assignment of Probabilities

Bayesian decision theory assumes that agents making choices assign subjective probabilities to outcomes, even in cases where information on probabilities is obviously absent. Here we show that agents that presume that they are equal risks can share risks mutually beneficially, even if the probabilities of losses are unpredictable or genuinely uncertain. We show also that different risk aversions among pool members do not exclude mutually beneficial loss sharing at uncertainty. Sharing when individuals’ losses differ in probabilities or in amount may still make individuals better off. Our findings are related to the theory of the insurance firm, to the management of development risks, and to the theory of justice.JEL Classification: D8, G22, L10, L30     

Financial hardship assistance behind the scenes: Insights from financial counsellors

Financial hardship, in a credit society such as Australia, can affect almost anyone. To protect consumers from the negative impacts of financial hardship—which can include the stresses of enforcement action and disconnection from essential services—legal protections have been incorporated into the regulatory frameworks for the consumer credit, energy, water and telecommunications sectors. In this article, we outline the findings of our study, which used a survey of financial counsellors around Australia and focus group interviews with Victorian financial counsellors to examine how these legal protections are being implemented by service providers in these four sectors. Our findings highlight a tendency on the part of service providers to take a generic, one‐size‐fits‐all approach to compliance with these legal protections that prevents them from effectively assisting consumers struggling with debt. We discuss the particular shortcomings of this approach in the context of consumers living on low incomes—especially Centrelink incomes—and outline the policy implications of our findings for assisting these vulnerable groups.     

The impact of tax rates, political partisanship and economic variables on the distribution of state and local tax burdens

This study finds that the effective state and local tax rate for the top 1% of income households as a percentage of the effective state and local tax rate for the bottom 20% of income households in 2002 is significantly influenced by whether a state has a multi-rate income tax, right-to-work laws, the liberalism of a state's electorate, the average tax burden in a state and past tax policy. Democratic Party strength in state government, Republican or Democratic Party institutional control of state government, change in real per capita income, a Democratic Governor and the change in the share of income going to the top 1% of income households are not significant predictors. The empirical results are identical for the top 2-5% of income households to the bottom 20% of income households.     

The sovereign crisis and Italy’s potential output

We evaluate the effects of the European sovereign crisis on Italian potential output (natural output, in the absence of nominal rigidities) by simulating a New Keynesian model. Our results are as follows. First, the 2011–2013 recession subtracted 1.6 percentage points from potential output growth and widened the output gap. Second, the 2013 reforms limited the reduction in output capacity to 1.4 points and enhanced long-run growth by 3. Third, once a balanced budget is achieved in the medium term, reductions in either labor or capital income taxes would boost potential output growth by 0.2 points per year.     

Why Ugandan rural households are opting to pay community health insurance rather than use the free healthcare services

Twikirize JM, O'Brien C. Why Ugandan rural households are opting to pay community health insurance rather than use the free healthcare services Uganda reintroduced free healthcare in 2001, but today, nine years later, less than 30 per cent of the population are using these services. This study investigated why rural households were under‐utilising the government's free health services and turning to community health insurance instead. A survey carried out on 260 randomly selected households was triangulated with qualitative data gained from 3 focus groups and 12 in‐depth interviews. The findings showed that 21 per cent of the households always accessed the government's free health services, while 79 per cent used private health services. The reasons given were poor quality services, including frequent drug stock‐outs, unmotivated and insufficiently trained health personnel, and overcrowding. Factors influencing enrolment in community health insurance included easier access to healthcare, financial protection against the cost of care, better quality care and benefits related to mutual assistance. This has both practical and policy implications, which are discussed in this article.     

Poverty among households in Estonia

Estonia was occupied by the Soviet Union for 50 years. Now she has restored her independence and extensive transformation has started, creating acute social problems. The economic survival of the whole society has become a main goal. The authors examine different poverty lines using the family budget data of 239 households surveyed in May and August 1992 for comparison. The analysis reveals that, whereas the wages and expenditure are low compared with unregulated prices, the share of households living under the poverty line does not reflect the real situation. The poverty among Estonian households reveals a skewed structure of expenditure that indicates exclusion from the consumption-centered way of life. Empirical evidence is given that single-earner households and households with 3 or more children face the danger of falling into deep poverty.     

构建省以下政府间合理财政关系问题研究——兼论“省管县”体制向常态化发展的可能性及路径

对于“省管县”财政体制改革的认识，不能仅定位于压缩财政层级或县域政区财政脱困的权宜之计，必须将其提升至地方行政管理体制变革的高度。中国的财政管理体制改革必须在行政管理体制改革的大背景中找到自己的位置。本文认为，应逐步通过解除市领导县的管理体制，重新整合县域行政辖区，以及必要的省级行政区划的调整，在形成了一个相对合理地地方行政管理层级架构之后，方能营造出构建相对合理的地方政府间财政关系的可能性，进而使得“省管县”财政管理体制成为一种常态化的模式。