Florian Manuel Egli

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Egli

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Florian Manuel

ORCID

0000-0001-8617-5175

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Publications 1 - 10 of 36

Quantifying climate finance needs in the nationally determined contributions of developing countries
Isah, Abdulrasheed; Egli, Florian Manuel; Schmidt, Tobias; et al. (2025)
Climate Policy
Climate finance is critical for developing countries to achieve the goals of the Paris Agreement. Understanding country-specific climate finance needs and priorities is therefore essential for the effectiveness of multilateral climate frameworks in facilitating climate finance flows to developing countries. The Nationally Determined Contributions (NDCs) that countries submit under the Paris Agreement provide information on national climate goals and sectoral priorities. While there is a huge literature on the transparency, accountability, and policy implications of NDC targets, less attention has been paid to the climate finance needs that developing countries communicate in their NDCs. Here, we propose a framework for measuring the specificity of developing countries’ climate finance needs and develop the Climate Finance Needs Specificity (CLIFS) dataset by manually analyzing 251 NDCs – 133 first and 118 updated NDCs. We measure the specificity of climate finance needs across mitigation and adaptation corresponding to the existence and the level of granularity of climate finance needs reported in these NDCs. Our results show an increase in the specificity of climate finance estimates between the first and updated NDCs for both mitigation and adaptation, and at the sectoral and sub-sectoral levels. African countries are more likely to quantify climate finance needs in their NDCs than countries from other regions. Based on data from sample countries, we find that estimated annual climate finance needs exceed $600 billion by 2030. This is double the amount pledged to the New Collective Quantified Goal (NCQG) on climate finance by 2035 and underscores the need for strong ambition in the implementation of the Baku to Belém Roadmap. We provide policy implications for various stakeholders, highlight the limitations of our study, and outline future research directions related to climate finance and policy.
A dynamic analysis of financing conditions for renewable energy technologies
Egli, Florian Manuel; Steffen, Bjarne; Schmidt, Tobias (2018)
Nature Energy
Determinants of fossil fuel divestment in European pension funds
Egli, Florian Manuel; Schärer, David; Steffen, Bjarne (2022)
Ecological Economics
Divestment from fossil fuel companies could help align financial flows with climate targets and reduce the related risk exposure of investors. Yet, investors reach different conclusions whether to divest. In this article, we derive hypotheses for financial and non-financial divestment motives to explore the determinants of divestment. Using a newly compiled data set on the 1000 largest European pension funds, we find that 129, or 13%, of these funds, representing USD 2.6 trillion in assets under management (33%), have divested from fossil fuels. Most of these funds (n = 75, AUM = USD 2.1 trillion) have committed to divesting from coal only, while some have committed to divest from all fossil fuels (n = 16, AUM = USD 109 billion). We find that divestment is more likely among larger and publicly owned pension funds. Among privately owned pension funds, we find that open funds competing for clients are more likely to divest compared with company funds restricted to employees. Hence, we identify size, ownership and market competition as key determinants for divestment decisions. Furthermore, we find weaker evidence for sectoral differences (e.g., higher likelihood in financial sector), albeit independent of carbon intensities, and a positive effect of climate policy stringency.
Accounting for finance in electrification models for sub-Saharan Africa
Agutu, Churchill; Egli, Florian Manuel; Williams, Nathaniel J.; et al. (2022)
Nature Energy
Electrifying 600 million people in sub-Saharan Africa will require substantial investments. Integrated electrification models inform key policy decisions and electricity access investments in many countries. While current electrification models apply sophisticated geospatial methods, they often make simplistic assumptions about financing conditions. Here we establish cost of capital values, reflecting country and electrification mode (that is, grid extension, minigrids and stand-alone systems), and specific risks faced by investors and integrate them into an open source electrification model. We find that the cost of capital for off-grid electrification is much higher than currently assumed, up to 32.2%. Accounting for finance shifts approximately 240 million people from minigrids to stand-alone systems in our main scenario, suggesting a more cost-effective electrification mode mix than previously suggested. In turn, electrification models based on uniform cost of capital assumptions increase the per kWh cost of electricity by 20%, on average. Upscaling and mainstreaming off-grid finance can lower electrification cost substantially.
Skills-based and regionally explicit labor market exposure to the low-carbon transition in Europe
Zaussinger, Felix; Schmidt, Tobias; Egli, Florian Manuel (2025)
Joule
Transitioning to a low-carbon economy leads to shifts in the labor market. Yet, an effective policy response to such shifts is currently limited by knowledge gaps on the occupations at risk, their skill profiles, and their regional and sectoral distributions. Here, based on a novel classification of occupational exposure covering 3,008 occupations and 13,500 skills, we map the labor market exposure to the low-carbon transition across European regions and sectors using granular labor force surveys. We find that workers in high-carbon jobs lacking industry decarbonization options (at-risk jobs) have significantly fewer skills and that their skills are less transversal compared with low-carbon or neutral jobs, which may inhibit switching to in-demand occupations. Moreover, large variations between regions and sectors can be expected. For example, while at-risk jobs are most frequent in the mining sector in relative terms (11%), the manufacturing sector is most affected in absolute terms (0.9 M). Crucially, our approach shows that effective deployment of industry decarbonization options helps reduce the number of at-risk workers from 6.2 to 2.3 M. Finally, we show that, among European countries with available data, Germany and Hungary face a particular challenge with a disproportionately high share of their workforce at risk, combined with low public support via the EU Just Transition Fund. Responding to these national and regional labor market impacts is critical to avoid policy backlash.
Estimating the cost of capital for solar PV projects using auction results
Egli, Florian Manuel; Orgland, Nikolai; Taylor, Michael; et al. (2023)
Energy Policy
The cost of capital (CoC) is an important parameter for accurately calculating power generation cost, particularly for capital-intensive renewables such as solar PV. However, data on CoC is sparse, which is an issue given large differences in CoC between countries and over time. The global trend towards competitive auctions for renewable energy deployment provides an opportunity to fill this gap. Here, we demonstrate how to combine auction price and project-level cost data to estimate the CoC for solar PV over time in nine countries, analysing 3′983 individual projects. Based on our results, we conclude that the CoC has fallen considerably across countries in all five continents analysed. These decreases were largely due to a reduction in premiums that investors demand for solar PV projects. We also find a strong decline in the variance of the data across time, pointing to better data quality and/or more homogenous project conditions. This trend is encouraging for future analyses, including potential CoC forecasting. However, given data quality issues and the amount of manual work required to address these, the approach should not be used as a standalone to estimate the CoC across countries.
Harnessing oil and gas superprofits for climate action
Egli, Florian Manuel; Grubb, Michael; Stünzi, Anna (2024)
Climate Policy
Climate change disproportionately harms low-income countries, whilst international climate finance to support them remains inadequate. Negotiations about the New Collective Quantified Goal (NCQG) centre around how to cover increasing needs of developing countries. Windfall profits of the fossil fuel industry, which benefits from this dominant source of greenhouse gas emissions, could contribute to mobilizing more finance, both for the NCQG and wider needs of domestic and international climate finance. We find that the energy crisis of 2022 led to oil and gas industry ‘superprofits’ in the same year – defined as being above the stated expectations at the beginning of the year – amounting to about half a trillion dollars (US$490 bn above the $753 bn projected by the companies). Over $200 bn of this accrued to companies directly controlled by governments, two-thirds of which do not have a historical commitment to contribute to international climate finance. The remaining $280 bn of superprofits went to privately controlled companies, of which over 95% are headquartered in countries currently contributing to international climate finance. We argue that there is a clear case to include fossil fuel profits on the agenda of UNFCCC climate finance negotiations and to pursue an international agreement on minimum fossil fuel production taxes. Given that most privately controlled superprofits occurred in G20 countries and the group's ability to reach agreement on corporation taxes recently, the G20 could be a natural forum to pursue such policy action.
Representation of financial markets in macro-economic transition models-a review and suggestions for extensions
Sanders, Mark; Serebriakova, Alexandra; Fragkos, Panagiotis; et al. (2022)
Environmental Research Letters
As the energy transition accelerates and renewable energy technologies become cost-competitive with fossil fuels in many countries, the availability of finance could become a bottleneck. Integrated assessment models (IAMs) and other macro-economic transition (MET) models typically do not feature detailed financial markets and do not sufficiently consider financing barriers and opportunities for the transition to carbon neutrality. While progress has been made in the representation of financial markets in macro-models since the financial crisis of 2008 the focus has been on financial (in)stability of the financial sector, not its ability to finance investment projects in the energy transition. Hence, a crucial gap remains, preventing macro model-based analysis of financing barriers and policy interventions that may accelerate the energy transition. In this article we review how state-of-the-art macro-economic models consider the financial sector. From this review we identify what elements are still missing to adequately model the financial dynamics and challenges for the energy transition specifically. Based on a discussion of relevant parts of the finance literature, we then propose four steps to improve the representation of finance in global IAMs and MET models more generally.
The politics of phasing out fossil fuels: party positions and voter reactions in Norway
Egli, Florian Manuel; Knecht, Nielja; Sigurdsson, Fride; et al. (2025)
Climate Policy
To mitigate climate change, fossil fuels need to be phased out, but political parties may fear a voter backlash when implementing the required policies. We investigate whether such backlash occurred in Norway, a multi-party democracy reliant on a large petroleum sector. Specifically, we analyse whether the loss of jobs in the petroleum industry due to the 2014 crash of the international oil price has influenced political support for the petroleum sector. Using data from party manifestos, we find that party positions on the petroleum sector remained constant over time even during an industry downturn. Pro-petroleum parties capitalized on the oil price shock by increasing their vote shares. However, the reaction remained local and confined to parties whose voters are not overwhelmingly concerned with other subjects, such as immigration. The voter gains enjoyed by pro-petroleum parties did not arise at the expense of pro-fossil fuel phaseout parties; instead, it was parties with an ambiguous position on the issue that incurred losses. Hence, multi-party politics of fossil fuel phaseouts are complex and taking a pro-phaseout position may not be politically costly.
A dynamic climate finance allocation mechanism reflecting the Paris Agreement
Egli, Florian Manuel; Stünzi, Anna (2019)
Environmental Research Letters
Reaching the goal of the Paris Agreement requires substantial investment. The developed country parties have agreed to provide USD$100 billion in climate finance annually from 2020 to 2025. Ongoing negotiations on post-2025 commitments are likely to exceed that sum and include a broader scope of parties. However, there is no guidance regarding the allocation of contributions. Here, we develop a dynamic mechanism based on two conventional pillars of a burden sharing mechanism: emission responsibility and ability to pay. The mechanism adds dynamic components that reflect the Paris principle to 'ratchet-up' ambition; it rewards countries with ambitious mitigation targets and relieves countries with a high degree of climate vulnerability. Including developed country parties only, we find that ten countries should bear 85% of climate finance contributions (65% if all parties to the Paris Agreement are included). In both scopes, increasing climate ambition is rewarded. If the EU increased its emission reduction target from 40% to 55% by 2030, member states could reduce their climate finance contributions by up to 3.3%. The proposed mechanism allows for an inclusion of sub-, supra- or non-state actors. For example, we find a contribution of USD$3.3 billion annually for conventionally excluded emissions from international aviation and shipping.

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Florian Manuel Egli

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