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In this note, we establish an alternative reference scenario based on an ARFIMA estimated using global CO2 emissions from 1750 to 2013. These new reference forecasts are free from additional assumptions on demographic and economic variables, often used in most reference forecasts. Instead, we only rely on the properties of the underlying stochastic process for global CO2 emissions that are, in this sense, closer to fundamentals. Our reference forecasts are clearly below the levels proposed by other reference scenarios available in the literature. This is important, as it suggests that the ongoing policy goals are actually easier to reach than what is implied by the standard reference scenarios. Having lower and more realistic reference emissions projections gives a truer assessment of the policy efforts that are needed, and highlights the lower costs involved in mitigation efforts, thereby maximizing the likelihood of more widespread environmental policy efforts.

The purpose of this paper is to measure the degree of persistence of the overall, core, food and energy Harmonized Indexes of Consumer Prices for the European Monetary Zone (HICP-EAs) and to identify its implications for decision-making in the private sector and in public policy. Using a non-parametric approach, our results demonstrate the presence of a statistically significant level of persistence in four HICP-EAs: headline, core, food and energy. Moreover, contrary to popular belief, the core index does not reflect permanent price changes. We also find evidence that the food and energy price indexes are more volatile and more persistent than the other two price indexes. Our results also show a reduction in persistence for both the headline and the core price indexes after the implementation of the single monetary policy, but not for food and energy. These results have important implications for both the private sector and for policymakers who use the core as a reference price index for their decision-making because the use of this index can lead to an erroneous perception of price movements.

Abstract:This paper extends the neoclassical growth model with natural capital by introducing two new concepts: allocation of natural capital and materialization. We consider that anthropogenic environmental impact is correlated with the throughput of the economy (materialisation). Materialisation is the material throughput per unit of economic activity. We capture the effect of the reduction of this throughput -dematerialisation -in the elasticities of materialisation and aggregate environmental impact. In our framework the fraction of natural capital devoted to production does not provide direct environmental services nor does it contribute to ecosystem functioning namely affecting the carrying capacity of natural capital. We analyse an optimal sustainable growth path, in the context of exogenous technological change. Our main conclusion is that the ratio of dematerialisation elasticities must equal the inverse of the share of natural capital in order to assure unbounded economic growth with constant natural capital.Palavras-chave/Keyword: Economic growth, environmental concerns, sustainability constraints, materialisation and allocation of natural capital.

We provide reference forecasts for CO 2 emissions from burning fuel fossil and cement production in Portugal based on an ARFIMA model approach and using annual data from 1950 to 2017. Our reference projections suggest a pattern of decarbonization that will cause the reduction of 3.3 Mt until 2030 and 5.1 Mt between 2030 and 2050. This scenario allows us to assess effort required by the new IPCC goals to ensure carbon neutrality by 2050. For this objective to be achieved it is necessary for emissions to be reduced by 39.9 Mt by 2050. Our results suggest that of these, only 8.4 Mt will result from the inertia of the national emissions system. The remaining reduction on emissions of 31.5 Mt of CO 2 will require additional policy efforts. Accordingly, our results suggest that about 65.5% of the reductions necessary to achieve IPCC goals require deliberate policy efforts. Finally, the presence in the data of long memory with mean reversion suggests that policies must be persistent to ensure that these reductions in emissions are also permanent.