Collection |

Economics at Nature Research

Research in the economic sciences lies at the heart of addressing global societal challenges and achieving progress towards the UN Sustainable Development Goals. The Nature Research journals welcome the submission of research across the spectrum of economic sciences and allied disciplines. This Collection highlights economics research from a range of Nature Research journals that feature economics as a priority area in their scope. 

Environmental, energy & climate economics

A decrease in the cost of renewable energy is often attributed to technological learning. This study uses 18 years of data from 133 renewable energy projects in Germany, alongside practitioner interviews, to find that changing financing costs, not just technology, are responsible for a significant cost decrease.

Article | | Nature Energy

Renewable energy costs have declined in the past but things could change with increasing interest rates. This study shows that in Germany, if interest rates increased to pre-financial crisis levels in 5 years, the levelized cost of solar photovoltaics and onshore wind could rise by 11 and 25%, respectively.

Analysis | | Nature Sustainability

Global warming could trigger irreversible regime shifts—‘tipping points’—in the climate system. This study analyses climate policy in the presence of a potential domino effect resulting from the interaction of such tipping points.

Article | | Nature Climate Change

Better understanding of the determinants of residential water demand is important for Tropical Asian countries. Here the author studied how Singapore household electricity use from appliances modify weather-induced water demand and found that residential water and electricity demand respond differently to heat across different income groups.

Article | Open Access | | Nature Communications

Temperature, and therefore climate change, can affect a country's economic productivity, but it has not been clear if rich and poor countries, or different aspects of economic productivity, show similar relationships. These authors use economic data from 166 countries for the years 1960 to 2010 to uncover a universal nonlinear relationship that reconciles earlier results. Economic productivity peaks at an annual average temperature of 13 °C, and the authors explore the likelihood of global economic contraction under future warming scenarios.

Letter | | Nature

Many governments use subsidies for fossil fuels to reduce the cost of energy for domestic consumption. This has led to the frequent argument that removing subsidies could play an important part in mitigating climate change. Now, Jessica Jewel and colleagues show that subsidy removal would indeed substantially lower emissions in fossil-fuel-exporting countries, but would reduce global carbon dioxide emissions by only a few per cent by 2030. This small reduction would largely be due to offsetting effects from international trade and fuel substitution. The authors also find that subsidy removal would not dramatically increase the use of renewable energy, adding to the suggestion that extensive revisions of subsidy policies would not produce a major benefit for climate mitigation.

Letter | | Nature

A shift away from fossil fuel subsidies to carbon pricing could generate revenues to finance progress towards the Sustainable Development Goals. This Perspective shows that in many low-income countries, as private sources of finance are limited, revenues from carbon taxes could be a particularly attractive policy option for financing the SDGs.

Perspective | | Nature Sustainability

Transgressing planetary boundaries has generated global, ongoing and interconnected problems that represent a real challenge to policy makers. This Perspective sheds light on the complexities of designing policies that can keep human life within the biophysical limits of planet Earth.

Perspective | | Nature Sustainability

This Review assesses climate change damage functions, which relate climate variables to economic losses, and how integrated information from impacts, adaptation and vulnerability research could be used to improve estimates of economic risk.

Review Article | | Nature Climate Change

The growing prevalence of drought conditions across the world means that mitigation and adaptation will require accounting for feedback loops between water availability and interventions. The Willamette River Valley in Oregon serves as a case study for how to use coupled human–natural systems to mitigate drought.

Article | | Nature Sustainability

Integrated assessment models estimate the impact of climate change on current economic output, but not on its rate of growth. This study modifies a standard integrated assessment model to allow climate change to directly affect gross GDP growth rates. Results show that climate change significantly slows down GDP growth in poor regions but not in rich countries, with implications for the level of near-term mitigation.

Letter | | Nature Climate Change

It is important to examine the economic viability of battery storage investments. Here the authors introduced the Levelized Cost of Energy Storage metric to estimate the breakeven cost for energy storage and found that behind-the-meter storage installations will be financially advantageous in both Germany and California.

Article | Open Access | | Nature Communications

Political interests play a key role in the passage of climate policy. This study quantifies that political lobbying reduced the probability of enacting the Waxman–Markey bill in the United States by 13 percentage points, representing US$60 billion in expected climate damages.

Article | | Nature Climate Change

Agricultural & natural resource economics

For a developed nation to move to a sustainable society requires simultaneous rebalancing of economics, energy, agriculture and behaviour. Steve Hatfield-Dodds et al. use a multimodel framework to assess the ability to achieve this within a single nation-continent, Australia. Looking at climate, water, food, energy and biodiversity, they show that economic improvement is possible without ecological deterioration, but that specific political and economic choices need to be made to achieve this.

Article | | Nature

The decades-long movement for sustainable seafood is centred on a ‘theory of change’ that emphasizes third-party initiatives for certification and consumer signalling. The evolution of that theory, and its potential futures, shows the challenges of management and co-ordination with multiple actors.

Perspective | | Nature Sustainability

Microeconomics & behavioural economics

Popular opinion has it that unethical business practices are prevalent in the culture of the financial sector. Ernst Fehr and colleagues sought scientific evidence to support this claim. They find that in a laboratory game designed to reveal dishonest behaviour, employees of a large international bank behaved by-and-large as honestly as the rest of us. But in tests designed to mimic the competitive nature of their profession, many of the bankers began to act dishonestly. Those from other industries and student volunteers did not show this effect. The authors conclude that if financial institutions are to regain our trust, they need to encourage honest behaviour by changing the norms associated with their workers' professional identity.

Letter | | Nature

Why are people so often overconfident? Schwardmann and van der Weele show that people self-deceive into higher confidence if they have the opportunity to persuade others for profit and that higher confidence aides persuasion.

Letter | | Nature Human Behaviour

The zero-determinant (ZD) strategies discovered by Press and Dyson overturned several decades of consensus about the iterated prisoner's dilemma. Here, the authors provide the first empirical evidence in support of Press and Dyson’s theory, by showing that knowledge of the opponent and the length of the interaction can facilitate the Generous and Extortionate ZD strategies as predicted.

Article | Open Access | | Nature Communications

In contrast to a previous study in which only bankers showed increased dishonesty when reminded of their profession, this study found that such reminders induced some dishonesty in bankers, although the effect was not significant, and that this effect was not unique to bankers.

Article | | Nature

Honesty is an important character trait in all human societies. Good institutions that limit cheating and rule violations are crucial for prosperity and development, yet deception is common in nature and humans are no exception. Using a behavioural test of honesty with young people (in 23 countries) in which lying is undetectable at the individual level but can be inferred at the population level, Simon Gächter and Jonathan Schulz find that high national scores on an index of rule-breaking are linked with reduced personal honesty.

Letter | | Nature

Fehr and Schurtenberger show that the prevailing evidence supports the view that social norms are causal drivers of human cooperation and explain major cooperation-related regularities. Norms also guide peer punishment and people have strong preferences for institutions that support norm formation.

Review Article | | Nature Human Behaviour

Knowledge of payoffs has been assumed to be weakly beneficial for the emergence of cooperation between humans. Here the authors provide evidence to the contrary, showing that during interactions in a competitive environment access to information about payoffs leads to less cooperative behaviour.

Article | Open Access | | Nature Communications

Punishment by peers can enforce social norms, such as contributing to a public good. Here, Abbink and colleagues show that individuals will enforce norms even when contributions reduce the net benefit of the group, resulting in the maintenance of wasteful contributions.

Article | Open Access | | Nature Communications

Public, labour, development & welfare economics

The economic impact of climate change has typically been considered at regional or national levels. This Perspective assesses impacts at household level to determine effects on poverty and the poor. It shows how rapid development could reduce these impacts.

Perspective | | Nature Climate Change

The cost of green electricity is unfairly distributed, with consumers paying more while industry actors are subsidized. Here, the authors find that reducing the inequity in cost burden by abolishing exemptions increases consumer acceptance of these costs.

Article | | Nature Energy

The social science of happiness needs to recognize the importance of social connection and prosocial action for human well-being and become more interdisciplinary with greater collaboration, especially among social scientists and policymakers.

Perspective | | Nature Human Behaviour

Natural field experiments combine randomized control with an absence of observer effects. However, they have only been used to investigate key labour market phenomena such as unemployment since the early 2000s. This paper reviews the literature and summarizes the insights natural field experiments contribute to the field of unemployment.

Review Article | | Nature Human Behaviour

Wealth inequality and wealth visibility can both potentially affect levels of cooperation in a society and overall levels of economic success. Akihiro Nishi et al. use an online game to test how the two factors interact. Surprisingly, wealth inequality by itself did not damage cooperation or overall wealth as long as players do not know about the wealth of others. But when players' wealth was visible to others, inequality had a detrimental effect.

Letter | | Nature

The interaction between land degradation and the livelihoods of the poor is complex and conditioned by important economic, social and environmental factors. These factors are also in part responsible for the limited success of economic growth policies to reduce poverty.

Review Article | | Nature Sustainability

Ambitious carbon pricing reform is needed to meet climate targets. This Perspective argues that effective revenue recycling schemes should prioritize behavioural considerations that are aimed at achieving greater political acceptance.

Perspective | | Nature Climate Change

Aerosol impacts have not been comprehensively considered in the cost-benefit integrated assessment models that are widely used to analyze climate policy. Here the authors account for these impacts and find that the health co-benefits from improved air quality outweigh the co-harms from increased near-term warming, and that optimal climate policy results in immediate net benefits globally.

Article | Open Access | | Nature Communications

Increasingly, financial institutions will be exposed to climate risks that will exacerbate the negative economic impacts of climate change. An agent-based integrated assessment model is used to analyse climate impacts on the global banking system, finding an increase in banking crises and public bailout costs.

Letter | | Nature Climate Change

India’s Pradhan Mantri Ujjwala Yojana is a programme that seeks to transition poor households away from unclean cooking fuels. In this Analysis, the authors use liquefied petroleum gas sales data to assess the adoption of cooking gas and the impact of this programme in a district of rural Karnataka.

Analysis | | Nature Energy