This paper introduces a novel composite energy poverty indicator, the M2LIHC, which combines elements of the twice-median expenditure share (2M) and Low Income High Cost (LIHC) measures. Using a unique dataset merging the Czech Household Budget Survey and EU-SILC data from 2017-2022, we demonstrate how this hybrid approach provides new insights into energy poverty dynamics. The M2LIHC indicator addresses key limitations of existing metrics, avoiding the LIHC measure\u2019s counterintuitive response to income changes in the lowest decile and mitigating the 2M indicator\u2019s potential overestimation of energy poverty among higher-income households with high energy costs. Our comparative analysis reveals significant differences in energy poverty rates and household characteristics identified by each indicator. The M2LIHC measure proves more robust to income fluctuations than LIHC while maintaining sensitivity to both income and energy cost components. We find energy poverty in the Czech Republic has increased across all indicators from 2017 to 2022, with the M2LIHC indicator suggesting a rise from 8.9% to 13.5%. To further validate our approach, we employ the DASMOD (Distributional And Social Impact Model) to simulate various energy and climate policy scenarios. These simulations demonstrate the complex effects of compensation policies on energy poverty measures, with M2LIHC providing a more nuanced view of policy impacts. By providing a more comprehensive and theoretically consistent measure of energy poverty, coupled with policy simulation capabilities, the M2LIHC indicator offers policymakers an improved tool for targeting support and assessing the effectiveness of energy poverty alleviation strategies in the context of energy transitions and climate policies.<\/p>\n
Environmental policies play a crucial role in mitigating climate change and improving air quality, yet their macroeconomic and sectoral implications remain a subject of debate, particularly in coaldependent economies such as the Czech Republic. This paper evaluates the long-term economic and environmental impacts of key climate policies outlined in the updated Czech National Energy and Climate Plan (NECP) within the framework of the EU\u2019s Fit-for-55 package. We employ a hybrid recursivedynamic Computable General Equilibrium (CGE) model, integrating a bottom-up electricity module that disaggregates power generation by technology and a discrete choice module that endogenizes consumer preferences for vehicle technologies. The model is formulated as a mixed complementarity problem (MCP) in GAMS, ensuring the consistent integration of sector-specific technological dynamics within a macroeconomic framework. The electricity module follows a technology-specific zero-profit condition with capacity constraints, while the transport module links consumer choice probabilities to aggregate vehicle stock evolution. The recursive dynamic structure captures investment accumulation, capital stock evolution, and intertemporal adjustments to policy shocks. We assess two scenarios: With Existing Measures (WEM), reflecting the continuation of current climate policies, and With Additional Measures (WAM), incorporating enhanced decarbonization strategies, including coal phase-out, the expansion of renewables, and the introduction of a second Emissions Trading System (ETS2). Our results indicate that while WAM requires higher upfront investments, it leads to a 75% reduction in power sector CO2 emissions by 2040 and an 80% market share for battery electric vehicles (BEVs) by 2050. GDP initially benefits from green investments but slows post-2041 due to sectoral shifts, particularly in fossil fuel-related industries. By combining top-down macroeconomic analysis with sector-specific bottom-up technological representation, this study provides a comprehensive framework for assessing the system-wide effects of climate policy. The findings offer empirical insights for Czech and EU policymakers in designing cost-effective and equitable decarbonization strategies.<\/p>\n
Dr. Matej Opatrny<\/a> MSc. I\u00f1aki Alberto Veruete Villegas<\/a>
\n(Researcher, Charles University Environment Center \/ Lecturer, Charles University, Institute of Economic Studies at Faculty of Social Sciences)<\/p>\n
\n(Researcher, Charles University Environment Center \/ PhD student at The Institute of Economic Studies, Faculty of Social Sciences, Charles University)<\/p>\nGuest<\/h5>\n