Matthias Rodemeier obtains an ERC Starting Grant
Matthias Rodemeier (Department of Finance and Baffi research center, in photo) was awarded an ERC Starting Grant, among Europe’s most prestigious sources of funding for early-career scholars. Since this European fund was established, the total number of successful projects submitted by researchers at Bocconi University has thus risen to 75.
Matthias Rodemeier: Can Markets Deliver Real Environmental Benefits?
Matthias Rodemeier’s M4E – Market-Based Solutions for Environmental Challenges examines the expanding role of private markets in areas where environmental regulation remains incomplete. This includes mitigation markets that avoid pollution, as well as adaptation markets that help market participants adjust to pollution and heatwaves. Both markets could be promising complements to environmental policy but suffer from severe informational frictions.
Carbon offsets, an example of mitigation markets, are intended to channel private money toward projects that reduce emissions. Yet buyers often have difficulty verifying whether the promised reductions in carbon emissions are real. In adaptation markets, multinational firms increasingly offer additional pay to workers to accept shifts during heatwaves or periods of severe air pollution. However, labor unions and regulators argue that workers underestimate the associated health risks of pollution and heat and may be lured into hazardous shifts by these incentives.
M4E will test whether better market design---through information disclosure, monitoring, and contract design---can make these private markets for the environment more effective. A large-scale field experiment involving around 20,000 clean cookstoves will use tamper-resistant, blockchain-based monitoring to measure the actual use and the true emission reductions of carbon offsets. Further experiments will investigate whether individually tailored advice through artificial intelligence can help firms and consumers distinguish high-impact carbon offsets from less credible ones.
A third part of the project will analyze data from more than seven million food deliveries in Italy. By combining information on couriers’ labor supply with real-time pollution and temperature data, Rodemeier will develop a novel algorithmic payment mechanism designed to compensate workers fairly for environmental health risks without encouraging uninformed workers to overexpose themselves to these hazards.
Also Grace Ballor, (Department of Social and Political Sciences and Dondena research center) have each been awarded an ERC Starting Grant. The European Research Council, established by the European Union in 2007, is Europe’s leading funding organization for excellent research. It funds researchers of any nationality and age to carry out projects across Europe. The ERC offers four main grant programs: Starting Grants, Consolidator Grants, Advanced Grants, and Synergy Grants.