Dr Kai Lessmann

FutureLab Leiter


Potsdam-Institut für Klimafolgenforschung (PIK)
T +49 (0)331 288 2563
P.O. Box 60 12 03
14412 Potsdam


Kai Lessmann ist leitet die Arbeitsgruppe FutureLab Public Economic and Climate Finance.

Research Interests

My research interests include the analysis of incentives for cooperative policy in the context of global public goods, and integrated assessment of climate change with a focus on economics and the choice of policy instruments.

Work in Progress

Most of my current manuscripts are available on my SSRN (Social Science Research Network) page.

  • Edenhofer, O., K. Lessmann and I. Tahri: "Asset Pricing and the Carbon Beta of Externalities", CESifo Discussion Paper
  • Rosenlund Soysal, E. and K. Lessmann: "Share Repurchase under Diverging Beliefs about Carbon Risk", available on SSRN
  • Yanovski, B., I. Tahri and K. Lessmann: Barriers to Investment in Long-term Infrastructure Projects, available on SSRN
  • Lessmann, K., I. Tahri and B. Yanovski: Portfolio bias of oil-based sovereign wealth funds.
  • Rosenlund Soysal, E., H. Schuldt and K. Lessmann: Financial Frictions and Climate Policy
    in an Open Economy: Promoting a low-cost Green Transition through Clean Energy Investments.
  • Banionienė, Justina, Lina Dagilienė, Michael Donadelli, Patrick Grüning, Marcus Jüppner, Renatas Kizys, Kai Lessmann: The Quadrilemma of a Small Open Circular Economy Through a Prism of the 9R Strategies. Working Paper
  • Franks, M., M. Kalkuhl and K. Lessmann: Optimal carbon prices of carbon dioxide removal. Presented at EEA-ESM 2021, PDF.
  • Kalkuhl, M., M. Franks, F. Gruner, K. Lessmann and O. Edenhofer: Pigou’s Advice and Sisyphus’ Warning: Carbon Pricing with Non-Permanent Carbon-Dioxide Removal (previously Optimal Carbon Pricing when Carbon Removal is not permanent). CESifo Working Paper No. 10169
  • Borck, R., M. Kalkuhl and K. Lessmann: Is working from home good for the

My publications in the PIK Publications database, on Social Science Research Network SSRN, and Research Papers in Economics (RePEc) (also via IDEAS and EconPapers).


  • Lessmann, K. and M. Kalkuhl (2024): Climate Finance Intermediation: Interest Spread Effects in a Climate Policy Model. Journal of the Association of Environmental and Resource Economists. Volume 11, Number 1
    January. DOI 10.1086/725920. Request a PDF.
  • Franks, M. and K. Lessmann (2023). Tax competition among asymmetric countries with international capital and fossil resource markets. Resources Policy Volume 83 103613. DOI 10.1016/j.resourpol.2023.103613. PDF
  • Max Franks, Matthias Kalkuhl, Kai Lessmann (2023). Optimal Pricing for Carbon Dioxide Removal Under Inter-Regional Leakage. Journal of Environmental Economics and Management (forthcoming). DOI: 10.1016/j.jeem.2022.102769. Download accepted manuscript here.
  • Schuldt, H., K. Lessmann (2022): Financing the low-carbon transition: The impact of financial frictions on clean investment. Accepted for publication in Macroeconomic Dynamics. DOI:10.1017/S1365100522000542. Working paper available on SSRN
  • Semmler, W., K. Lessmann, I. Tahri, J. P. Braga (2022): Energy Transition, Asset Price Fluctuations, and Dynamic Portfolio Decisions. Accepted for publication in Annals of Operations Research. doi:10.1007/s10479-022-05018-2.
  • Edenhofer, O., C. Klein, K. Lessmann and M. Wilkens (2022): "Financing the transformation: a proposal for a credit scheme to finance the Paris Agreement" Climate Policy, DOI: 10.1080/14693062.2022.2075820. Accepted manuscript.
  • McConnell, A., B. Yanovski and K. Lessmann (2022) Central bank collateral as a green monetary policy instrument, Climate Policy, 22:3, 339-355, DOI: 10.1080/14693062.2021.2012112. Updated manuscript.
  • Tietjen, O., Pahle, M., Lessmann, K. (2021): "Hedging and temporal permit issuances in cap-and-trade programs: The Market Stability Reserve under risk aversion" Resource and Energy Economics 63, 101214, available as "Carbon Pricing in Electricity Markets Under Uncertainty – The Impact of Risk Aversion and Futures Markets" on SSRN
  • Emmerling, J., U. Kornek, V. Bosetti, K. Lessmann (2020): "Climate thresholds and heterogeneous regions: implications for coalition formation", The Review of International Organizations, online first, doi:10.1007/s11558-019-09370-0. PDF
  • Franks, M., K. Lessmann, M. Jakob, J.C. Steckel, and O. Edenhofer (2018): "Mobilizing Domestic Resources for the Agenda 2030 via Carbon Pricing" Nature Sustainability 1, 350-357, doi:10.1038/s41893-018-0083-3.
  • Franks, M., D. Klenert, A. Schultes, K. Lessmann, O. Edenhofer (2018): "Is Capital Back? The Role of Land Ownership and Savings Behavior." International Tax and Public Finance 25(5), 1252-1276, view.
  • Meya, J., U. Kornek, K. Lessmann (2018): "Uncertainty and the internal stability of climate coalitions - a Monte-Carlo analysis in the model of international climate coalitions." International Environmental Agreements: Politics, Law and Economics 18(2): 175-198, updated manuscript.
  • Klenert, D., L. Mattauch, O. Edenhofer, K. Lessmann (2018): "Infrastructure and Inequality: Insights from Incorporating Key Economic Facts about Household Heterogeneity." Macroeconomic Dynamics 22(4), 864-895, doi:10.1017/S1365100516000432.
  • Schwerhoff, G., U. Kornek, K. Lessmann, M. Pahle (2017): "Leadership in Climate Change Mitigation: Consequences and Incentives", Journal of Economic Surveys 32(2),491-517, doi:10.1111/joes.12203.
  • Kornek U., J. Steckel, K. Lessmann, O. Edenhofer (2017): "The Climate Rent Curse: New Challenges for Burden Sharing". International Environmental Agreements: Politics, Law and Economics, 17(6), 855-882, doi:10.1007/s10784-017-9352-2, PDF
  • Franks, M., O. Edenhofer, and K. Lessman (2017): "Why Finance Ministers Favor Carbon Taxes, Even if They Do Not Take Climate Change into Account." Environmental and Resource Economics 68(3), 445–472,
  • Steckel, J.C., M. Jakob, C. Flachsland, U. Kornek, K. Lessmann, O. Edenhofer (2016): "Towards Sustainable Development Finance". Wiley International Reviews Climate Change, doi:10.1002/wcc.437
  • Lessmann, K., U. Kornek, V. Bosetti, R. Dellink, J. Emmerling, J. Eyckmans, M. Nagashima, H.-P. Weikard, Z. Yang (2015): "The stability and effectiveness of climate coalitions: A comparative analysis of multiple integrated assessment models". Environmental and Resource Economics, 62(4), 811-836, doi:10.1007/s10640-015-9886-0, updated manscript.
  • Edenhofer, O., Jakob, M., Creutzig, F., Flachsland, C., Fuss, S., Kowarsch, M., Lessmann, K., Mattauch, L., Siegmeier, J., Steckel, J. (2015): "Closing the Emission Price Gap." Global Environmental Change 31:132-143. updated manuscript.
  • Kalkuhl, M., Edenhofer, O., Lessmann, K. (2015): "The Role of Carbon Capture and Sequestration Policies for Climate Change Mitigation", Environmental and Resource Economics Volume 60, Issue 1, pp 55-80, doi:10.1007/s10640-013-9757-5PDF.
  • Jakob, M., K. Lessmann and T. Wildgrube (2014), "The Role of Emissions Trading and Permit Allocation in International Climate Agreements with Asymmetric Countries", Strategic Behavior and the Environment: Vol. 4: No. 4, pp 361-392. doi:10.1561/102.00000050, PDF.
  • Lessmann, K., R. Marschinski, M. Finus, U. Kornek, O. Edenhofer (2013): "Emissions trading with non-signatories in a climate agreement - An analysis of coalition stability", The Manchester School, doi:10.1111/manc.12045. (Pre-peer-review Bath Economics Research Paper version).
  • Edenhofer, O., C. Flachsland, M. Jakob, K. Lessmann: The Atmosphere as a Global Commons - Challenges for Challenges for International Cooperation and Governance. In: Semmler, W., L. Bernard (eds.): The Oxford Handbook of the Macroeconomics of Global Warming. Oxford University Press, and online. Discussion Paper 2013-58. Cambridge, Mass.: Harvard Project on Climate Agreements, August 2013 PDF
  • Pahle, M., Lessmann, K., Edenhofer, O., Bauer, N. (2013): Investments in Imperfect Power Markets under Carbon Pricing: A Case Study Based Analysis. The Energy Journal 34(4), doi:10.5547/01956574.34.4.10.
  • Kalkuhl, M., Edenhofer, O., Lessmann, K. (2013): Renewable energy subsidies: Second-best policy or fatal aberration for mitigation? Resource and Energy Economics, 35 (3), pp. 217-234, PDF.
  • Jakob, M. and K. Lessmann (2012): "Signaling in International Environmental Agreements: The Case of Early and Delayed Action" International Environmental Agreements: Politics, Law and Economics 12(4), 309-325.
  • Kalkuhl, M., O. Edenhofer and K. Lessmann (2012): "Learning or Lock-in: Optimal Technology Policies to Support Mitigation". Resource and Energy Economics, 34(1), 1-23, PDF.
  • Heitzig, J., Lessmann, K., Zou, Y. (2011): "Self-enforcing strategies to deter free-riding in the climate change mitigation game and other repeated public good games." Proceedings of the National Academy of Sciences (PNAS), 108, 38, 15739-15744, PDF.
  • Lessmann, K. and O. Edenhofer (2011): "Research Cooperation and International Standards in a Model of Coalition Stability." Resource and Energy Economics, 33(1), 36-54. doi:10.1016/j.reseneeco.2010.01.001, PDF.
  • Edenhofer, O., Knopf, B., Barker, T., Baumstark, L., Bellevrat, E., Chateau, B., Criqui, P., Isaac, M., Kitous, A., Kypreos, S., Leimbach, M., Lessmann, K., Magné, B., Scrieciu, S., Turton, H., van Vuuren, D.P. (2010): The economics of low stabilization: exploring its implications for mitigation costs and strategies. The Energy Journal, Volume 31 (Special Issue 1). The Economics of Low Stabilization, 2010, PDF
  • Held, H., Kriegler, E., Lessmann, K., Edenhofer, O. (2009). "Efficient Climate Policy under Technology and Climate Uncertainty." Energy Economics, doi: 10.1016/j.eneco.2008.12.012.
  • Lessmann, K., R. Marschinski, O. Edenhofer (2009). "The effects of tariffs on coalition formation in a dynamic global warming game" Economic Modelling 26(3):641-649. PDF, doi:10.1016/j.econmod.2009.01.005.
  • Edenhofer, O, Kemfert, C., Lessmann, K., Grubb M., Koehler J. (2006). "Induced Technological Change: Exploring its Implications for the Economics of Atmospheric Stabilization: Synthesis Report from the Innovation Modeling Comparison Project." The Energy Journal (Special Issue: Endogenous Technological Change and the Economics of Atmospheric Stabilisation): 57-107, PDF.
  • Edenhofer, O., Lessmann K., Bauer, N. (2006). "Endogenous and Induced Technological Change in the Model MIND." The Energy Journal (Special Issue: Endogenous Technological Change and the Economics of Atmospheric Stabilisation): 207-222. PDF
  • Edenhofer, O., Lessmann, K. (2005). "Climate Policy and Energy Security." International Network To Advance Cllimate Talks, Options for Future Climate Policy: Transatlantic Perspectives. PDF
  • Edenhofer, O., Lessmann, K., Bauer, N., Held, H., (2005). "Climate Protection! - A New Energy Policy?" Vierteljahreshefte zur Wirtschaftsforschung 74(2):137-147. PDF
  • Lessmann, K., A. Beyer, J. Klasmeier, M. Matthies (2005). "Influence of Distributional Shape of Substance Parameters on Exposure Model Output." Risk Analysis 25:1137-1145, doi:10.1111/j.1539-6924.2005.00669.x.


  • Lessmann, K. (2010). "Towards more cooperation and low-carbon technology – Endogenous Technological Change in Strategies for Mitigating Climate Change." Suedwestdeutscher Verlag fuer Hochschulschriften, ISBN 978-3838113036. Publication of the PhD Thesis
  • Lessmann, K. (2009). "Endogenous Technological Change in Strategies for Mitigating Climate Change" PhD Thesis. urn:nbn:de:kobv:83-opus-23595


  • Flachsland, C., Lessmann, K., Edenhofer, O. (2012): Climate Policy in a Decentralised World. - In: Edenhofer, O., Wallacher, J., Lotze-Campen, H., Reder, M., Knopf, B., Müller, J. (Eds.), Climate Change, Justice and Sustainability. Dordrecht : Springer, 257-268
  • Edenhofer, O., Lessmann, K. (2007): "Vom Preis des Klimaschutzes und vom Wert der Erde. Technischer Fortschritt und das Konzept 'starker' Nachhaltigkeit." Jahrbuch für Ökologische Ökonomik, Band 5: Soziale Nachhaltigkeit, Seite 239ff, Metropolis Verlag, Marburg 2007.


  • Sörgel, B., Kriegler, E., Bertram, C., Crawford, M., Delsa, L., Franks, R. M., Humpenöder, F., Leip, D., Lessmann, K., Popp, A., Taconet, N., Weindl, I., Edenhofer, O. (2022): Joint implementation of the Sustainable Development Goals, climate change mitigation and biosphere protection: Policy options for tackling multiple crises simultaneously, Potsdam : Potsdam Institute for Climate Impact Research (PIK), 33 p. doi:10.48485/pik.2022.003.
  • Lessmann, K., Schütze, F. et al. (2021): The Financial Sector as Climate Protector? The Potential of Sustainable Finance. Background Paper (in German), download.
  • Duscha, V., J. Schleich, U. Kornek und Lessmann, K. (2015): "Verteilungsgerechtigkeit und Vorreiterverhalten in internationaler Klimapolitik", Hintergrundpapier zum 3. Forum Klimaökonomie des BMBF, PDF.
  • Kornek, u., K. Lessmann, H. Tulkens (2014), “Transferable and Non Transferable Utility Implementations of Coalitional Stability in Integrated Assessment Models”, CORE working paper 2014/35.
  • Edenhofer, O., C. Flachsland, K. Lessmann (2011): Wem gehört die Atmosphäre? Nach dem Klimagipfel in Cancún. Stimmen der Zeit 2: 75-88.
  • Lessmann, K. (2009). "Endogenous Technological Change in Strategies for Mitigating Climate Change" PhD Thesisurn:nbn:de:kobv:83-opus-23595.


  • "Determinants of cooperative climate policy among heterogeneous countries – insights from numerical modeling", invited lecture at University of Kassel, Volkswirtschaftliches Forschungskolloquium, November 30th 2016, Institut für Volkswirtschaftslehre. PDF
  • "The effect of climate thresholds on coalition formation", 7th Atlantic Workshop on Energy and Environmental Economics. link_icon.gifAWEEE home, PDF
  • "Emission trading with non-signatories in a climate agreement - An analysis of coalition stability" World Congress of Environmental and Resource Economists WCERE 2010, Montreal. PDF
  • "Endogenous Technological Change in Strategies for Mitigating Climate Change" Defense of PhD thesis. PDF
  • "The Effect of Trade Sanctions in International Environmental Agreements" Workshop Coalitions for Climate Cooperation, 15-16 June 2009 in Venice. PDF
  • "Research Cooperation and International Standards in a Model of Coalition Stability." Conference on the International Dimension of Climate Policies, NCCR, Bern. PDF
  • "The Effects of Trade Sanctions in International Environmental Agreements." EcoMod Conference 2008, July 3rd, Berlin. PDF
  • "Coalition Stability subject to Technological Change and Trade." FEEM, Milan, Dec 4th, 2006. PDF


  • MICA - Model of International Climate Agreements
  • PRIDE - Policy and Regulation in a Decentralized Economy