the optimal biopower capacity in co firing plants an empirical analysis abstract biomass fuels carry appealing features in replacing traditional fossil fuels especially coal in power generation due to the bulk sparse and low energy density drawbacks of biomass many studies implicitly indicate small and limited scale in biopower generation this study contributes to the bioenergy literature by explicitly studying the optimal biopower capacity of biopower co firing technology in coal fired power plants which has practical implications for potential biopower practitioners investors and policymakers this study indicates that the optimal biopower capacity of biomass co firing in coal powered plants is intermediate i e 12 mw on average in order to take advantage of economies of scale without incurring high transportation cost regional variations are also found in the aspects of production cost and optimal capacity due to local characteristics local biomass availability plays a critical role in shaping biopower s generation cost optimal capacity and cost changing patterns

wheat from chaff meta analysis as quantitative literature review abstract this paper presents and develops a quantitative method of literature reviewing and evaluating empirical research meta regression analysis or mra economics is theory driven yet we must learn empirically if economics is to advance mra offers a more objective statistical method to summarize our empirical knowledge and to explain the wide study to study variation in economic research mra is used to assess the evidence for ricardian equivalence and its findings are contrasted to those of conventional narrative review furthermore mra establishes a platform from which to distinguish genuine empirical effect from the exploitable specification error that infests applied econometrics

production costs scope economies and multi client outsourcing under quantity competition abstract two game models are developed based on production costs and scope economies to investigate the widely observed multi client outsourcing mco phenomenon analytical results demonstrate that outsourcers high in house production costs and the advantage of scope economies motivate firms to outsource collectively to an independent vendor under certain conditions if both firms make their outsourcing decisions simultaneously collective outsourcing is one of the two equilibria if both firms make decisions sequentially collective outsourcing becomes the unique equilibrium furthermore the comparative statics of the critical degree of scope economies are examined for the occurrence of mco with regard to diverse market parameters finally it is proved that market prices decrease as the degree of scope economies increases when mco occurs this research helps explain some widely observed phenomena such as malls supply chain cities and the china price

supply of biomass bioenergy and carbon mitigation method and application this study develops an analytical framework for deriving the supply of biomass feedstock and subsequently electricity and co2 displacement generated from the biomass this systematic approach minimizes the total cost of both feedstock and electricity production and involves the determination of the optimal power plant size and the derivation of the supply curves the analytical framework is applied to the case of logging residues in the us both the theoretical and empirical results point to the importance of simultaneously considering feedstock production energy conversion and environmental benefits costs in bioenergy project development leading to useful policy implications for bioenergy development and deployment

contracting for software development software contracting is a multi faceted issue that involves legal economic managerial and technological considerations to better understand the economic aspect of software contracting this paper provides a summary review of software development contracts followed by a gametheoretic model developed to incorporate incentive and information issues associated with software contracting in the model an outside contractor is hired to develop a software system over multiple periods due to the uncertainties about costs or technology the developer faces the risk of having to abandon the project at an intermediate phase the user is better informed of the benefit of the system while the developer privately discovers the development costs as the project advances given the limited information the contracting parties make decisions in their own interest leaving each party vulnerable to the other s opportunistic behavior in this setting we construct a viable contract that aligns the incentives of the contracting parties and produces the same equilibrium outcome as in in house development we also relate the implications of the model to the actual contract cases

asymmetries in price and quantity adjustments by the competitive firm focusing on the crucial role of inventory carry overs in the production and sales decision we describe the profit maximizing behavior of a dynamic competitive firm facing random prices each firm s behavior is incorporated into a stochastic equilibrium model of the competitive industry with uncertain demand the industry model exhibits asymmetric cyclical fluctuations of the keynesian sort when demand is weak output contracts while price holds at a fixed floor when demand is strong price increases as output is constrained by a ceiling even in a pure world of constant returns without increasing costs the inability to instantaneously coordinate production and sales along with the existence of inventories is sufficient to yield a backward i shaped supply curve for the short run journal of economic literature classification numbers 020 021 022

multiperiod sales production decisions under uncertainty abstract this paper studies the behavior of an expected profit maximizing multiperiod firm under uncertainty in output and demand the firm s problem is to determine in each period the level of sales and inventory and the expected output for the coming period the optimal policy is derived in an explicit closed form and is proved to be myopic it is shown that the observed phenomenon of downward price inflexibility can be explained and further specified by using the results of our model

promotion policies for renewable energy and their effects in taiwan abstract taiwan is an interesting case in bioenergy development and its government has employed several subsidies to promote bioenergy such as released land compensation and energy crop subsidies however how farmers respond to these economic incentives is not clear the study employs the concept of big data by incorporating data on the input output of crop production demand elasticities international trade and tariffs processing technologies commodity prices and energy prices for more than 85 of taiwanese agricultural and forest commodities the study first utilizes a mathematical programming model to examine the effectiveness of these policies in terms of bioenergy production and ghg greenhouse gas emissions reduction and then applies the dynamic structural equation model to analyze the interactions among important input and output factors such as social welfare energy prices bioenergy production ghg emissions and co 2 trade prices the results show that 1 the ghg price is more effective than the coal price in the sense of reducing the ethanol production 2 the gasoline price has a negative impact on contemporary electricity production while the coal and ghg prices have positive impacts 3 current ethanol production has a negative influence on current ghg emissions reductions and 4 the gasoline price coal price ghg price and ghg emissions reductions have a significant positive impact on contemporary welfare

asymmetric price adjustments a supply side approach using a model of dynamic price competition we provide an explanation from the supply side for the well established observation that output prices react faster in response to input cost increases than to decreases when costs decline the opportunity of profitable storing in anticipation of higher future costs allows competitive firms to coordinate on prices above current marginal costs the initial price response is only partial and profitable storing relaxes competition conversely when costs rise storing is not beneficial in anticipation of lower future costs and firms immediately adjust their prices to current marginal costs which entails the standard bertrand outcome our results shed new light on the empirical evidence about asymmetric pricing and can stimulate further empirical investigation on this puzzle

causes for an asymmetric relation between the price of crude oil and refined petroleum products we revisit the issue of asymmetries in the relation between the price of crude oil and refined petroleum products in the united states an econometric analysis of monthly data indicates that the asymmetric relation between the price of crude oil and motor gasoline is generated by refinery utilization rates and inventory behavior the asymmetric relation between the price of crude oil and home heating oil probably is generated by contractual arrangements between retailers and consumers together these results imply that price asymmetries may be generated by efficient markets under these conditions there is little justification for policy interventions to reduce or eliminate price asymmetries in motor gasoline and home heating oil markets

sectoral implications of farm program modifications the overall and distributional effects of farm programs and selected revisions are examined using a mathematical programming sector model the model incorporates market distortions caused by price supports target prices program participation deficiency payments and marketing loans current farm programs are found to increase producer prices depress consumer prices and in turn result in excess production and higher consumption and exports domestic and foreign consumers as well as domestic producers are subsidized by farm programs social deadweight loss occurs as government payments exceed welfare benefits received by consumers and producers society as a whole benefits from reductions in program provisions

inventories rational expectations and the business cycle abstract the simplest macroeconomic models in which markets clear instantaneously and expectations are rational preclude the existence of business cycles that is of serially correlated deviations of output from trend this paper studies one of several mechanisms that can be used to make these so called new classical models produce business cycles the mechanism is the gradual adjustment of inventory stocks two macroeconomic models of inventory holdings are formulated both imply first that current output should be a decreasing function of the stock of inventories and second that inventories once perturbed from equilibrium levels should adjust only gradually these two features are then embedded into an otherwise standard macroeconomic model in which markets clear instantaneously and expectations are rational two principal conclusions are reached first disturbances such as unanticipated changes in money will set in motion serially correlated deviations of output from trend second if desired inventories are sensitive to the real interest rate then even fully anticipated changes in money can affect real variables

contracts delivery lags and currency risks abstract this paper presents a competitive model in which exchange rate uncertainty has real effects on how trade contracts are written and executed in this model exporting firms have an incentive to delay delivery on trade contracts whenever they can sell their products on the domestic market for a higher price than the domestic currency value of the price specified by the trade contracts in general it is costly for a firm to offer a credible commitment to the promised delivery date of a trade contract we demonstrate that under certain conditions a firm can costlessly commit to a policy of no delivery lags by the appropriate choice of the currency of denomination of trade contracts

the use and abuse of meta analysis in environmental and natural resource economics an assessment motivated by the 2006 report of a work group appointed by the environmental protection agency epa this paper examines the present state of meta analysis in environmental economics and offers recommendations for its future use to this end we summarize and assess 140 meta analyses from 125 published and unpublished studies covering 17 topical categories in environmental and resource economics first we provide several generic meta analysis models as reference points and discuss major estimation issues five econometric issues are identified as part of a complete analysis 1 sample selection criteria 2 basic data summary 3 primary data heterogeneity 4 heteroskedasticity and 5 non independence of multiple observations from primary studies second a tabular summary is presented for the 140 meta analyses with respect to estimation methods third a narrative summary is presented for 19 meta analyses including the three value of statistical life studies examined by the epa work group and one analysis from each of 16 other categories fourth we offer a set of best practice guidelines for future meta analyses in this and other areas of economics last the paper comments on the use of meta analytic methods for benefit transfers of environmental values

evaluation of land use based greenhouse gas abatement measures in germany abstract agricultural production contributes 11 to the total german greenhouse gas ghg emissions we compare the efficiency of three different land use based ghg abatement measures in combination and as separately applied measures the production of short rotation coppices of feedstocks for biomethane production and peatland restoration we evaluate these options with respect to the following criteria cost efficiency ghg abatement costs abatement potential and impact on agricultural production we use the regional supply model raumis to investigate the different abatement measures at the sector and regional level up to a reduction of ghg emission of 25 1012 g co2eq peatland restoration is the most cost efficient option short rotation coppice allow some cost efficient mitigation also only at limited scale energy maize is only an option if high abatement targets should be met the joint implementation of several abatement strategies allows meeting specified targets at lower costs the crowding out effect between the options is limited the spatial analysis indicates measure specific regional competitiveness and application e g short rotation coppice in eastern and southern germany peat restoration in northern germany and energy maize production in central germany

directional shadow price estimation of co2 so2 and nox in the united states coal power industry 1990 2010 abstract shadow prices also termed marginal abatement costs provide valuable guidelines to support environmental regulatory policies for co 2 so 2 and no x the key contributors to climate change this paper complements the existing models and describes a directional marginal productivity dmp approach to estimate directional shadow prices dsps which present substitutability among three emissions and are jointly estimated we apply the method to a case study of co 2 so 2 and no x produced by coal power plants operating between 1990 and 2010 in the united states we find that dsp shows 1 1 times the maximal shadow prices estimated in the current literature we conclude that estimating the shadow prices of each by product separately may lead to an overestimation of the marginal productivity and an underestimation of the shadow prices

vertical price transmission in the egyptian tomato sector after the arab spring this study assesses price transmission along the egyptian tomato food marketing chain in the period that followed the arab spring which accentuated economic precariousness in egypt static and tim

economic impacts of biofuels deployment in andalusia this paper aims to estimate the economic impacts of increasing the production capacity of the installed biofuel plants in andalusia southern spain a computable general equilibrium cge approach is used to calculate the changes in the economic sectors activity in employment as well as in gdp and other macroeconomic variables relevant to biofuel plants in andalusia under two distinct scenarios i based on an operating biodiesel plant with 90 ktoe year of installed capacity ii upgrading to 2174 ktoe by 2013 in compliance with the regional plan andaluz de sostenibilidad energetica pasener 2007 2013 results show that compliance with the pasener goal would increase the activity level of the economic sectors considered by 3 04 the total induced employment generated would reach 167 975 equivalent full time jobs lasting one year and the gdp would increase by 9 82

what are the key drivers of mac curves a partial equilibrium modelling approach for the uk marginal abatement cost mac curves are widely used for the assessment of costs related to co2 emissions reduction in environmental economics as well as domestic and international climate policy several meta analyses and model comparisons have previously been performed that aim to identify the causes for the wide range of mac curves most of these concentrate on general equilibrium models with a focus on aspects such as specific model type and technology learning while other important aspects remain almost unconsidered including the availability of abatement technologies and level of discount rates this paper addresses the influence of several key parameters on mac curves for the united kingdom and the year 2030 a technology rich energy system model uk markal is used to derive the mac curves the results of this study show that mac curves are robust even to extreme fossil fuel price changes while uncertainty around the choice of the discount rate the availability of key abatement technologies and the demand level were singled out as the most important influencing factors by using a different model type and studying a wider range of influencing factors this paper contributes to the debate on the sensitivity of mac curves

global land use implications of first and second generation biofuel targets recently an active debate has emerged around greenhouse gas emissions due to indirect land use change iluc of expanding agricultural areas dedicated to biofuel production in this paper we provide a detailed analysis of the iluc effect and further address the issues of deforestation irrigation water use and crop price increases due to expanding biofuel acreage we use globiom an economic partial equilibrium model of the global forest agriculture and biomass sectors with a bottom up representation of agricultural and forestry management practices the results indicate that second generation biofuel production fed by wood from sustainably managed existing forests would lead to a negative iluc factor meaning that overall emissions are 27 lower compared to the no biofuel scenario by 2030 the iluc factor of first generation biofuels global expansion is generally positive requiring some 25 years to be paid back by the ghg savings from the substitution of biofuels for conventional fuels second generation biofuels perform better also with respect to the other investigated criteria on the condition that they are not sourced from dedicated plantations directly competing for agricultural land if so then efficient first generation systems are preferable since no clear technology champion for all situations exists we would recommend targeting policy instruments directly at the positive and negative effects of biofuel production rather than at the production itself

ethanol production food and forests this paper investigates the direct and indirect impacts of ethanol production on land use deforestation and food production a partial equilibrium model of a national economy with two sectors and two regions one of which includes a forest is developed it analyses how an exogenous increase in the ethanol price affects input allocation land and labor between sectors energy crop and food the total effect of ethanol prices on food production and deforestation is decomposed into three partial effects first the well documented effect of direct land competition between rival uses arises it increases deforestation and decreases food production second an indirect displacement of food production across regions possibly provoked by the reaction of international food prices increases deforestation and reduces the food sector s output finally labor mobility between sectors and regions tends to decrease food production but also deforestation the total impact of ethanol production on food production is negative while there is an ambiguous impact on deforestation

price dynamics in a vertical sector the case of butter we develop a reduced form model of price transmission in a vertical sector allowing for refined asymmetric contemporaneous and lagged own and cross price effects under time varying volatility the model is used to investigate the wholesale retail price dynamics in the u s butter market the analysis documents the nature of nonlinear price dynamics in a vertical sector it finds strong evidence of asymmetric retail price responses both in the short term and the longer term but only weak evidence of asymmetric wholesale price responses asymmetric retail responses play a major role in generating a skewed distribution of butter prices the empirical results indicate the presence of imperfect competition at the retail level

vertical governance change and product differentiation under decreasing component costs in deciding on whether and when to outsource component production firms should consider the trade off between total production costs and the ability to horizontally differentiate products we study the outsourcing decision in a duopoly under decreasing but uncertain market rates for components given that outsourcing increases the substitutability of the final products we find that there is at least one firm that eventually outsources component production because it cannot differentiate its product enough by in house production to justify the eventually higher costs the follower outsources at a lower market rate or may even remain vertically integrated the follower thus incurs the eventually much higher in house component costs longer while the low substitutability is enjoyed by both firms under endogenous roles firms thus engage in a preemption game to be the first to outsource we also find that firms generally outsource at lower market rates if uncertainty is higher but seek to preempt at remarkably higher market rates if substitutability remains low

soybean inventory and forward curve dynamics we present two results concerning soybean prices first we exhibit a simple relationship between stocks and price volatility the observation of an increasing price volatility with decreasing inventory is often mentioned in the literature but has so far been documented using a proxy for inventory see fama and french 1987 1988 litzenberger and rabinowitz 1995 instead we reconstruct a yearly quarterly and monthly database of worldwide soybean inventories using aggregate data from the united states brazil and argentina we show that under all time scales price volatility is an increasing linear function of inverse inventory which we term scarcity second we show how the addition of the factor scarcity in a state variable approach to the dynamics of the term structure of soybean forward prices improves the quality of the fit we document this property on a 25 year database of cbot futures contracts and show that the superior accuracy also affects long maturity futures contracts an important property for the valuation of long term origination contracts between producing countries and the agrifood industry

the social cost of carbon emissions seven propositions determining the social cost of carbon emissions scc is a crucial step in the economic analysis of climate change policy as the us government s recent decision to use a range of estimates of the scc centered at 77 tc or equivalently 21 tco2 in cost benefit analyses of proposed emission control legislation underlines this note reviews the welfare economics theory fundamental to the estimation of the scc in both static and intertemporal contexts examining the effects of assumptions about the typical agent s pure rate of time preference and elasticity of marginal felicity of consumption production and mitigation technology and the magnitude of climate change damage on estimates of the scc we high light three key conclusions i an estimate of the scc is conditional on a specific policy scenario the details of which must be made explicit for the estimate to be meaningful ii the social discount rate relevant to intertemporal allocation decisions also depends on the policy scenario and iii the scc is uniquely defined only for policy scenarios that lead to an efficient growth path because marginal costs and benefits of emission mitigation diverge on inefficient growth paths we illustrate these analytical conclusions with simulations of a growth model calibrated to the world economy authors abstract

scope economies market information and make or buy decision under asymmetric information abstract this paper presents a make or buy m b model in which a firm say firm 1 may produce in house or outsource a product to the unique vendor the monopolist in the outsourcing market demand for the finished product is stochastic and price sensitive and firm 1 s information forecast about the base market demand and corresponding precision are known when the m b decision is faced firm 1 is risk neutral and owns a constant return to scale technology while the vendor is risk averse and enjoys the advantage of scope economies a traditional solution is provided under perfect information under asymmetric information we demonstrate that when outsourcing is realized both parties expected profits increase with firm 1 s forecast accuracy only if the forecasted market demand is higher than the base demand i e good news outsourcing strictly dominates in house production if the yield of the vendor s production input is sufficiently low or its economies of scope are remarkably attractive furthermore it is optimal for firm 1 to hide information at first and decide whether or not to share information only after the vendor s supply price is announced however the vendor s profit is constrained by the trade off between the coordination effort for impelling firm 1 to share information and the advantages of its monopoly on outsourcing market low production costs as well as scope economies

burning peat in ireland an electricity market dispatch perspective abstract this paper examines peat power production in ireland under the three pillars of energy policy security competitiveness and environment peat contributes to energy security as an indigenous fuel it reduces dependency on imports during a period of low capacity margins the operation of the peat plants is useful from a system security perspective peat generation is being financially supported by consumers through an electricity levy the fuel also has high carbon intensity it is not politically viable to consider peat on equal economic criteria to other plant types because of history and location this paper reviews electricity generation through combustion of peat in ireland and quantifies the costs of supporting peat utilising economic dispatch tools finding the subsidy is not insignificant from a cost or carbon perspective it shows that while peat is beneficial for one pillar of energy policy security the current usage of peat is not optimal from a competitiveness or environmental perspective by switching from the current must run mode of operation for peat to the dispatched mode used for the other generation significant societal savings in the range 21 m per annum can be achieved as well as reducing system emissions by approximately 5 per year

determination of employment with wage and price speculation the purpose of this paper is to investigate whether aggregate fluctuations in employment may be explained within a market clearing framework as intertemporal substitution in labor supply and demand an intertemporal substitution model for the firm is derived this model is estimated with a lucas rapping type supply equation empirical results with finnish data lend support to the intertemporal substitution model particularly concerning the demand function specification on the other hand the results for the supply equation are somewhat mixed being rather sensitive to the dynamic specification

development of marginal abatement cost curves for the building sector in armenia and georgia abstract armenia and georgia are taking climate change agenda seriously and contributing to efforts for mitigating global climate change through various ways including preparation of low carbon development strategies for their future economic growth the improvement of energy efficiency is one of the key elements of the low carbon development strategies this study develops a methodology to estimate marginal abatement cost mac curve for energy efficiency measures and apply in the building sector in both countries the study finds that among the various energy efficiency measures considered the replacement of energy inefficient light bulbs i e incandescent lamps with efficient light bulbs is the most cost effective measure in saving energy and reducing greenhouse gas ghg emissions from the building sector most energy efficiency improvement options considered in the study would produce net economic benefits even if the value of reduced carbon is not taken into account while the mac analysis conducted demonstrates the cost competitiveness of various energy efficiency measures in armenia and georgia the study also offers a caution to policy makers to have supplemental analysis before prioritizing the implementation of these measures or introducing policies to support them

marginal abatement costs of greenhouse gas emissions from european agriculture cost effectiveness and the eu non ets burden sharing agreement abstract we propose a quantitative assessment of the marginal abatement costs mac of greenhouse gas emissions from european agriculture and analyze the implications of the non ets burden sharing agreement bsa for this sector this assessment is based on mac reduced forms the generic specification of which enables simple parameterization and numerical computations such mac curves are parameterized for each member state using the outputs of a detailed model of the european agricultural supply they are then used to compute total and marginal abatement costs involved by the bsa targets as well as the cost effective effort sharing the corresponding emission price and abatement costs the main findings are i flexibility mechanisms such as a cap and trade system for agricultural emissions could reduce the total costs of meeting the 10 eu abatement target by a factor two to three relative to the strict implementation of each country s target ii the corresponding equilibrium emission price is found to be 32 42 tco2eq depending on the assumption regarding business as usual emissions and iii a cap and trade system with allowances based on the bsa targets would involve substantial transfers from eu 15 countries to new member states an important share of which being made of hot air

does ecological economics have a future contradiction and reinvention in the age of climate change abstract this paper addresses the role of neoclassical methodologies in ecological economics and the contradictions these methodologies pose to the field s critical founding principles we first consider robert costanza s treatment of nicholas stern s global deal and then survey climate change related articles published in this journal over the past five years this survey reveals how mainstream neoclassical methodologies dominate discourse and do so by marginalizing more critical political economy analyses this situation imperils the field s founding vision of a no growth steady state it also fails to address the related growth dynamics of capitalism without such a critical treatment the field s formal embrace of methodological pluralism actually entails an ideological empiricism that renders ecological economics theoretically incoherent this situation undermines the field s historical promise as an alternative economic paradigm ecological economics now faces a problematic future its survival in a form faithful to its founding vision will require an explicit choice to address its internal contradictions and reinvent itself in ways relevant to our contemporary context without such a choice ecological economics will likely succumb to an implicit acceptance of the hegemony of mainstream economic methodologies and their pro growth imperatives

environmental prices uncertainty and learning there is an increasing demand for putting a shadow price on the environment to guide public policy and incentivize private behaviour in practice setting that price can be extremely difficult as uncertainties abound there is often uncertainty not just about individual parameters but about the structure of the problem and how to model it a further complication is the second best nature of real environmental policy making in this paper we propose some practical steps for setting prices in the face of these difficulties drawing on the example of climate change we consider how to determine the overall target for environmental protection how to set shadow prices to deliver that target and how we can learn from the performance of policies to revise targets and prices perhaps most significantly we suggest that estimates of the marginal cost of environmental protection rather than the marginal benefit will often provide the more consistent and robust prices for achieving targets

co2 emission abatement cost and its decomposition a directional distance function approach accurately estimating carbon dioxide co2 abatement costs and effectively identifying the factors impacting those costs can improve the applicability and effectiveness of policy implementation this paper proposes a new method to estimate co2 abatement costs cac based on the directional distance function the method theoretically decomposes cac into carbon productivity and output elasticity of substitutions this decomposition can identify the types of cac the method also investigates the effects of development mode selection on cac by selecting different directional vectors following the theoretical discussion an empirical study is presented focusing on high energy consumption firms in the united states u s the results were as follows 1 in sustainable development mode changes in the average cac of all firms were caused both by carbon productivity and output elasticity of substitution carbon productivity dominated cac differences among different firm types 2 in general the amelioration potential of firm technology and environmental management was gradually explored by firms during sample period corresponding environmental regulatory strategies are needed for firms with different cac characteristics 3 firms selecting different development modes will realize significant differences in cac firms in the sustainable development mode had the highest cac levels however this mode was best for achieving a win win between economic benefits and environmental protection

competition and outsourcing with scale economies scale economies are commonplace in operations yet because of analytical challenges relatively little is known about how firms should compete in their presence this paper presents a model of competition between two firms that face scale economies i e each firm s cost per unit of demand is decreasing in demand a general framework is used which incorporates competition between two service providers with price and time sensitive demand a queuing game and competition between two retailers with fixed ordering costs and pricesensitive consumers an economic order quantity game reasonably general conditions are provided under which there exists at most one equilibrium with both firms participating in the market we demonstrate in the context of the queuing game that the lower cost firm in equilibrium may have a higher market share and a higher price an enviable situation we also allow each firm to outsource their production process to a supplier even if the supplier s technology is no better than the firms technology and the supplier is required to establish dedicated capacity so the supplier s scale can be no greater than either firm s scale we show that the firms strictly prefer to outsource we conclude that scale economies provide a strong motivation for outsourcing that has not previously been identified in the literature

coordinating investment production and subcontracting we value the option of subcontracting to improve financial performance and system coordination by analyzing a competitive stochastic investment game with recourse the manufacturer and subcontractor decide separately on their capacity investment levels then demand uncertainty is resolved and both parties have the option to subcontract when deciding on their production and sales we analyze and present outsourcing conditions for three contract types 1 price only contracts where an ex ante transfer price is set for each unit supplied by the subcontractor 2 incomplete contracts where both parties negotiate over the subcontracting transfer and 3 state dependent price only and incomplete contracts for which we show an equivalence result while subcontracting with these three contract types can coordinate production decisions in the supply system only state dependent contracts can eliminate all decentralization costs and coordinate capacity investment decisions the minimally sufficient price only contract that coordinates our supply chain specifies transfer prices for a small number 6 in our model of contingent scenarios our game theoretic model allows the analysis of the role of transfer prices and of the bargaining power of buyer and supplier we find that sometimes firms may be better off leaving some contract parameters unspecified ex ante and agreeing to negotiate ex post also a price focused strategy for managing subcontractors can backfire because a lower transfer price may decrease the manufacturer s profit finally as with financial options the option value of subcontracting increases as markets are more volatile or more negatively correlated

technical change and the marginal cost of abatement abstract we address one aspect of the treatment of technical change in the environmental economics literature how technical change impacts the marginal cost of abatement we review a selection of papers that employ a variety of representations of technical change and show that these representations have quite different and sometimes surprising effects on the marginal costs of pollution reductions we argue that these varied representations in fact correspond to a variety of different technology options we then present results indicating that this representation matters the impacts of technical change on the marginal cost of abatement can crucially impact policy analysis

the regional economic impacts of biofuels a review of multisectoral modelling techniques and evaluation of applications allan g j the regional economic impacts of biofuels a review of multisectoral modelling techniques and evaluation of applications regional studies the regional economic impact of biofuel production depends upon a number of interrelated factors the specific biofuels feedstock and production technology employed the sector s embeddedness in the rest of the economy through its demand for local resources and the extent to which new activity is created these issues can be analysed using multisectoral economic models some studies use input output io and social accounting matrix sam modelling frameworks whilst a nascent computable general equilibrium cge literature has begun to examine the regional impact of biofuel development this paper reviews compares and evaluates these approaches for modelling the regional economic impacts of biofuels

renewable energy and macroeconomic efficiency of oecd and non oecd economies abstract this article analyzes the effects of renewable energy on the technical efficiency of 45 economies during the 2001 2002 period through data envelopment analysis dea in our dea model labor capital stock and energy consumption are the three inputs and real gdp is the single output increasing the use of renewable energy improves an economy s technical efficiency conversely increasing the input of traditional energy decreases technical efficiency compared to non oecd economies oecd economies have higher technical efficiency and a higher share of geothermal solar tide and wind fuels in renewable energy however non oecd economies have a higher share of renewable energy in their total energy supply than oecd economies

do gasoline prices respond asymmetrically to crude oil price changes the authors test and confirm that retail gasoline prices respond more quickly to increases than to decreases in crude oil prices among the possible sources of this asymmetry are production inventory adjustment lags and market power of some sellers by analyzing price transmission at different points in the distribution chain the authors attempt to shed light on these theories spot prices for generic gasoline show asymmetry in responding to crude oil price changes which may reflect inventory adjustment effects asymmetry also appears in the response of retail prices to wholesale price changes possibly indicating short run market power among retailers

the social costs of second best policies evidence from agricultural ghg mitigation abstract this paper investigates the social costs of second best agricultural greenhouse gas ghg mitigation policies adjustments along the land use and input intensity margins are represented within a regionalized optimization model of california crop production calibrated to economic and agronomic information second best policies relying on spatially aggregated ghg emission factors lead to small abatement efficiency losses while policies targeting a single ghg lead to moderate losses in contrast policies targeting a single input entail large abatement efficiency losses which nonetheless can be reduced by combining instruments

meta regression analysis a quantitative method of literature surveys abstract pedagogically literature reviews are instrumental they summarize the large literature written on a particular topic give coherence to the complex often disparate views expressed about an issue and serve as a springboard for new ideas however literature surveys rarely establish anything approximating unanimous consensus ironically this is just as true for the empirical economic literature to harmonize this dissonance we offer a quantitative methodology for reviewing the empirical economic literature meta regression analysis mra is the regression analysis of regression analyses mra tends to objectify the review process it studies the processes that produce empirical economic results as though they were any other social scientific phenomenon mra provides a framework for replication and offers a sensitivity analysis for model specification in this brief essay we propose a new method of reviewing economic literature mra and discuss its potential

the costs of carbon sequestration a revealed preference approach increased concem by policy makers with the threat of global climate change has brought with it considerable attention to the possibility of encouraging the growth of forests as a means of sequestering carbon dioxide national academy of sciences nas 1992 james p bruce et al 1996 1 the kyoto protocol to the united nations framework convention on climate change 1997 which establishes emission reduction targets for the united states and other industrialized nations states that carbon sequestration can be used by participating nations to achieve their targets moreover even before the kyoto agreement this approach had become an explicit element of both u s and intemational climate policies u s department of energy 1991 united nations general assembly 1992 william j clinton and albert gore 1993 this high level of interest has been due in part to suggestions that sufficient lands are available to use the approach to mitigate a substantial share of annual carbon dioxide c02 emissions greg marland 1988 daniel a lashof and dennis a tirpak 1989 mark c trexler 1991 and claims that growing trees to sequester carbon is a relatively inexpensive means of combating climate change roger a sedjo and allen m solomon 1989 daniel j dudek and alice leblanc 1990 nas 1992 in other words the serious attention given by policy makers to carbon sequestration can partly be explained by implicit assertions about respective marginal cost functions i develop and demonstrate a method by which the costs of carbon sequestration can be estimated on the basis of evidence from landowners behavior when confronted with the opportunity costs of alternative land uses the simplest of previous economic analyses derived single point estimates of average costs associated with particular sequestration levels marland 1988 sedjo and solomon 1989 dudek and leblanc 1990 edwin s rubin et al 1992 omar masera et al 1995 often it has been assumed that land opportunity costs are zero g van kooten et al 1992 j k winjum et al 1992 new york state energy office 1993 robert k dixon et al 1994 another set of studies essentially engineering costing models has constructed marginal cost schedules by using information on revenues and costs of production for altemative uses on representative types or locations of land and then sorting these in ascending order of cost robert j moulton and kenneth r richards 1990 richards et al 1993 simulation models include a model of the lost profits due to removing land from agricultural production peter j parks and ian w hardie 1995 a mathematical programming model of the agricultural sector and the timber market richard m adams et al 1993 a related model incorporating the effects of agricultural price support programs j m callaway and bruce mccarl 1996 and a dynamic simulation model of forestry susan swinehart 1996 lastly an analysis by andrew j plantinga 1995 adopts land use elasticities from an econometric study to estimate sequestration costs we draw on some of the best features of the previous studies including the carbon levelization method of moulton and richards john f kennedy school of government harvard university 79 john f kennedy street cambridge ma 02138 and resources for the future richard newell supplied excellent research assistance and valuable comments on a previous version were provided by lawrence goulder william nordhaus andrew plantinga kenneth richards two anonymous referees participants in seminars at the universities of california at los angeles and santa barbara the university of maryland the university of michigan the university of texas harvard university stanford university yale university resources for the future and the national bureau of economic research the author alone is resdonsible for any errors 1 after fossil fuel combustion deforestation is the second largest source of carbon dioxide emissions estimates of annual global emissions from deforestation range from 0 6 to 2 8 billion tons compared with slightly less than 6 0 billion tons annually from fossil fuel combustion cement manufacturing and natural gas flaring combined r a houghton 1991 t m smith et al 1993

price transmission and local market power empirical evidence from the austrian gasoline market we analyse the impact of local market power on price margins and different dimensions of price adjustment dynamics speed and asymmetry of price transmission using data for a large number of indiv

combining bottom up and top down abstract we motivate the formulation of market equilibrium as a mixed complementarity problem which explicitly represents weak inequalities and complementarity between decision variables and equilibrium conditions the complementarity format permits an energy economy model to combine technological detail of a bottom up energy system with a second best characterization of the over all economy our primary objective is pedagogic we first lay out the complementarity features of economic equilibrium and demonstrate how we can integrate bottom up activity analysis into a top down representation of the broader economy we then provide a stylized numerical example of an integrated model within both static and dynamic settings finally we present illustrative applications to three themes figuring prominently on the energy policy agenda of many industrialized countries nuclear phase out green quotas and environmental tax reforms

the effect of ethanol policies on the vertical price transmission in corn and food markets this paper analyzes the impact of ethanol policies on price transmission along the food supply chain we consider the us corn sector and its vertical links with food and ethanol energy markets we find that ethanol is a source of imperfect price transmission in the food supply chain ethanol however alters price transmission only under a binding blender s tax credit and only from food to corn not vice versa our results indicate that ethanol weakens the response of corn and food prices in terms of their level changes to shocks occurring in agricultural corn and food markets the results are robust to different assumptions on the model parameters although market power has previously been identified as a source of imperfect price transmission in the food supply chain our findings show that in the presence of ethanol the imperfect price transmission may occur even if markets are perfectly competitive this warrants careful evaluation of markets before any policy intervention

marginal abatement costs of greenhouse gas emissions a meta analysis in this paper we carry out a meta analysis of recent studies into the costs of greenhouse gas mitigation policies that aim at the long term stabilisation of these gases in the atmosphere we find the cost estimates of the studies to be sensitive to the stringency of the stabilisation target the assumed emissions baseline the way in which the time profile of emissions is determined in the model the choice of control variable co2 only versus multigas the number of regions and energy sources in the model and to a lesser degree the scientific forum in which the study was developed we find that marginal abatement costs of the stringent long term targets that are currently considered by the european commission are still very uncertain but might exceed the costs that have been suggested by recent policy assessments

industrial clusters knowledge integration and performance abstract scholars examining the phenomenon of industrial clusters have begun to regard them as social communities specializing in efficient knowledge creation and transfer in addition to neo classical arguments focusing on the advantages of localization we seek to contribute to this body of work by developing the argument that both the degree of knowledge integration between an industrial cluster s agents and the scope of their economic activities are key dimensions behind their economic performance we present a model that incorporates a hypothesized relationship between these three dimensions and argue that a formal test of this hypothesis constitutes a promising area of future empirical research in this field

the effects of militarization on biofuel consumption and co2 emission abstract the cointegration and causal relation among co2 emissions economic growth militarization and biofuel consumption were tested from 1984 to 2015 period for unite states us the autoregressive distributed lag and three supplementary long run estimators the dynamic ols canonical cointegration regression and fully modified ols were employed to reveal the long run impacts of economic growth militarization and biofuel consumption on co2 emissions toda and yamamoto s mwald and rao f tests were applied to find out the direction of causality the evidence of bi directional causality between biofuel consumption and economic growth between economic growth between militarization and biofuel consumption and co2 emissions and between biofuel consumption and co2 emissions was determined the results of forecast error variance determined 50 1 of the forecast error variance of co2 emissions is explained by the forecast error variance of militarization and 59 4 by energy consumption

does renewable and or non renewable energy consumption matter for total factor productivity tfp growth evidence from the brics abstract studies proved that output growth is mainly associated with the total factor productivity tfp growth and variables that affect the tfp have an important explanatory power on output in this regards the aim of this study is to examine the causal relationship between different types of energy consumption and tfp growth in the brics from 1992 to 2012 a panel bootstrap granger causality test by konya 2006 68 was employed to investigate the direction of possible connection between energy consumption and tfp growth results show that no remarkable causal link exists between renewable energy consumption and tfp growth in the brics however in the case of non renewables energy consumption creates a positive externality that contributes economic development in brazil and south africa by the growth of tfp as well as energy use itself in this respect policies that promote coal and non renewable electricity consumption in south africa and natural gas consumption in brazil may be beneficial for their economic development

economic potential of biomass based fuels for greenhouse gas emission mitigation use of biofuels diminishes fossil fuelcombustion thereby also reducing net greenhousegas emissions however subsidies are neededto make agricultural biofuel productioneconomically feasible to explore the economicpotential of biofuels in a greenhouse gasmitigation market we incorporate data onproduction and biofuel processing for thedesignated energy crops switchgrass hybridpoplar and willow in an u s agriculturalsector model along with data on traditionalcrop livestock production and processing andafforestation of cropland net emissioncoefficients on all included agriculturalpractices are estimated through crop growthsimulation models or taken from the literature potential emission mitigation policies ormarkets are simulated via hypothetical carbonprices at each carbon price level theagricultural sector model computes the newmarket equilibrium revealing agriculturalcommodity prices regionally specificproduction input use and welfare levels environmental impacts and adoption ofalternative management practices such asbiofuel production results indicate no rolefor biofuels below carbon prices of 40 perton of carbon equivalent at these incentivelevels emission reductions via reduced soiltillage and afforestation are more costefficient for carbon prices above 70 biofuels dominate all other agriculturalmitigation strategies

on the cost effectiveness of national economy wide greenhouse gas emissions abatement measures abstract this paper explores cost effective greenhouse gas abatement options for the european union member state of cyprus for those sectors of the national economy that are not subject to the european emissions trading system the analysis leads to the construction of a baseline and several alternative marginal emission abatement cost curves it addresses all economic sectors and considers all different types of mitigation measures improving energy efficiency switching to low or zero carbon fuels and inducing behavioural change towards public transport modes we apply nationally appropriate data that are mainly derived from local market information and judgement of national experts finally we present results of several sensitivity analyses which address main shortcomings of marginal abatement cost curves that have been identified in the literature and discuss the policy implications of each one of them apart from its relevance for eu member states this assessment is useful for all countries seeking guidance in their decarbonisation strategies

the usefulness of marginal co2 e abatement cost curves in austria energy efficiency measures are manifold in all economic sectors these measures can be pictured by a marginal abatement cost curve macc which is a common way to show co2 e abatement potential and its related costs in various fields in this paper we calculated the marginal co2 e abatement cost curve for austria for the first time to fulfill the need for country specific cost curves one of the strengths of such curves lies in their ability to highlight that energy efficiency measures can even have negative abatement costs the weaknesses consist of neglecting a change in energy prices the rate of diffusion and compatibility with existing technologies by using a static bottom up approach we constructed the macc for four economic sectors household service transport energy and found a national mitigation potential of 45 4 million tons co2 e the results further show that even with the measures with negative abatement costs it is possible to make the necessary co2 e mitigation to fulfill the kyoto protocol the conclusions emphasize that the curve makes a contribution to overcome one of the barriers of implementation by providing enhanced information on energy efficiency measures and its costs

when does a carbon tax on fossil fuels stimulate biofuels a carbon tax is an efficient economic instrument to reduce emissions of carbon dioxide released from fossil fuel burning if designed properly it could also help significantly to promote renewable energy using a multi sector multi country computable general equilibrium model this study investigates under what circumstances a carbon tax would help stimulate penetration of biofuels into the energy supply mix for road transportation in various countries and regions around the world this study shows that a carbon tax cum biofuel subsidy policy where a carbon tax is introduced to fossil fuels and part of the tax revenue is used to finance the biofuel subsidy would significantly help stimulate market penetration of biofuels on the other hand a carbon tax alone policy where the entire tax revenue is recycled to households through a lump sum transfer does not help stimulate biofuels significantly even at higher tax rates although the carbon tax cum subsidy policy would cause higher loss in economic output at the global level as compared to the carbon tax alone policy the incremental loss is relatively small the key policy insight drawn from the study is that if a carbon tax were to be implemented in an economy for the purpose of climate change mitigation recycling part of its revenue to finance biofuel subsidies would significantly help stimulate biofuels

potential environmental impacts of increased reliance on corn based bioenergy this paper integrates economic and physical models to assess a how increases in agricultural commodity prices driven by ethanol production and other factors affect land use and cropping systems in the us midwest and b how the changes in land use and cropping systems in turn affect environmental quality in the region the empirical framework includes a set of econometric models that predict land conversion crop choices and crop rotations at the parcel level based on commodity prices land quality climate conditions and other physical characteristics at the sites the predictions are then combined with site specific environmental production functions to determine the effect of rising commodity prices on nitrate runoff and leaching soil water and wind erosion and carbon sequestration results suggest that increasing commodity prices will result in widespread conversions of non cropland to cropland fifty percent of the region s pasture and range land will be converted to cropland with 6 corn rising commodity prices will also result in dramatic changes in crop mix and rotation systems in the midwest with 6 corn the total acreage of corn will increase by 23 and 40 in the corn belt and lake states respectively the acreage of continuous corn will increase considerably in both regions as well these changes in land use and crop mix will have a large impact on agricultural pollution approaches to mitigating the environmental impacts are discussed

a cost benefit analysis of the eu 20 20 2020 package the european commission did not publish a cost benefit analysis for its 2020 climate package this paper fills that gap comparing the marginal costs and benefits of greenhouse gas emission reduction the uncertainty about the marginal costs of climate change is large and skewed and estimates partly reflect ethical choices e g the discount rate the 2010 carbon price in the eu emissions trading system can readily be justified by a cost benefit analysis emission reduction is not expensive provided that policy is well designed a condition not met by planned eu policy it is probably twice as expensive as needed costing one in ten years of economic growth the eu targets for 2020 are unlikely to meet the benefit cost test for a standard discount rate 3 pure rate of time preference the benefit cost ratio is rather poor 1 30 so that benefits need to be very much higher or costs very much lower than typically assumed to justify the 2020 targets only a very low discount rate 0 prtp would justify the 20 emission reduction target for 2020

new evidence on asymmetric gasoline price responses in a 1997 paper borenstein cameron and gilbert bcg claim that gasoline prices rise quickly following an increase in the price of crude oil but fall slowly following a decrease this note estimates an error correction model with daily spot gasoline and crude oil price data over the period 1985 1998 and finds no evidence of asymmetry in wholesale gasoline prices the sources of the difference in results are twofold first we use the standard engle granger two step estimation procedure whereas bcg used a nonstandard estimation methodology second even using bcg s nonstandard specification the use of daily rather than weekly data yields little evidence of price asymmetry

choosing a monetary value of greenhouse gases in assessment tools a comprehensive review there is a societal need for using monetary estimates of social impacts of co2 and other greenhouse gases in different assessment tools such as cost benefit analysis and life cycle assessment a number of estimates are available in the literature since these differ by several orders of magnitude there is ambiguity and confusion about which to use this review aims to give some guidance on this issue the variation in carbon value estimates depends on several uncertain aspects which will remain uncertain including climate sensitivity assumptions about future emissions and decision makers ethical standpoints hence there is no single correct monetary value for co2 it will depend on the ethical standpoint of the user due to this estimates of social costs of co2 emissions cannot be used for calculating an optimal emission level although they can inform such assessments it is suggested that marginal abatement cost values are used for emissions capped by binding targets in short term assessments and that social cost of carbon values should be used for all other emissions benchmark principles for choosing a monetary carbon value are suggested along with associated estimates depending on the choices made with regard to ethical standpoints and assumptions about future emissions and climate sensitivity estimates can be significantly higher than the ones typically used in assessment tools today the estimates need continuous updating and there is need for better understanding and communication around the limitations and uncertainties involved

the static and dynamic environmental efficiency of renewable energy a malmquist index analysis of oecd countries abstract in recent years renewable energy and environmental efficiency have been interesting issues for both academics and industry actors when discussing sustainable development against this background the present study examines the environmental efficiency of renewable energy from the static and the dynamic perspective in 31 oecd countries a study conducted to understand the impact of renewable energy across countries as a non parametric methodology data envelopment analysis is used to measure environmental efficiency through multiple inputs and outputs labor capital and renewable energy supply are the three inputs while gdp is the desirable output and carbon emissions are the undesirable output to measure the dynamic environmental efficiency of renewable energy the malmquist productivity index is applied to estimate the average efficiency change from 2004 to 2011 the results demonstrate geographical differences in environmental efficiency across the oecd countries in oecd america have the highest average environmental efficiency and those in oecd europe have the largest standard deviation we also find that dynamic efficiency is influenced by the global financial crisis triggered in the united states further we show that oecd countries implement both catch up and frontier shift strategies to improve environmental efficiency

impacts of a united states biofuel policy on new zealand s agricultural sector abstract the rise in oil prices has spurred interest in biofuels policies in the united states like the renewable fuel standard rfs have led to an expansion of ethanol production while the new zealand government has mandated a minimum level of biofuel sales the research used a partial equilibrium model of international trade to quantify the price and farmgate income effects of the us rfs policy the goal was to examine the competition between food and biofuel production and to quantify the impact of the policy on the agricultural sector in new zealand the rfs policy has a significant impact on corn prices but a small effect on livestock prices and production there thus appears to be little conflict between food and fuel uses for corn at the level of the rfs mandate new zealand s pasture based livestock sector benefits from the use of corn for ethanol production it receives better prices for its products but does not face the same input cost increases as competitors the results suggest that new zealand faces an interesting decision it could support investment in biofuels research or benefit from the biofuels boom through the indirect impacts on demand and prices for meat and milk

identification of environmental and financial cost efficient heating and ventilation services for a typical residential building in belgium abstract assisted by designers and contractors dwelling owners have historically based their decisions including the choice of building services on investment costs given the increasing interest in the environmental dimension of the built environment it is also important to include environmental impact in the decision making process this paper focuses on the life cycle environmental impact and financial costs of heating and ventilation alternatives for new dwellings in belgium insight into the environmental impact and financial costs of correctly dimensioned configurations over the entire life cycle could enable better choices commonly used alternatives are considered as well as more advanced ones these are compared and the optima are determined identifying the best choice within a limited budget the analysis indicates that in addition to energy efficiency measures regarding the building skin a well designed heating and ventilation system plays an important role in reducing financial costs and environmental impact over the lifespan of a dwelling different heating and ventilation solutions are likely to be selected when initial and life cycle costs are juxtaposed with environmental financial and total costs nevertheless preferences based on total costs generally coincide with those based on financial costs

how costly is mitigation of non co2 greenhouse gas emissions from agriculture a meta analysis this text reviews the assessments of marginal abatement costs of methane and nitrous oxide emissions from agriculture we use agricultural emissions and the corresponding prices collected from 21 studies that have assessed abatement potentials and costs using various modeling approaches and assumptions we first highlight the implications of the modeling approach for marginal abatement costs harmonized abatement rates for three emission prices 10 20 and 50 2005 tco2eq are regressed on variables that reflect various modeling assumptions and study characteristics in a second step the emission price is introduced as an explanatory variable when controlling for a few key characteristics of the studies the models explain an important share of the observed variability in abatement rates the type of modeling approach is found to have a significant effect in particular we find that equilibrium models lead to higher abatement rates for a given price the flexibility in nitrogen use and its effect on crop yields also plays a significant role in lowering marginal abatement costs the results of the second step indicate that the price elasticity of the abatement rate is about 0 6 this estimate is found to be robust to several specifications and consistent with previous assessments covering other economic sectors

targets for global climate policy an overview a survey of the economic impact of climate change and the marginal damage costs shows that carbon dioxide emissions are a negative externality the estimated pigou tax and its growth rate are too low to justify the climate policy targets set by political leaders a lower discount rate or greater concern for the global distribution of income would justify more stringent climate policy but would imply an overhaul of other public policies catastrophic risk justifies more stringent climate policy but only to a limited extent

performance measures and metrics in outsourcing decisions a review for research and applications outsourcing an operations strategy that influences the performance of a supply chain has become an important component of global operations management an effective global sourcing strategy helps companies to manage the flow of parts and finished products in meeting the needs of overseas and domestic markets outsourcing reduces the cost of assets facilitates core competencies to reduce production costs leads to strategic flexibility and reduces administrative and overhead costs some of the reasons why companies are against outsourcing include integration challenges sacrificing their competitive base opportunistic behaviour rising transaction and coordination costs limited innovation and higher procurement costs despite these shortcomings outsourcing will continue to play an important role in enhancing organizational competitiveness therefore an attempt has been made to review the literature on outsourcing with particular reference to performance measures and metrics pmms used in arriving at outsourcing decisions the main objective of this paper is to present a taxonomy classification of pmms in outsourcing decisions at the pre outsourcing during outsourcing and post outsourcing stages also based on the literature review and analysis an attempt is made to determine a list of specific tools and techniques for pmms in outsourcing finally the limitations of the paper and future research directions are presented

opportunity for profitable investments in cellulosic biofuels research efforts to allow large scale conversion of cellulose into biofuels are being undertaken in the us and eu these efforts are designed to increase logistic and conversion efficiencies enhancing the economic competitiveness of cellulosic biofuels however not enough attention has been paid to the future market conditions for cellulosic biofuels which will determine whether the necessary private investment will be available to allow a cellulosic biofuels industry to emerge we examine the future market for cellulosic biofuels differentiating between cellulosic ethanol and drop in cellulosic biofuels that can be transported with petroleum fuels and have equivalent energy values we show that emergence of a cellulosic ethanol industry is unlikely without costly government subsidies in part because of strong competition from conventional ethanol and limits on ethanol blending if production costs of drop in cellulosic biofuels fall enough to become competitive then their expansion will not necessarily cause feedstock prices to rise as long as local supplies of feedstocks that have no or low valued alternative uses exist then expansion will not cause prices to rise significantly if cellulosic feedstocks come from dedicated biomass crops then the supply curves will have a steeper slope because of competition for land

dynamic model for market competition and price rigidity abstractthis article presents a price floor model in which durability unit costs and production period are factors in explaining price rigidity this article elaborates that cost structure plays an essential role in resolving the inconclusive relationship between market concentration and price rigidity when the industry is characterized by decreasing returns of scale the degree of price flexibility decreases as market competition intensifies the reverse is true when the industry exhibits increasing returns of scale the factors that cause price rigidity also foster price adjustment asymmetry and price adjustment lag during times of recession the model exhibits upward price flexibility as costs increase but downward price rigidity as costs decrease even under forward looking expectations the way in which firms adjust prices could look as though they have adaptive expectations if price stickiness is a characteristic of market competition then public policies determined by price level could be too

the effects of consumers price expectations on sellers dynamic pricing strategies abstract the authors propose a dynamic market equilibrium model to investigate how consumers form price expectations and how these expectations influence their sequential search behavior and prices in the market they derive a perfect bayesian nash equilibrium and show that whereas higher current period prices induce search consumers who observe higher historical prices form higher price expectations become more pessimistic and search less furthermore the authors show that when prices increase as a result of an increase in marginal costs consumers respond by searching more which then leads to higher prices and instant price adjustment in contrast because consumer search activities decline when prices fall sellers may respond by lowering their prices just enough to dampen consumers search tendencies when costs decrease the authors test their theoretical model and its implications and find support for it in a series of simulated market experiments

the contractual nature of the firm for their helpful comments i am grateful to armen a alchian yoram barzel keith leffler john s mcgee and dean worcester 1 ronald h coase the nature of the firm 4 economica 386 1937 the paper however was written several years earlier see note 3 infra 2 the social sciences citation index provides the following information breaking down the period of 1966 80 into three five year periods the total citations of coase s firm paper for each subperiod are 1966 70 17 citations 1971 75 47 citations and 1976 80 105 citations

the applicability of marginal abatement cost approach a comprehensive review abstract the marginal abatement cost mac methodology is widely used in climate change policies policy makers rely on mac to assess feasible strategies and related costs to achieve emission reduction goals this paper introduces a variety of mac methodologies aiming at solving diverse problems which utilizes various calculable logic thus producing different results and implications this study applies a mind mapping method to capture differentiation of mac methods and systematically classify mac methodologies the applicability path analysis was proposed based on principles such as stakeholder type decision making objectives cost concept strategy mode and information scope our goal is to assess the applicability of different methodologies to reduce misuse by policy makers and to serve as a guide for subsequent research which might prompt and lead to the derivation of more consequential results in future studies the results of this study suggest that the complex method is not always better than the simplified method because policy makers are required to select the appropriate method according to the type of information needed it may even be suggested that mac could be reliable by ranking relative value of options compared with baseline rather than focusing on the absolute value of individual measures

regional economic impacts of biomass based energy service use a comparison across crops and technologies for east styria austria abstract biomass action plans in many european countries seek to expand biomass heat and fuel supply mainly to be supplied by peripheral agricultural regions we develop a two plus ten region energy focused computable general equilibrium cge model that acknowledges land competition in analysing the sub state local regional economic implications of such a strategy embedded within a global context our model is based on a full cost analysis of selected biomass technologies covering a range of agricultural and forestry crops as well as thermal insulation the local regional macroeconomic effects differ significantly across technologies and are governed by factors such as net labour intensity in crop production the high land intensity of agricultural biomass products crowds out conventional agriculture and thus lowers employment and drives up land prices and the consumer price index the regional economic results show that net employment effects are positive for all forestry based biomass energy and also show for which agriculture based biomass systems this is true even when accounting for land competition when regional consumer price development governs regional wages or when the agricultural sector is in strong enough competition to the international market positive employment and welfare impacts vanish fully for agriculture based bio energy

the stylized facts about the behavior of manufacturers inventories and backorders over the business cycle 1959 1980 recent theoretical work has highlighted the role of inventories in propagating business cycles this paper attempts to provide an empirical foundation for current and future research on the role inventories play in business cycles the evidence presented here indicates that inventories and backorders are major variables in predicting output fluctuations further the evidence is that disaggregating inventories by stage of fabrication is important in predicting output in concert with previous findings our results suggest that disaggregated inventories ought to be a component of models of the business cycle

market penetration of biodiesel abstract this research examines in detail the technology and economics of substituting biodiesel for diesel 2 this endeavor examines three areas first the benefits of biodiesel are examined and the technical problems of large scale implementation second the biodiesel production possibilities are examined for soybean oil corn oil tallow and yellow grease which are the largest sources of feedstocks for the united states examining in detail the production possibilities allows to identity the extent of technological change production costs byproducts and greenhouse gas ghg emissions finally a u s agricultural model fasomghg was used to predict market penetration of biodiesel given technological progress variety of technologies and feedstocks market interactions energy prices and carbon dioxide equivalent prices fasomghg has several interesting results first diesel fuel prices have an expansionary impact on the biodiesel industry the higher the diesel fuel prices the more biodiesel is produced however given the most favorable circumstances the maximum biodiesel market penetration is 9 in 2030 with a wholesale diesel price of 4 per gallon second the two dominant sources of biodiesel are from corn and soybeans sources like tallow and yellow grease are more limited because they are byproducts of other industries third ghg prices have an expansionary impact on the biodiesel prices because biodiesel is quite ghg efficient finally u s government subsidies on biofuels have an expansionary impact on biodiesel production and increase market penetration at least an additional 3

a critical review of distance function based economic research on china s marginal abatement cost of carbon dioxide emissions abstract the last few years have witnessed a rapidly emerging literature estimating the marginal abatement cost or the shadow price of carbon dioxide co2 emissions in china using parametric or non parametric distance function approaches this is largely driven by the fact that china has become the world s largest carbon emitter and thus faced mounting domestic and international pressure to mitigate emissions there is an urgent policy need to model and predict the cost burdens of various mitigation scenarios consistent information about the marginal abatement cost of co2 emissions plays a crucial role in addressing this need however the existing literature has suffered from various issues that have severely weakened the scientific support that these studies could potentially provide for sound policy making this paper provides a thorough and critical review of this rapidly emerging literature and identifies important research directions that need the most attention from scholars

optimal inventories and equilibrium price behavior abstract this paper departs from the established tradition of equilibrium inventory theory by examining the relationship between inventories and market prices when production is instantaneous but distribution is costly inventory holdings are not buffer stocks and do not facilitate production smoothing rather production variability exceeds the variability of final sales voluntary holdings of marketable finished goods are not restricted to occasional speculation during periods of unexpectedly low demand but may persist even when capital losses are anticipated in these respects the paper reconciles important features of the inventory decision problem with the results of modern investment theory

long and short run price asymmetries and hysteresis in the italian gasoline market abstract using monthly data from 1994 to 2013 we study the long run relation of the pre tax retail prices of gasoline with crude price and the nominal exchange rate we find a strongly significant long run relation we then use the nonlinear ardl nardl model to assess the asymmetries on both the short and long run elasticities as well as the presence of hysteresis in the pricing behaviour the estimation results confirm the presence of asymmetry in the long run elasticities with significant differences between the crude price and the exchange rate as well as the presence of hysteresis in the relation between the retail price of gasoline and crude oil price

agricultural pollution and regulation how to subsidize agriculture agricultural pollution is extremely serious in china and agricultural output quantity subsidy makes it even worse this paper captures the impacts of agricultural subsidy including quantity subsidy and innovation subsidy on agricultural pollution agriculture output quantity total pollution or emission equilibrium price consumer and producer surplus government budget and social welfare are all addressed in this study the results show that emission reducing innovation subsidy is better than quantity subsidy because it reduces the pollution from agriculture and profits for the agricultural firm are higher under innovation subsidy than under quantity subsidy more importantly output quantity and consumer surplus under innovation subsidy are also larger than those under quantity subsidy if the subsidy rate is not too high this study finds that the importance of the environment to the consumer marginal emission and pollution tax will decrease output quantity consumer and producer surplus and social welfare however agricultural subsidy increases them furthermore this study indicates that innovation subsidy can alleviate the food quantity safety and quality of environment dilemma in agriculture

carbon sequestration or abatement the effect of rising carbon prices on the optimal portfolio of greenhouse gas mitigation strategies abstract existing projections of the optimal share of carbon sequestration in an overall portfolio of greenhouse gas mitigation strategies almost all assume the carbon price to be constant over time this paper shows analytically that if the price instead increases over time consistent with projections from integrated assessment models it becomes optimal to delay certain sequestration projects whereas the optimal timing of energy based abatement projects remains unchanged as a result the optimal share of sequestration falls and significantly so calibrating our analytical model we find that a modest 3 rate of price increase results in about a 60 reduction in the optimal sequestration share relative to constant price projections numerical simulations based on predicted carbon price paths from nordhaus rice01 model indicate quantitatively similar reductions under an economically efficient scenario and much larger reductions 80 100 for up to 80 years under a scenario that aims to limit the atmospheric co 2 concentration to double its pre industrial level