tax induced emissions estimating short run emission impacts from carbon taxation under different market structures abstract this article finds that the introduction of a carbon tax increased short run carbon emissions in an imperfectly competitive wholesale electricity market the unique feature of the western australian setting is that the same carbon tax was introduced and later repealed but the market structure differed at each event at the repeal event the dominant firm had less incentive to exercise unilateral market power then the opposite result is observed emissions were lower with the tax i show how the short run impact of pollution taxation in imperfect markets depends on production technologies market structure and the size of the tax

opec market failure or power failure abstract the actions of opec and saudi arabia are discussed in terms of their objectives and their technical and social constraints it is concluded 1 that opec does not act as a cartel and 2 that hotelling s rule is not an important feature of pricing or production opec s more specifically saudi arabia s ideal policy is to keep price moderate to try to assure a market for their high reserves over the long run such an action would require heavy investments in capacity including in excess capacity for times of interruption of supply from other countries as in the 1990s and for times of high demand as in the 2000s the action may be inconsistent with other objectives and in any case may be too difficult to achieve

limit pricing and the in effectiveness of the carbon tax we present a theory of limit pricing monopoly in non renewable resource production facing a very inelastic demand an oil monopoly seeks to induce the highest price that does not destroy its demand unlike the conventional hotellian analysis the monopoly tolerates some ordinary substitutes to its oil but deters high potential ones with limit pricing policy induced extraction changes do not obey the usual logic for example oil taxes have no effect on current oil production extraction increases when high potential substitutes are promoted but can be effectively reduced by supporting ordinary substitutes the carbon tax not only applies to oil it also penalizes its ordinary carbon substitutes whose market shares are taken over by the monopoly thus the carbon tax ambiguously affects current and long term oil production and carbon emissions

strategic resource dependence we consider a situation where an exhaustible resource seller faces demand from a buyer who has a substitute but there is a time to build delay for the substitute we find that in this simple framework the basic implications of the hotelling model 1931 are reversed over time the stock declines but supplies increase up to the point where the buyer decides to switch under such a threat of demand change the supply does not reflect the current resource scarcity but it compensates the buyer for delaying the transition to the substitute the analysis suggests a perspective on costs of oil dependence

natural resource economics under the rule of hotelling abstract natural resource stocks held in situ are physical assets equilibrium in the assets market requires that their rates of return be such that their owners are just willing to hold on to them rather than invest elsewhere i discuss a number of factors relating to the evolution of extraction costs to the durability of the resource to market structure and to uncertainty that are important in correctly characterizing the rate of return on holding exhaustible natural resource stocks the emphasis is put on how those factors can potentially help bridge the gap between the basic hotelling s rule of natural resource exploitation and the historical behaviour of the flow price of a number of resources i also highlight some theoretical and empirical issues that need further attention

is there really a green paradox abstract in the absence of a co2 tax the anticipation of a cheaper renewable backstop increases current emissions of co2 since the date at which renewables are phased in is brought forward and more generally future emissions of co2 will decrease the effect on global warming is unclear green welfare falls if the backstop is relatively expensive and full exhaustion of fossil fuels is optimal but may increase if the backstop is sufficiently cheap relative to the cost of extracting the last drop of fossil fuels plus marginal global warming damages as then it is attractive to leave more fossil fuels unexploited and thus limit co2 emissions we establish these results by analyzing depletion of non renewable fossil fuels followed by a switch to a clean renewable backstop paying attention to timing of the switch and the amount of fossil fuels remaining unexploited we also discuss the potential for limit pricing when the non renewable resource is owned by a monopolist finally we show that if backstops are already used and more backstops become economically viable as the price of fossil fuels rises a lower cost of the backstop will either postpone fossil fuel exhaustion or leave more fossil fuel in situ thus boosting green welfare however if a market economy does not internalize global warming externalities and renewables have not kicked in yet full exhaustion of fossil fuel will occur in finite time and a backstop subsidy always curbs green welfare

ordering the extraction of polluting nonrenewable resources energy markets are often characterized by the use of multiple nonrenewable resources such as coal and natural gas with different pollution characteristics the same resource may have different qualities as when high and low sulfur coal is used to generate electricity multiple resources are used in providing transportation services such as cars running on gasoline or plug in hybrids that may be fueled by electricity produced from coal when these nonrenewable resources contribute differentially to pollution what is the opti mal sequence of extraction over time harold hotelling 1931 developed the classical theory of extraction of a nonrenewable resource orris c herfindahl 1967 extended the hotelling model by considering many resources with different unit costs of extraction and proposed the least cost first principle extraction must be ordered by cost with the cheapest resource used first others have examined whether herfindahl s model remains valid in a variety of situations in a general equilibrium setting see murray kemp and ngo v long 1980 tracy r lewis 1982 in the presence of setup costs g rard gaudet moreaux and stephen w salant 2001 under het erogeneous demands chakravorty and darrell l krulce 1994 and when the extraction rate is constrained jean pierre amigues et al 1998 stephen p holland 2003 in these studies following hotelling and herfindahl resources were differentiated by cost alone in this paper we abstract from cost considerations and focus on how the sequence of extraction may be affected when resources are differentiated only by their pollution character istics we consider two resources one more polluting than the other without loss of generality consider coal to be the dirty resource and natural gas the clean one both may be used to generate electricity environmental regulation is imposed through a cap on the stock of pollution this may be a stylized approximation of an international agreement such as the kyoto protocol which aims to stabilize the concentration of greenhouse gases in the atmosphere 1 with heterogeneity in pollution the results are nonintuitive and do not depend on the emis sion rates of the resources when the economy is already at its allowable stock of pollution the clean natural gas is used first and use of the dirty coal is postponed to the future this is what one would expect armed with insights from the herfindahl model however when the economy starts from below the ceiling and accumulates pollution coal may be used first and use of the clean natural gas is postponed the optimal strategy is to benefit from natural dilution by build ing the stock of pollution as quickly as possible this is done by burning coal rather than natural

fuel consumption in road transport a comparative study of china and oecd countries abstract energy conservation and emissions reduction have been the focus of the road transport sector due to its energy intensive and air pollution intensive nature it also embodies the imprints of human technological progress this paper compares the energy consumption of the road transport sector in china and oecd countries we used time series and panel data co integration analysis error correction model and dynamic model to study the impacts of the major influencing factors such as income income structure urbanization price and technological advancement on gasoline and diesel consumption in road transport overall china s fuel consumption is influenced mainly by investment government expenditure and demographic changes such as urbanization while the fuel consumption of oecd countries is mainly driven by household final consumption expenditure in the short run and from a dynamic perspective china s fuel consumption is less influenced by its historical consumption than current influencing factors while that of oecd countries is more affected by historical fuel consumption based on the analysis and findings of this study some policy implications are proposed

extraction of a resource with a substitute for some of its uses important resources e g oil may be used for several purposes there may exist good substitutes for such a resource in some of its uses but no substitute in other uses the price and extraction paths for the resource are analysed for several market structures some of these paths differ substantially from the corresponding paths for the case of no substitute and for the case of a substitute for all the resource s uses in particular a jump in the resource price may occur l extraction d une ressource quand il existe un substitut pour certains des usages qu on peut en faire certaines ressources importantes comme 1 huile par exemple peuvent etre utilisees a plusieurs fins dans certains cas il se peut qu il existe des substituts pour certains usages qu on peut en faire alors que dans d autres cas il n existe pas de substituts l auteur examine la tarification et les diverse strategies d extraction dans des structure de marches differentes certaines de ces strategies d extraction different substantiellement de celles qui auraient ete utilisees soit dans le cas oiu aucun substitut n existe soit dans le cas ou substitut existe pour tous les usages qu on peut faire de la ressource en particulier on peut observer un saut dans le prix de la ressource

the problem of the commons still unsettled after 100 years the problem of the commons is more important to our lives and thus more central to economics than a century ago when katharine coman led off the first issue of the american economic review as the us and other economies have grown the carrying capacity of the planet in regard to natural resources and environmental quality has become a greater concern particularly for commonproperty and open access resources the focus of this article is on some important unsettled problems of the commons within the realm of natural resources there are special challenges associated with renewable resources which are frequently characterized by open access an important example is the degradation of openaccess fisheries critical commons problems are also associated with environmental quality a key contribution of economics has been the development of market based approaches to environmental protection these instruments are key to addressing the ultimate commons problem of the twenty first century global climate change jel q15 q21 q22 q25 q54

monopoly unilateral climate policies and limit pricing abstract we examine the behavior of a fossil fuel monopolist who faces demand from two regions a climate club and the rest of the world row each region is able to produce a perfect substitute for fossil energy at constant marginal costs the climate club uses a carbon tax and a renewables subsidy as policy instruments the row is policy inactive we fully characterize the market equilibrium and show that due to differences in climate policies between the climate club and the row the monopolistic fossil fuel supplier may choose for two limit pricing phases to postpone entry of renewables producers first in the climate club and later in the row as soon as energy demand from the climate club shifts from fossil fuels to renewables the monopolist abruptly increases the fossil price for the row

sequential development and exploitation of an exhaustible resource do monopoly rights promote conservation this paper explores the problem of sequential exploitation of exhaustible resources by a monopolist when a setup cost must be incurred to access the next pool under certain circumstances the monopolist will always follow a more conservationist path of extraction and delay the introduction of new resource pools compared to a social planner however with other forms of consumer demand the monopolist may exhaust the resource more quickly especially if many new options will follow these results may apply especially to depletable resources like antibiotics or biotech products for which significant research and development costs are required followed by monopoly rights conferred by patents

disagreement in inflation expectations empirical evidence for colombia the literature on expectation disagreements in emerging economies is scarce this paper examines the disagreements in inflation expectations for the colombian economy during the 2010 2017 period w

on monopoly power in extractive resource markets abstract potential monopoly power in extractive resource markets is reduced by the depletability of reserves this paper examines the dependence of monopoly power on resource rent and on uncertainty over future reserve levels a model is developed that treats reserves as inventories that fluctuate stochastically over time as a result of exploration development and production activities solutions of the model illustrate how output and monopoly power vary with the elasticity of demand rent as a fraction of price and the variance of reserve fluctuations it is shown that uncertainty over future reserves can speed up production and by reducing resource rent restore part of the monopoly power otherwise lost because of depletion antitrust implications are discussed with reference to several resources

opec behavior a test of alternative hypotheses since interpretations of past and future oil price patterns depends on the model chosen the author tests and compares alternative theories of opec as a first step in validating the choice on any one model the results show that among opec countries the partial market sharing cartel model is the only model not rejected by at least some of the 11 members and gives the best explanation of production in comparison with 11 non opec countries the competitive model could not be rejected for 10 of the 11 non opec producers this raises the question of why if opec is a cartel friedman s predictions have not come true and introduces new questions for future research 19 references 3 tables

optimal taxes on fossil fuel in general equilibrium we analyze a dynamic stochastic general equilibrium dsge model with an externality through climate change from using fossil energy our central result is a simple formula for the marginal externality damage of emissions or equivalently for the optimal carbon tax this formula which holds under quite plausible assumptions reveals that the damage is proportional to current gdp with the proportion depending only on three factors i discounting ii the expected damage elasticity how many percent of the output flow is lost from an extra unit of carbon in the atmosphere and iii the structure of carbon depreciation in the atmosphere thus the stochastic values of future output consumption and the atmospheric co2 concentration as well as the paths of technology whether endogenous or exogenous and population and so on all disappear from the formula we find that the optimal tax should be a bit higher than the median or most well known estimates in the literature we also formulate a parsimonious yet comprehensive and easily solved model allowing us to compute the optimal and market paths for the use of different sources of energy and the corresponding climate change we find coal rather than oil to be the main threat to economic welfare largely due to its abundance we also find that the costs of inaction are particularly sensitive to the assumptions regarding the substitutability of different energy sources and technological progress

efficiency inducing taxation for a monopolistically supplied depletable resource author s bergstrom ted cross john porter dick abstract we show that for a depletable resource if the competitive time path of prices is known and if the profit function is concave then there is an easily described time path of taxes and or subsidies that would induce a monopolist to follow an efficient time path of extraction

on efficiency inducing taxation for a non renewable resource monopolist the problem of using taxes to induce a monopolist supplier of a non renewable resource to extract efficiently has been solved under the assumption that the government has perfect information about the monopolist s cost function and reserves and is able to precommit to an entire sequence of taxes over time we extend this literature by constructing an efficiency inducing tax mechanism that does not require the government to have any information about the cost function or reserves and which does not require it to precommit to a sequence of taxes over time

on comparing monopoly and competition in exhaustible resource exploitation abstract it is widely believed that exhaustible resource monopolies do not enjoy as much market power as standard non resource monopolies and may even produce in a socially optimal way we argue that this paradoxical result arises from an inappropriate comparison methodology when similar assumptions are applied to the resource and the conventional cases we show that the resource monopoly behaves as expected i e restricts supply

nonparametric estimation of exact consumers surplus and deadweight loss we apply nonparametric regression models to estimation of demand curves of the type most often used in applied research from the demand curve estimators we derive estimates of exact consumers surplus and deadweight loss which are the most widely used welfare and economic efficiency measures in areas of economics such as public finance we also develop tests of the symmetry and downward sloping properties of compensated demand we work out asymptotic normal sampling theory for kernel and series nonparametric estimators as well as for the parametric case the paper includes an application to gasoline demand empirical questions of interest here are the shape of the demand curve and the average magnitude of welfare loss from a tax on gasoline in this application we compare parametric and nonparametric estimates of the demand curve calculate exact and approximate measures of consumers surplus and deadweight loss and give standard error estimates we also analyze the sensitivity of the welfare measures to components of nonparametric regression estimators such as the number of terms in a series approximation

growth renewables and the optimal carbon tax optimal climate policy is investigated in a ramsey growth model of the global economy with exhaustible oil reserves an infinitely elastic supply of renewables stock dependent oil extraction costs and convex climate damages four regimes can occur depending on the initial social cost of oil being larger or smaller than that of renewables and depending on the initial oil stock being large or small we also offer some policy simulations for the first and second regime which illustrate that with a lower discount rate more oil is left in situ and renewables are phased in more quickly we identify the conditions under which the optimal carbon tax rises or decreases subsidizing renewables without a carbon tax induces more oil to be left in situ and a quicker phasing in of renewables but oil is depleted more rapidly initially the net effect on global warming is ambiguous abstract from author