a dynamic analysis of the marketable permits approach to global warming policy a comparison of spatial and temporal flexibility abstract this paper presents a generalized dynamic model of greenhouse gas emissions trading under constraints on the volume of transactions an empirical version of the model is used to evaluate potentially cost saving flexibility mechanisms joint implementation and clean development mechanism and potentially cost adding restrictions supplementarity of the kyoto protocol the results indicate the greatest gains would stem from extending permit trading spatially among industrialized nations although sizable gains would also emanate from the inclusion of developing countries gains from intertemporal trading banking and borrowing are meager restrictions on the volume of permit purchases have by far the most costly effect when developing countries are incorporated into trading sensitivity tests with respect to differential discount rates across countries and technological change indicate the results are robust

how to use the clean development mechanism in the residential sector the case of brazilian refrigerators the definition of simple and reliable emission baselines is crucial to foster clean development mechanism cdm projects this paper assesses a project methodology that could boost large scale energy efficiency projects in the sector of domestic appliances the baseline appliance is defined a priori in a conservative manner as the design option minimizing life cycle social costs the project methodology consists in a program which rebates new appliances according to their emission savings compared to the baseline is the proposed baseline acceptable what could be the impact of such project on emissions to address these questions we look for insights from a hypothetical case on brazilian refrigerators a rational choice model is developed which assumes that households select design options minimizing life cycle private costs results suggest that electricity tariff distortions and financial constraints might hamper project performances and allow significant free riding low income households remain trapped into low efficiency choices and high income households adopt outperforming appliances whether rebated or not however simple solutions likely to improve the project methodology do exist c 2005 elsevier ltd all rights reserved

the psychology of early institutional economics the instinctive approach of thorstein veblen s conspicuous consumer theory abstract thorstein veblen a founder of original or old institutional economics combined social and evolutionary thought in his institutionalist approach to dealing with psychological social and economic issues the psychological content of veblen s writings takes instinct and habits into consideration the economic literature on the psychological content of veblen s writings has focused on habits despite the importance of instincts in veblen s works this paper attempts to discuss veblen s notion of instincts in order to make its role clearer in his approach to conspicuous consumer decision making it discusses the role of instincts the instinct of workmanship the relationship between habits and instincts and their influence on the conspicuous consumer consequently this paper contributes to a better understanding of how inner forces and socialization culminate in behavior in veblen s conspicuous consumer approach

emission trading with fiscal externalities the case for a common carbon tax for the non ets emissions in the eu a government is fiscally constrained if it is unable to raise sufficient tax revenue to finance the first best level of public spending when involved in emission trading a fiscally constrained government will potentially seek to close its fiscal gap through emission permit sales this fiscal incentive therefore generates a fiscal externality in the permit market that is endogenous to the extent of fiscal constrainedness among the participating countries our theory explains how and when fiscal externalities may be expected to arise moreover we show that in a permit market equilibrium with fiscal externalities the initial allocation of emission permits between countries will affect 1 the price of emission permits 2 the global distribution of abatement effort and 3 total greenhouse gas mitigation costs this is contrary to the textbook model of emission permit markets our findings are especially relevant for the eu which is about to allow for trading in emission rights between eu member countries for all emissions outside the european emissions trading system

will markets direct investments under the kyoto protocol lessons from the activities implemented jointly pilots under the kyoto protocol countries can meet treaty obligations by investing in projects that reduce or sequester greenhouse gases elsewhere prior to ratification treaty participants agreed to launch country based pilot projects referred to collectively as activities implemented jointly aij to test novel aspects of the project related provisions relying on a ten year history of projects we investigate the determinants of aij investment our findings suggest that review agency preferences related to national political objectives and possibly deeper cultural ties influenced project selection and limited the number of aij projects bilateral ties also appear to have affected investment decisions directly possibly because of related transaction costs the results suggest an investment process different from the assumptions that underlie well known estimates of cost savings related to the protocol s flexibility mechanisms we conclude that if approaches developed under the aij programs to approve projects are retained the scale of investment under kyoto s flexibility provisions and their cost savings will be less than what is generally anticipated and the pattern of investment less driven by abatement costs

technology choice and cdm projects in china case study of a small steel company in shandong province abstract corporate motives and strategies of both investing and hosting country affect the outcomes of a clean development mechanism cdm project who introduces what technology to whom and result in large differences in economic viability and the co 2 emission reductions this is particularly true for steel industry in which steel making consists of many detailed and complex processes a given strategy could produce cumulative effects of the individual technologies used leading to large energy savings overall the objective of this study is to demonstrate some analytical methods that can be used to quantitatively evaluate the impacts of technology selection on the profit performance of cdm projects specifically in this study we analyze a cdm project to introduce energy saving technology from japan to a small steel manufacturer in china s shandong province and conduct a simulation of the quantitative relationships between various technology options and profitability based on these results we examine the environmental and economic significance of technology selection for cdm projects to take this further we then reconsider the profitability of a project as typical fdi activity i e without the cdm and by comparing this outcome with the cdm case we clarify the significance and potential of the cdm

estimating the marginal abatement cost curve of co2 emissions in china provincial panel data analysis abstract this paper estimates the marginal abatement cost curve macc of co2 emissions in china based on a provincial panel for the period of 2001 2010 the provincial marginal abatement cost mac of co2 emissions is estimated using a parameterized directional output distance function four types of model specifications are applied to fit the mac carbon intensity pairs the optimal specification controlling for various covariates is identified econometrically a scenario simulation of china s 40 45 carbon intensity reduction based on our macc is illustrated our simulation results show that china would incur a 559 623 yuan t roughly 51 57 increase in marginal abatement cost to achieve a corresponding 40 45 reduction in carbon intensity compared to its 2005 level

international diversification of investments in climate change mitigation abstract numerous studies have shown that international emissions trading can significantly lower the costs of greenhouse gas ghg abatement economic models however ignore the substantial economic and political risks associated with investments in developing countries where according to these models a large share of global ghg abatement takes place we use a mean variance approach to compute international portfolios of carbon abatement activities that balance low abatement costs and investment risks expected returns are derived from marginal abatement cost curves the volatility of the growth rate of regional carbon dioxide emissions is used as an indicator of investment risk we find first that well diversified portfolios can significantly reduce investment risks second the least risk portfolio is distinct from the cost efficient allocation based on equalization of marginal abatement costs and much more costly to implement this indicates that existing models which neglect investment risks overestimate the cost savings due to international emissions trading

estimating the price of tradable permits for greenhouse gas emissions in 2008 12 abstract many attempts have been made recently to predict the prices of tradable permits for greenhouse gas ghg emissions in the first commitment period of the kyoto protocol 2008 12 in this paper we attempt to refine these price estimates based on i the results of economic models and identification of factors which influence prices but are not fully reflected in the models ii lessons from price forecasting experience in the us sulfur dioxide market and iii current price data from the nascent international market for ghg permits we expect ghg permit prices to be at the lower end of the broad spectrum of existing predictions this implies among other things that resource transfers to developing countries associated with emissions trading will be relatively low nevertheless even a modest price will have a significant influence on the decisions of consumers and investors in energy markets around the world

the market for tradable ghg permits under the kyoto protocol a survey of model studies abstract this paper gathers results from 25 models of the market for tradable greenhouse gas ghg emission permits under the kyoto protocol due to diverging projections of emissions growth and different modeling approaches the model results differ substantially the average market volume is approximately 17 and 33 billion usd under global trading and annex b trading respectively including non carbon ghg lowers compliance costs and permit prices in the absence of the us permit demand roughly equals hot air from the former soviet union these countries can increase their revenues from selling permits by restricting supply which raises the permit price

an empirical analysis of the co2 shadow price in chinese thermal power enterprises abstract this paper estimates the shadow price of co2 and explores its determinants for thermal power enterprises in china using a parametric quadratic directional distance function we evaluate the inefficiency and shadow price of co2 for 124 power enterprises in 2004 applying deterministic and econometric methods a regression analysis is undertaken to examine the factors that drive shadow prices our results indicate that there are large inefficiencies in terms of electricity production and co2 emissions the shadow price is a negative function of firm size age and coal share and is positively correlated with the technology level this correlation between shadow prices and its determinants is not sensitive to changing assumptions regarding directional vectors although such changes do alter the distribution of shadow prices the large variation witnessed in shadow prices across power enterprises argues in favor of market based regulation such as an emissions trading system as opposed to the command and control regulation currently used in china to minimize overall abatement cost

giving firms an e for effort consumer responses to high effort firms this research shows that consumers reward firms for extra effort more specifically a series of three laboratory experiments shows that when firms exert extra effort in making or displaying their products consumers reward them by increasing their willingness to pay store choice and overall evaluations even if the actual quality of the products is not improved this rewarding process is defined broadly as general reciprocity consistent with attribution theory the rewarding of generally directed effort is mediated by feelings of gratitude when consumers infer that effort is motivated by persuasion however they no longer feel gratitude and do not reward high effort firms

burden sharing in a greenhouse egalitarianism and sovereignty reconciled the allocation of emission entitlements across countries is the single most controversial issue in international climate policy extreme positions within the policy debate range from entitlements based on current emission patterns sovereignty to entitlements based on equal per capita allocations egalitarianism this paper shows that gradual convergence from sovereignty towards egalitarianism could provide a pragmatic solution to the equity debate when combined with international emissions trading the convergence approach stands out for offering the developing countries substantial incentives for participation in the international greenhouse gas abatement effort without imposing excessive burdens on the industrialized countries

modeling competitive firms performance under price sensitive demand and cap and trade emissions constraints abstract this study analytically examines the effects on profitability of using an emissions cap and trade policy a game theoretic cournot model with two competitive firms producing goods along with undesirable emissions for a single market is investigated production costs are non linear and product demand is price sensitive first relationships are derived to maximize each firm s profit under a given emissions permit price and given emissions constraints or caps production volumes for each firm at the equilibrium are determined with and without the assumption that emissions permit trading can occur relationships are then developed to investigate behavior as a function of emissions caps the allocation of caps between firms and the emissions permit price bounds on the ranges within which permit trading will occur are also determined results show the conditions under which profits rise or fall as emissions constraints are tightened the conditions under which firms benefit equally from emissions permit trading are also developed finally the analysis shows that the firm with the lower emissions intensity will never purchase emissions permits if its operational costs are higher than those of the competitor therefore cap and trade will not necessarily provide an incentive for the firm with the lowest emissions intensity to increase its market share

clean development investments an incentive compatible cge modeling framework the clean development mechanism established under the kyoto protocol allows industrialized annex i countries to offset part of their domestic emissions by investing in emissions reduction projects in developing non annex i countries computable general equilibrium analysis of the clean development mechanism s impacts so far mimics the clean development mechanism as a sector emissions trading scheme thereby overstating its potential to save climate change mitigation costs this study develops a novel approach that represents the clean development mechanism more realistically by compensating clean development mechanism implementing sectors for additional abatement cost and by endogenizing clean development mechanism credits as a function of investment compared with previous representations the proposed approach is more consistent in its incentive structure and investment characteristics at the sector level an empirical application of the new methodology demonstrates that the economy wide cost savings from the clean development mechanism tend to be lower than suggested by conventional modeling approaches while clean development mechanism implementing sectors do not lose in output

price drivers and structural breaks in european carbon prices 2005 2007 this article aims at characterizing the daily price fundamentals of european union allowances euas traded since 2005 as part of the emissions trading scheme ets the presence of two structural changes on april 2006 following the disclosure of 2005 verified emissions and on october 2006 following the european commission announcement of stricter phase ii allocation allows to isolate distinct fundamentals evolving overtime the results extend previous literature by showing that eua spot prices react not only to energy prices with forecast errors but also to unanticipated temperatures changes during colder events besides the sub period decomposition of the pilot phase gives a better grasp of institutional and market events that drive allowance price changes

an emerging equilibrium in the eu emissions trading scheme abstract the european union s emissions trading scheme ets is the key policy instrument of the european commission s climate change program aimed at reducing greenhouse gas emissions to eight percent below 1990 levels by 2012 a critically important element of the eu ets is the establishment of a market determined price for eu allowances this article examines the extent to which several theoretically founded factors including economic growth energy prices and weather conditions determine the expected prices of the european union co 2 allowances during the 2005 through to the 2009 period the novel aspect of our study is that we examine heavily traded futures instruments that have an expiry date in phase 2 of the eu ets our study adopts both static and recursive versions of the johansen multivariate cointegration likelihood ratio test as well as a variation on this test with a view to controlling for time varying volatility effects our results are indicative of a new pricing regime emerging in phase 2 and point to a maturing market driven by the fundamentals these results are valuable both for traders of eu allowances and for those policy makers seeking to improve the design of the european union ets

veblen s evolutionary programme a promise unfulfilled this article examines in detail the way in which veblen attempted to give theoretical expression to the programme for an evolutionary economics that he outlined in methodological terms in his 1898 essay why is economics not an evolutionary science veblen s conception of darwinian methodological principles led him to attempt to develop a theory of institutional evolution that was purely causal in nature this theory was never satisfactorily developed by veblen at base his theory was one of new technology changing economic conditions and new economic conditions leading to new ways of thinking and to new institutions through a non intentional process of habituation those who attempted to follow veblen such as hoxie and mitchell found difficulties with the key aspects of this theory and both men came to abandon it institutionalism in the interwar period is devoid of attempts to develop veblen s theory and veblen s programme remained a promise unfulfilled

combining price and quantity controls to mitigate global climate change abstract uncertainty about compliance costs causes otherwise equivalent price and quantity controls to behave differently and leads to divergent welfare consequences although most of the debate on global climate change policy has focused on quantity controls due to their political appeal this paper argues that price controls are more efficient simulations based on a stochastic computable general equilibrium model indicate that the expected welfare gain from the optimal price policy is five times higher than the expected gain from the optimal quantity policy an alternative hybrid policy combines both the political appeal of quantity controls with the efficiency of prices using an initial distribution of tradeable permits to set a quantitative target but allowing additional permits to be purchased at a fixed trigger price even sub optimal hybrid policies offer dramatic efficiency improvements over otherwise standard quantity controls for example a 50 trigger price per ton of carbon converts the 3 trillion expected loss associated with a simple 1990 emission target to a 150 billion gain these results suggest that a hybrid policy is an attractive alternative to either a pure price or quantity system

the emissions trading paradox abstract this article considers the price history of co2 allowances in the eu emission trading scheme since european emissions trading started in 2005 the prices of allowances have varied between less than one and thirty euro per ton of co2 this previously unpredicted volatility and more notably a significant price crash in may 2005 led to the hypothesis that electricity producers might use their market power to influence the prices of allowances besides market power the combination of information asymmetry and price interdependencies between prices of primary goods especially electricity and allowances plays an important role in explaining the emissions trading paradox the model presented will show that banking can lead to such a price crash if market participators act rationally furthermore in such a scenario banking can be profitable for sellers at the cost of buyers

veblen on the machine process and technological change this paper explores veblen s analysis of technological change i claim that rather than succumbing to the traditional criticisms his approach founders due to his failure to fully articulate a social ontology whilst veblen s analysis of his own time remains in many ways compelling this failure creates a gap between meta theoretical promise and current theoretical results i show how work in the social studies of technology has successfully avoided the ontological problems associated with veblenian economics this success is tempered by the fact that the field has not yet provided an appropriate framework to systematise the ways in which technical innovations transform social relations in ways that are beyond conscious control and manipulation copyright the author 2009 published by oxford university press on behalf of the cambridge political economy society all rights reserved oxford university press

marginal abatement costs of co2 emission reductions geographical flexibility and concrete ceilings an assessment using the poles model abstract the kyoto protocol envisage the setting up of flexibility mechanisms allowing annex b countries to fulfil their commitments to reducing greenhouse gases with respect for the principle of economic efficiency the current negotiations relate in particular to the possibility of setting up a system of tradable emissions permits for annex b countries and also of introducing ceilings to trade this paper analyses the stakes and economic potential of adopting this instrument both for those countries that made commitments in kyoto and for developing countries it is based on a formal approach that allows for a consistent framework of analysis the emission permit market is in fact simulated on the basis of a reference scenario and of marginal abatement cost curves and estimated by the poles model after analysing these marginal abatement cost curves and comparing them with those produced by other models we explore two different configurations for a competitive market a market limited to the annex b countries and a world market the results produced by the model show that widening the market to include developing countries is more effective than the annex b market solution it reduces the cost of implementing kyoto for oecd countries and at the same time allows the countries of the south to benefit from selling the permits this research also shows that introducing restrictions on exchanges for annex b countries could have a counter productive redistribution effect with the ethical argument that underlies that particular measure

trade of permits for greenhouse gas emissions bilateral trade need not be the answer the kyoto protocol sets national quotas on ghg emissions and allows international trade of these quotas taking terms of trade effects into account we argue that this trade is characterized by asymmetric identity dependent externalities and show that bilateral trade of permits may not be sufficient for an efficient allocation of emissions we derive conditions under which bilateral trade does improve the allocation of permits the conditions are strong in this sense we argue that for emissions permits market design matters

on the difficulty of evolutionary analysis thorstein veblen s 100 year old question why is economics not an evolu tionary science remains relevant evolutionary analysis even for those social scientists who trace their intellectual heritage to evolutionary thought has been difficult for three reasons effective incorporation of time requires a respectful and detailed treatment of the past dominant social science paradigms have made it difficult to account for novelty and concern with policy and current issues of social debate creates a tendency towards taxonomy the twentieth century history of economic anthropology and institutional economics illustrates that a failure to overcome these difficulties leaves veblen s vision unfulfilled the reasonable reaction to veblen s famous question why is economics not an evolutionary science is to ask a further question why is it still not an evolutionary science and then to continue with the questions why are the other social sciences not evolutionary sciences why especially have the american institutionalists who claim veblen as a founding father and who have an organisation called the association for evolutionary economics found evolutionary analyses difficult in this paper i propose to address these questions by examining aspects of the history of one discipline anthropology and one subdiscipline institutional economics that emerged from the evolutionary vision of the late nineteenth century 1 veblen s anthropological roots were

it s not what you get but when you get it the effect of gift sequence on deposit balances and customer sentiment in a commercial bank abstract the authors examine the impact of gifts on deposit balances and customer satisfaction in a longitudinal field experiment conducted at a commercial bank they find that gifts increased deposit balances survey response rates and customer satisfaction compared with the no gift control they manipulated several factors within the gift treatment gift type the accompanying message and the sequence of gift value which improved 35 then 100 gift worsened 100 then 35 gift or was a single gift a highly detrimental effect of decreasing gift value occurred on deposit balances this deterioration aversion persisted in a long term follow up analysis of deposit balances a vignette experiment replicates deterioration aversion and extends the results demonstrating increased effectiveness of improving gifts over constant gift sequences and indicating that the mechanism underlying deterioration aversion involves the violation of expectations

carbon trading across sources and periods constrained by the marrakesh accords abstract we examine the potential effects on permit prices and abatement costs of four compliance rules governing emissions trade across sources and periods in the kyoto protocol the banking rule that allows excess permits to be used later the restoration rate rule that penalizes borrowing the commitment period reserve rule that limits sales and finally the suspension rule that restricts borrowing and sales our framework is a two period model where parties may be out of compliance in the kyoto period but are assumed to comply at a later time under varying assumptions about market power and us participation we find that the rules may have pronounced effects on individual costs but overall efficiency is not severely affected

the role of economics in climate change policy many policy problems have frustratingly long histories of inefficient regulation that can be difficult or impossible to reverse even where large efficiency gains might be had from doing so climate change is an exception however because little real action has been undertaken to date it presents an unusual opportunity for an efficient economic policy to be employed right from the beginning however the opportunity could easily be lost ongoing negotiations conducted under the auspices of the united nations framework convention on climate change have so far produced the kyoto protocol a deeply flawed agreement that manages to be both economically inefficient and politically impractical in this article we examine the key economic characteristics of climate change and argue that economic theory provides good guidance on the design of an efficient and politically realistic policy because climate change involves vast uncertainties and has potentially enormous distributional effects neither of the standard market based environmental policy instruments is a viable approach a tradable permit system would be inefficient and an emissions tax would be politically unrealistic however a hybrid policy combining the best features of the two would be an efficient and practical approach we then compare our hybrid proposal to the kyoto protocol and argue that it overcomes the protocol s shortcomings

technological change in economic models of environmental policy a survey this paper provides an overview of the treatment of technological change in economic models of environmental policy numerous economic modeling studies have confirmed the sensitivity of mid and long run climate change mitigation cost and benefit projections to assumptions about technology costs in general technical progress is considered to be a noneconomic exogenous variable in global climate change modeling however there is overwhelming evidence that technological change is not an exogenous variable but to an important degree endogenous induced by needs and pressures hence some environmenteconomy models treat technological change as endogenous responding to socio economic variables three main elements in models of technological innovation are i corporate investment in research and development ii spillovers from r d and iii technology learning especially learning by doing the incorporation of induced technological change in different types of environmental economic models tends to reduce the costs of environmental policy accelerates abatement and may lead to positive spillover and negative leakage

factors affecting the carbon allowance market in the us the us carbon allowance market has different characteristic and price determination process from the eu ets market since emitting installations voluntarily participate in emission trading scheme this paper examines factors affecting the us carbon allowance market an autoregressive distributed lag model is used to examine the short and long run relationships between the us carbon allowance market and its determinant factors in the long run the price of coal is a main factor in the determination of carbon allowance trading in the short run on the other hand the changes in crude oil and natural gas prices as well as coal price have significant effects on carbon allowance market

the environment as a factor of production the authors develop a model of environmental resource use in production with an empirical analysis of how electric power companies consume and bank sulfur dioxide pollution permits the model considers emissions fuels and labor as variable inputs with quasi fixed inputs of permits and capital incorporating information from permit markets allows the authors to distinguish between user costs and asset shadow values their findings indicate that firms are holding stocks of pollution permits for reasons other than short term cost savings the results also reveal substantial substitution possibilities between emissions permits stocks and other factors of production the authors speculate that anticipated secondary markets for carbon offset inventories related to the flexibility mechanisms of the kyoto protocol will have similar effects for greenhouse gas emitting firms

aligning renewable energy targets with carbon emissions trading to achieve china s indcs a general equilibrium assessment abstract this study evaluates the economic impact of achieving china s intended nationally determined contributions indcs through emissions trading scheme ets and renewable energy policy using a computable general equilibrium cge model we explored the behavior of different sectors in the carbon market carbon trade amount carbon price and the economic impact of an emissions cap and trade on the employment and gdp the results demonstrate that the electricity and aviation sectors have relatively higher mitigation costs and tend to be the main buyers of the carbon credits whereas chemicals nonmetal production iron and steel paper and other manufacturing sectors have relatively lower mitigation costs and tend to be the main sellers carbon trading price and market scale are closely related to various factors such as the emissions quota allocation scheme among sectors coverage of participating sectors and the level of renewable energy development emission trading is also confirmed to be an economically efficient approach that contributes to the achievement of emission reduction targets with less economic cost in order to make full use of this approach policy maker should assign an appropriate emissions quota allocation scheme extend coverage of various sectors and promote the expansion of low carbon technologies such as renewable energy

integrating bioenergy into computable general equilibrium models a survey in the past years biofuels have received increased attention since they were believed to contribute to rural development energy security and to fight global warming it became clear though that bioenergy cannot be evaluated independently of the rest of the economy and that national and international feedback effects are important computable general equilibrium cge models have been widely employed in order to study the effects of international climate policies the main characteristic of these models is their encompassing scope global models cover the whole world economy disaggregated into regions and countries as well as diverse sectors of economic activity such a modelling framework unveils direct and indirect feedback effects of certain policies or shocks across sectors and countries cge models are thus well suited for the study of bioenergy biofuel policies one can currently find various approaches in the literature of incorporating bioenergy into a cge framework this paper gives an overview of existing approaches critically assesses their respective power and discusses the advantages of cge models compared to partial equilibrium models grouping different approaches into categories and highlighting their advantages and disadvantages is important for giving a structure to this rather recent and rapidly growing research area and to provide a guidepost for future work

transaction costs institutional rigidities and the size of the clean development mechanism transaction costs and institutional rigidities will reduce the attractiveness of the kyoto protocol flexibility mechanisms compared to domestic greenhouse gas abatement options the clean development mechanism cdm in particular is likely to entail considerable costs of baseline development project registration verification and certification the activities implemented jointly pilot phase and the prototype carbon fund programme give indications about these costs there is evidence that projects with high implementation costs have high transaction costs as well moreover cdm projects have to be approved by host country institutions and so far only a small share of host countries has been able to set up these institutions several of the larger host countries intend to only approve projects if the market price is above a certain threshold some governments will also levy fees to finance costs of approval bodies we assess these issues using a quantitative model of the kyoto protocol permit market we conclude that while changes in demand from annex b countries remain the crucial factor the size of the cdm will depend to a significant degree on transaction costs and institutional barriers in host countries

adventurous and charismatic spirits entrepreneurs of veblen and schumpeter abstract the aim of this study is to analyze the evolving role of the entrepreneur in the economic and institutional structure based on the analyses of veblen and schumpeter in both analyses the historical evolution of the entrepreneur is crucial in understanding economic and institutional change it can be claimed that clues for socio economic transformation should be searched within institutions entrepreneurs and habits and by this way it is possible to demonstrate the mutual interactions between economic and social spheres

the approach of institutional economics this paper assesses the old institutional economics it emphasizes the importance of key old institutionalist themes concerning the necessity of habits and rules and the role of institutions a problem in the alternative theoretical program of the new institutionalism is the untenability of its assumption of an original institution free market or state of nature even optimizing behavior requires the prior existence of habits and rules although it still lacks a complete and systematic theory the evolutionary approach of the old institutionalists tackles the problem of the interactive relationship of actor to structure without analytical reduction to one or the other

political economy of the kyoto protocol the kyoto protocol negotiated in december 1997 is the first international treaty to limit emissions of greenhouse gases but kyoto does not mark the conclusion to international cooperation on climate change it is really just a beginning this paper shows that in the aggregate the benefits of undertaking the kyoto reductions should exceed the corresponding costs provided these are achieved cost effectively but although kyoto seeks to promote cost effectiveness it may yet prove very costly moreover the agreement may not even achieve the reductions that it promises either because emissions will relocate to the countries that are not required to stay within kyoto prescribed ceilings or because paper trades will be promoted by the protocol s mechanisms more fundamentally kyoto does not deter non compliance and it only weakly deters non participation these flaws need to be mended but the nature of the problem makes that an especially difficult task copyright 1998 by oxford university press

beyond kyoto backstop technologies and endogenous prices on co2 permits and fossil fuels this paper analyses the markets for fossil fuels given that the limits the kyoto protocol sets on co2 emissions from annex b countries extend beyond 2008 2012 a forward looking model with endogenous prices for fossil fuels is applied under different assumptions concerning the technological progress for a carbon free backstop technology both the time profile of the international permit price needed for the kyoto forever targets as well as the implications through reduced demand and lower producer prices for fossil fuels are calculated the permit price has to rise at least up to 2030 in order to fulfil the emission targets from then on the necessary permit price shows different future developments dependent on when the backstop technology starts to replace oil since changes in the availability of the backstop technology shift the time profile of the permit price the loss of petroleum wealth for oil and gas producers varies between the scenarios but is never more than 20 findings indicate that the

emission trading under the kyoto protocol effects on fossil fuel markets under alternative regimes abstract the consequences of the kyoto protocol for the fossil fuel markets depend on which policy instruments are used in order to reach the emission targets this paper uses a numerical model to assess the significance of international emissions trading for the oil coal and gas markets three different trading regimes are compared particular attention is devoted to the eu proposal about limits on acquisitions and transfers of emission permits we find that the eu proposal will be non binding for buyers of emission permits but will significantly constrain the sale of emission permits from eastern europe the eu proposal will increase the level of abatement in annex b countries and will cause a sharp increase in the price of permits compared to the free trade equilibrium

reevaluating the first and the second dividends of environmental tax reforms abstract there is increasing global interest in market based climate change policies following the last elections in the united states in this context an exxon mobil chief executive came out in favour of a carbon tax this paper is concerned with the welfare analysis of environmental tax reforms etr and takes up the claims for the need of an unambiguous and operative definition of the double dividend both for empirical purposes and political advisement in this paper we contest the usual definition of the second dividend and its assimilation to an efficiency dividend we propose alternative definitions by suggesting a different splitting of the total welfare variation between the first and the second dividend in order to isolate the efficiency effects of the etr the new definitions become clearly understandable and easy for economic and policy interpretation concepts like weak and strong double dividend turn out to be unnecessary finally we analyze etr for the us economy to illustrate the advantages of the proposed definitions for policy implementation

endogenous technological change in climate change modelling this article investigates the impact on optimal co2 abatement and carbon tax levels of introducing endogenous technological change in a macroeconomic model of climate change we analyse technological change as a function of cumulative capacity as incorporated recently in energy systems models our calculations confirm that including endogenous innovation implies earlier emission reduction to meet atmospheric carbon concentration constraints however the effect is stronger than suggested in the literature moreover the development of non fossil energy technologies constitutes the most important opportunity for emission reductions optimal carbon tax levels reducing fossil energy use are lower than usually advocated