policy adoption rules and global warming although there is widespread agreement about the dangers of global warming and the resulting need to cut down emissions there does not seem to be general agreement about the exact form the policy should take or the timing of its adoption failure to adopt and implement policies against global warming reflects the complexity of the problem the uncertainties of climate change and the cost of policy adoption issues associated with the interactions between uncertainties and irreversibilities in determining the timing of policy adoption are analyzed by using the methodology of optimal stopping rules optimal policy functions are derived for cooperative and noncooperative solutions with differential game representation issues associated with the empirical application of the optimal policy rules are also considered

price determination in the eu ets market theory and econometric analysis with market fundamentals abstract we investigate the price determination of the european union emission allowance eua of the european union emissions trading scheme eu ets we postulate an uncertain permit price and risk averse firms which have the possibility to hedge in the forward market the firms produce final goods abate their emissions and trade permits in the permit market the dependence of the equilibrium permit price on exogenous variables is studied in a permit market model we test our theoretical findings with empirical data from 2005 to 2010 in the eu ets market we use daily forward prices of eua as our dependent variable we use several econometric models with multiple stationary time series to discover that there is a strong relationship between the fundamentals such as german electricity prices and gas and coal prices with the price of eua we find that the eua forward price depends on fundamentals especially on the price of electricity as well as on the gas coal difference in a statistically significant way

reevaluation and renegotiation of climate change coalitions a sequential closed loop game approach abstract major international environmental problems can be characterized as stock externality phenomena long term international environmental coalitions are subject to unexpected shocks certain shocks might have strong impacts on regional environmental policies and their commitments to the coalition the open loop solutions in optimal control problems and differential games cannot capture regions reactions to those shocks in this paper we develop a feasible modeling approach that uses the closed loop strategies to study the issues of reevaluation and renegotiation of climate change coalitions for the purpose we design an algorithm that decomposes a closed loop strategy into a sequence of open loop equilibria and implement the algorithm in the rice model am econ rev 86 1996 741 an integrated assessment model of climate change and economies we analyze policy and methodological implications of the closed loop strategies through simulations of the rice model

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

emissions cap or emissions tax a multi sector business cycle analysis abstract we develop a multi sector business cycle model to analyze stochastic implications of reducing co 2 emissions with carbon permits or with carbon taxes in the presence of multiple sources of macroeconomic uncertainty the model is calibrated to reflect the u s experience as in previous studies using a single sector version of our model we find that the cap regime generates lower volatility of real variables than the tax regime but the latter may be preferable from the welfare perspective still our multi sector analysis points to the importance of the origin of the shocks in the ranking of the two instruments and to the desirability of going beyond a single sector analysis in evaluating their merits we find no significant difference between the cap and the tax regimes when shocks come from non energy sectors in contrast the cap has lower volatility but higher welfare costs than the tax for the shocks to energy production

the organizational foundations of x inefficiency a game theoretic interpretation of argyris model of organizational learning abstract this paper addresses the issue why does x inefficiency persist in many organizations when its existence nature and causes are known and when everyone stands to gain from correcting the errors that cause it and why are some organizations able to learn while others appear not to we construct a model of persisting x inefficiency based on argyris concepts of organizational learning it is argued that organizations succeed in eliminating x inefficiency by achieving a critical mass of individuals willing to admit and correct error once achieved this critical mass may lead to a new stable and efficient equilibrium

real exchange rate volatility and the price of nontradable goods in economies prone to sudden stops the dominant view in the empirical literature on exchange rates is that the high variability of real exchange rates is due to movements in exchange rate adjusted prices of tradable goods this paper shows that this dominant view does not hold in mexican data for the periods in which the country had managed exchange rate regimes variance analysis of a 30 year sample of monthly data shows that movements in the price of nontradables relative to tradables account for up to 70 percent of the variability of the real exchange rate during these periods the paper proposes a model in which this stylized fact and the sudden stops that accompanied the collapse of mexico s managed exchange rates could result from an endogenous amplification mechanism operating via nontradables prices in economies with dollarized liabilities and credit constraints the key feature of this mechanism is irving fisher s debt deflation process numerical evaluation suggests that the fisherian deflation effects on consumption the current account and relative prices dwarf those induced by the standard balance sheet effect typical of the sudden stops literature

global warming economics in the long run a conceptual framework economic models of climate change typically analyze its short run effects for example up to the year 2100 or for a doubling of atmospheric co2 this is a potentially serious shortcoming since under a business as usual scenario atmospheric co2 concentrations could more than quadruple we introduce a framework that endogenously accounts for long run climate change and examine the implications of alternative mitigation strategies one in which the rates of annual emissions are reduced and one that places absolute limits on the total amount of carbon released we discuss alternative valuation frameworks drawing on the debate surrounding the stern review

magnitude and direction of technological transfers for mitigating ghg emissions this paper discusses the issues of technological transfers aimed at reducing ghg mitigation costs under various assumptions in a new version of rice model we introduce technological transfer mechanism that donors monetary transfers go to recipients ghg mitigation through such transfer mechanism we examine the relationships between magnitude direction of transfers and choice of social welfare weights in the model our simulations show that different social welfare weights may lead to significant shifts on magnitudes even directions of technological transfers the results suggest that proposing policies of technological transfers should be mindful of distributional aspects and modeling assumptions

a general equilibrium analysis of climate change impacts on tourism this paper studies the economic implications of climate change induced variations in tourism demand using a world cge model the model is first re calibrated at some future years obtaining hypothetical benchmark equilibria which are subsequently perturbed by shocks simulating the effects of climate change we portray the impact of climate change on tourism by means of two sets of shocks occurring simultaneously the first set of shocks translate predicted variations in tourist flows into changes of consumption preferences for domestically produced goods the second set reallocate income across world regions simulating the effect of higher or lower tourists expenditure our analysis highlights that variations in tourist flows will affect regional economies in a way that is directly related to the sign and magnitude of flow variations at a global scale climate change will ultimately lead to a welfare loss unevenly spread across regions 2005 elsevier ltd all rights reserved

carbon pricing and deep decarbonisation abstract experts frequently point to carbon pricing as the most cost effective tool for reducing greenhouse gas emissions empirical studies show that carbon pricing can successfully incentivise incremental emissions reductions but meeting temperature targets within defined timelines as agreed under the paris agreement requires more than incremental improvements it requires achieving net zero emissions within a few decades to date there is little evidence that carbon pricing has produced deep emission reductions even at high prices while much steeper carbon prices may deliver greater abatement political economy constraints render their feasibility doubtful an approach with multiple instruments including technology mandates and targeted support for innovation is indispensable to avoid path dependencies and lock in of long lived high carbon assets we argue that carbon pricing serves several important purposes in such an instrument mix but also that the global commitment to deep decarbonisation requires acknowledging the vital role of instruments other than carbon pricing

robust tests of forward exchange market efficiency with empirical evidence from the 1920s summary this paper provides a robust statistical approach to testing the unbiasedness hypothesis in forward exchange market efficiency studies the methods we use allow us to work explicitly with levels rather than differenced data they are statistically robust to data distributions with heavy tails and they can be applied to data sets where the frequency of observation and the futures maturity do not coincide in addition our methods allow for stochastic trend non stationarity and general forms of serial dependence the methods are applied to daily data of spot exchange rates and forward exchange rates during the 1920s which marked the first episode of a broadly general floating exchange rate system the tail behaviour of the data is analysed using an adaptive data based method for estimating the tail slope of the density the results confirm the need for the use of robust regression methods we find cointegration between the forward rate and spot rate for the four currencies we consider the belgian and french francs the italian lira and the us dollar all measured against the british pound we find support for a stationary risk premium in the case of the belgian franc the italian lira and the us dollar and we find support for the simple market efficiency hypothesis where the forward rate is an unbiased predictor of the future spot rate and there is a zero mean risk premium in the case of the us dollar

the effects of energy price technology and disaster shocks on china s energy environment economy system abstract this paper constructs a dynamic stochastic general equilibrium dsge model to analyze the effects of energy price technology and disaster shocks on china s energy environment economy 3e system it also studies stylized facts as well as co integration and error correction dynamic analyses of this system the disaster shock is modeled as a two state markov switching process the results show that both technology and energy price shocks increase the ratio of environmental investment to gdp the improvement in technology and rising energy prices helps to reduce co2 pollution and improve economic restructuring among the three kinds of shocks technology shock is the most important the robustness of the model is tested through statistical methods

optimal climate policy is a utopia from quantitative to qualitative cost benefit analysis abstract the dominance of quantitative cost benefit analysis cba and optimality concepts in the economic analysis of climate policy is criticised among others it is argued to be based in a misplaced interpretation of policy for a complex climate economy system as being analogous to individual inter temporal welfare optimisation the transfer of quantitative cba and optimality concepts reflects an overly ambitious approach that does more harm than good an alternative approach is to focus the attention on extreme events structural change and complexity it is argued that a qualitative rather than a quantitative cba that takes account of these aspects can support the adoption of a minimax regret approach or precautionary principle in climate policy this means implement stringent ghg reduction policies as soon as possible

multi factor agricultural productivity efficiency and convergence in botswana 1981 1996 abstract this paper applies the sequential malmquist index to calculate multi lateral multi factor productivity mfp indices for agriculture in the 18 districts and the commercial sector of botswana from 1981 to 1996 the mfp index grew at an average rate of 1 7 per annum led by the regions that specialize in livestock which grew at well over 3 per annum this growth was powered by technological change at 4 per year but offset by technical efficiency falling at 2 4 per annum as the commercial sector and the better regions exploited new technologies and infrastructure whereas the less productive areas fell further behind the best practice frontier thus convergence tests show that the gap between the more productive and the poorer regions widened

a strategic analysis of global warming theory and some numbers we model the global warming process as a dynamic commons game in which the players are countries their actions at each date produce emissions of greenhouse gases and the state variable is the current stock of greenhouse gases the theoretical analysis is complemented by a calibration exercise the first set of results establishes theoretically and then with illustrative numbers the over emissions due to a tragedy of the commons the power of simple sanctions to lower emissions and increase welfare is then examined as is the effect of cost asymmetry finally a complete theoretical charactrization is provided for the best equilibrium and it is shown that it has a very simple structure it involves a constant emission rate through time

cooperation and subgame perfect equilibria in global pollution problems with critical threshold the paper examines the issue of international pollution control under a dynamic framework involving heterogeneous countries and a critical threshold we propose an appealing specification for this type of problem and its novelty is illustrated by the fact that countries use linear strategies in equilibrium although their utility and damage functions are highly convex the stock of pollution under cooperation is always lower surprisingly emissions are always higher in distant periods under the cooperative scenario and we show through examples that this is a significant finding rather than some marginal effect it is also shown that the efficient allocation of pollution abatement is driven only by the respective technologies of the countries finally a dynamic transfer scheme allowing to implement the cooperative solution is proposed

computing business as usual with a representative agent and a pollution externality abstract computing the no policy equilibrium business as usual in a representative agent ra model is complicated by the presence of a pollution externality since simple optimization internalizes the pollution cost many researchers use ad hoc methods but there is no way to know how reliable these are a solution is presented in which the ra model is divided into n identical components each identified with its own sub agent sub agents play a dynamic game leading to a nash equilibrium for sufficiently large n this approach keeps most of the pollution cost external and in the limit it is equivalent to a myopic firms model in which the entire cost is external this approach has the advantage of theoretical consistency and empirical applications indicate that it is easily implemented

on categorical variables and non parametric statistical inference in the pursuit of causal explanations this paper proposes a pragmatic alliance between critical realism and non parametric statistical techniques in pursuit of causal explanations of economic phenomena by retroductive means the alliance depends on clarifying the interpretive requirements for forming categories within nominal or classificatory scales or as ordinal or ranking scales it also depends on establishing the scope of demiregularities as something to be explained and as something that allows a rough and ready extension of experimental conditions the roughness and readiness of demiregularities is matched by the assumptions and conditions of non parametric analysis

the effects of ageing and an environmental trust fund in an overlapping generations model on carbon emission reductions most currently employed integrated assessment models for climate change are of a dynastic nature they employ the ramsey rule linking the interest rate economic growth and the rate of pure time preference this paper argues that although a dynastic framework might be convenient for economic analysis it is restrictive and can be misleading overlapping generations models which do not employ the ramsey rule are more flexible and may give results different from those derived from dynastic models with the integrated assessment model alice 2 0 it is shown how various assumptions on demographic change and public institutions can affect the interest rate thereby influencing the efficient greenhouse gas emission reductions it is concluded that dynastic integrated assessment models are in many respects inappropriate for providing policy makers with quantitative figures about the costs of carbon dioxide emissions and their desirable reduction levels 2001 elsevier science b v all rights reserved

economic growth and greenhouse gas emissions abstract recent empirical research has examined the relationship between certain indicators of environmental degradation and income concluding that in some cases an inverted u shaped relationship which has been called an environmental kuznets curve ekc exists between these variables unfortunately this inverted u shaped relationship does not hold for greenhouse gas emissions one explanation of the absence of ekc like behavior in greenhouse gas emissions is that greenhouse gases are special pollutants that create global not local disutility but the international nature of global warming is not the only reason that prevents de linking greenhouse gas emissions from economic growth the intergenerational nature of the negative impact of greenhouse gas emissions may have also been an important factor preventing the implementation of greenhouse gas abatement measures in the past in this paper we explore the effect that the presence of intergenerational spillovers has on the emissions income relationship we use a numerically calibrated overlapping generations model of climate economy interactions we conclude that 1 the intertemporal responsibility of the regulatory agency 2 the institutional capacity to make intergenerational transfers and 3 the presence of intergenerationally lagged impact of emissions constitute important determinants of the relationship between economic growth and greenhouse gas emissions

cooperation on climate change mitigation abstract we analyze conditions under which it is possible to achieve efficient mitigation of greenhouse gas emissions with a self enforcing international agreement in which all countries find it in their self interest to abide by the agreement we model the choice of emissions by countries as a dynamic game we use a two part punishment scheme for deviations from an agreement that is renegotiation proof and show when this scheme supports the efficient outcome as a subgame perfect equilibrium using numerical examples we show that an efficient subgame perfect equilibrium exists for a range of reasonable parameter values the existence of such equilibrium may be non monotonic in the discount rate and the ratio of slope of marginal abatement cost and marginal damages

climate clubs overcoming free riding in international climate policy notwithstanding great progress in scientific and economic under standing of climate change it has proven difficult to forge inter national agreements because of free riding as seen in the defunct kyoto protocol this study examines the club as a model for international climate policy based on economic theory and empirical modeling it finds that without sanctions against non participants there are no stable coalitions other than those with minimal abatement by contrast a regime with small trade penalties on non participants a climate club can induce a large stable coalition with high levels of abatement jel q54 q58 k32 k33

descriptive prescriptive and second best approaches to the control of global greenhouse gas emissions a prescriptive second best approach is developed for determining the control of greenhouse gas emissions in an inter temporal multi region model of the world concerns about inter and intra generational equity are reflected in the rate of time preference and regional weights of a social welfare function choices are narrowed down by the ethical principle of anonymity a third dimension of equity inequality aversion is subject to greater variation the aggressiveness of recommended abatement can be made to bracket results for a common descriptive model by the choice of inequality aversion in this manner the perception of a sharp dichotomy between descriptive and prescriptive approaches is moderated

oil supply shocks and the u s economy an estimated dsge model abstract we develop and use a medium sized dsge model of the u s economy to evaluate how u s real gdp responds to oil price movements that originate from global oil supply shocks the core of the model is a standard macroeconomic dsge framework that includes nominal and real frictions the model includes oil as an input in multiple domestic sectors consumption intermediate goods and transportation services we include a domestic oil production sector for the united states to reflect the recent development in shale oil technology the model also captures international trade in goods and oil the model parameters are set through a combination of calibration and bayesian estimation using quarterly data for 1991 through 2015 baseline estimation of the model finds the elasticity of u s real gdp with respect to an oil price shock of 0 015 which is among the less elastic estimates in the literature using the model to conduct counterfactual analysis we find that decreasing steady state u s oil consumption substantially reduces the response of real gdp to oil prices increasing u s domestic oil production only modestly reduces the response of real gdp to oil prices

faraway so close coupled climate and economic dynamics in an agent based integrated assessment model abstract in this work we develop an agent based model that offers an alternative to standard computable general equilibrium integrated assessment models iams the dystopian schumpeter meeting keynes dsk model is composed of heterogeneous firms belonging to capital good consumption good and energy sectors production and energy generation lead to greenhouse gas emissions which affect temperature dynamics climate damages are modelled at the individual level as stochastic shocks hitting workers labour productivity energy efficiency capital stock and inventories of firms in that aggregate damages emerge from the aggregation of losses suffered by heterogeneous interacting and boundedly rational agents the model is run focusing on a business as usual carbon intensive scenario consistent with a representative concentration pathway 8 5 we find that the dsk model is able to account for a wide ensemble of micro and macro empirical regularities concerning both economic and climate dynamics simulation experiments show a substantial lack of isomorphism between the effects of micro and macro level shocks as it is typical in complex system models in particular different types of shocks have heterogeneous impact on output growth unemployment rate and the likelihood of economic crises pointing to the importance of the different economic channel affected by the shock overall we report much larger climate damages than those projected by standard iams under comparable scenarios suggesting possible shifts in the growth dynamics from a self sustained pattern to stagnation and high volatility and the need of urgent policy interventions

testing for efficiency catching up we used advances in data envelopment analysis dea techniques to examine efficiency scores and investigate the issue of convergence and divergence in a cross country analysis specifically we used bootstrapping techniques to examine a data set of 52 developed and developing countries we found that when using the standard dea model some of the results were not robust further we broke the sample into groups to examine club convergence we found that efficiency scores were significantly different between groups and that there was some evidence of convergence of efficiency scores within each group

optimal dynamic carbon taxes in a climate economy model with distortionary fiscal policy how should carbon be taxed as a part of fiscal policy the literature on optimal carbon pricing often abstracts from other taxes however when governments raise revenues with distortionary taxes carbon levies have fiscal impacts while they raise revenues directly they may shrink the bases of other taxes e g by decreasing employment this article theoretically characterizes and then quantifies optimal carbon taxes in a dynamic general equilibrium climate economy model with distortionary fiscal policy first this article establishes a novel theoretical relationship between the optimal taxation of carbon and of capital income this link arises because carbon emissions destroy natural capital they accumulate in the atmosphere and decrease future output consequently this article shows how the standard logic against capital income taxes extends to distortions on environmental capital investments second this article characterizes optimal climate policy in sub optimal fiscal settings where income taxes are constrained to remain at their observed levels third this article presents a detailed calibration that builds on the seminal dice approach but adds features essential for a setting with distortionary taxes such as a differentiation between climate change production impacts e g on agriculture and direct utility impacts e g on biodiversity existence value the central quantitative finding is that optimal carbon tax schedules are 8 24 lower when there are distortionary taxes compared to the setting with lump sum taxes considered in the literature

decomposing the integrated assessment of climate change abstract we present a decomposition approach for integrated assessment modeling of climate policy based on a linear approximation of the climate system in our formulation the economic and natural science components are processed independently on different time scales turnpike properties of the ramsey growth model can be exploited to provide a precise representation of post terminal emissions and to reduce the economic horizon required to accurately approximate transition paths germaine to the economic assessment of climate policies our decomposition accommodates formulation of the economic model in a complementarity format and thereby provides a means of incorporating second best effects that are not easily represented in an optimization model

when managers cover their posteriors making the decisions the market wants to see the stock market has opinions as to what choices firms should make we show that concern for current share prices may lead managers to make these choices rather than those suggested by their own superior information even when arbitrarily many privately informed firms have to make a similar decision the market s prejudices may still prevail we compare the distortions that arise from share price maximization with those due to herd behavior among profit maximizing firms and show that the former results in strictly less efficient use of information

review on integrated strategies for energy policy planning and evaluation of ghg mitigation alternatives abstract this review paper is devoted to elaborating the status of different energy policy planning studies and the evaluation of various ghg mitigation studies it includes some of the major developments in global energy scenario status of green house gas ghg emissions issues in the implementation of kyoto protocol and ghg mitigation clean development mechanism cdm and energy scenario especially pertaining to the residential industrial and commercial energy sector in the initial sections the later part of this paper highlights the salient contributions in various literatures pertaining to energy demand forecasting in residential commercial and industrial sector ghg estimation methodologies and ghg mitigation studies in various sectors the success and difficulties in implementing various policy planning practices were also discussed in the paper most of the prominent literature in the area of energy demand and consumption analysis towards effective implementation of ghg mitigation is described in the end a comprehensive comments and recommendations based on the study were furnished

changing productive efficiency in telecommunications in the united states abstract the issue explored is whether incentive regulation in the telecommunications industry in the united states has resulted in an increase in productive efficiency after providing an overview of the nature of incentive regulation the methodology for measuring the effects of incentive regulation on productive efficiency is reviewed this methodology is data envelopment analysis dea and allows for the measurement of both technical efficiency and allocative efficiency of individual local exchange carriers the results of empirically implementing the dea approach indicate that in the aggregate there is little change in technical efficiency in fact average technical efficiency in 1989 was the same as in 1998 next while outputs continued to grow at about their historical rate across lecs the sizeable increase in the two types of capital increased inputs well above their historical average rates for some lecs leading to short run allocative inefficiency on average however allocative efficiency shows no identifiable trend between 1988 and 1998 finally in the aggregate total economic efficiency what incentive regulation in the telecommunications industry in the united states was designed to promote does not have a demonstrable trend between 1988 and 1998

emissions targets and the real business cycle intensity targets versus caps or taxes for reducing greenhouse gas emissions intensity targets are attracting interest as a flexible mechanism that would better allow for economic growth than emissions caps for the same expected emissions however the economic responses to unexpected productivity shocks differ using a real business cycle model we find that a cap dampens the effects of productivity shocks in the economy on all variables except for the shadow value of the emissions constraint an emissions tax leads to the same expected outcomes as a cap but with greater volatility certainty equivalent intensity targets maintain higher levels of labor capital and output than other policies with lower expected costs and no more volatility than with no policy

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

international and intergenerational environmental externalities we examine a world in which policymakers actions in a given country at a given time have long lived effects on a common resource the global environment we consider the first best in which long lived planners behave cooperatively then examine the allocation of resources when there is non cooperation across countries across time or both finally we analyze the dynamic behavior of the economy along balanced growth paths it is found that while long lived international institutions are necessary to internalize all externalities cooperation at a point in time may be harmful to future generations

balancing contemporary fairness and historical justice a quasi equitable proposal for ghg mitigations abstract in this paper we analyze the impasse caused by polarizing positions of the united states and china in international negotiations on carbon mitigation by incorporating the bern carbon cycle module into the rice model developed by nordhaus and yang 1996 we set up a framework for tracking regional contributions to carbon concentration and to global climate change our proposal labeled the color preservation principle uses regional contribution share to global carbon concentration as the criterion for international cooperation through simulations in rice model with bern module rice b we examine the rationales of the arguments made by the united states and china we conclude that both countries standpoints are severely flawed to facilitate the global cooperation on carbon mitigations major concessions are needed from the two top carbon emitters

the economic effects of climate change greenhouse gas emissions are fundamental both to the world s energy system and to its food production the production of co2 the predominant gas implicated in climate change is intrinsic to fossil fuel combustion specifically thermal energy is generated by breaking the chemical bonds in the carbohydrates oil coal and natural gas and oxidizing the components to co2 and h2o one cannot have cheap energy without carbon dioxide emissions similarly methane ch4 emissions an important greenhouse gas in its own right are necessary to prevent the build up of hydrogen in anaerobic digestion and decomposition one cannot have beef mutton dairy or rice without methane emissions climate change is the mother of all externalities larger more complex and more uncertain than any other environmental problem the sources of greenhouse gas emissions are more diffuse than any other environmental problem every company every farm every household emits some greenhouse gases the effects are similarly pervasive weather affects agriculture energy use health and many aspects of nature which in turn affects everything and everyone the causes and consequences of climate change are very diverse and those in low income countries who contribute least to climate change are most vulnerable to its effects climate change is also a long term problem some greenhouse gases have an atmospheric life time measured in tens of thousands of years the quantities of emissions involved are enormous in 2000 carbon dioxide emissions alone and excluding land use change were 24 billion metric tons of carbon dioxide tco2

spatial and temporal efficiency in climate policy applications of fund fund is an integrated assessment model of the interactions between climate and economy nine world regions emit greenhouse gases and suffer damages from climate change a number of greenhouse gas emission reduction policies are compared including optimal and cost effective strategies strategies with early and late abatement and strategies with and without international co operation the analyses confirm that co operation matters resulting in substantially lower costs or higher welfare the real commitments of policy targets based on an absolute level e g 1990 emissions are hard to estimate because of the uncertainties in the baseline postponing action conflicts with minimising costs and maximising welfare but so does sharp emission reduction at the short term as proposed in the kyoto protocol

does the adoption of new technology boost productive efficiency in the public sector the case of icus system abstract in the last decade a significant amount of financial resources has been devoted by the greek government and the european union to provide the intensive care units icu of the greek public health care system with high tech medical equipment in order to improve their productive efficiency using a unique data set we employ the dea bootstrap of simar and wilson 2007 approach to estimate the efficiency of each icu and to explore the impact of these investments on their efficiency our results indicate that although the technical efficiency is benefited from the embodiment of new medical technology the scale efficiency remains unaffected the role of the asymmetric information of the icus proximity to pools of knowledge and of the composition of the medical personnel seems to be the crucial factors for the improvement of their productive efficiency

unraveling effects of coal output cut policy on air pollution abatement in china using a cge model abstract recently frequent hazy weather in china caused by pm2 5 is mainly attributed to irrational energy consumption structure so the policies cutting coal output and promoting electric power substitution were initiated facing some resistance in the policy implementation what the proper target of cutting coal output is or whether there is a need to cut electricity prices for electric power substitution are still unknown or debatable to exploring this knowledge gap this paper set the eight action plan policy scenarios in which the coal output cut is set from 3 to 10 respectively further in order to observe whether the policy of cutting electric price will reduce the negative effects of action plan policy scenarios the eight enhanced action plan policy scenarios were also set in which the coal output cut is set from 3 to 10 respectively with the hypothetical electric price cut 3 by using the developed computable general equilibrium cge model the policy scenarios are simulated and the economic and environmental effects are tested the results showed that first in most policy scenarios the environmental and economic effects were changing synchronously in inverted u shapes but the policy to cut coal output would lead to positive environmental effects and negative economic effects second cutting electricity price could contribute to promoting electricity substitution though it couldn t be conducive to improving the electricity structure third the reduction of electricity price could also help to reduce the resistance in policy implementation consequently for optimal environmental effects and economic resistance it is recommended to set the policy target of cutting coal output as 6 while the moderate reduction of electricity price is needed and set as 3

a hotelling model with a ceiling on the stock of pollution abstract environmental agreements such as the kyoto protocol aim to stabilize the amount of carbon in the atmosphere which is mainly caused by the burning of nonrenewable resources such as coal we characterize the solution to the textbook hotelling model when there is a ceiling on the stock of emissions we consider both increasing and decreasing demand for energy we show that when the ceiling is binding both the low cost nonrenewable resource and the high cost renewable resource may be used jointly a key implication is that if energy demand were to decline in the long run we may supplement energy supply through clean renewables to meet the environmental standard but then revert back to using only dirty fossil fuels in the future when the ceiling has become non binding that is the much heralded societal transition to clean energy resources may be short lived

does distribution matter efficiency equity and flexibility in greenhouse gas abatement this paper analyses banking and borrowing ofcarbon emission rights within the framework ofa simple integrated assessment model breaking the world economy in just two regionsit will be shown 1 increasing intertemporal flexibility in greenhouse gasabatement through banking and borrowing ofcarbon emission permits has a positive effecton welfare for regions with a poor endowment incarbon emission rights but negatively affectsrich endowed regions 2 intergenerationalfairness advocates intertemporal flexibility ingreenhouse gas abatement irrespectively of theinitial allocation of carbon rights 3 optimal carbon accumulation is not independentof the initial allocation of carbon rights different initial sharing rules clearlyinfluence the development of atmospheric carbonconcentration

structure organizational behavior and technical efficiency the case of an indian industry abstract the differences in certain aspects of organizational behavior across large and small firms could be explained as a response mechanism to structural conditions like capital market imperfections and high market transaction costs this in turn could explain the relative production efficiency of large and small firms this paper examines the issue on the basis of firm level survey data for an indian industry

research on a single policy or policy mix in carbon emissions reduction abstract existing literature on the optimal type of carbon mitigation policy and whether it is better to apply a policy mix instead of a single policy is still unclear this paper assesses the policy effectiveness under exogenous shocks by applying a dynamic stochastic general equilibrium dsge model comparing the differences between the carbon mitigation and economic impacts of a policy mix versus a single policy carbon tax or carbon trading scheme the results showed that energy demand is rigid in response to technological shocks therefore there is no significant difference for the energy consumption related carbon emissions in response to the technological progress under three different policy scenarios a carbon tax scenario i a carbon trading scheme scenario ii and a carbon policy mix scenario iii overall carbon emissions policy has a negative impact on the economy compared to the other two policies a carbon trading scheme has a relatively slight impact on the economy a mandatory carbon price would have a more significant impact than would a market based carbon price the policy mix formed by a carbon tax and a carbon trading is comprehensive in terms of both price flexibility and coverage scope

a regional dynamic general equilibrium model of alternative climate change strategies outcomes and noncooperative equilibria this study finds that cooperative policies show much higher levels of emissions reductions than do noncooperative strategies that there are substantial differences in the levels of controls in both the cooperative and the noncooperative policies among different countries and that high income countries may be the major losers from cooperation jel h41 q4 q2 q20

game theoretic models for climate change negotiations abstract negotiations to reduce greenhouse gas accumulation in the atmosphere are modeled as extensive games of perfect information various solution concepts such as nash equilibrium reaction function equilibrium correlated equilibrium and bargaining solutions are applied analyzed and computed special reduction techniques are used when the size of the game tree becomes excessive a new solution concept the tree correlated equilibrium is also introduced main features of an excel add in designed to compute various solutions are briefly described and a sample policy analysis for a special negotiating scenario is discussed

integrating economic analysis and the science of climate instability abstract scientific understanding of climate change and climate instability has undergone a revolution in the past decade with the discovery of numerous past climate transitions so rapid and so unlike the expectation of smooth climate changes that they would have previously been unbelievable to the scientific community models commonly used by economists to assess the wisdom of adapting to human induced climate change rather than averting it lack the ability to incorporate this new scientific knowledge here we identify and explain the nature of recent scientific advances and describe the key ways in which failure to reflect new knowledge in economic analysis skews the results of that analysis this includes the understanding that economic optimization models reliant on convexity are inherently unable to determine an optimal policy solution it is incumbent on economists to understand and to incorporate the new science in their models and on climatologists and other scientists to understand the basis of economic models so that they can assist in this essential effort

the adoption of incentive regulation and its effect on technical efficiency in telecommunications in the united states abstract incentive regulation has become an important regulatory tool in the telecommunications industry in the united states the issue explored here is whether incentive regulation has resulted in an increase in efficiency after providing an overview of the nature of incentive regulation a methodology for measuring technical efficiency and its change is introduced this is a multiple output multiple input distance function approach to measuring technical efficiency the results of implementing this approach for 19 local exchange carriers for the 1988 1999 period indicate that in the production of local service intrastate toll access service and interstate access to local loops there was no change in technical efficiency between the 1988 1990 period and the 1991 1999 period something that incentive regulation was specifically designed to promote

how china s current carbon trading policy affects carbon price an investigation of the shanghai emission trading scheme pilot abstract to better establish a unified carbon market in china this study evaluates the effect of current carbon trading policy and further investigates the relationship between such policy that is published during the second phase of shanghai environment and energy exchange seee and shanghai emission allowance shea price we aim to analyze whether these policies can improve the operation efficiency of current carbon market by the mean reversion test cox ingersoll ross cir model and event study method we first analyze the potential price discovery function of shea products thereby describing the transmission channel of current policy to shea price then we examine the effect of carbon policies published in different periods on their corresponding shea price by the auto correlation test and cir simulation we find that 3 4 of all auto correlation values are less than 0 after apr 2017 and the minimum cumulative error is 31 3792 under the supply and demand channel these findings imply that shea price has the discovery function at the middle and end of trading period and the current policy affects shea price through its effect on the fundamentals of supply and demand further more than 60 of all r values r value that reflects the response of price to policy are less than 1 which implies that the published policy will improves future shea price accordingly we argue that seee belongs to a policy oriented market and the change of carbon price is closely related to emission allocation policies in this case china s government should further push forward the smooth operation of current carbon market by the aid of incentive policy in the coming period

estimating the benefits of adaptation to extreme climate events focusing on nonmarket damages abstract this paper provides a first approach on how to evaluate nonmarket damages from extreme climate events in monetary units by applying a computable general equilibrium cge approach we develop a static cge model which zooms into one single period of a standard auerbach kotlikoff model while we observe private and instantaneous adaptation in reaction to price changes we explicitly model public adaptation funded by taxing either labor or capital we apply our model to heat waves in switzerland and are able to show that heat waves affect cohorts utility in an unadapted economy in substantially different ways while young and less vulnerable cohorts profit in welfare terms and because of inheritance from heat waves vulnerable but surviving cohorts welfare decreases substantially thus without adaptation vulnerable cohorts are worse off and might have even fewer possibilities to invest in private adaptation in the long run overall we show that with adaptation the negative impact of a 2003 like heat wave on output can be reduced from about 0 5 of gdp to 0 04 of gdp additionally equivalent variation is reduced from about 1 to 0 18