no free ride to zero emissions simulating a region s need to implement its own zero emissions vehicle zev mandate to achieve 2050 ghg targets abstract the adoption of zero emission vehicles zevs is limited by a variety of barriers some are region specific e g availability of charging infrastructure while others are global in nature e g battery prices where improvements spill over between regions this study explores regional spillover effects and ghg impacts of strong zev focused policy specifically the zev mandate in place in ten u s states zev states which requires automakers to sell a minimum amount of zevs each year we use a dynamic technology adoption model to simulate passenger vehicle sectors in north america focusing on the case of one small region british columbia covering 0 7 of the market as potentially free riding off of zev states policy covering 23 of the market results indicate that free ridership is not effective even with the zev mandate driving very high sales in zev states british columbia cannot achieve significant zev adoption without also implementing its own zev mandate further for british columbia to meet its 2050 ghg targets it may need a zev mandate in addition to complementary climate policies pushing zevs to account for 40 93 of new vehicle sales in 2050 in short regions seeking low carbon transportation likely need to implement their own stringent policies

lobbying by capital and labor over trade and labor market policies abstract this paper uses the common agency approach to analyze the joint determination of product and labor market distortions in a small open economy capital owners and union members lobby the government on both tariffs and minimum wages while other factors of production are not organized the paper shows that product and labor market distortions always move in the same direction and that their level is not modified by social pacts between capital and labor it also shows that labor market distortions are second best hence conditionality by foreign organizations should target distortions in product markets but not in labor markets

exploring the potential for energy conservation in french households through hybrid modeling although the building sector is recognized as having major potential for energy conservation and carbon dioxide emissions mitigation conventional bottom up and top down models are limited in their ability to capture the complex economic and technological dynamics of the sector this paper introduces a hybrid framework developed to assess future household energy demand in france res irf a bottom up module of energy consumption for space heating has several distinctive features i a clear separation between energy efficiency i e investment in energy efficient technologies and sufficiency i e changes in the utilization of energy consuming durables which allows the rebound effect to be assessed ii the inclusion of barriers to energy efficiency in the form of intangible costs consumer heterogeneity parameters and the learning by doing process iii an endogenous determination of retrofitting which represents trade offs between retrofit quantity and quality subsequently res irf is linked to the imaclim r computable general equilibrium model this exercise shows that compared to a 37 reduction in final energy demand achievable in business as usual in existing dwellings an additional reduction of 14 could be achieved if relevant barriers to efficiency and sufficiency were overcome

determinants of import demand for non renewable energy petroleum products empirical evidence from nigeria abstract this study estimated determinants of import demand for refined petroleum products in nigeria for the period 1984 2013 it employed the autoregressive distributed lag ardl bounds test cointegration method and analysed both long run and short run determinants of import demand for total and specific petroleum products in the long run aggregate and sectoral incomes are significant determinants of import of refined kerosene further real effective exchange rate reer aggregate income gdp manufacturing sector s income domestic energy production dep and population growth rate pgr are drivers of import of refined motor spirit moreover reer dep and manufacturing sector s income are propellers of import of refined distillate fuel also reer and total output of petroleum products are major drivers of total import of refined petroleum products short run results show that previous period gdp pgr and manufacturing and service sectors incomes are determinants of import demand for refined kerosene moreover reer gdp previous pgr and manufacturing sector s income exert significant effects on the import of refined motor spirit further significant effects of reer dep previous pgr domestic output of the product and manufacturing and service sectors incomes on the import demand for distillate fuel were found policy implications of the foregoing are articulated in the paper

common agency and coordination general theory and application to government policy making we develop a model of common agency with complete information and general preferences with nontransferable utility and we prove that the principals nash equilibrium in truthful strategies implements an efficient action we apply this theory to the construction of a positive model of public finance where organized special interests can lobby the government for consumer and producer taxes or subsidies and targeted lump sum taxes or transfers the lobbies use only the nondistorting transfers in their noncooperative equilibrium but their intergroup competition for transfers turns into a prisoners dilemma in which the government captures all the gain that is potentially available to the parties

removal of u s ethanol domestic and trade distortions impact on u s and brazilian ethanol markets we analyze the impact of trade liberalization and removal of the federal tax credit in the united states on u s and brazilian ethanol markets using a multi market international ethanol model calibrated on 2005 market data and policies the removal of trade distortions induces a 23 2 percent increase in the price of world ethanol on average between 2006 and 2015 relative to the baseline the u s domestic ethanol price decreases by 14 1 percent which results in a 7 5 percent decline in production and a 3 2 percent increase in consumption the lower domestic price leads to a 2 5 percent rise in the share of fuel ethanol in gasoline consumption u s net ethanol imports increase by 192 8 percent brazil responds to the higher world ethanol price by increasing its production by 8 8 percent on average total ethanol consumption in brazil decreases by 3 2 percent and net exports increase by 61 9 percent relative to the baseline the higher ethanol price leads to a 4 7 percent increase in the share of sugarcane used in ethanol production the removal of trade distortions and 51 per gallon tax credit to refiners blending ethanol induces a 22 5 percent increase in the world ethanol price

an economic analysis of the fisheries bycatch problem abstract bycatch is the incidental take of a species that has value to some other group this paper compares open access and individual transferable quota equilibria to the equilibrium in which the joint value of the fisheries is maximized the open access induced problems can be corrected by an individual transferable quota system only if both the target species and the bycatch species have tradable quotas and only if the bycatch species does not have existence value there exists a range of the bycatch to target species harvest levels for which the total harvest of each will be exactly taken by a given technology even under open access however there may not even exist a unique open access equilibrium if bycatch is allocated by rule of capture prohibitions on the sale of bycatch reduce the bycatch level but they also reduce social welfare

the triple bottom line meeting ecological economic and social goals with individual transferable quotas this paper deals with the sustainable management of a renewable resource based on individual and transferable quotas itqs when agents differ in terms of harvesting costs or catch capability in a dynamic bio economic model we determine the feasibility conditions under which a fishery manager can achieve sustainability objectives which simultaneously account for stock conservation economic efficiency and maintenance of fishing activity for the agents along time we show how the viability of quota management strategies based on itq depends on the degree of heterogeneity of users in the fishery the current status and the dynamics of the stock together with the selection of tac schedules in particular for a given stock we compute the maximin effort for a given set of agents and we derive the maximal number of active agents for a given guaranteed effort an application to the nephrops fishery in the bay of biscay illustrates the results

picking winners modelling the costs of technology specific climate policy in the u s passenger vehicle sector abstract researchers debate the cost effectiveness of technology specific versus technology neutral climate policies but few quantify the differences using the case of low carbon vehicle technologies in the us passenger vehicle sector ethanol plug in electric and hydrogen we develop a technology adoption simulation model that represents increasing returns to adoption in both financial costs and consumer preferences representing uncertainty through monte carlo analysis we compare the policy costs tonne co2 out to 2050 of i a technology neutral carbon tax ii a somewhat neutral vehicle standard requiring low carbon vehicle sales but allowing competition among technologies and iii technology specific vehicle standards requiring sales of just one technology on average across simulations the carbon tax is twice as cost effective as the best vehicle standard in part because the tax more substantially affects vehicle use rates among the vehicle standards a technology specific standard that selects the right winner plug in electric vehicles is more cost effective than the neutral standard as it more quickly stimulates technology improvement however there is risk in a technology specific approach mistakenly forcing a loser technology hydrogen results in policy costs that are 2 to 5 times higher than other policies results can help policymakers trade off the costs and risks of different climate policy options

political internalization of economic externalities and environmental policy abstract this paper derives the characteristics of endogenous environmental policy in a common agency model of politics and proceeds to show that competition between lobby groups is an important source of internalization of economic externalities our analysis generalizes bhagwati s principle of targeting to the case of distorted political markets moreover we show that the politically optimal structure of environmental taxes incorporates a pigouvian adjustment however since lobby groups care about the distribution of income as well as about efficiency the equilibrium structure of taxes differs considerably from the pigouvian rule

electricity trade and ghg emissions assessment of quebec s hydropower in the northeastern american market 2006 2008 abstract worldwide electricity sector reforms open up electricity markets and increase trades this has environmental consequences as exports and imports either increase or decrease local production and consequently greenhouse gas ghg emissions this paper s objective is to illustrate the importance of electricity trade s impact on ghg emissions by providing an estimate of the net ghg emissions resulting from these trades to achieve this objective quebec hourly electricity exchanges with adjacent jurisdictions were examined over the 2006 2008 period in order to associate a specific ghg emission quantity to electricity trades hourly marginal electricity production technologies were identified and validated using the ontario hourly output per power plant and information released in the quebec adjacent system operator reports it is estimated that over three years imports into quebec were responsible for 7 7 mt of ghg while quebec hydropower exports avoided 28 3 mt of ghg emissions hence the net result is 20 6 mt of avoided emissions over 2006 2008 or about 7 mt per year which corresponds to more than 8 of the quebec yearly ghg emissions when ghg emissions from all life cycle stages resource extraction to end of life are accounted for the net avoided ghg emissions increase by 35 to 27 9 mt

a note on market power in itq fisheries abstract individual transferable quotas itqs in fisheries are analogous to transferable pollution permits in environmental policy however they are different in that the right to produce is for the final product the fish whereas pollution permits are for a non market joint product i e sulfur dioxide of the good produced for sale in both cases the actual economic efficiency effects of creating the property rights depend upon the workings of the market for both the final product and the rights there has been considerable work on market failures for pollution permits and this paper extends the analysis to itqs it is shown that the difference between pollution permits and itqs can change the type and occurrence of failure in the market for the final product but it does not affect the potential for failure in the market for permits

what do regulators do dynamic behavior of resource managers in the north pacific halibut fishery 1935 1978 abstract most of the literature in resource economics is normative focusing on questions such as how should the use of resources be regulated little attention has been paid to exactly what regulators actually do in practice this paper develops and estimates a model of regulatory behavior we model the regulators objective structure as well as the mechanism regulators use to select policy instruments to achieve their objectives we estimate the model using the north pacific halibut fishery as a case study allowing computation of the basic structural parameters as well as implicit weights in the regulators objective function as revealed by their actual decisions

implications of delaying transport decarbonisation in the eu a systems analysis using the primes model abstract the transport sector decarbonisation represents an essential part of the ghg emissions reduction strategy of the eu for the 2030 and 2050 horizon the strategy presumes a far reaching structural system change towards the marketing of advanced electrified powertrains and use of energy carriers such as electricity and hydrogen that are generated in a carbon free way the decade 2020 2030 is expected to set in motion the complex process of the necessary transformation of the power generation and transport systems which mandates the successful coordination of the interrelated market actors consumers and policy makers this paper presents a systems analysis that aims to assess what would happen if the decarbonisation strategy fails to develop as anticipated during the decade 2020 2030 we refer to this timeframe as the lost decade to answer this question our analysis is based on counterfactual scenarios quantified using the primes energy systems model the analysis concludes that the decade 2020 2030 is a critical point in this transformation limited progress in the coming decade would require the adoption of stringent policy measures beyond 2030 which along with the pressure to reduce emissions in a short period are found to increase substantially the total costs of the system

minimum information management in fisheries this paper deals with problems of optimal management of common property fisheries it advances the proposition that many fisheries management schemes which are theoretically capable of generating efficiency are actually not practicable owing to their huge informational requirements this applies for instance to management by means of corrective taxes subsidies the paper proceeds to show that there exists under fairly unrestrictive conditions market based management systems that require minimal information for their operation but lead nevertheless to efficiency in common property fisheries one such system is the individual transferable share quota system

car buyers and fuel economy abstract this research is designed to help researchers and policy makers ground their work in the reality of how us consumers are thinking and behaving with respect to automotive fuel economy our data are from semi structured interviews with 57 households across nine lifestyle sectors we found no household that analyzed their fuel costs in a systematic way in their automobile or gasoline purchases almost none of these households track gasoline costs over time or consider them explicitly in household budgets these households may know the cost of their last tank of gasoline and the unit price of gasoline on that day but this accurate information is rapidly forgotten and replaced by typical information one effect of this lack of knowledge and information is that when consumers buy a vehicle they do not have the basic building blocks of knowledge assumed by the model of economically rational decision making and they make large errors estimating gasoline costs and savings over time moreover we find that consumer value for fuel economy is not only about private cost savings fuel economy can be a symbolic value as well for example among drivers who view resource conservation or thrift as important values to communicate consumers also assign non monetary meaning to fuel prices for example seeing rising prices as evidence of conspiracy this research suggests that consumer responses to fuel economy technology and changes in fuel prices are more complex than economic assumptions suggest the us department of energy and the energy foundation supported this research the authors are solely responsible for the content and conclusions presented

econometric modeling of fisheries with complex life histories avoiding biological management failures abstract economics of the fishery has focused on the wastefulness of common pool resource exploitation pure open access fisheries dissipate economic rents and degrade biological stocks biologically managed fisheries also dissipate rents but are thought to hold biological stocks at desired levels we develop and estimate an empirical bioeconomic model of the gulf of mexico gag fishery that questions the presumptive success of biological management unlike previous bioeconomic life history studies we provide a way to circumvent calibration problems by embedding our estimation routine directly in the dynamic bioeconomic model we nest a standard biological management model that accounts for complex life history characteristics of the gag biological intuition suggests that a spawning season closure will reduce fishing pressure and increase stocks and simulations of the biological management model confirm this finding however simulations of the empirical bioeconomic model suggest that these intended outcomes of the spawning closure do not materialize the behavioral response to the closure appears to be so pronounced that it offsets the restriction in allowable fishing days our results indicate that failure to account for fishing behavior may play an important role in fishery management failures

passenger transport modal split based on budgets and implication for energy consumption approach and application in china transport will be the strongest growing energy demand sector in the future especially in developing countries like china and it needs more attention the evolution of transport structure is very important in the dynamic of transport development and therefore worth emphasis in this study a modal split model maximizing spatial welfare and constrained by travel money budget and time budget is developed this approach differs from the general econometric based approach used in most existing macro transport studies and deals with the cost and speed of transport modes as important variables explicitly the model is then applied to china s transport sector together with sensitivity test despite many data problems the decomposition of energy consumption generated from bottom up model based on this modal split identified the importance of modal split and turnover expansion in the next 30 years which should be a stronger area of focus in transportation studies

electric vehicles rising from the dead data needs for forecasting consumer response toward sustainable energy sources in personal transportation abstract since standard vehicles are powered by internal combustion mechanisms that rely on fossil fuels electric vehicles that are propelled by one or more electric engines have been proposed as an alternative to promote sustainable personal transportation in this paper we propose a general demand model for vehicle purchases at the individual level assuming that the necessary microdata is available we then list the ideal microdata that would be needed for estimating this general demand model for elaborating this list we take into account the particularities of low emission vehicles with emphasis in their cost reliability environmental benefits tradeoff as well as the potentiality for evaluation of welfare improving policies related to adoption of energy efficient technologies we discuss data sources and collection strategies for the different attributes of the model especially for those characteristics that are nonstandard such as symbolic values for instance we discuss the role of range anxiety as a barrier of adoption of electric vehicles and the implied relevance of including driving range to get consumers willingness to pay for better performing electric batteries

price elasticity block tariffs and equity of natural gas demand in china investigation based on household level survey data abstract on the basis of a newly established database from the chinese residential energy consumption survey this paper estimates the price elasticity of natural gas demand for the households and investigates the factors that affect residential natural gas consumption in china to address the endogeneity problems the non residential natural gas price has been adopted as the instrumental variable for residential natural gas price results demonstrate that the natural gas demand of chinese households respond significantly to price change with an overall price elasticity coefficient of 0 898 in the meanwhile 1 increase in family members would cause 0 159 rise in natural gas demand and household in the south consumes 28 8 more natural gas than that in the north recognizing the heterogeneity of residential natural gas price elasticity for different households quantile regression technique has further been applied to analyze the distributional effect of natural gas consumption the simulation suggests that the gini coefficient drops from 0 49 to 0 40 after introducing an increasing block tariff scheme to replace the original flat tariff system confirming a price reform has potential to improve the energy equity situation by reshaping the energy consumption pattern

do energy prices stimulate food price volatility examining volatility transmission between us oil ethanol and corn markets this paper examines volatility transmission in oil ethanol and corn prices in the united states between 1997 and 2011 we follow a multivariate garch approach to evaluate the level of interdependence and the dynamics of volatility across these markets preliminary results indicate a higher interaction between ethanol and corn markets in recent years particularly after 2006 we only observe however significant volatility spillovers from corn to ethanol prices but not the converse we also do not find major cross volatility effects from oil to corn markets the results do not provide evidence of volatility in energy markets stimulating price volatility in grain markets

clean air and renewable fuels the market for fuel ethanol in the us from 1984 to 1993 abstract ethanol made from corn has become an increasingly important fuel additive in the us over the past decade the market for ethanol has grown from 550 million gallons in 1984 to approximately 1 5 billion gallons in 1995 recent clean air legislation has mandated the use of cleaner burning fuels in the us in specific regions and seasons the fundamental role of fuel ethanol is changing from a gasoline substitute and octane enhancer to being one of a number of possible clean air additives in addition to these changing market conditions the institutional structure surrounding the ethanol market has changed while there is a uniform national subsidy for ethanol use each state has its own supplemental subsidy level which varied from zero to over 0 40 per gallon recently many state subsidy levels have been declining but significant incentives still remain including the federal 0 54 per gallon incentive this paper explores the economic characteristics of the us ethanol market the market supply and demand for ethanol are estimated econometrically the results highlight the importance of the state and federal incentives and mandates along with transportation costs in making corn based ethanol an attractive alternative to gasoline further investigation using a probit model to predict whether a state has an ethanol market or not reinforces the results of the supply demand market model the implications of the market characteristics for current and future us ethanol policy and clean fuels use are discussed

putting foxes in charge of the hen house the political economy of harvest quota regulations this paper considers a dynamic common agency model of natural resource harvest quota regulation in which both conservationists and harvesters vie to influence the regulator s quota allocations as well as the choice of regulator conservationists tend to benefit from the adoption of regulation since the regulator will reduce the aggregate harvest quota relative to the unregulated equilibrium harvesters however only support the adoption of regulation if the regulator places sufficient weight on their welfare because harvester s support of regulation is conditional while conservationist s support of regulation is unconditional harvester s interests tend to be over represented in the truthful markov perfect equilibrium

how a symmetric is the response of import demand to changes in its determinants evidence from european energy imports abstract energy imports are crucial for european countries yet little is known about determinants of their import demand we update long outdated estimates of import demand elasticities using recent data for crude and derived energy products and contribute to the debate on the asymmetry of import demand by using recent developments in econometric modelling our results have important implications for the geopolitics of energy markets in europe asymmetric income seems to be the most relevant determinant of import demand economic growth and fossil fuel consumption are correlated even in the context of the european agenda towards renewables our results suggest that european economic recovery may derail the drive for lower fossil consumption and that changes in the natural gas market may further complicate this drive especially regarding russia as the primary supplier to the eurozone

transport mode choice by commuters to barcelona s cbd this paper analyses the determinants of travel mode choice for suburbanised commuters in barcelona spain after describing the importance of residential suburbanisation and the parallel increase in the share of private car use by commuters into the city centre a nested logit model of transport mode choice is estimated the results reveal low elasticities particularly in the case of car commuters values of travel time savings are high although within the ranges obtained in the literature it is observed that continuing suburbanisation will result in increasing the market share of rail at the expense of the private car use and mainly the bus provided that accessibility to the public transport network is maintained at present levels

towards a contemporary approach for understanding consumer behaviour in the context of domestic energy use domestic sector energy use is increasing in the uk and currently accounts for 30 of total use policies of liberalised energy markets have allowed greater consumer choice but have not sought to reduce carbon emissions overall sales of energy efficiency products are rising but uk housing stock standards are poor and do not facilitate improved efficiency and further the sales of such products are influenced by their price thus the higher capital costs of products such as boilers and solar systems make them initially unattractive to consumers previous market based research into the adoption of energy efficiency products has often focused on single factors for example demographics this has limited the ability of policy makers to make informed decisions that address a broader range of factors such as individuals cognitive abilities values and attitudes as well as external factors such as social networks marketing and products and services this paper provides a wider critique of the theoretical base related to consumer behaviour product attributes and socio environmental theories that relate to energy use the aim of the paper is to draw together theories relevant to energy use in order to aid policy making in the broader context and to develop the discussion around integrated theories of consumer behaviour

assessing the economic value of renewable distributed generation in the northeastern american market abstract incentive programs and tax rebates are commonly offered to offset the high initial costs of small scale renewable energy systems res and foster their implementation however the economic costs of res grid integration must be fully known in order to determine whether such subsidies are justified the objective of this paper is to assess the economic value of res including their environmental benefits using hourly generation information in conjunction with hourly wholesale price data reaching the paper s objective will provide a better estimate of the bias that could result from neglecting 1 the time pattern of the hourly wholesale price 2 the impacts of carbon taxes on the hourly wholesale price and 3 the value of the marginal hourly ghg emissions selected res include two types of grid connected photovoltaic panels 3 kwp mono and poly crystalline and three types of micro wind turbines 1 10 and 30 kw modeled for different climatic conditions in the province of quebec canada the cost of electricity is based on the technical performance of these res using a life cycle costing methodology the economic value of res electricity is estimated using the hourly wholesale electricity price in northeastern american markets in 2006 2008 results show that distributed generation dg has no economic benefits using the selected res even with a us 100 tonne of co2 equivalent carbon tax this finding remains the same when the value of the avoided ghg emissions is fully internalized except for one scenario micro wind 30 kw our results are key to understanding the extent to which subsidies for distributed res can be economically sustainable when the latter are integrated into regional networks driven by centralized electricity production

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

toward a more complete model of individual transferable fishing quotas implications of incorporating the processing sector abstract economic analyses of individual transferable quota itq fisheries management traditionally have focused on the harvesting sector however harvester decisions impact the economic performance of co dependent processing firms this paper incorporates both sectors in an analysis of the effect of itqs on commercial fisheries results show that as a consequence of season elongation under a harvester only allocation of fishing rights capital nonmalleability implies that processor quasi rents will be redistributed to harvesters these losses could promote political gridlock and jeopardize adoption of an itq policy unless they are fully compensated or unless redistribution is avoided by a policy superior initial allocation of rights to both harvesters and processors

co2 abatement from renewables in the german electricity sector does a co2 price help abstract the overlapping impact of the emission trading system ets and renewable energy re deployment targets creates a classic case of interaction effects whereas the price interaction is widely recognized and has been thoroughly discussed the effect of an overlapping instrument on the abatement attributable to an instrument has gained little attention this paper estimates the actual reduction in demand for european union allowances that has occurred due to re deployment focusing on the german electricity sector for the five years 2006 through 2010 based on a unit commitment model we estimate that co 2 emissions from the german electricity sector are reduced by 35 to 60 mtons or 10 to 18 of what estimated emissions would have been without any re policy but with the co 2 price remaining in place at the observed level furthermore we find that the abatement attributable to re injections is greater in the presence of an allowance price than otherwise the same holds for the ets effect in presence of re injection this interaction effect is consistently positive for the german electricity system at least for the considered years and on the order of 0 5 to 1 5 of emissions

supply and demand elasticities in the u s ethanol fuel market abstract the market for ethanol has grown from approximately 1 2 billion gallons in 1997 to almost 5 billion gallons in 2006 with the huge increase in ethanol demand in recent years the growth in derived demand for corn has driven up many food prices this paper uses monthly data from 1997 2006 to estimate the market supply and demand for ethanol at the national level the simultaneous determination of the supply and demand curves using two stage least squares allows for the calculation of supply and demand side elasticities which are important results in light of the tremendous growth in this market and recent legislation concerning ethanol

the real time price elasticity of electricity the real time price elasticity of electricity contains important information on the demand response of consumers to the volatility of peak prices despite the importance empirical estimates of the real time elasticity are hardly available this paper provides a quantification of the real time relationship between total peak demand and spot market prices we find a low value for the real time price elasticity which may partly be explained from the fact that not all users observe the spot market price if we correct for this phenomenon we find the elasticity to be fairly low for consumers currently active in the spot market if this conclusion applies to all users this would imply a limited scope for government intervention in supply security issues

the impact of energy prices on the volatility of ethanol prices and the role of gasoline emissions abstract the contribution of renewable energy resources is vital for a country s economic growth by providing high efficiency in energy as well as an effective tool for the confrontation of climate change in particular concerning the eu an increase in the consumption of renewable energy resources as a proportion of the total energy consumption by its member states was set as an objective until 2020 ethanol has been widely used as a substitute to conventional energy like gasoline and oil the present paper surveys the role of alternative energy prices and gas emissions in the formation of the ethanol prices the results of the empirical survey confirmed the existence of a sole relationship among the variables employed according to the results obtained an increase in the volume of emissions or in gasoline prices results in an increase in ethanol prices while the opposite is confirmed in the case of crude oil he elasticity of ethanol prices to the increase of the emissions is another result worth mentioning indicative of the significant role of the emissions in the formation of ethanol prices

volatility spillovers between food and energy markets a semiparametric approach previous literature on volatility links between food and energy prices is scarce and mainly based on parametric approaches this article examines these links by using a semiparametric garch model recently proposed by long et al 2011 which is essentially a nonparametric correction of the parametric conditional covariance function the analysis focuses on price links between crude oil ethanol and sugar prices in brazil results suggest strong volatility links between the prices studied parametric approximations of the conditional covariance matrix may lead to misleading results that can be improved upon by using nonparametric techniques

measurement of natural and cyclical excess capacity in china s coal industry abstract overcapacity is a persistent problem in china s economy previous de capacity measures based on the quantity of the total excess capacity have failed to prevent the recurrence of increasingly worse overcapacity to solve this problem we attempt to quantitatively analyze china s excess coal capacity by dividing it into the long term natural excess capacity and short term cyclical excess capacity using the state space model and kalman filter algorithm the results show that china s excess coal capacity can indeed be divided into natural excess capacity and cyclical excess capacity and they have different causes fluctuations roles and effects on the price in 1995 2001 cyclical excess capacity was the main factor of overcapacity but in 2002 2015 natural excess capacity played a key role cyclical excess capacity has a negative effect on the price whereas natural excess capacity has little effect on it therefore policy makers should focus on the causes the fluctuations and the roles of natural excess and cyclical excess in addition to those of the total excess capacity they should also consider the relationship between the capacity and price based on the different effects of the natural excess capacity and cyclical excess capacity on the price

an ethanol blend wall shift is prone to increase petroleum gasoline demand abstract in 2010 the u s environmental protection agency announced a waiver allowing an increase in the fuel ethanol blend limit the blend wall from 10 e10 to 15 e15 justifications for the waiver are reduced vehicle fuel prices and less consumption of petroleum gasoline leading to greater energy security empirical investigations of this waiver using monte carlo simulations reveal an anomaly where a relaxation of this blend wall elicits a demand response under a wide range of elasticities this demand response can actually increase the consumption of petroleum gasoline and thus lead to greater energy insecurity the economics supporting this result and associated policy implications are developed and discussed

instrument choice in a fishery abstract this paper considers the choice of regulatory instruments in a fishery fishing captains consumers and input suppliers each attempt to influence the regulator s choice of instruments the regulator chooses among instruments such as input restrictions entry restrictions or individual transferable quotas itqs regulatory instruments that result in zero fishery rents can only occur if the regulator places an extraordinary weight on the welfare of input suppliers relative to fishing captains and consumers indeed heterogeneity of fishing captains is neither necessary nor sufficient to obtain regulations that fail to generate fishery rents

a systematic assessment of the environmental impacts of transport policy this paper presents an integrated urbanpassenger transport model system for evaluatingthe impact of a large number of interrelatedpolicy instruments on urban travel behaviourand the environment the model system has fourintegrated modules defining household locationand automobile choices commuter workplace andcommuting travel choices non commuting travelactivity and worker distributed workpractices the demand model system estimatedas a set of discrete and continuous choicemodels is combined with a set of equilibratingcriteria in each of the location automobileand commuting markets to predict overall demandfor passenger travel in various socio economicsegments automobile classes and geographiclocations we illustrate the diversity of thesystem by applying the integrated system toperth western australia in the context ofassessing their impacts on greenhouse gasemissions the model system is embedded withina decision support system to make it anattractive suite of tools for practitioners

price formation of fish an application of an inverse demand system inverse demand systems explain price variations as functions of quantity variations they have properties analogous to those of regular demand systems there are very few examples of their empirical application in part this is due to lack of data for which price is the decision variable and the quantity given the case of fish landed at belgian sea ports appears to suit an inverse demand system well a rotterdam variant of such a system in estimated allais interaction intensities have been derived and show a reasonable pattern

improving behavioral realism in hybrid energy economy models using discrete choice studies of personal transportation decisions hybrid energy economy models combine top down and bottom up approaches to explore behaviorally realistic responses to technology focused policies this research uses empirically derived discrete choice models to inform key behavioral parameters in cims a hybrid model the discrete choice models are estimated for vehicle and commuting decisions from a survey of 1150 canadians with the choice models integrated into cims we simulate carbon taxes gasoline vehicle disincentives and single occupancy vehicle disincentives to show how different policy levers can motivate technological change we also use the empirical basis for the choice models to portray uncertainty in technological change costs and emissions

unraveling the multiple margins of rent generation from individual transferable quotas individual transferable quotas itqs induce changes along both the extensive margin via consolidation of quota among fewer vessels and the intensive margin as harvesters adjust their behavior to itq incentives we use itq introduction in the bering sea crab fishery to decompose the sources of rent generation across both margins we embed an empirically calibrated structural model of the harvesting process into a sector level model allowing us to experimentally unravel the itq treatment we show that the magnitude and source of rent generation under itqs critically depends on the manner and degree of rent dissipation before itqs are implemented

a model of regulated open access resource use abstract this paper develops a model of regulated open access resource exploitation the regulatory model assumes that regulators are goal oriented choosing target harvest levels according to a safe stock concept these harvest quotas are implemented by setting season lengths conditioned on the industry fishing capacity the industry enters until rents are dissipated conditioned on season length regulations harvest levels fishing capacity season length and biomass are determined jointly using parameter estimates from the long regulated north pacific halibut fishery predictions of these variables from the regulated open access model are compared to predictions that arise from the gordon model

pass through of the policy induced e85 subsidy insights from hotelling s model abstract we build a structural model of imperfect competition for a retail market that supplies both low ethanol e10 and high ethanol e85 gasoline blends the model permits us to study some impacts of the e85 subsidy induced by the u s renewable fuel standard specifically how the pass through of this subsidy to retail prices is affected by market power the model is rooted in hotelling s horizontal differentiation framework which is extended to also represent the imperfect substitutability between e10 and e85 a vertical product differentiation attribute the model naturally captures two sources of imperfect competition in the fuel market refueling stations market power arising from their spatial location and limited availability of e85 stations we derive both analytical and numerical solutions for nash equilibrium outcomes under various scenarios in our baseline parameterization when the penetration of e85 stations is incomplete we find that the pass through rate is about 0 7 complete penetration of e85 stations leads to near complete pass through notwithstanding the market power enjoyed by stations because of their spatial location with monopolistic market power e g collusion however with full penetration of e85 stations the pass through rate is lower moreover when market power only arises from location differentiation duopoly model with full penetration of e85 the pass through rate converges to one as the subsidy gets large whereas it converges to zero if a station has exclusivity in selling e85 partial penetration of e85 or there is collusion monopoly power from collusion

the wood pellet market in austria a structural market model analysis abstract eu bioenergy policies and oil price hikes have resulted in a significant increase of installed pellet boilers for residential heating hence european demand for wood pellets has been growing faster and more steadily than supply leading to rising market prices in recent years this article presents an econometric analysis of demand and supply of wood pellets in the residential heating sector in austria one of the most dynamic markets for residential pellets annual and monthly time series data between 2000 and 2014 are used in a two stage least squares 2sls regression to estimate supply and demand elasticities of wood pellets in all model specifications pellets demand is found to be inelastic from 0 66 to 0 76 and pellets supply unit elastic from 1 03 to 1 18 thus consumers are highly exposed to price changes resulting from supply shocks policies which support investments in pellet boilers will shift the demand of wood pellets and likely leading to higher prices for consumers

the effects of itq management on fishermen s welfare when the processing sector is imperfectly competitive in this paper we use a general model of imperfect competition to predict welfare changes within an open access fishery after it transitions to individual transferable quota itq management although related research has explored the effects of market power in the harvesting sector on itq performance none has considered the implications of an imperfectly competitive processing sector addressing this question we find that although fishermen should expect to gain from itqs under perfect competition they may suffer welfare losses if the processing sector is imperfectly competitive

supply elasticity matters for the rebound effect and its impact on policy comparisons abstract we develop a model of the rebound effect which explicitly accounts for both the demand and supply sides of the energy sources we consider a transportation sector originally using a dirty fossil fuel and examine the relative effectiveness of alternative policies efficiency improvements in the dirty fuel technology sector e g cafe standards and technology shifts by partial adoption of a new clean technology e g low carbon fuel standards the model generates endogenous equilibrium quantities and prices for the dirty and clean fuels we characterize the magnitude of the rebound effect as a function of demand and supply elasticities and use the equilibrium values to compare policy options when the supply of the dirty fuel is inelastic we find that introducing a new technology with non zero emissions may actually increase the total level of emissions similar to the leakage effect a technology shift policy can perform better than an efficiency improvement policy in the dirty fuel sector only when the dirty fuel supply is sufficiently elastic the emission intensity of the new technology very low and the technology shift is greater than a threshold value using data for gasoline as a proxy for the dirty technology and several other cleaner technologies we show that these conditions are satisfied by a hypothetical zero emission technology but not by electric vehicles using the average us generation mix or the current us corn based e85 our results demonstrate the importance of accounting for the supply side in estimating the magnitude of the rebound effect and its impact on fuel consumption in a large scale policy implementation

assessing the life cycle environmental benefits of renewable distributed generation in a context of carbon taxes the case of the northeastern american market abstract distributed generation dg using renewable energy systems res can play an important role in reducing greenhouse gas ghg emissions given that dg could overlap with carbon tax implementation the objective of this work is to assess the implications of introducing different carbon tax levels from 0 to 100 us tonne of co 2 and to assess the ghg abatement performance when dg is applied to reach the paper objective different levels of carbon taxes were assessed by using the developed partial equilibrium model for the north eastern american electricity market the developed model is crucial to 1 estimate the increase of the hourly market price for different carbon taxes scenarios and 2 identify the hourly marginal electricity production technologies reducing its production as a consequence to dg results show that the increase of carbon taxes significantly decrease the environmental benefits as a consequence of dg when considering ghg emissions the 30 kw micro wind turbine efficiency gets from 6 3 to 3 8 kg co 2 eq kw h when carbon tax increases from 0 to 60 us tonne co 2 eq 60 reduction same trend is observed for other environmental impacts such as resource human health and ecosystem quality these results help in giving more insight on how two overlapping clean air policies interfere and how efficient they are in reducing ghg emissions at the same time

a theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

cost effectiveness of greenhouse gas mitigation in transport a review of methodological approaches and their impact abstract a review is given of methodological practices for ex ante cost effectiveness analysis cea of transport greenhouse gas ghg mitigation measures e g fuel economy and co2 standards for road vehicles in the us and eu besides the fundamental differences between different types of policies and abatement options which inherently result in different cea outcomes differences in methodological choices and assumptions are another important source of variation in cea outcomes fourteen methodological issues clustered into six groups are identified on which thirty three selected studies are systematically reviewed the potential variation between lower and upper cost effectiveness estimates for ghg mitigation measures in transport resulting from different methodological choices and assumptions lies in the order of 400 per tonne co2 eq the practise of using cea for policy making could improve considerably by clearly indicating the specific purpose of the cea and its strengths and limitations for policy decisions another improvement is related to the dominant approach in transport ghg mitigation studies the bottom up financial technical approach which assesses isolated effects implying considerable limitations for policy making a shift to welfare economic approaches using a hybrid model has the potential to establish an improved assessment of transport ghg mitigation measures based on realistic market responses and behavioural change

regulation of multinational firms with two active governments a common agency approach abstract when a government agency imposes cost based taxes regulations on a multinational with private cost information it may initiate countervailing regulations by another of the governments with which the multinational interacts we analyze the problem of optimal regulation of a multinational under incomplete cost information via trade taxes by multiple governments as a problem of common agency with adverse selection by focusing on the game played by the competing governments we characterize the equilibrium trade taxes and show that the non cooperative behavior of the governments not only reduces aggregate national welfare but also reduces firm profits

biofuels policy and the us market for motor fuels empirical analysis of ethanol splashing low ethanol prices relative to the price of gasoline blendstock and tax credits have resulted in discretionary blending at wholesale terminals of ethanol into fuel supplies above required levels a practice known as ethanol splashing in industry parlance no one knows precisely where or in what volume ethanol is being blended with gasoline and this has important implications for motor fuels markets because refiners cannot perfectly predict where ethanol will be blended with finished gasoline by wholesalers they cannot know when to produce and where to ship a blendstock that when mixed with ethanol at 10 would create the most economically efficient finished motor gasoline that meets engine standards and has comparable evaporative emissions as conventional gasoline without ethanol blending in contrast to previous empirical analyses of biofuels that have relied on highly aggregated data our analysis is disaggregated to the level of individual wholesale fuel terminals or racks of which there are about 350 in the us we incorporate the price of ethanol as well as the blendstock price to model the wholesaler s decision of whether or not to blend additional ethanol into gasoline at any particular wholesale city terminal the empirical analysis illustrates how ethanol and gasoline prices affect ethanol usage controlling for fuel specifications blend attributes and city terminal specific effects that among other things control for differential costs of delivering ethanol from bio refinery to wholesale rack

ethanol demand in brazil regional approach abstract successive studies attempting to clarify national aspects of ethanol demand have assisted policy makers and producers in defining strategies but little information is available on the dynamic of regional ethanol markets this study aims to analyze the characteristics of ethanol demand at the regional level taking into account the peculiarities of the developed center south and the developing north northeast regions regional ethanol demand is evaluated based on a set of market variables that include ethanol price consumer s income vehicle stock and prices of substitute fuels i e gasoline and natural gas a panel cointegration analysis with monthly observations from january 2003 to april 2010 is employed to estimate the long run demand elasticity the results reveal that the demand for ethanol in brazil differs between regions while in the center south region the price elasticity for both ethanol and alternative fuels is high consumption in the north northeast is more sensitive to changes in the stock of the ethanol powered fleet and income these among other evidences suggest that the pattern of ethanol demand in the center south region most closely resembles that in developed nations while the pattern of demand in the north northeast most closely resembles that in developing nations

legislators and interest groups how unorganized interests get represented this paper derives a supply price for public policy using a constrained maximization model in the model three sets of agents each have preferences over outcomes organized interest groups offer campaign contributions to improve their own wealth voters offer votes to obtain outcomes closer to their most preferred outcomes and legislators seek both campaign contributions and votes to obtain reelection a given legislator s supply price for policy is shown to depend on the productivity of his effort as determined by committee assignments priority and ability and by the preferences of his unorganized constituency in the home district two extreme assumptions about the effectiveness of campaign spending in eliciting votes are used to illustrate the comparative statics properties of the model the prediction of the model is that interest groups will in general seek out legislators whose voters are indifferent to the policy the interest group seeks thus voters who do have preferences over policy are in effect represented even though they are not organized

contracting problems and regulation the case of the fishery the inefficiencies of common property fisheries are of continuing concern to economists the early work by scott gordon 1954 and anthony scott 1955 outlined the problem and later studies by james crutchfield and giulio pontecorvo 1969 and frederick bell 1972 provided empirical estimates of the losses that result those studies were followed by the dynamic models of colin clark 1976 and james quirk and vernon smith 1970 of optimal harvest rates and the use of corrective taxes or quotas to achieve them but in spite of a large and growing literature and the persuasiveness of the outlined efficiency criteria most fisheries retain common property aspects with overcapitalization and excessive labor input why those conditions persist and the failure of the regulatory response to them are the issues addressed in this paper we examine a number of fisheries but focus on the texas shrimp industry which is one of the nation s most valuable fisheries for a single species and which shares the common property characteristics observed elsewhere it is considered overcapitalized and catch per unit of effort is falling 2 examination of the fishery reveals the many margins along which rent dissipation occurs and the nature of the regulations necessary for controlling fishing effort to avoid those losses the regulatory environment in texas is complicated by conflict within the fishery between inshore and offshore fishermen the latter assert that bay shrimping reduces the number of shrimp that successfully migrate to the gulf the inshore fishery is highlighted by another issue the recent resettlement of some 30 45 000 vietnamese refugees including many fishermen along the texas coast marine advisory service paul starr their entry has been met by hostility and violence from existing shrimpers who recognize that they are in an environment characterized by the absence of property rights bay shrimpers have lobbied the texas legislature for broad limits on new entrants yet ironically the sale of additional boats by individual shrimpers to the vietnamese has facilitated entry of the refugees into the fishery regulations in the texas shrimp and other fisheries are incomplete leaving many options for rent dissipation uncontrolled because of high contracting costs among fishermen and political factors that mold government actions contracting costs are high among heterogeneous fishermen who vary principally with regard to fishing skill 3 montana state university and texas a m university respectively we benefitted from comments by terry anderson raymond c battalio gardner brown oscar burt micha gisser wade griffin john r moroney anthony d scott peter temin and participants in workshops at texas a m university and the university of washington research assistance was provided by scott barnhart and phil mizzi funding was provided by sea grant texas a m university throughout this paper we use the terms common property and open access interchangeably here the terms describe a situation where no property rights group or individual exist s for the resource 2catch per unit of effort in the inshore texas gulf and federal gulf waters is presented for 1963 77 by w l griffin c g tydlacka and w e grant they show catch per unit of effort generally falling in inshore and offshore waters while catch per unit of effort fluctuates from year to year it falls from approximately 360 kg shrimp per unit of effort to 220 kg from 1963 to 1977 the common property nature of the fishery is reflected in the following statistics since 1975 the number of vessels has grown by 23 percent nelson swartz for fish houses the record of entry is similar between 1970 a d 1977 the number of firms grew from 259 to 287 though during that period many left the industry as others entered the number of fish houses was calculated from license data supplied by the texas parks and wildlife department the record of entry by fish houses suggests that monopsony as discussed by colin clark and gordon munro is absent in the fishery 3there may be minor differences in labor leisure choices and capital but our statistical evidence and discussions with fishermen indicate that catch variations are largely due to skill government regulations in the texas bays restrict capital and our empirical evidence shows boats to be relatively homogeneous

the energy efficiency gap what does it mean abstract as renewed attention has been given by policy makers to energy conservation issues it has frequently been asserted that an energy efficiency gap exists between actual and optimal energy use the critical questions is how to define the optimal level of energy efficiency this paper seeks to disentangle some confusing strands of argument that are frequently brought to bear on this question by identifying the major conceptual issues that determine the set of feasible answers we identify five separate and distinct notions of optimality the economists economic potential the technologists economic potential hypothetical potential the narrow social optimum and the true social optimum each of these has associated with it a corresponding definition of the energy efficiency gap our analysis demonstrates that necessary preconditions for identifying the right measure of the energy efficiency gap include understanding and disentangling market failure and non market failure explanations for the gradual diffusion of energy efficient technologies

the neighbor effect simulating dynamics in consumer preferences for new vehicle technologies abstract understanding consumer behaviour is essential in designing policies that efficiently increase the uptake of clean technologies over the long run expert opinion or qualitative market analyses have tended to be the sources of this information however greater scrutiny on governments increasingly demands the use of reliable and credible evidence to support policy decisions while discrete choice research and modeling techniques have been applied to estimate consumer preferences for technologies these methods often assume static preferences this study builds on the application of discrete choice research and modeling to capture dynamics in consumer preferences we estimate canadians preferences for new vehicle technologies under different market assumptions using responses from two national surveys focused on hybrid gas electric vehicles and hydrogen fuel cell vehicles the results support the relevance of a range of vehicle attributes beyond the purchase price in shaping consumer preferences towards clean vehicle technologies they also corroborate our hypothesis that the degree of market penetration of clean vehicle technologies is an influence on people s preferences the neighbor effect finally our results provide behavioural parameters for the energy economy model cims which we use here to show the importance of including consumer preference dynamics when setting policies to encourage the uptake of clean technologies

product differentiation and oligopoly in international markets the case of the u s automobile industry this paper develops and estimates a model of the u s automobile industry on the demand side a discrete choice model is adopted that is estimated using micro data from the consumer expenditure survey the estimation results are used in conjunction with population weights to derive aggregate demand on the supply side the automobile industry is modelled as an oligopoly with product differentiation equilibrium is characterized by the first order conditions of the profit maximizing firms the estimation results are used in counterfactual simulations to investigate two trade policy issues the effects of the ver and exchange rate pass through

do green tech policies need to pass the consumer test the case of ethanol fuel abstract this paper investigates a question sometimes overlooked by policymakers and regulators namely the need of a robust value proposition for green technologies to successfully enter the market in particular results from consumer choice models are used to develop measures of consumer acceptance of ethanol blends and flex fuel vehicles is studied a fuel vehicle system that has received attention in a variety of federal and state policies the analysis suggests that under projected fuel prices and given the characteristics of the competing vehicle fuel systems consumers are unlikely to substitute ethanol blends for gasoline the analysis also highlights the need for further research in this area

economic policy and special interest politics a great deal of research has been done on the boundary between economics and political science in the last five to ten years this research in political economics spans many subfields such as macroeconomics trade public finance regulation rational choice politics and game theory a common denominator has been to study structural models of the political process agents behave rationally within well specified economic and political institutions where the policymaking process is formulated as an extensive form game methodologically much progress has been made relative to traditional approaches which were often based on inconsistent or irrational political and economic behaviour relying on non derived influence functions political support functions or vote functions yet the modem work has largely developed separately in each subfield without much contact with other subfields and each of the resulting literatures tends to focus on a distinct but partial aspect of the political process in this lecture i shall argue that even though the progress to date has been substantial we can gain a better understanding of policymaking in democracies by combining the insights from different strands of thinking on some economic policy issues the conflicting views both among citizens and politicians basically reduce to a single left to right dimension examples may include the politics of inflation vs unemployment capital taxation or the size of government we can think about policy issues within this domain of general interest politics as being resolved via traditional downsian electoral competition at least to a first approximation but the economic policy process also allows narrow interest groups ample opportunities to concentrate benefits to their own group at the expense of the population as a whole the resulting policy conflict is generically multi dimensional resolving it by voting alone would thus result in condorcet cycles we therefore need to go beyond the simplest electoral models to understand policy determination within this domain of special interest politics this lecture deals with special interest politics to make my point about fruitful analytical arbitrage i will stick to the same underlying policy example throughout this will be a simple model of a society where the government uses