or practice selecting a portfolio of environmental programs for a synthetic fuels facility this article describes how a u s department of energy steering committee used a decision analysis procedure to develop a portfolio of environmental and health research programs for a commercial scale synthetic fuels facility the procedure used information and insights from decision analyses conducted in five technical areas to support decision analysis at the portfolio level the problem was complex because it included many combinations of studies that could be funded multiple objectives in the five technical areas as well as at the portfolio level and uncertainties about research needs the availability of technical data and research costs the article discusses the rationale for using formal decision analysis the main features of the procedure and how the procedure provided the steering committee with a logical basis for evaluating a large number of diverse technical projects and with the help of health and environmental experts established research priorities and budget allocations in a logical and defensible manner

the differential impact of low carbon technologies on climate change mitigation cost under a range of socioeconomic and climate policy scenarios this paper considers the effect of several key parameters of low carbon energy technologies on the cost of abatement a methodology for determining the minimum level of performance required for a parameter to have a statistically significant impact on co2 abatement cost is developed and used to evaluate the impact of eight key parameters of low carbon energy supply technologies on the cost of co2 abatement the capital cost of nuclear technology is found to have the greatest impact of the parameters studied the cost of biomass and ccs technologies also have impacts while their efficiencies have little if any sensitivity analysis of the results with respect to population gdp and co2 emission constraint show that the minimum performance level and impact of nuclear technologies is consistent across the socioeconomic scenarios studied while the other technology parameters show different performance under higher population lower gdp scenarios solar technology was found to have a small impact and then only at very low costs these results indicate that the cost of nuclear is the single most important driver of abatement cost and that trading efficiency for cost may make biomass and ccs technologies more competitive

the optimal research and development portfolio of low carbon energy technologies a study of china to support decision making for an optimal portfolio strategy for low carbon energy technology research and development r d this study proposes a dynamic two stage stochastic programming model taking into account both the uncertainty of technological change and damages of climate change based on china s economic and technology level and expert elicitation an r d investment portfolio strategy looking at three low carbon technologies carbon capture and storage ccs solar photovoltaic pv and nuclear including nine projects is investigated through the proposed model the optimized results show that the optimal r d technology portfolio is robust to different levels of risk in climate damage however the total social costs for the optimal r d technology portfolio is lowest in the medium risk of climate damage scenario under different opportunity costs the composition of the optimal r d portfolio varies however projects for each of the three technologies always constitute the optimal r d portfolio furthermore the implication is that a technology synergistic r d strategy is conducive to enhancing the level of co2 abatement and reducing the total social cost

firm incentives to promote technological change in pollution control reply abstract the process of technological change in pollution control is broken into three basic steps innovation diffusion and optimal agency response firm incentives to promote these steps are then examined under five regulatory regimes direct controls emission subsidies emission taxes free marketable permits and auctioned marketable permits on a relative basis emission taxes and auctioned permits provide the highest firm incentives to promote technological change at times free permits generate lower incentives direct controls which are common regulatory tools usually provide the lowest relative firm incentives to promote technological change

long term forecasts for energy commodities price what the experts think the ability to forecast energy prices in the long term is important for a wide range of reasons from the formulation of countries energy and transportation policies to the defensive strategies of nations to investment decisions within the private sector despite the importance of these predictions however forecasters and market pundits face a difficult challenge when trying to forecast over the long term while statistical models can credibly rely on assumptions about the relationship between variables in the short term they are frequently less reliable in the long term as political and technological transformations profoundly change how the economy works over time towards improving long term predictions for energy commodities this paper uses the elicitation and aggregation of experts beliefs to put forward forecasts for crude oil and natural gas prices by incentivizing experts to tell the truth and minimising their own biases through the application of the bayesian truth serum with this approach we generated both short term and long term forecasts and used the short term forecast to validate the quality of the experts predictions

climate change and optimal energy technology r d policy public policy response to global climate change presents a classic problem of decision making under uncertainty theoretical work has shown that explicitly accounting for uncertainty and learning in climate change can have a large impact on optimal policy especially technology policy however theory also shows that the specific impacts of uncertainty are ambiguous in this paper we provide a framework that combines economics and decision analysis to implement probabilistic data on energy technology research and development r d policy in response to global climate change we find that given a budget constraint the composition of the optimal r d portfolio is highly diversified and robust to risk in climate damages the overall optimal investment into technical change however does depend in a non monotonic way on the risk in climate damages finally we show that in order to properly value r d abatement must be included as a recourse decision

corporate governance provisions and firm ownership firm level evidence from eastern europe we study differences in the use of two corporate governance provisions e cumulative voting and proxy by mail voting e in a sample of about 220 firms located in four eastern european countries after controlling for other firm characteristics we find that firms that have a large minority blockholder are more likely to allow cumulative voting we do not find any significant relationship between the use of these corporate governance provisions and foreign ownership we conclude that the use of cumulative voting is associated with the presence of large minority shareholders 2006 published by elsevier ltd jel classification g34 p2

large scale scenario analysis of future low carbon energy options abstract in this study we use a multi model framework to examine a set of possible future energy scenarios resulting from rd and portfolios lacking ccs and nuclear tend to be stochastically dominated by others we find that the dominance of ccs becomes even stronger as uncertainty in climate damages increases finally we show that there is significant value in carefully choosing a portfolio as relatively small portfolios can dominate large portfolios

instrument choice for environmental protection when technological innovation is endogenous this paper compares qualitatively and quantitatively the welfare effects of emissions taxes auctioned emissions permits and free grandfathered permits when technological innovation is endogenous we find that there is no unambiguous case for preferring any of these policy instruments the relative welfare ranking of instruments depends on the costs of innovation the extent to which innovations can be imitated the slope and level of the marginal environmental benefit function and the number of polluting firms we illustrate the types of situations when there can be significant welfare discrepancies between the policies and when there are not

technological change and uncertainty in environmental economics abstract technological change is widely believed to play a crucial role in mastering the challenges of man made climate change the drivers and impacts of technological change have therefore become an important research issue in the field of climate economics while models to analyze the interactions between economy energy and the environment initially treated technological change as exogenous more recent modeling approaches often represent technological change as endogenously induced typically models of induced technological change in climate economics are based on perfect foresight in a deterministic world however both technological change and climate impacts are subject to large uncertainties that may substantially affect the design of efficient climate policies against this background the special issue presents five articles contributing to the study of uncertainty and technological change in climate change economics

setting environmental policy when experts disagree how can a decision maker assess the potential of environmental policies when a group of experts provides divergent estimates on their effectiveness to address this question we propose and analyze a variant of the well studied alpha maxmin model in decision theory in our framework and consistent to the paper s empirical focus on renewable energy r d investment experts subjective probability distributions are allowed to be action dependent in addition the decision maker constrains the sets of priors to be considered via a parsimonious measure of their distance to a benchmark average distribution that grants equal weight to all experts while our model is formally rooted in the decision theoretic framework of olszewski rev econ stud 74 567 595 2007 it may also be viewed as a structured form of sensitivity analysis we apply our framework to original data from a recent expert elicitation survey on solar energy the analysis suggests that more aggressive investment in solar energy r d is likely to yield significant dividends even or rather especially after taking expert ambiguity into account

photovoltaic power stations in germany and the united states a comparative study by data envelopment analysis abstract this study compares photovoltaic pv power stations between germany and the united states to examine which country more efficiently provides renewable energy in their usages for the comparative analysis this study utilizes data envelopment analysis dea as a methodology to evaluate the performance of pv power stations from the perspective of both solar and land usages a total of one hundred sixty pv power stations eighty in germany and eighty in the united states are used for this comparison the demand for sustainable energy and energy security has been rapidly increasing over the past decade because of concerns about environment and limited resources pv solutions are one of many renewable technologies that are being developed to satisfy a recent demand of electricity germany is the world s top installer and consumer of pv power and the united states is one of the top five nations germany leads the way in installed pv capacity even though the nation has less solar resources and land area due to limited solar resources low insolation and sunshine and land area the united states should have a clear advantage over germany however the empirical result of this study exhibits that pv power stations in germany operate more efficiently than those of the united states even if the latter has many solar and land advantages the surprising result indicates that the united states has room for improvement when it comes to utilizing solar and land resources and needs to reform the solar policy for such a purpose feed in tariff fit may be an effective energy policy at the state level in the united states because the fit provides investors such as utility companies and other types of energy firms with financial incentives to develop large pv power stations and generation facilities for other renewable energy it may be true that the fit is a powerful policy tool to promote pv and other renewable installation and support a reduction of an amount of greenhouse gases however the fit poses a large financial burden to consumers with a massive increase in renewable energy installation like in germany and spain therefore it is necessary for the united states to consider how to align a policy with a speed of technology innovation to balance between the benefit and the cost derived from the policy implementation on renewable energy in addition this study discusses policy issues regarding cost allocation due to fit among stakeholders related to the electric power industry at the end this study proposes a new type of wholesale electricity market that provides simultaneous trading on electricity and greenhouse gas emissions by fully utilizing modern computer science technology that exists in universities and national laboratories of the united states

investment in risky r d programs in the face of climate uncertainty we analyze how the socially optimal technology rd and that uncertainty in damages interacts with uncertainty in the returns to rd and r d that reduces the emissions to output ratio and argue that this is a good representation of r d into fossil fuel technologies for r d programs into non carbon technologies optimal investment is higher in riskier programs our empirical model indicates that the optimal investment in a risky program is about 3 1 2 times larger than in a program with certain returns for r d programs aimed at reducing emissions in fossil fuel based technologies our results show that qualitatively investment is higher in less risky programs under most uncertain damage scenarios our empirical model shows however that the risk profile of fossil fuel based r d programs generally has little quantitative impact on optimal investment the exception is that when the probability of a catastrophe inducing full abatement is very high investment is about twice as high in risky programs compared to programs with certain returns

incentives for advanced pollution abatement technology at the industry level an evaluation of policy alternatives abstract in this research we evaluate the incentive effects of five environmental policy instruments to promote the development and adoption of advanced pollution abatement technology in a heterogenous industry from most to least incentive the policy instruments can be rank ordered as follows i auctioned permits ii emissions taxes and subsidies iii issued marketable permits iv performance standards including performance standards in this list necessitates the assumption that they are differentiated between heterogeneous firms before the technology adoption in a way which replicates the initial emissions control distribution of the efficient incentive based instruments with the starting point normalized in this fashion the instrument rankings are invariant with respect to the size of firms the size of the industry or the industry s abatement cost structure

pv sector in the european union countries clusters and efficiency abstract european union eu due to several challenges that exist nowadays has changed its energy policy in order to fulfill international commitments concerning greenhouse gas emission and to assure safety in supply and stable prices eu has been a leader in renewable energy in many eu countries solar energy is a possible and very viable option together with wind energy photovoltaic energy is the new support core of a low carbon eu economy in what concerns electricity production in this work clusters of countries were generated based on the energy produced by pv systems and the share of energy from pv systems in the total electricity produced by renewable sources this work also analyzed the production of energy from the photovoltaic sector in eu and compared it with the existing potential for this type of energy roughly half of the eu countries are producing energy within the limits of what is expected considering the irradiation on optimally inclined plane however some of them could improve the ratio between energy production and installed power considering the leader countries in energy production from photovoltaic czech republic and spain are the countries that exceed what it is expected

r d investment strategy for climate change abstract the economic costs of stabilizing greenhouse gas concentrations over the coming century depend critically on the development of new technologies in the energy sector our research and development r d investment strategy is the control variable for technology availability this paper proposes an analytic framework for determining optimal r d investment allocation and presents some numerical results to demonstrate the implementation of the methodology the value of technological advance in three targeted areas fossil based generation renewables and carbon capture and storage is represented by the increase in expected welfare in the presence of an emissions policy constraint of initially uncertain stringency r d expenditure increases the probability of advance optimal investment is determined by its relationship with success probability which is assumed to exhibit decreasing returns to scale relative to the value of success while the numerical results are speculative the paper offers insights into the nature of an optimal technology strategy for addressing climate change

growth and competition in renewable energy industries insights from an integrated assessment model with strategic firms abstract this article describes the development implementation and application of an integrated assessment modeling framework featuring renewable technology markets with producers engaged in cournot competition scenario results reveal how climate policy and inter firm learning spillovers interact with market structure to affect wind and solar pv prices adoption producer profits and carbon emissions competitive markets yield consistently lower markups than concentrated markets leading to significantly more adoption and lower emissions widespread solar pv adoption is a key component of the largest emissions reductions but this requires substantial price reductions that only occur if the solar pv market is competitive and learning spills over across producers whether a leading firm has a profit incentive to facilitate or obstruct learning spillovers depends on the availability of cost competitive substitute technologies if such a substitute exists the firm prefers strong spillovers that help its industry compete against the substitute if not the firm prefers weak spillovers that prevent competitors in its industry from seizing market share the relationship between price and cumulative capacity is endogenous in the modeling framework regression analysis of scenario results yields price learning rates which are similar to unit production cost learning rates in competitive markets but substantially lower even negative in concentrated markets

innovation in pollution control comparisons of the various institutional arrangements for controlling pollutant emissions from individual sources effluent fees effluent control subsidies marketable permits and direct command and control regulation have usually focused on their static efficiency properties and institutional feasibility e g dales 1968 zerbe 1970 baumol and oates 1975 kneese and schultze 1975 marin 1978 mills and white 1978 spence and weitzman 1978 russell 1979 a relatively neglected area has been the study of how each arrangement influences innovation in pollution control a few studies e g kneese and schultze 1975 marin 1978 mills and white 1978 russell 1979 have casually claimed that the control methods that rely on economic incentives provide superior incentives for innovation but there have been few systematic studies of the question this paper provides a simple model of pollution control innovation by a profitmaximizing polluter who is subject to the various control methods the consequences of the methods will be explored in three major contexts first we assume that the polluter and the innovation is a small enough part of the overall pollution problem so that none of the important marginal conditions are changed by the innovation second we assume that the polluter and the innovation are important enough so that marginal conditions are changed by the innovations but that the governmental authority determining pollution control incentives or levels fails to make the appropriate adjustments third we again assume that the innovation causes marginal conditions to change but in this case the governmental authority makes the appropriate adjustments we use the term ratcheting to describe this last phenomenon in all cases we assume that the innovating polluter correctly predicts the reactions of the governmental authority and bases his innovation decisions on that prediction a profit maximizing entrepreneur would normally be expected to adopt any innovation that promised gains present discounted value to him in excess of initial

mobilizing private finance for low carbon innovation a systematic review of barriers and solutions this paper analyses the field of innovation studies regarding barriers to low carbon innovation and consequences for finance investment and divestment and contributes to a more holistic understanding of the underlying mechanisms a combination of technological barriers combined with economic barriers institutional and political barriers contribute to sub optimal low carbon investment all along the innovation cycle policy makers need to take a systemic approach to enable the redirection of diverse private financial sources instruments range from cutting dirty r d subsidies and support for clean technology innovation and diffusion levelling the institutional playing field and making risks of high carbon and low carbon technologies transparent to providing a consistent but adaptive long term transition strategy this would allow financiers to gradually shift their investments away from high carbon mainstream markets and scale low carbon technology niche markets however financiers also need to sharpen their competencies with regard to new clean technologies and markets

advanced solar r d combining economic analysis with expert elicitations to inform climate policy the relationship between r d investments and technical change is inherently uncertain in this paper we combine economics and decision analysis to incorporate the uncertainty of technical change into climate change policy analysis we present the results of an expert elicitation on the prospects for technical change in advanced solar photovoltaics we then use the results of the expert elicitations as inputs to the minicam integrated assessment model to derive probabilistic information about the impacts of r d investments on the costs of emissions abatement

to steal or not to steal firm attributes legal environment and valuation data on corporate governance and disclosure practices reveal wide within country variation that decreases with the strength of investors legal protection a simple model identifies three firm attributes related to that variation investment opportunities external financing and ownership structure using firm level governance and transparency data from 27 countries we find that all three firm attributes are related to the quality of governance and disclosure practices and firms with higher governance and transparency rankings are valued higher in stock markets all relations are stronger in less investor friendly countries demonstrating that firms adapt to poor legal environments to establish efficient governance practices

predicting corporate governance in emerging markets abstract this paper investigates what predicts corporate governance in emerging markets specifically we examine what predicts governance changes and the level of governance itself to conduct this study we utilize a unique dataset from alliancebernstein that consists of monthly firm level corporate governance ratings for 24 emerging market countries for almost seven years since the alliancebernstein ratings are time series data they allow us to determine the direction of change in a firm s corporate governance and the timing of these changes using these data we find two main results first as firms grow they are more likely to improve their governance second the level of political risk where the firm resides is negatively and significantly related to the level of firm governance but positively and significantly related to changes in firm governance hence firm governance is better in countries with lower political risk but firms are more likely to improve their governance in countries with higher political risk

modelling energy technologies in a competitive market abstract energy economic models must predict the mix of energy technologies in competitive energy markets we examine a market composed of several competing technologies with geographically heterogeneous cost distributions an approach for determining both the market share and average market cost of energy produced by these technologies is derived the formalism developed which is based on a conditional least cost distribution function can be used to correct the convertional logit treatment of these quantities in several existing models and to better interpret empirical data in order to determine more realistic cost distribution functions for energy technologies

gradual wage price adjustments labor market frictions and monetary policy rules abstract in this paper the role of different types of labor market frictions in the dynamics of output and inflation is investigated for this purpose the keynes goodwin model discussed in chen et al 2006 and franke et al 2006 is extended by a labor search and matching module along the lines of mortensen et al 1994 after estimating the resulting model with u s aggregate time series and comparing its dynamics with those of a var model the performance of different types of monetary policy rules for inflation and more generally for macroeconomic stability is analyzed