price volatility in the carbon market in china abstract china is the world s largest developing country and a carbon dioxide emitter a functional carbon market can effectively reduce carbon emissions this paper uses the markov chain monte carlo stochastic volatility model and the wavelet multi resolution model to analyze the volatility of price returns and the dynamic characteristics of price fluctuations in the carbon pilot markets in hubei shanghai and shenzhen the price movements in these markets are compared to the emissions trading system of the european union eu ets the results show that there is a volatility clustering in the price of carbon trading in hubei shanghai shenzhen and the eu ets china s carbon pilot markets have a deficiency in terms of volatility stability as does the eu ets from a long term perspective china s carbon market lacks a detailed development plan which is vital because the construction of the market system is not yet optimal from a short term view china s carbon market is not active and the participants attitude toward risk is extremely sensitive

democracy and economic growth a meta analysis despite a sizeable theoretical and empirical literature no firm conclusions have been drawn regarding the impact of political democracy on economic growth this article challenges the consensus of an inconclusive relationship through a quantitative assessment of the democracy growth literature it applies meta regression analysis to the population of 483 estimates derived from 84 studies on democracy and growth using traditional meta analysis estimators the bootstrap and fixed and random effects meta regression models it derives several robust conclusions taking all the available published evidence together it concludes that democracy does not have a direct impact on economic growth however democracy has robust significant and positive indirect effects through higher human capital lower inflation lower political instability and higher levels of economic freedom democracies may also be associated with larger governments and less free international trade there also appear to be country and region specific democracy growth effects overall democracy s net effect on the economy does not seem to be detrimental

why does the combination of the european union emissions trading scheme and a renewable energy target makes economic sense abstract the european climate and energy mix of targets and policies has been criticised by many economists in particular it is often argued that the renewable energy targets do not make economic sense because they represent an expensive option to reduce co2 emissions within a cap and trade scheme such as the european union emissions trading scheme eu ets in addition it has also been claimed that support for renewable electricity deployment negatively interacts with the eu ets having a dampening effect on the co2 price which favours the dirtiest technologies and is detrimental for the greener ones in this article we argue that this mainstream economic view is short sighted and that a multidisciplinary economic analysis of the climate and energy policy mix is required mainstream economic analysis is based on a narrow approach for the assessment of instrument combinations and neglects relevant insights from several economic disciplines including innovation economics and political economy approaches in reality economic theory supports the combination of an ets and renewable energy targets the existence of different policy goals and market failures the demand pull influence of renewable energy policies on innovation a political economy approach and the different risk exposure of renewable energy technologies call for a policy mix although policy combinations are not a panacea and bring problems on their own the aforementioned negative interaction between renewable energy deployment and the carbon price in the eu ets can be mitigated through appropriate coordination and or instrument choice and design

a symmetric safety valve abstract how to set policy in the presence of uncertainty has been central in debates over climate policy concern about costs has motivated the proposal for a cap and trade program for carbon dioxide with a safety valve that would mitigate against spikes in the cost of emission reductions by introducing additional emission allowances into the market when marginal costs rise above the specified allowance price level we find two significant problems both stemming from the asymmetry of an instrument that mitigates only against a price increase one is that most important examples of price volatility in cap and trade programs have occurred not when prices spiked but instead when allowance prices collapsed second a single sided safety valve may have unintended consequences for investment we illustrate that a symmetric safety valve provides environmental and welfare improvements relative to the conventional one sided approach

supply of renewable energy sources and the cost of eu climate policy abstract what are the excess costs of a separate 20 target for renewable energy as a part of the eu climate policy for 2020 we answer this question using a computable general equilibrium model worldscan which has been extended with a bottom up module of the electricity sector the model set up makes it possible to base the calibration directly on available estimates of costs and capacity potentials for renewable energy sources in our base case simulation the costs of eu climate policy with the renewables target are 6 higher than those of a policy without this target the uncertainty in this estimate is considerable however and depends on our assumptions about the availability of low cost renewable energy the initial cost level the steepness of the supply curves and share of renewable energy in the baseline within the range we explore the excess costs vary from zero when the target is not a binding constraint to 32 when the cost progression and the initial cost disadvantage for renewable energy are high and its initial share is low

the effects of a free repair warranty on the discrete time periodic replacement policy abstract this paper presents the effects of a free repair warranty on a periodic replacement policy with a discrete time process considering a repairable product that should be operational at the time over an indefinitely long operation cycle n n 1 2 under the discrete time periodic replacement policy a product is preventively replaced at pre specified operation cycles n 2 n 3 n n 1 2 when the product fails a minimal repair is performed at the time of failure and the failure rate is not disturbed by each repair the cost models from the customers perspectives are developed for both warranted and non warranted products the corresponding optimal replacement period n is derived such that the long run expected cost rate is minimized under the assumption of the discrete time increasing failure rate the existence and uniqueness of the optimal replacement period are shown and the impact of a free repair warranty on the optimal periodic replacement policies is investigated analytically the optimal n for a warranted product should be adjusted toward the end of the warranty period finally numerical examples are demonstrated for the optimal policy illustration and verification the observations from the numerical results provide valuable information for a buyer user to adjust the optimal periodic replacement policy if a product is operating in discrete time under a free repair warranty

the european renewable energy target for 2030 an impact assessment of the electricity sector abstract the european union set binding targets for the reduction of greenhouse gases ghg and the share of renewable energy re in final energy consumption by 2020 the european council agreed to continue with this strategy through to 2030 by setting a re target of 27 in addition to a ghg reduction target of 40 we provide a detailed sectoral impact assessment by analyzing the implications for the electricity sector in terms of economic costs and the regional distribution of investments and shares of electricity generated from renewable energy sources res e according to the impact analysis by the european commission the 27 re target corresponds to a res e share of 49 our model based sensitivity analysis on underlying technological and institutional assumptions shows that the cost effective res e share varies between 43 and 56 secondly we quantify the economic costs of these variants and those which would be incurred with higher shares the long term additional costs for higher res e shares would be less than 1 of total system costs the third aspect relates to the regional distribution of eu wide efforts for upscaling renewables we point out that delivering high res e shares in a cost effective manner involves considerably different efforts by the member states

democracy history and economic performance a case study approach summary crossnational statistical studies show a positive relationship between the length of time a country has been democratic and its economic performance old democracies grow faster ceteris paribus and also demonstrate advantages in some economic policies thought to be conducive to growth however the causal connections between regime history and economic policy and performance remain opaque arguments are highly speculative for the causal pathways are usually difficult to measure and are not readily testable in a large n cross country format in order to illuminate possible interconnections between regime history and economic performance we identify three countries in the developing world whose recent history may be regarded as illustrative brazil india and mauritius our analysis of these cases focuses on the achievement of policy consensus and policy reform both of which are commonly regarded as critical to economic performance intensive study of our chosen cases suggests multiple mechanisms by which democratic experience might translate into greater success on these policy dimensions

good things do not always come in threes on the excess cost of overlapping regulation in eu climate policy since the mid 1990 s the european union eu aims at pushing global climate policy the objective is to promote international cooperation by the adoption of substantial eu wide greenhouse gas emission reduction targets and their least cost implementation our quantitative impact assessment of the eu climate and energy package shows that the myriad of instruments used in the eu to curb greenhouse gas emissions is doomed to generate substantial excess cost we conclude that eu climate and energy policy should better disentangle its choices of objectives targets and policy instruments on rigorous economic grounds in order to improve the coherence and overall cost effectiveness of policy initiatives

explaining the attacker s advantage technological paradigms organizational dynamics and the value network abstract understanding when entrants might have an advantage over an industry s incumbent firms in developing and adopting new technologies is a question which several scholars have explained in terms of technological capabilities or organizational dynamics this paper proposes that the value network the context within which a firm competes and solves customers problems is an important factor affecting whether incumbent or entrant firms will most successfully innovate in a study of technology development in the disk drive industry the authors found that incumbents led the industry in developing and adopting new technologies of every sort identified by earlier scholars at component and architectural levels competency enhancing and competency destroying incremental and radical as long as the technology addressed customers needs within the value network in which the incumbents competed entrants led in developing and adopting technologies which addressed user needs in different emerging value networks it is in these innovations which disrupted established trajectories of technological progress in established markets that attackers proved to have an advantage the rate of improvement in product performance which technologists provide may exceed the rate of improvement demanded in established markets this mismatch between trajectories enables firms entering emerging value networks subsequently to attack the industry s established markets as well

scenario analysis on co2 emissions reduction potential in china s electricity sector abstract with the approach of the year 2012 a new round of international negotiations has energized the entire climate change community with this analyses on sector based emissions reduction and mitigation options will provide the necessary information to form the debate in order to assess the co2 emissions reduction potential of china s electricity sector this research employs three scenarios based on the long range energy alternative planning system leap model to simulate the different development paths in this sector the baseline scenario the current policy scenario and the new policy scenario seek to gradually increase the extent of industrial restructuring and technical advancement results imply that energy consumption and co2 emission in china s electricity sector will rise rapidly in all scenarios until 2030 triple or quadruple the 2000 level however through structural adjustment in china s electricity sector and through implementing technical mitigation measures various degrees of abatement can be achieved these reductions range from 85 to 350 million tons co2 per year figures that correspond to different degrees of cost and investment demand side management and circulating fluidized bed combustion cfbc ranked in order are employed prior to use to realize emissions reduction followed by supercritical plants and the renovation of conventional thermal power plants in the long term nuclear and hydropower will play the dominant role in contributing to emissions reduction it is also suggested that a self restraint reduction commitment should be employed to help contribute to the reduction of emission intensity an avenue that is more practical for china in light of its current development phase setting the year 2000 as the base year the intensity reduction target could possibly range from 4 2 to 19 4 dependent on the implementation effectiveness of various mitigation options

a conjoint analysis of corporate preferences for the sectoral crediting mechanism a case study of shanxi province in china it is crucial to understand corporate preferences in designing and planning new market based instruments using the method of conjoint analysis this paper evaluates corporate preferences for policy alternatives of the sectoral crediting mechanism aiming at supporting its discussions and development data were collected from 94 companies in all 11 prefecture level cities of shanxi province china the results confirm that companies are most concerned about three policy attributes domestic policy instruments the relationship with the clean developing mechanism and the principle of common but differentiated responsibilities from the viewpoint of the chinese businesses surveyed the ideal policy alternative has a domestic policy instrument in which installations with voluntary targets receive tradable units while co existing with the clean developing mechanism and providing opportunities to get financial and technical assistance from developed countries meanwhile the coverage of the sectoral crediting mechanism could be expanded to small companies that are the most inefficient and thus have the lowest abatement costs in some sectors the results of this study are important in light of ongoing discussions and developments of the sectoral crediting mechanism in china

democracy and economic growth a historical perspective recent studies appear to show that democracy has no robust association with economic growth yet all such work assumes that the causal effect of democracy can be measured by a country s regime status in a particular year t which is correlated with its growth performance in a subsequent period t 1 the authors argue that democracy must be understood as a stock rather than a level measure that is a country s growth performance is affected by the number of years it has been democratic in addition to the degree of democracy experienced during that period in this fashion democracy is reconceptualized as a historical rather than a contemporary variable with the assumption that long run historical patterns may help scholars to understand present trends the authors speculate that these secular historical infiuences operate through four causal pathways each of which may be understood as a type of capital physical capital human capital social capital and political capital this argument is tested in a cross country analysis and is shown to be robust in a wide variety of specifications and formats

designing an emissions trading scheme for china an up to date climate policy assessment abstract we assess recent chinese climate policy proposals in a multi region multi sector computable general equilibrium model with a chinese carbon emissions trading scheme ets when the emissions intensity per gdp in 2020 is required to be 45 lower than in 2005 the model simulations indicate that the climate policy induced welfare loss in 2020 measured as the level of gdp and welfare in 2020 under climate policy relative to their level under business as usual bau in the same year is about 1 the chinese welfare loss in 2020 slightly increases in the chinese rate of economic growth in 2020 when keeping the emissions target fixed at the 2020 level after 2020 in absolute terms the welfare loss will reach about 2 in 2030 if china s annual economic growth rate is 0 5 percentage points higher lower the climate policy induced welfare loss in 2030 will rise decline by about 0 5 percentage points full auctioning of carbon allowances results in very similar macroeconomic effects as free allocation but full auctioning leads to higher reductions in output than free allocation for ets sectors linking the chinese to the european ets and restricting the transfer volume to one third of the eu s reduction effort creates at best a small benefit for china yet with smaller sectoral output reductions than auctioning these results highlight the importance of designing the chinese ets wisely

eu climate policy up to 2020 an economic impact assessment in its fight against climate change the eu is committed to reducing its overall greenhouse gas emissions to at least 20 below 1990 levels by 2020 to meet this commitment the eu builds on segmented market regulation with an eu wide cap and trade system for emissions from energy intensive installations ets sectors and additional measures by each eu member state covering emission sources outside the cap and trade system the non ets sector furthermore the eu has launched additional policy measures such as renewable energy subsidies in order to promote compliance with the climate policy target basic economic reasoning suggests that emission market segmentation and overlapping regulation can create substantial excess costs if we focus only on the climate policy target in this paper we evaluate the economic impacts of eu climate policy based on numerical simulations with a computable general equilibrium model of international trade and energy use our results highlight the importance of initial market distortions and imperfections as well as alternative baseline projections for the appropriate assessment of eu compliance cost

designing an eu energy and climate policy portfolio for 2030 implications of overlapping regulation under different levels of electricity demand abstract the european union s current climate and energy policy has to operate under an ex ante unforeseen economic crisis as a consequence prices for carbon emission allowances in the eu emissions trading system collapsed however this price collapse may be amplified by the interaction of a carbon emission cap with supplementary policy targets such as minimum shares for renewables in the power sector the static interaction between climate and renewable policies has been discussed extensively this paper extends this debate by analysing the efficiency and effectiveness of a policy portfolio containing a cap and trade scheme and a target for a minimum renewable share in different states of aggregate electricity demand making use of a simple partial equilibrium model of the power sector we identify an asymmetric interaction of emissions trading and renewable quotas with respect to different states of aggregate electricity demand the results imply that unintended consequences of the policy interaction may be particularly severe and costly when aggregate electricity demand is low and that carbon prices are more sensitive to changes in economic activity if they are applied in combination with renewable energy targets our analysis of the policy interaction focuses on the eu yet the conclusions may also be of relevance for fast growing emerging economies like china

the macroeconomics of populism in latin america by populism this paper refers to an economic approach that emphasizes growth and income redistribution and deemphasizes the risks of inflation and deficit finance external constraints and the reaction of economic agents to aggressive nonmarket policies it analyzes two instances of populism chile under allende and peru under garcia these experiences are described in detail not as a righteous assertion of conservative economics but as a warning that populist policies ultimately fail and always at a frightening cost to the groups they were supposed to benefit this paper explores the question of whether some variant of populist policies could succeed it suggests that populist policies could succeed if they stayed clear of foreign exchange constraints emphasized reactivation for a brief initial period and then shifted to growth policies most important expansionary policies must reflect awareness of capacity constraints and must rely for financing on an extremely orthodox fiscal policy and rigorous tax adminsitration the paper concludes by warning that imf style policies unconcerned with growth of social progress may establish financial stability in the short run but inevitably open the door to yet another round of destructive reaction in the form of populist policies

financial development and energy consumption in central and eastern european frontier economies this study examines the impact of financial development on energy consumption in a sample of 9 central and eastern european frontier economies several different measures of financial development are examined including bank related variables and stock market variables the empirical results obtained from dynamic panel demand models show a positive and statistically significant relationship between financial development and energy consumption when financial development is measured using banking variables like deposit money bank assets to gdp financial system deposits to gdp or liquid liabilities to gdp of the three stock market variables investigated only one stock market turnover has a positive and statistically significant impact on energy consumption both short run and long run elasticities are presented the implications of these results for energy policy are discussed

new market mechanism and its implication for carbon reduction in china abstract this article presents a detailed review and analysis of the discussions around the new market mechanism nmm and explores its potential in china it contributes to the current discussion of the nmm in three aspects first this article attempts to streamline ideas about the nmm the term nmm is considered to be an umbrella concept for emission trading systems which all parties can engage in on a voluntary basis in the implementation of their intended nationally determined contributions and which need to satisfy three criteria i having a large scale scope ii aiming to facilitate a net emission reduction iii allowing flexibility for the host country we also present a framework to clarify the nmm based on this framework major options with a high implementation potential are identified second we argue that the national level operational framework determines the chance of successful implementation of the nmm we identify different options based on a literature survey and evaluate them with respect to effectiveness and efficiency third we choose china a highly influential country regarding climate change polices as a case to analyze the potential contributions and challenges of the nmm and its implementation at different stages of national development

mass democracy the real reason that brazil ended inflation summary populism and expanded democratic participation often have been painted as the enemy of sane macroeconomics yet brazil s experience suggests possibly benign implications of stable mass democracy for national economic management in developing countries prior to 1930 agrarian elites ruled brazil as political participation gradually expanded policymakers elaborated the regulatory framework of import substituting industrialization isi isi not only generated strong growth but also chronically high and volatile inflation with costs falling most heavily on the disenfranchised a poor majority the advent of mass democracy in the mid 1980s gave the poor a political voice for the first time and plausibly was the crucial cause for the demise of hyperinflation a decade later

optimal age for preventive replacement under a combined fully renewable free replacement with a pro rata warranty abstract this paper focuses on an age replacement policy for products under a new warranty strategy which combines a fully renewable free replacement with a pro rata warranty policy called fully renewable frw prw policy for this combined warranty strategy whenever a product fails within the warranty period it is replaced by a new one and a new warranty is issued meanwhile if the failure occurs during the first time interval i e the free replacement warranty frw interval replacement is made at no cost to the buyer however if the failure occurs during the second time interval i e the pro rata warranty prw interval replacement is made at a pro rata cost to the buyer dividing the replacement age into three separate periods within frw during prw and post warranty then given that the replacement age is in a certain interval the cost model from the user buyer perspective is developed and the corresponding local optimal replacement age is derived such that the long run expected cost rate is minimized afterward the global optimal replacement age is determined structural properties of these optimal policies are obtained and presented and special cases of the model are discussed finally a numerical example is given for illustration

assessing the design of three carbon trading pilot programs in china abstract to help overcome the challenge of growing co2 emissions china is experimenting with market based instruments including pilot co2 emissions trading systems etss in seven regions that serve as precursors of a national co2 ets implementing an ets in a rapidly growing economy in which government authorities exercise significant control over markets poses many challenges this study assesses how well three of the most developed pilot etss in guangdong shanghai and shenzhen have adapted carbon emissions trading to china s economic and political context we base our study on new information gathered through interviews with local pilot ets regulators and experts analysis of recent trading data and extensive legal and literature reviews we point out instances in which pilot regulators have deftly tailored carbon emissions trading to china s unique context and instances in which designs are insufficient to ensure smooth operation we also indicate areas in which broader institutional reforms of china s political economy may be required for carbon emissions trading to operate successfully we make nine recommendations to improve the design and operation of the pilot programs and to inform the construction of a national co2 ets

the impacts of liquidity dynamics on emissions allowances price different evidence from china s emissions trading pilots abstract the liquidities of china s emissions trading markets have significant impacts on emissions allowances price movement and pricing efficiency liquidity measures on illiquidity ratio and trade values indicate hubei emissions allowances hbea product has the highest liquidity shenzhen allowances sza and guangdong emissions allowances gdea products have the higher liquidity than beijing emissions allowances bea and shanghai emissions allowances shea products while tianjin emissions allowances tjea product has the lowest market liquidity in considered china s emissions trading pilots the dynamics of the illiquidity ratios for all selected emissions allowances products are negatively related with emissions allowances returns and trade volumes for bea tjea sza and hbea products are also negatively related with emissions allowances returns the dynamics of daily illiquidity ratios and trade based liquidity in beijing tianjin guangdong shenzhen hubei emissions pilots have significant volatility clustering impacts on the variances of regional emissions allowances returns previous market shocks of overnight and intraday price variations have the more persistent influences on the gdea returns than hbea returns reflecting greater inter day price ranges clustering effect

replacement costs under warranty cost moments and time variability we consider a product that is sold under one of the two common warranty policies under the pro rata warranty policy a failed item is replaced by a new one or is repaired at a cost prorated to the age of the failed item under the free replacement warranty policy replacements or repairs during the warranty period are provided by the supplier free of charge to the buyer assuming that successive failure times form a renewal process we derive moments of the total replacement cost for both policies during the product life cycle 0 t we also provide an extension to time varying failure time distributions in the case of the pro rata warranty policy

how people respond to contingent valuation questions a verbal protocol analysis of willingness to pay for an environmental regulation abstract this paper investigates what a respondent is thinking when answering a willingness to pay question in a contingent valuation using a think aloud technique from psychology called verbal protocol analysis the willingness to pay responses we observed seem to be constructed from a variety of considerations including an obligation to pay a fair share of the cost of the solution and signaling concern for a larger set of environmental issues the finding that respondents seem to construct their values at the time they are asked rather than reporting a more well defined value is seen as consistent with over two decades of research on the psychology of decision making potential uses of verbal protocols in contingent valuation studies are also discussed

emissions trading in china emerging experiences and international lessons grants by the robert bosch foundation under the program sustainable partners partners for sustainability the australian research council and the australian government supported different parts of the project

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

public preferences for carbon tax attributes the impacts of climate change are already visible throughout the world recognizing the threats posed by climate change the durban platform the 17th session of the conference of parties cop 17 underscores that the global nature of climate change calls for the widest possible cooperation and ambitious action by all countries a crucial starting point for the design of effective and publicly acceptable policies is to explore public preferences for climate policy instruments using a choice experiment this study investigates public preferences for carbon tax attributes in a developing country context the results account for heterogeneity in preferences and show that turkish people prefer a carbon tax with a progressive cost distribution rather than one with a regressive cost distribution the private cost has a negative effect on the probability of choosing the tax earmarking carbon tax revenues increases the public acceptability of the tax moreover there is a preference for a carbon tax that promotes public awareness of climate change

carbon trading in a socialist market economy can china make a difference a global carbon trading system has gained shape since several major asia pacific economies declared their participation as the largest national source of greenhouse gases china is probably the most prominent newcomer pilot emission trading schemes are being introduced in this country with prospects for developing into a national scheme the initiative is primarily motivated by expected economic benefits rather than environmental commitments viability is uncertain due to the absence of a liberal political economic system as we know in the western world the theory of carbon trading is being tested in an unusual place with huge implications both practically and theoretically

tax evasion and optimal environmental taxes abstract this paper introduces a new argument to the debate about the role of environmental taxes in modern tax systems some environmental taxes particularly taxes on gasoline or electricity are more difficult to evade than taxes on labor or income when the tax base is shifted in a revenue neutral manner toward these environmental taxes the result is a net reduction in the amount of tax evasion using a carbon tax as a motivating example the tax evasion effect is shown to sharply reduce the welfare cost of controlling emissions a simple computable general equilibrium model suggests that the impact of considering tax evasion can be large costs are lowered by 28 in the united states by 89 in china and by 97 in india in countries with high levels of pre existing tax evasion a carbon tax will pay for itself through improvements in the efficiency of the tax system

the effects of climate policy on corporate technological upgrading in energy intensive industries evidence from china abstract the innovation effect is an important component when measuring the performance of environmental policy instruments based on a questionnaire survey this research has examined corporate energy conservation and emission reduction efforts in energy intensive industries in china under the pressure of different climate policies and in particular looked into their adoption of those technological innovation and diffusion activities the results show a large variety of corporate adoption of energy saving practical activities in general climate policies have played a greater role in promoting the adoption of managerial energy saving activities in respondent companies while comparatively their influences on the adoption of technology upgrading activities are relatively weak regulatory measures have exerted greater pressure and influence on corporate short term behavioural change as stated by the respondent companies however market based instruments show greater incentive effect in promoting adoption of energy conservation and emission reduction activities that refer to corporate long term oriented strategic planning or adjustment for instance they exert a significant incentive effect on increasing long term research and development investment for technological innovation and also play an important role in optimising corporate organisational structure the econometric analysis further proves the influences of market based instruments in promoting corporate adoption of technological innovation and diffusion activities

the economic impact of carbon pricing with regulated electricity prices in china an application of a computable general equilibrium approach we use a dynamic cge model sicge to assess the economic and climate impacts of emissions trading system ets in china with a carbon price of 100 yuan ton co2 a particular focus is given to the regulated electricity price regime which is a major concern of electricity sector s cost effective participation in ets in china we found 1 carbon pricing is an effective policy for china to reduce co2 emissions total co2 emissions reduction ranges from 6 8 to 11 2 in short term 2 rigid electricity price entails lower co2 emissions reduction but can be considered as a feasible starting point to introduce carbon pricing policies in short term as long as governmental subsidies are given to electricity production 3 in mid and long term the efficient policy is to earmark carbon revenue with competitive electricity price we propose to use carbon revenue to reduce consumption tax in the first year of the introduction of carbon price and to use the carbon revenue to reduce production tax in following years

an analysis of company choice preference to carbon tax policy in china abstract this paper summarizes an analysis of choice preferences of chinese companies to the design options of carbon tax policy the data were collected from 201 companies with around half of them based in the western shanxi province and the other half from the eastern jiangsu province modeling analysis of the discrete choice dataset confirms the statistically significant relationships between the company s preferences to carbon tax policy with the policy attributes including tax rate tax relief measures and the revenue utilization from the viewpoint of chinese businesses the option of carbon tax policy with tax rate at 10 30 yuan t co 2 allowing tax relief to energy intensive sectors using the revenues specific for climate change and starting as early as the 13th five year plan period 2016 2020 would be preferable and realistic the results of this research may be referred for the discussions and development of carbon tax policy in china

politics of economic liberalization in india abstract attempts at liberalizing india s import substitution model of development have had a mixed record some success in changing the policy regime highlights the role of a new technocratic leadership that has received support from both indian business groups and from external aid agencies conversely popular sectors within india including the rank and file of the ruling party the organized workers in the public sector and the numerically significant middle and lower peasantry have registered their opposition while the government remains committed to liberalizing the economy the momentum has slowed down and given the pressures of electoral politics a populist economic program has been simultaneously readopted it appears that the marriage of political and economic liberalism may not be an easy one in countries like india

alternative approaches to cost containment in a cap and trade system we compare several emissions reduction instruments including quantity policies with banking and borrowing price policies and hybrid policies safety valve and price collar using a dynamic model with stochastic baseline emissions the instruments are compared under the design goal of obtaining the same expected cumulative emissions across all options based on simulation analysis with the model parameterized to values relevant to proposed us climate mitigation policies we find that restrictions on banking and borrowing including the provision of interest rates on the borrowings can severely limit the value of the policy depending on the regulator chosen allowance issuance path although emissions taxes generally provide the lowest expected abatement costs a cap and trade system combined with either a safety valve or a price collar can be designed to provide expected abatement costs near those of a tax but with lower emissions variance than a tax consistently a price collar is more cost effective than a safety valve for a given expected cumulative emissions outcome because it encourages inexpensive abatement when abatement costs decline

sectoral crediting mechanism how far china has to go abstract based on the review of the basic design of the sectoral crediting mechanism scm a promising option for developing countries emission reduction commitments this paper analyzes five important practical issues for china to solve before participating in scm which include 1 difficulties in determining a crediting baseline 2 the unsolved over supply problem in the carbon market 3 the very likely carbon credits falling short of mitigation costs problem 4 the immature market oriented price system jeopardizing the success of motivation incentives and 5 inadequate capacity building corresponding suggestions or compromise solutions are given after a discussion of each issue it is also recommended that in order to witness scm come into being researchers and negotiators should endeavor to solve the practical issues that scm meets now bearing in mind the balance of interests of both developing and developed countries finally we believe that scm s political barriers can be overcome when technical economic institutional and capacity problems are solved

advancing the experiment to reality perspectives on shanghai pilot carbon emissions trading scheme shanghai as the most advanced mega city in china has launched a pilot carbon emission trading scheme sh ets that is designed to achieve a compromise between the domestic context in shanghai and a need for national policy appeal this paper gives an overview of the latest progress of the sh ets and sheds some light on the features of key design components such as the threshold for inclusion sector coverage cap setting allowance allocation and the monitoring reporting and verification mrv system based on a concern that manipulative principles and economic dynamics may lead to uncertainties and ultimately influence the emission reduction effect of the scheme this paper conducts an evaluation of potential uncertainties such as those caused by changes in patterns of economic growth strategic trading activities related to the bankable allowances carbon leakage risks and insufficient mrv capabilities to advance the experiment to reality this paper suggests some changes are made to the pilot which include adjusting the allowance allocation principles to facilitate change in the domestic energy structure improving the disclosure of emission data to guarantee information symmetry gauging the carbon leakage risks to strengthen compliance and introducing risk management for non regulated players and derivatives products

affordability of energy cost increases for korean companies due to market based climate policies a survey study by sector this paper estimates the affordability of energy cost increases for energy intensive companies due to the introduction of market based climate policies in korea data were collected from 62 respondents from iron steel cement and petrochemical industries over 90 of which are under control of the target management scheme an ongoing mandatory system limiting the greenhouse gases ghg emissions of large energy consuming entities the affordable energy cost increase was estimated using the multiple bounded discrete choice mbdc format results of which show that a mean energy cost increase of 2 6 is acceptable for all the entities sampled companies from the three sectors had similar affordability with an average acceptable energy cost increase of 2 5e2 8 the affordable policy induced energy cost in creases equate to carbon prices of 2500e4000 krw t co2 about 2 3e3 5 usd t co2 for the companies surveyed econometric analysis confirmed a strong correlation between energy price level and company ownership with cost affordability with a view to developing carbon tax policy and a domestic ghg emissions trading scheme in korea this research provides a basis from an industrial perspective for carbon pricing

company s affordability of increased energy costs due to climate policies a survey by sector in china this paper estimates the affordability of chinese companies on energy cost increases due to the introduction of market based climate policies the data were collected from 170 respondents mainly from iron and steel cement and chemical industries using a multiple bounded discrete choice mbdc format estimations indicate that a mean of 8 8 in energy cost increase would be acceptable for all the samples the chemical companies express a slightly higher affordability with the mean of acceptable ratios of energy cost increases being 9 9 while the cement companies show slightly lower affordability with a mean of 7 7 econometric analysis confirms that the market competition degree has a significant but negative relationship with the affordability while the company s size is significantly and positively associated with the affordability calculations indicate that the mean of affordable energy cost increases roughly equals a carbon price of 83 7 cny t co2 about 12 usd t co2 for chemical companies and around 40 cny t co2 about 6 usd t co2 for iron and steel and cement sectors this result provides a meaningful referendum for the development of carbon tax and the establishment of a domestic carbon emissions trading scheme in china especially from the perspective of surveyed industries

introducing the emissions trading system to china s electricity sector challenges and opportunities we examine the challenges and opportunities to introduce emissions trading ets in china s electricity sector in which the interaction between ets and electricity market reform plays a major role china s electricity sector is currently in a slow progress towards a more competitive and market based system both equal share dispatching policy and regulated wholesale and retail pricing policies pose significant challenges for implementation of ets in china s electricity sector one of the important points of ets is to give a price for carbon emissions and establish a cost pass through mechanism reminded that the essential of carbon pricing is to put a price on carbon emissions that is equal to discounted value of the external damages it should be regarded as a part of broader policy package for energy and resources price reform this will require that any low carbon power policy should be considered as a part of whole policy package aiming at further liberalizing the electricity sector in china three policy options are identified to incorporate ets with electricity reform under different circumstances a combination of those three options is also proposed to break the lock and reinforce the positive interaction between ets and the transition towards a competitive electricity system in link with current pilot ets designs a roadmap to introduce ets in a stepwise manner is suggested

sulfur dioxide control in china policy evolution during the 10th and 11th five year plans and lessons for the future china s central government established national goals to reduce sulfur dioxide so2 emissions by 10 in both the 10th and 11th five year plan periods 2001 2005 and 2006 2010 respectively but the early policies were unsuccessful at reducing emissions emissions increased 28 during the 10th five year plan after adapting a number of policies and introducing new instruments during the 11th five year plan so2 emissions declined by 14 we examine the evolution of these policies their interplay with technical and institutional factors and capture lessons from the 11th five year plan to guide future pollution control programs we find that several factors contributed to achievement of the 11th five year plan so2 reduction goal 1 instrument choice 2 political accountability 3 emission verification 4 political support 5 streamlined targets and 6 political and financial incentives the approach integrated multiple policy instruments market based command and control and administrative instruments specific to the chinese context the evolution of so2 reduction policies and programs has implications for further so2 reductions from power plants and other sources as well as control of other atmospheric pollutants such as nitrogen oxides nox and carbon dioxide co2 in china

coherence causality and effectiveness of the eu environmental policy system results of complementary statistical and econometric analyses this paper presents the first empirical test of coherence i e consistency of policies within a framework causality i e logical priority of objectives over policies and effectiveness i e ability of policies to tackle challenges as defined by objectives of the overall eu environmental policy system to do so i applied complementary statistical cross sectional and time series and econometric dynamic tri probit analyses to an original panel dataset based on addressed issues i e pollution vs resource trans boundary vs domestic flow vs stock rather than on implemented policies i e eu legislation aiming at optimal pollution production optimal resource use and market competition it would be impossible to perform similar analyses by referring to realized policies rather than tackled issues due to the unbalanced sample characterizing the former with respect to the latter as well as due to overlapping objectives interrelated policies and non univocal relationships between objectives and policies in contrast with previous studies of single eu environmental policies characteristics of the eu environmental policy or eu environmental objectives i found that the overall eu environmental policy system is internally coherent dynamically causal and ex ante effective moreover the evidence suggests that many issues are correlated trans boundary issues became more relevant in 2012 pollution production was more significant than resource use and flow issues were more important than stock issues from 1995 to 2010 finally i show that few objectives overlapped a safe environment objective 1987 1997 was preferred to a greenhouse gas ghg reduction objective 2003 2012 but pursued with a 2 year lag although the latter has recently become preferred to the former in addition a ghg reduction objective was preferred to a sustainable development objective 1998 2002

measuring the maturity of carbon market in china an entropy based topsis approach abstract in this study we construct an evaluation index system in terms of three dimensions including internal external and interface factors we propose an entropy based topsis model to measure the maturity of carbon market the proposed model uses the entropy method to objectively weight the indicators and the topsis method to measure the maturity of carbon market taking china s seven pilot carbon markets from 2013 to 2017 as an example the empirical results are that the overall maturity of china s pilot carbon markets is relatively low for the sake of small market size low market effectiveness low market activeness and high price volatility moreover due to the difference in the quotas transaction volume market liquidity and market supporting facilities there are obvious differences in maturities among china s seven pilot carbon markets in 2017 the maturity of hubei market is the highest reaching 0 6146 the maturity of guangdong shenzhen beijing shanghai and tianjin reaches 0 6108 0 5022 0 4351 0 4267 and 0 3888 respectively the maturity of chongqing market is the only 0 3633 at the lowest level what s more from the perspective of maturity evolution trend hubei guangdong and shenzhen fluctuate upward from the market opening to 2017 and steadily rank in the top three shanghai and tianjin show a u shaped growth trend declining from 2013 to 2015 and continuing to rise from 2015 to 2017 beijing shows a fluctuating downward trend from 2013 to 2017 while ranking fourth chongqing ranks relatively low but it shows an escalating trend finally several targeted policy implications are put forward to enhance the maturities of carbon markets