causalities between co2 electricity and other energy variables during phase i and phase ii of the eu ets the topic of this article is the analysis of the interplay between daily carbon electricity and gas price data with the european union emission trading system eu ets for co2 emissions in a first step we have performed granger causality tests for phase i of the eu ets january 2005 until december 2007 and the first year of phase ii of the eu ets 2008 the analysis includes both spot and forward markets given the close interactions between the two sets of markets the results show that during phase i coal and gas prices through the clean dark and spark spread impacted co2 futures prices which in return granger caused electricity prices during the first year of the phase ii the short run rent capture theory in which electricity prices granger cause co2 prices prevailed on the basis of the qualitative results of the granger causality tests we obtained the formulation testable equations for quantitative analysis standard ols regressions yielded statistically robust and theoretically coherent results

forecasting crude oil price volatility and value at risk evidence from historical and recent data abstract this paper adopts the markov switching multifractal msm model and a battery of generalized autoregressive conditional heteroscedasticity garch type models to model and forecast oil price volatility extending previous work by wei et al 2010 and wang et al 2016 we evaluate the forecasting performance of all these models via a superior predictive ability spa test we go beyond previous research by i considering oil price volatility in the nineteenth century along with recent data ii applying different types of msm models and iii considering value at risk predictions besides our forecasting of volatility confirming its successful performance in other studies the new msm model comes out as the model that most often across forecasting horizons and subsamples cannot be outperformed by other models this superiority also applies to forecasting of value at risk

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

energy prices and co2 emission allowance prices a quantile regression approach we use a quantile regression framework to investigate the impact of changes in crude oil prices natural gas prices coal prices and electricity prices on the distribution of the co2 emission allowance prices in the united states we find that i an increase in the crude oil price generates a substantial drop in the carbon prices when the latter is very high ii changes in the natural gas prices have a negative effect on the carbon prices when they are very low but have a positive effect when they are quite high iii the impact of the changes in the electricity prices on the carbon prices can be positive in the right tail of the distribution and iv the coal prices exert a negative effect on the carbon prices

plant vintage technology and environmental regulation abstract we use data on productivity and pollution abatement costs at individual pulp and paper mills to test whether the impact of environmental regulation on productivity differs by plant vintage and technology plants with higher pollution abatement costs have significantly lower productivity levels this relationship differs greatly based on a plant s technology with productivity at integrated mills being greatly affected by abatement costs while the impact at non integrated mills is negligible plant vintage does not seem to matter with older and newer plants showing similar impacts reported abatement costs appear to substantially understate the true costs of abatement accounting for the impact of technology differences makes some difference in the estimated overall impact of environmental regulation

evaluating interval forecasts a complete theory for evaluating interval forecasts has not been worked out to date most of the literature implicitly assumes homoskedastic errors even when this is clearly violated and proceed by merely testing for correct unconditional coverage consequently i set out to build a consistent framework for conditional interval forecast evaluation which is crucial when higher order moment dynamics are present the new methodology is demonstrated in an application to the exchange rate forecasting procedures advocated in risk management

what explains the short term dynamics of the prices of co2 emissions using the vector auto regression var and the vector error correction models vecm this paper analyzes the short term dynamics of the prices of co2 emissions in response to changes in the prices of oil coal natural gas electricity and carbon emission allowances the results show that i a positive shock to the crude oil prices has a negative effect on the co2 allowance prices ii an unexpected increase in the natural gas prices raises the price of co2 emissions iii a positive shock to the prices of the fuel of choice coal has virtually no significant impact on the co2 prices iv there is a clear positive effect of the coal prices on the co2 allowance prices when the electricity prices are excluded from the var system and v a positive shock to the electricity prices reduces the price of the co2 allowances we also find that the energy price shocks have a persistent impact on the co2 allowance prices with the largest effect occurring six months after a shock strikes the effect is particularly strong in the case of the natural gas price shocks additionally we estimate that it takes between 7 3 and 9 6 months to halve the gap between the actual and the equilibrium prices of the co2 allowances i e to erase any price over or undervaluations after a shock strikes finally the empirical findings suggest an important degree of substitution between the three primary sources of energy i e crude oil natural gas and coal particularly when electricity prices are excluded from the var system

patenting in the shadow of competitors this article empirically examines the patenting behavior of new biotechnology firms that have different litigation costs i show that firms with high litigation costs are less likely to patent in subclasses with many other awards particularly those of firms with low litigation costs this pattern is consistent with the literature on costly litigation which suggests that firms that have high litigation costs will take greater precautions to avoid litigation these results are robust to a variety of control variables and modifications that seek to test alternative explanations

the resolution of financial distress most models of financial structure embody an assumption about financial distress that causes debt to be costly to the issuing firm this approach has been criticized on the grounds that the assumed costs could be avoided by a costless financial reorganization in this article we show that despite the possibility of costless reorganization it may be rational for firms to incur significant costs in the resolution of financial distress the main assumptions that give rise to our results are the existence of asymmetric courts to impose a reorganization on the claimants of a firm article published by oxford university press on behalf of the society for financial studies in its journal the review of financial studies

cost functions and nonlinear prices estimating a technology with quality differentiated inputs the paper is concerned with developing a production theory for the case when some inputs have nonlinear prices because the price depends on endogenous quality this involves extending the notion of a cost function to the case where nonlinear prices are parameters of costs after developing the appropriate theory we apply our results to the case of coal fired electric power generation where fuel quality depends on sulfur and ash impurities environmental regulations induce a negative value on sulfur whereas ash impurities degrade performance and thus reduce production possibilities a number of empirical results emerge including significant rates of technological change that are sulfur and ash saving though capital using this change may explain in part the recent drop in the price of sulfur allowances in the united states

capacity utilization in a generalized malmquist index including environmental factors a decomposition analysis productivity measures ignoring environmental effects may give misleading information on total productivity growth further business cycles in the form of capacity utilization may significantly influence productivity measures we develop an overall malmquist productivity index and decompose changing efficiency rates into a contribution from environmental factors capital and capacity utilization our new combined capacity utilization element contributes to the literature in that it also takes into account the restriction for producing negative externalities empirical applications illustrate that the choice of inputs influences the overall productivity measure and its decomposition into efficiency changes and technical changes and the capacity utilization element

forecasting volatility in the petroleum futures markets a re examination and extension abstract this paper examines the volatility models and their forecasting abilities for four types of petroleum futures contracts traded on the new york mercantile exchange the aim of this paper is twofold firstly it replicates and carries out the robustness checks using the rigorous model confidence set test on the out of sample volatility forecast analysis undertaken by sadorsky energy economics 2006 28 467 488 through the same statistical models but with the extended data on daily prices of petroleum futures our test results largely confirm the findings obtained in the replicated paper secondly our paper also explores the relevance of some statistical complexities e g model optimality regime switches and alternative distribution functions in volatility forecasting through a large number of moving windows our results in general show that accounting for the model optimality structural breaks and using the asymmetric heavy tailed distribution functions in the estimations lead to significant forecasting accuracy gains

an econometric analysis of emission allowance prices knowledge of the statistical distribution of the prices of emission allowances and their forecastability are crucial in constructing among other things purchasing and risk management strategies in the emissions constrained markets this paper analyzes the two emission permits markets co2 in europe and so2 in the us and investigates a model for dealing with the unique stylized facts of this type of data its effectiveness in terms of model fit and out of sample value at risk forecasting as compared to models commonly used in risk forecasting contexts is demonstrated

extending the economic theory of regulation to the form of policy the mutually beneficial connection between industries and the governments that regulate them is the subject of a large literature led by stigler 1971 what has not been studied is how firms choose their desired policies from the set including entry barriers price floors subsidies and demand stimulation we take as given that government and incumbents from the supply and demand for regulation and explore the choice of political product

an empirical test of the comparative and contributory negligence rules in accident law scholars in the field of law and economics have developed an extensive theoretical literature on the effects of liability rules in accident law but have done little testing of their theoretical models in this article i develop an empirically testable model of the incentives for injurers and victims to avoid accidents under both the older contributory negligence rule and the newer rule of comparative negligence the model takes account of the fact that in the automobile accident context drivers do not know in advance with whom they will be involved in an accident and whether they will be the injurer or the victim or both it also allows for uncertainty in legal decision making the model is tested using a data set of rear end automobile accidents litigated in court the results suggest first that incentives to take care to avoid accidents are stronger under the contributory negligence rule than under the newer rule of comparative negligence and second the incentives set up by the comparative negligence rule for drivers to avoid accidents are weaker than is economically efficient

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

multilateral productivity comparisons when some outputs are undesirable a nonparametric approach multilateral productivity comparisons of firms producing multiple outputs some of which are undesirable are obtained by making two modifications to the standard farrell approach to efficiency measurement the restriction that production technology satisfy strong disposability of outputs is relaxed to allow for the fact that undesirable outputs may be freely disposable and the efficiency measures are modified to allow for an asymmetric treatment of desirable and undesirable outputs performance measures that satisfy these requirements are calculated as solutions to programming problems the methodology is applied to a sample of mills producing paper and pollutants

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

modeling co2 emission allowance prices and derivatives evidence from the european trading scheme this paper studies the three main markets for emission allowances within the european union emissions trading scheme eu ets powernext nord pool and european climate exchange ecx the analysis suggests that the prohibition of banking of emission allowances between distinct phases of the eu ets has significant implications in terms of futures pricing motivated by these findings we develop an empirically and theoretically valid framework for the pricing and hedging of intra phase and inter phase futures and options on futures respectively

marginal abatement costs of carbon dioxide emissions and its influencing factors a global perspective abstract reducing co 2 emissions has become a major and urgent environmental goal worldwide in this paper we sample the data of 41 regions including 165 countries from 2000 to 2014 and adopt a gravity model to obtain an overview of the global flows of co 2 emissions energy consumption the global economy and capital stock since the beginning of the 21st century we then investigate global technical efficiency reduction potential shadow prices and factors influencing the marginal abatement costs of co 2 emissions based on a quadratic directional output distance function the empirical results show the following 1 the global centres of gravity for co 2 emissions energy consumption and capital stock have accelerated their shift to the asian inland in the 21st century but the global centre of gravity for the economy did not show the same trend 2 global technical inefficiency demonstrates a u shape with a turning point in 2007 average annual total global co 2 emissions could be reduced by 4482 28 mt and the global marginal abatement costs of co 2 emissions are approximately 673 74 697 73 usd t 3 the relationship between economic development and marginal abatement costs is represented by a u shaped curve the world is currently in the climbing phase of this curve implying that controlling co 2 emissions is becoming more costly moreover energy structure industrial structure and co 2 emissions are negatively correlated with marginal abatement costs finally the financial crisis has had a significant effect on marginal abatement costs

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

allowance price drivers in the first phase of the eu ets abstract in the first phase of the eu emissions trading scheme eu ets the price per ton of co 2 initially rose to over 30 the price then collapsed to essentially zero by mid 2007 by deriving a structural model of the allowance price under the assumption of efficient markets i examine the extent to which this variation in price can be explained by marginal abatement costs i then gradually relax the model by allowing for delayed adjustment of price to fundamentals as well as by introducing lagged lhs variables the pattern of results suggests that while prices were not initially driven by marginal abatement costs this inefficiency was largely corrected after the accounting of 2005 emissions in april 2006

modeling the price dynamics of co2 emission allowances abstract in this paper we analyze the short term spot price behavior of carbon dioxide co 2 emission allowances of the new eu wide co 2 emissions trading system eu ets after reviewing the stylized facts of this new class of assets we investigate several approaches for modeling the returns of emission allowances due to different phases of price and volatility behavior in the returns we suggest the use of markov switching and ar garch models for stochastic modeling we examine the approaches by conducting an in sample and out of sample forecasting analysis and by comparing the results to alternative approaches our findings strongly support the adequacy of the models capturing characteristics like skewness excess kurtosis and in particular different phases of volatility behavior in the returns

litigation liability and incentives for care abstract in this paper potential injurers are subject to a negligence standard and differ in cost of taking care in the event of accident the injurer s degree of care is private information in litigation that follows award of damages for pain and suffering will lead to a general increase in care and hence reduce the likehood of accident a tighter negligence standard will lead some potential injurers to take more care and others to take less adoption of a rule under which the loser at trial must pay the litigation costs of the winner will reduce the pressure for punitive damages

carbon price drivers phase i versus phase ii equilibrium abstract the aim of this paper is to investigate the determinants of the carbon price during the two phases of the european union emission trading scheme eu ets more specifically relying on daily eu allowance futures contracts we test whether the carbon price drivers identified for phase i still hold for phase ii and evolve toward a long run relationship using cointegration techniques and accounting for the 2006 structural break in the carbon market we show that while a cointegrating relationship exists for both phases of the eu ets the nature of this equilibrium relationship is different across the two subperiods with an increasing role of fundamentals in phase ii deriving equilibrium values we show that the carbon price tends to be undervalued since the end of 2009

forecasting volatility in the biofuel feedstock markets in the presence of structural breaks a comparison of alternative distribution functions abstract the need for research on commodity volatility has grown considerably due to the important role and financialization of commodities in global asset markets this paper examines the volatility forecasting performance of a wide variety of garch based models in the context of biofuel feedstock markets in the presence of structural breaks our sample is also extended to several non renewable energy commodities to evaluate comparatively the volatility forecasting performance across various commodity markets the model specifications allow for different conditional distribution functions in the rolling window estimations a break detection algorithm finds significant evidence of structural breaks in the unconditional variance of all commodity returns under study the out of sample analysis which is based on an up to date model comparison testing procedure reveals that volatility models accommodating structural breaks in the data provide the best volatility forecasts for most cases regarding the relevance of distribution functions the skewed normal distribution dominates in the model confidence sets nevertheless the complex distribution functions do not always outperform simpler ones although true return distribution is asymmetric and heavy tailed

issue in pollution control interplant cost differences and economies of scale debate on interplant pollution control cost differences focuses on the question of whether a system of taxes or transferable discharge permits should require those plants with low treatment costs to control a higher share of effluents another issue under debate is whether those industries with a large minimum size may be effectively barred by pollution control requirements evidence of the inefficiency of present institutional arrangements is shown by studying production function estimations of 30 pulp and paper mills in wisconsin and michigan a more efficient reallocation of pollution control resources could be effected with more market oriented regimes 58 references 6 tables dck

litigation and settlement under two sided incomplete information this paper deals with a simple game of litigation and settlement with incomplete information parties are assumed to have the choice between settling their dispute out of court or resorting to costly litigation the set of sequential equilibria is characterized and conditions are given under which an efficient equilibrium does exist efficient equilibria however will be ruled out by various tests of refinement a comparative statics analysis is carried out with respect to the quality of private information which parties are assumed to receive before any moves have to be made

efficient liability rules for an economy with non identical individuals abstract this paper is about accident situations involving two risk neutral parties both parties engage in activities that are profitable but affect the magnitude of possible bilateral accidents we analyse how the activity choices can be decentralized by liability rules that assign the costs to the two parties to an accident we show that rules which share damages are superior to rules where one party bears the entire accident costs

a model of carbon price interactions with macroeconomic and energy dynamics abstract this paper develops a model of carbon pricing by considering two fundamental drivers of european union allowances economic activity and energy prices on the one hand economic activity is proxied by aggregated industrial production in the eu 27 as it provides the best performance in a preliminary forecasting exercise vs other indicators on the other hand brent natural gas and coal prices are selected as being the main carbon price drivers as highlighted by previous literature the interactions between the macroeconomic and energy spheres are captured in a markov switching var model with two states that is able to reproduce the boom bust business cycle hamilton 1989 first industrial production is found to impact positively negatively the carbon market during periods of economic expansion recession thereby confirming the existence of a link between the macroeconomy and the price of carbon second the brent price is confirmed to be the leader in price formation among energy markets bachmeier and griffin 2006 as it impacts other variables through the structure of the markov switching model taken together these results uncover new interactions between the recently created eu emissions market and the pre existing macroeconomic energy environment

eu emission allowances and the stock market evidence from the electricity industry this paper constitutes to our best knowledge the first econometric analysis on stock market effects of the eu emission trading scheme eu ets our results suggest that eu emission allowance eua price developments matter to the stock performance of electricity firms eua price changes and stock returns of the most important european electricity corporations are shown to be positively related this effect does not work asymmetrically so that stock markets do not seem to react differently to eua appreciations in comparison to depreciations the carbon market effect is shown to be both time and country specific it is particularly strong for the period of eua market shock in early 2006 and differs with respect to the countries where the electricity corporations analysed are headquartered stock market reactions to eua volatility could not be shown

modeling and forecasting the volatility of carbon dioxide emission allowance prices a review and comparison of modern volatility models abstract the launch of the markets for carbon dioxide emission allowances was guided by the aim to use the supposedly efficient price formation mechanism of an organized exchange to optimally allocate a certain quantity of emissions among potential polluters while this introduction of a centralized trading arrangement should have helped to achieve required emission reductions with a minimum of economic losses from the viewpoint of market participants it has raised concerns about appropriate risk management provisions to cope with the fluctuations of time varying allowance prices the present review provides an overview over state of the art models for price volatility expanding the scope from relatively simple garch type models to models with long term dependence and regime switches including the relatively recent class of so called multifractal models we provide a comparative application of these models to carbon dioxide emission allowance prices from the european union emission trading scheme and evaluate their performance with up to date model comparison tests based on out of sample forecasts of future volatility and value at risk

modeling persistence of carbon emission allowance prices this study reexamines the issue of persistence in carbon emission allowance spot prices using daily data and covering the period from 28 2 2007 to 14 05 2014 for this purpose we use techniques based on the concept of long memory accounting for structural breaks and non linearities in the data with both of these aspects potentially affecting the degree of persistence our results indicate that while there is no evidence of non linearity when allowing for structural breaks persistence of shocks to the carbon emission allowance is markedly reduced with the same being transitory in nature for recent sub samples

eua and scer phase ii price drivers unveiling the reasons for the existence of the eua scer spread abstract this article studies the price relationships between eu emissions allowances euas valid under the eu emissions trading scheme eu ets and secondary certified emissions reductions scers established from primary cers generated through the kyoto protocol s clean development mechanism cdm given the price differences between euas and scers financial and industrial operators may benefit from arbitrage strategies by buying scers and selling euas i e selling the eua scer spread to cover their compliance position as industrial operators are allowed to use scers towards compliance with their emissions cap within the european system up to 13 4 our central results show that the spread is mainly driven by eua prices and market microstructure variables and less importantly as we would expect by emissions related fundamental drivers this might be justified by the fact that the eu ets remains the greatest source of cer demand to date

the minimum cvar strategy with semi parametric estimation in carbon market hedging problems abstract effective hedging strategies are important in reducing price volatility risk for business investors and companies participating into carbon markets in this paper we investigate the risk triggered by price fluctuation of european union allowance eua a semi parametric approach with cornish fisher expansion which approximates the quantile using the higher moments of the distribution is provided to estimate hedging ratios using cvar as risk objective function the approach can successfully capture the features of higher moments with the heavy tailed and higher kurtosis distribution of the eua returns which tends to be neglected the hedging performances of minimum cvar model we proposed and the conventional minimum variance model are evaluated and compared our empirical results show that minimum cvar hedging strategy generally outperforms the other in sample using all the effectiveness criteria while it is not consistent out of sample the proposed semi parametric minimum cvar strategy with cornish fisher expansion is advisable in carbon market hedging problems

no win no fee some economics of contingent legal fees mark up in different types of case is to be issued after consultation with professional bodies american style share contracts whereby the lawyer is paid a proportion of the award if the case is won and nothing if it is lost will continue to be unenforceable at law and prohibited by the professional bodies the introduction of contingency fees in england and wales has been discussed in a number of official and semi official reports without any consensus emerging 3 we use a formal model of the litigation process to analyse the implications of contingent fees under both english and united states cost shifting rules in the model potential defendants can take care to avoid accidents which impose losses on potential plaintiffs if an accident occurs the defendant is sued by the plaintiff and makes a settlement offer if the plaintiff rejects the offer the case proceeds to trial plaintiffs who win at trial are awarded damages and under english rules costs against the defendant lawyer client contracts can be evaluated by the extent to which they a compensate plaintiffs after an accident by making it easy to sue and obtain redress b induce settlements rather than costly trials and c provide

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

banking and borrowing in the eu ets a review of economic modelling current provisions and prospects for future design this article deals with the issue of banking and borrowing in the context of the european union emissions trading scheme eu ets by attempting to provide a policy oriented unifying theoretical framework after describing the main features of the eu ets the core part of the article consists of variations of an inter temporal continuous time optimization model additional elements include flexibility measures currently discussed and proposed in other emissions trading systems usa australia which include the use of safety valves minimum price auctioning or offsets from domestic or international projects

a nonparametric analysis of variable cost minimization in the united states paper industry nanparametric tests of consistency of data with variable cost minimization returns to scale homotheticity are described and applied to data from the us paper industry results indicate that data from the us paper industry are consistent with the minimization of variable costs increased productivity due to technological improvements or increasing returns to scale and a homothetic production function a method derived from nonparametric estimation for screening hypothesized data sets prior to predictive use with an estimated production function is described

impact of the economic recession on the european power sector s co2 emissions abstract this paper investigates the impact of the economic recession on co 2 emissions in the european power sector during the years 2008 and 2009 three main determinants of the power sector s emissions are identified the demand for electricity the co 2 price and fuel prices a counterfactual scenario has been set up for each of these i e what these parameters would have been if not affected by the recession a simulation model of the european power sector is then employed comparing a historical reference simulation taking the parameters as actually occurred with the counterfactual scenarios the lower electricity demand due to the recession is shown to have by far the largest impact accounting for an emission reduction of about 175 mton the lower co 2 price due to the recession resulted in an increase in emissions by about 30 mton the impact of fuel prices is more difficult to retrieve an indicative reduction of about 17 mton is obtained mainly as a consequence of the low gas prices in 2009 the simulated combined impact of the parameters results in an emission reduction of about 150 mton in the european power sector over the years 2008 and 2009 as a consequence of the recession

endogenous cases and the evolution of the common law i develop a dynamic model of judge made law in which the ideal legal rule is unknown but can be learned in contrast to existing articles the flow of cases heard by the court is affected by the court s prior decisions the model highlights the significance of this feedback in explaining when and why the court will write broader or narrower opinions and the long run properties of common law in equilibrium the law settles endogenously because the incentives to make legally controversial choices disappear as the law evolves settled law exhibits residual uncertainty and ambiguity and potentially implements inefficient outcomes

voluntary product safety certification this paper describes the incentives for firms to seek voluntary product safety certifications we consider a firm that makes the decision of whether or not to seek certification prior to selling the product we show that even when the firm and the consumers have the same beliefs about the product s safety there are incentives for the firm to seek safety certification the main analysis investigates the role of consumer moral hazard and shows that it can lead to greater incentives for voluntary certification when inherent product safety and effort are substitutes but smaller incentives when they are complements the analysis of consumer moral hazard provides a nuanced perspective on the so called risk compensation or the peltzman effect phenomenon which postulates higher levels of accidents for safer products in our paper products that are successfully certified can end up with a higher incidence of accidents we also uncover an interesting nonmonotonic relationship between effectiveness of consumer

financially constrained lawyers an economic theory of legal disputes abstract financial constraints reduce the lawyer s ability to file lawsuits and bring cases to trial as a result access to justice for victims pretrial bargaining and potential injurers precaution might be affected we study civil litigation using a model that allows for asymmetric information financially constrained lawyers third party lawyer lending and a continuum of plaintiff s types we contribute to the economic analysis of law by generalizing seminal models of litigation bebchuk 1984 bebchuk 1988 katz 1990 offering the first formal definition of access to justice and presenting comprehensive social welfare analysis of relevant public policy we provide complete equilibrium characterization and identify necessary conditions for the existence of the mixed and pure strategy pbe access to justice is denied to some victims under the mixed strategy equilibrium we then study the social welfare effects of policies aimed at relaxing lawyers financial constraints and identify a necessary and sufficient condition for a welfare enhancing effect

sources of emission reductions market and policy stringency effects abstract international trade and economic development affect air emissions previous studies have decomposed their effects into scale composition and technique effects while the scale and composition effects occur through market responses the technique effect is a policy stringency influence through the mix of environmental policies this study analyzes whether the market or policy stringency effects are more prominent previous studies have been unable to adequately separate the market and policy stringency effects to independently measure the technique effect we use two indicators of policy stringency i e shadow prices of energy and industrial energy prices these policy stringency measures are treated as endogenous the effects on six types of air emissions are estimated utilizing a sector specific international panel dataset that includes newly industrialized and former transition economies the empirical results show that the major source of emissions reductions is the policy stringency effect through carbon related policies pollution offshoring to countries with weaker carbon related regulation has a minor role in the reduction of air emissions

improving the liquidity of china s carbon market insight from the effect of carbon price transmission under the policy release abstract through a series of policies release the trading system of china s carbon market is being improved but its current liquidity is still low to improve market liquidity this paper analyzes the relation between the release of policy related to carbon market operations and the volatility of carbon price thus arranging an optimal adjustment scheme for government s policy making through the jump test and logit regression we investigate historical policies and prices of 7 emission trading scheme pilots in china to explore the impact of policy release on carbon price and then quantify the effectiveness of these policies empirical results indicate that in the short term new policies can rapidly lead to a large volatility of carbon price but it can also reduce the abnormal volatility with the spread of price information further the demand stimulus policies promote a positive volatility of carbon price in the long term the insufficient demands for carbon emissions quota raise the disappearance of market dividends caused by the policy release and lead to an excessive call back of carbon price thus increasing mid and long term risks in carbon markets additionally china s macro environment policy can stabilize carbon price and thus an effective tool for improving the liquidity of carbon markets is developing demand stimulus policies

dynamic behavior of co2 spot prices co2 emission allowances are traded nowadays over the counter otc and on exchanges across the european union eu it thus becomes increasingly important for traders of these emission certificates to have a valid co2 spot price model to value potential derivatives in addition co2 emitting companies require an adequate co2 spot price model in order to better assess their production costs and support emissions related investment decisions however sufficient price history is still lacking for the european union emission trading scheme eu ets we therefore present a tractable stochastic equilibrium model reflecting stylized features of the eu ets and analyze the resulting co2 spot price dynamics our main findings are that co2 prices do not have to follow any seasonal patterns discounted prices should possess the martingale property and an adequate co2 price process should exhibit a time and price dependent volatility structure a brief empirical examination regarding market efficiency complements our analysis