the entrepreneur s idea and outside finance theory and evidence about entrepreneurial roles abstract we study the problem faced by the entrepreneur seeking outside support to turn an entrepreneurial idea into a successful innovation specifically a successful technological innovation resulting from research and development the paper develops and tests the hypothesis that as an entrepreneur s innovative idea becomes more complex the entrepreneur will find it more difficult to obtain outside finance and then outside support more generally for the commercialization of the idea consequently the entrepreneur will be more likely to take on additional roles beyond providing the essential idea the evidence supports the hypothesis that other things being the same an entrepreneur with a more complex idea will have greater difficulty obtaining outside finance and will be more likely to take on the additional roles of development production marketing and distribution that are necessary for successful innovation

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

gender differences in the allocation of assets in retirement savings plans in 1995 40 percent of working men and 32 percent of working women were covered by a defined contribution dc plan a distinguishing characteristic of these plans is that workers can generally choose how their assets are invested using data from the 1992 and 1995 surveys of consumer finances scf this paper examines whether workers differ systematically by gender in the allocation of assets in dc plans previous researchers have reported that many workers tend to invest their retirement assets too conservatively and in particular that women are less likely than men to invest in risky assets such as stocks in the presence of an equity premium a lower propensity by women to invest in stocks could translate into large differences in the accumulation of financial wealth for retirement we establish that gender differences in investment decisions exist though they are more complicated than previous studies have suggested we show that these differences are not completely explained by differences in individual or household characteristics a few studies have examined gender differences in investment decisions vickie l bajtelsmit and jack l vanderhei 1997 richard p hinz et al 1997 these studies use administrative data and report that women tend to invest their retirement funds in less risky vehicles than men michael haliassos and carol c bertaut 1995 use the 1983 scf to examine why such a large fraction of households do not own any stock they report that gender does not have a significant effect on the probability of owning stock though gender differences are not the focus of their paper what these data sources lack haliassos and bertaut being the exception is a rich set of demographic and other variables on households that theory predicts should affect investment behavior this paper adds to the literature by examining gender differences in investment decisions conditioning on such variables the results highlight the importance of including marital status risk aversion measures and the portfolio of assets held outside dc plans when examining gender differences in investment decisions in these plans

occupier requirements in commercial real estate markets changes in the business environment associated with globalisation innovation in information and communications technologies and the drive towards more flexible production systems should be reflected in changes in occupational requirements for property although much research assumes that property as a derived demand will simply be supplied in response to changed demand in practice the institutional structure of the market can act as a constraint on the provision of appropriate space empirical research into new working practices and their impact on the property portfolio suggest that change is muted and gradual in part this reflects resistance to the adoption of working practices in part it reflects the inertia of a traditional model of property procurement however there is growing evidence of innovation in the nature of provision and more active and strategic management of the property resource research in this area as in many other areas of real estate is hampered by lack of reliable and a

are women more risk averse we find that single women exhibit relatively more risk aversion in financial decision making than single men using u s sample data we examine household holdings of risky assets to determine whether there are gender differences in financial risk taking as wealth increases the proportion of wealth held as risky assets is estimated to increase by a smaller amount for single women than for single men gender differences in financial risk taking are also influenced by age race and number of children greater financial risk aversion may provide an explanation for women s lower levels of wealth compared with men s jel j16 d81 g11

some economics of global warming the greenhouse effect itself is simple enough to understand and is not in any real dispute what is in dispute is its magnitude over the coming century its translation into changes in climates around the globe and the impacts of those climate changes on human welfare and the natural environment these are beyond the professional understanding of any single person the sciences involved are too numerous and diverse demography economics biology and the technology sciences are needed to project emissions atmospheric chemistry oceanography biology and meteorology are needed to translate emissions into climates biology agronomy health sciences economics sociology and glaciology are needed to identify and assess impacts on human societies and natural ecosystems and those are not all there are expert judgments on large pieces of the subject but no single person clothed in this panoply of disciplines has shown up or is likely to this article makes an attempt to forecast the economic and social consequences of global warming due to anthropogenic greenhouse gases and attempting to prevent it

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

effects of international sharing of pollution abatement burdens on income inequality among countries abstract improvements in environmental quality will boost output production and hence economic growth however although environmental abatement equally benefits all economies in the world it is shown that if the private productive resources are not yet accumulated sufficiently in low income economies income inequality among economies can be widened in the short term not only under equal burden sharing of pollution abatement but even under income proportional burden sharing when the marginal productivity is diminishing the negative effect of the burden is large relative to the positive effect of the improved environment in economies in which resources are not accumulated sufficiently

affirmative action programs and business ownership among minorities and women affirmative action programs are commonly used as a means to level the playing field for minority and women owned firms in public procurement markets and therefore may be a positive factor in business entry and survival to the extent that affirmative action programs also apply to traditional labor markets however they may alter the opportunity cost of starting a business we utilize the elimination of affirmative action in california and washington states through voter initiatives to identify the effect of affirmative action on minority and female self employment rates in our base specifications we find evidence of modest increases in self employment among minorities and women in both california and washington after elimination of affirmative action consistent with the hypothesis that the opportunity cost of starting a business fell due to restricting opportunities in the traditional labor markets the sign of the estimated effect however is not uniformly positive when considering specific race gender groups and the statistical significance of the main results is somewhat sensitive to the choice of control states

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

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

university spin out companies and venture capital abstract the creation of university spin out companies that create wealth is a major policy objective of governments and universities finance is a catalyst of this wealth creation yet access to venture capital is a major impediment faced by these companies in this article we adopt a finance pecking order perspective to examine the problems faced by those university spin out companies seeking to access venture capital we triangulate evidence from spin out companies university technology transfer offices and venture capital firms in the uk and continental europe to identify the problems and to suggest policy developments for these parties as well as government we compare perceptions of high tech venture capital firms that invest in spin outs with those that do not and also consider vcs views on spin outs versus other high tech firms our evidence identifies a mismatch between the demand and supply side of the market in line with the pecking order theory venture capitalists prefer to invest after the seed stage however in contrast to the pecking order theory ttos see venture capital as more important than internal funds early on we develop policy implications for universities technology transfer offices academic entrepreneurs venture capital firms and government and suggest areas for further research

private investor participation and commercialization rates for government sponsored research and development would a prediction market improve the performance of the sbir programme an objective of the us small business innovation research sbir programme is the private sector commercialization of funded rd our analysis of department of defense dod phase ii awards suggests that the estimated probability of commercialization is only 0 47 we investigate econometrically whether outside private investors have useful information about proposed sbir projects prospects for commercialization our findings suggest that they do thereby providing support for the possibility that a prediction market could improve the performance of the sbir programme

heterogeneity in risky choice behaviour in a broad population we analyse risk preferences using an experiment with real incentives in a representative sample of 1 422 dutch respondents our econometric model incorporates four structural parameters that vary with observed and unobserved characteristics utility curvature loss aversion preferences towards the timing of uncertainty resolution and the propensity to choose randomly rather than on the basis of preferences we find that all four parameters contribute to explaining choice behaviour the structural parameters are significantly associated with socio economic variables but it is essential to incorporate unobserved heterogeneity in each of them to match the rich variety of choice patterns in the data

microcredit an answer to the gender problem in funding microfinance institutions mfis target people excluded from the traditional banking system by providing start up capital to these under financed individuals they enable a greater number of women to start their own business particularly in sectors where initial capital requirements are high our study follows a portfolio of 3 640 microcredit applicants in france over the 2000 2006 time period identifying mfi client profiles and bringing to light gender differences in borrowers compared to a wider sample of entrepreneurs this study shows that the male female gap found amongst company creators is also maintained amongst the clienteles of mfis empirical results also suggest that gender is a decisive factor regarding the amount of credit provided to borrowers when comparing with other factors in the borrower and firm profile thus to a certain extent mfis are found to reinforce gender inequalities in france

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

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

double dividend with involuntary unemployment efficiency and intergenerational equity this paper analyzes the double dividend and distributional issues within an overlapping generations model framework with involuntary unemployment we characterize the necessary conditions needed to obtain a double dividend when the revenue of the environmental tax is recycled by a variation of the labor tax rate we show that an employment dividend may occur without any efficiency dividend and that the young generation is not always harmed by the fiscal reform even without any intergenerational transfers therefore three dividends environmental efficiency and intergenerational equity can occur simultaneously

leveraging entrepreneurship through private investments does gender matter using project data from a random sample of phase ii research awards from the national institutes of health sbir program we estimate the relative probability that woman owned firms are able to attract private investments to fund the transition of the technology developed under the sponsorship of the sbir program to an innovation to enter the market we find that women owned firms are as much as 16 points less likely to attract private investment dollars compared to male owned firms factors excluding the size of the sbir award held constant women owned firms that received larger awards performed substantially better although the sbir program has a legislated directive to increase the participation of woman owned firms in the program our findings suggest that it might not be sufficient to overcome market perceptions about the profitability of such investments actually bringing a developed technology to market

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

political uncertainty and asset valuation evidence from business relocations in canada abstract quebec s drive for sovereignty from canada has been the source of political uncertainty for decades in canada this paper studies empirically stock market s reaction to the announcements of business relocations from the province of quebec to other provinces within canada similar announcements about toronto are used for control empirical results show that the market s reaction to the announcements of business relocations a from quebec is positive b from toronto is negative and c to toronto is positive the difference in abnormal returns between the quebec and toronto samples is positive and significant

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

cross border externalities and trade liberalization the strategic control of pollution the authors examine international trade in a commodity whose production creates a negative externality for the importing country and they consider the nations strategic policy choices when they can restrict trade and when they are bound by a free trade agreement when pollution abatement technology is available the exporting country induces its adoption despite national indifference to the externality in order to reduce the tariff in a free trade agreement environmental policy is used to exploit monopoly power in trade an alternative policy instrument a process standard is introduced national competition in controlling emissions leads to very restrictive antipollution measures we examine international trade in a commodity whose production creates a negative externality for the importing country and we consider the nations strategic policy choices when they can restrict trade and when they are bound by a free trade agreement when pollution abatement technology is available the exporting country induces its adoption despite national indifference to the externality in order to reduce the tariff in a free trade agreement environmental policy is used to exploit monopoly power in trade an alternative policy instrument a process standard is introduced national competition in controlling emissions leads to very restrictive anti pollution measures

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

gains from corporate headquarters relocations evidence from the stock market abstract this paper provides empirical evidence on investors perceptions of the relative advantages and costs of spatial agglomeration specifically we examine the stock price effects of headquarters relocations the stock market reaction is significantly positive when relocation decisions are attributed to cost savings indicating that cost savings available at less centralized locations outweigh any loss of enhancements associated with spatial clustering at urban centers in contrast decisions prompted by managerial self interest and desire for luxurious offices elicit an adverse reaction from investors

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

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

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

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

the macroeconomics of dr strangelove the cold war has ended and president george bush has declared the beginning of a 4 new world order this new world order has so far been characterized by the intensification of regional disputes civil strife and civil war its implications for arms proliferation and arms control are still unclear this paper considers both superpower conflict and the transition to international cooperation in the context of a model that emphasizes intergenerational linkages specifically we explore the weapons accumulation decisions of two adversarial countries in the context of a deterrence conflict initiation game embedded in an overlapping generations model the demographic structure of the overlapping generations model allows the analysis of both between and withincountry intergenerational external effects caused by past weapons accumulation decisions while the two country setting permits consideration of international external effects caused by the adversary country s current weapons accumulation decision we analyze the noncooperative equilibrium and then consider the effects of a regime change characterized by international cooperation but where the intergenerational externali

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

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

the consequences of a one sided externality in a dynamic two agent framework abstract we develop a dynamic model where all agents contribute to a global externality but only those in a specific region suffer from it we model this in a dynamic setting via a two agent non cooperative overlapping generations model and analyze the consequences for economic growth and intertemporal choices we find that multiple steady states may result from this asymmetry in particular if the agent who is affected by the externality has to spend a large share of his income to offset it then he may be stuck in an environmental poverty trap we provide conditions for the existence of and local convergence to the equilibria as well as a condition for the global convergence to the poverty trap while in addition to maintenance expenditures externalities tend to be addressed via studying taxes investment in r d or alike we focus on capital market integration specifically agents in the affected region can open up their capital market to enable capital inflows we investigate whether an open capital market improves or worsens their welfare while we do find that capital market integration eliminates the environmental poverty trap we show that capital market integration is not always in both agents interest in particular we provide conditions under which the agents prefer autarkic or integrated capital markets

the gender gap in federal and private support for entrepreneurship the role of gender in entrepreneurship has been thoroughly investigated however less is known about gender differences in access to private investment when attempting to develop a new technology in this paper we use data collected by the national research council of the national academies to estimate differences between the probability that a female owned firm and a male owned firm both conducting research funded by the small business innovation research program will receive private investment funding to help to commercialize the funded technology we find that female owned firms are disadvantaged in their access to private investment especially in the west and northeast regions of the usa

choosing a monetary value of greenhouse gases in assessment tools a comprehensive review there is a societal need for using monetary estimates of social impacts of co2 and other greenhouse gases in different assessment tools such as cost benefit analysis and life cycle assessment a number of estimates are available in the literature since these differ by several orders of magnitude there is ambiguity and confusion about which to use this review aims to give some guidance on this issue the variation in carbon value estimates depends on several uncertain aspects which will remain uncertain including climate sensitivity assumptions about future emissions and decision makers ethical standpoints hence there is no single correct monetary value for co2 it will depend on the ethical standpoint of the user due to this estimates of social costs of co2 emissions cannot be used for calculating an optimal emission level although they can inform such assessments it is suggested that marginal abatement cost values are used for emissions capped by binding targets in short term assessments and that social cost of carbon values should be used for all other emissions benchmark principles for choosing a monetary carbon value are suggested along with associated estimates depending on the choices made with regard to ethical standpoints and assumptions about future emissions and climate sensitivity estimates can be significantly higher than the ones typically used in assessment tools today the estimates need continuous updating and there is need for better understanding and communication around the limitations and uncertainties involved

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

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

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

financial decision making are women really more risk averse 40 males 33 females gain gambling gain domain loss gambling loss domain a contextual frames b abstract gambling frames studies the application of experimental methods provided stronger control of the economic environment in which decisions were made we elicited data which call into question the prevalence of stereotypic risk attitudes in financial decision making first we find that the comparative risk propensity of male and female subjects is strongly dependent on the financial decision setting second and more important we observe no gender differences in risk propensity when subjects face contextual decisions since in practice financial decisions are always contextual our results suggest that the above gender stereotype may not reflect true male and female attitudes toward financial risks i gender specific risk behavior an experimental design our experiment was designed to examine gender specific risk propensity in decisions relevant for investors and managers table 1 gives an overview of the experimental design in the main treatment we implemented risky choices in the form of investment and insurance decisions choice behavior in this treatment henceforth called the context treatment directly measures the risk behavior of male and female subjects in contextual financial decisions we also ran a control treatment in which the same risky choices were presented as abstract gambling decisions this control treatment henceforth called the abstract treatment allows us to validate the risk behavior induced by our experimental procedure in the light of the above mentioned gambling evidence in the context treatment subjects were confronted with risky choices in two different decision contexts subjects first had to complete a series of investment decisions they were then presented with a series of identical choices this time however framed as insur1 wealth effects from income differences outside the laboratory may still affect risk behavior in our experiment they are controlled for in our model 2 experimental instructions are available in german from the authors or in english from our web page www wif ethz ch publikationen htm ance decisions each investment and insurance decision incorporated a choice between a risky lottery and a certain payoff with the series of choices implemented in the two frames we elicited our subjects certainty equivalents for the same four risky lotteries l1 l2 l3 l4 in both contexts we implemented two frames in the context treatment in order to measure the risk propensity of subjects toward both perceived gains and perceived losses in both frames all possible payoffs for each decision were positive in the investment frame these payoffs were also presented as gains while in the insurance frame the same payoffs were presented as losses relative to an initial endowment therefore elicited certainty equivalents in the investment frame measure subjects risk propensities in the gain domain while certainty equivalents in the insurance frame measure risk propensity in the loss domain if in contextual financial decisions female subjects are generally more risk averse than men our results should display ceteris paribus lower female certainty equivalents in both the investment and insurance frames 3 the four lotteries l1 l2 l3 and l4 each had two possible outcomes payoffs in swiss francs 1 sfr a 0 60 and their probabilities were 30 sfr 6 10 sfr 6 30 sfr 2 10 sfr 2 30 sfr 6 10 sfr 6 and 50 sfr 2 20 sfr 2 respectively 4 experimental evidence suggests that individual risk propensity will vary systematically between the gain and loss domain daniel kahneman and amos tversky 1979 383 vol 89 no 2 gender and economic transactions 3y16 my68 mp 383 friday dec 10 08 20 am lp aer my68 figure 1 differences in mean certainty equivalents ce between male and female subjects by frame note certainty equivalents and male female differences are measured in swiss francs in the abstract treatment we confronted a different group of subjects with exactly the same risky decisions as those in the main treatment however as mentioned before all choices in this control treatment were framed as abstract gambling decisions again two frames were implemented in the gaingambling and loss gambling frames we measured the risk attitudes of subjects toward gambles in the gain and loss domain respectively subjects in both treatments were told in advance that one of their choices would determine their experimental earnings further all subjects completed a post experimental questionnaire which yielded information on each subject s disposable income this information is necessary to exclude wealth effects due to income differences outside the laboratory as an explanation of gender specific choice behavior

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

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

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

an overlapping generations model of growth and the environment this article analyzes the potential conflict between economic growth and the maintenance of environmental quality in an overlapping generations model short lived individuals make decisions which have long lasting effects on both factor productivity and the environment the model provides a theoretical explanation of observed correlations between environmental quality and income whereby economic growth is associated first with declines then improvements in environmental quality it suggests circumstances in which multiple pareto ranked steady state equilibria may arise and in which sustained growth of both capital and environmental quality may occur overmaintenance of the environment analogous to dynamically inefficient overaccumulation of capital may emerge copyright 1994 by royal economic society

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

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

incomplete information and incentives to free ride on international environmental resources abstract this paper studies free riding incentives on common environmental resources in an incomplete information repeated game where abatements are perishable and perfect substitutes two contrasting types of perfect bayesian equilibria emerge for high discount factors or low discount factors but pessimistic prior beliefs the inclusion of incomplete information has no impact on the pattern of abatements otherwise the countries attempt to use their private information strategically and the game becomes a war of attrition this generates an outcome where the pessimistic country unilaterally abates forever and another which involves delay until the first abatement if both countries are optimistic