Temperature and the Allocation of Time: Implications for Climate Change

by Joshua Graff Zivin and Matthew J. Neidell

- In this paper we estimate the impacts of climate change on the allocation of time using econometric models that exploit plausibly exogenous variation in daily temperature over time within counties. We find large reductions in U.S. labor supply in industries with high exposure to climate and similarly large decreases in time allocated to outdoor leisure. We also find suggestive evidence of short-run adaptation through temporal substitutions and acclimatization.

Zivin, J.G. and M.J. Neidell (2010). "Temperature and the Allocation of Time: Implications for Climate Change." NBER Working Paper No. 15717, Feb 2010.

Linking Emission Trading Schemes

by Georg Gruell and Luca Taschini

- Linking emission trading schemes would favor the depletion of low-cost abatement opportunities that are geographically spread over the globe. However, this would only be possible if the price of the emission permits in the different schemes converge to one price. Using a simple model-free structure, the paper first assesses how a unilateral link between two schemes or a bilateral link between schemes with restrictions on the amount of imported permits preempt a correct price convergence. Second, it shows under which conditions bilateral links between schemes with price containment mechanisms ensure permit price convergence.

Georg Gruell and Luca Taschini (2010). "Linking Emission Trading Schemes." Available at SSRN, Feb 2010.

Potentials and Limits of Bayesian Networks to Deal with Uncertainty in the Assessment of Climate Change Adaptation Policies

by Michela Catenacci and Carlo Giupponi

- The present paper analyses the effectiveness of the Bayesian networks model as a synthesis framework, which would allow the user to manage the uncertainty characterising the definition and implementation of climate change adaptation policies. The review shows the potentials of the model to characterise, incorporate and communicate the uncertainty, with the aim to provide an efficient support to an informed and transparent decision making process. The possible drawbacks arising from the implementation of BNs are also analysed, providing potential solutions to overcome them.

Catenacci, M. and C. Giupponi (2010). "Potentials and Limits of Bayesian Networks to Deal with Uncertainty in the Assessment of Climate Change Adaptation Policies." FEEM Note di lavoro 2010.007, Jan 2010.

Optimal Emission Tax with Endogenous Location Choice of Duopolistic Firms

by Masako Ikefuji, Jun-ichi Itaya and Makoto Okamura

- This paper explores optimal environmental tax policy under which duopoly firms strategically choose the location of their plants in a simple three-stage game. We examine how the relationship between the optimal emission tax and the choice of location of duopoly firms affects the welfare of the home country. We characterize the relationship between the optimal emission tax and the fixed cost, depending on the degree of environmental damage from production. Finally, we show the existence of asymmetric equilibrium in which either firm chooses relocation of its plant even if the duopoly firms are identical ex ante.

Ikefuji, M., J. Itaya and M. Okamura (2010). "Optimal Emission Tax with Endogenous Location Choice of Duopolistic Firms." FEEM Note di lavoro 2010.006, Jan 2010.

Modeling Biased Technical Change.Implications for Climate Policy

by Carlo Carraro, Enrica De Cian and Lea Nicita

- This paper tackles the issues of whether technical change is biased towards the energy sectors, the importance of the elasticity of substitution between factors in determining this bias and how mitigation policy is likely to affect it. The analysis is performed using the World Induced Technical Change model, WITCH. Three different versions of themodel are proposed. The starting set-up includes endogenous technical change only in the energy sector. A second version introduces endogenous technical change in both theenergy and non-energy sectors. A third version of the model embodies different sources of technical change, namely R&D and human capital.

Carraro, C., E. De Cian and L. Nicita (2010). "Modeling Biased Technical Change.Implications for Climate Policy." FEEM Note di lavoro 2010.004, Jan 2010.

Tradable Permits vs Ecological Dumping

by Fabio Antoniou, Panos Hatzipanayotou, Phoebe Koundouri

- In this paper we examine an alternative policy scenario, where governments allow polluting firms to trade permits in a strategic environmental policy model. We demonstrate, among other things, that with no market power in the permits market, governments of the exporting firms do not have an incentive to under-regulate pollution in order to become more competitive. This strategic effect is reversed and leads to a welfare level closer to the cooperative one and strictly higher to that when permits are non-tradable.

Fabio Antoniou, Panos Hatzipanayotou, Phoebe Koundouri(2010). "Tradable Permits vs Ecological Dumping." FEEM Note di lavoro 2010.002, Jan 2010.

Canada’s Bitumen Industry Under CO2 Constraints

by Gabriel Chan, John M. Reilly, Sergey Paltsev and Y.-H. Henry Chen

- We investigate the effects of implementing CO2 emissions reduction policies on Canada’s oil sands industry, the largest of its kind in the world. We apply the MIT Emissions Prediction and Policy Analysis (EPPA) model, a computable general equilibrium model of the world economy, augmented to include detail on the oil sands production processes, including the possibility of carbon capture and storage (CCS). We find: (1) without climate policy annual Canadian bitumen production increases over 6-fold from 2005 to 2050; (2) with CO2 emissions caps implemented in developed countries, Canadian bitumen production drops by nearly 65% from the reference 6-fold increase and bitumen upgrading capacity moves to the developing countries; (3) with CO2 emissions caps implemented worldwide, the Canadian bitumen production becomes essentially non-viable even with CCS technology, at least through our 2050 horizon.

Chan, G., J.M. Reilly, S. Paltsev and Y.-H. Chen (2010). "Canada’s Bitumen Industry Under CO2 Constraints." MIT Joint Program Report Series, Report 183, Jan 2010.

Modeling the Impact of Warming in Climate Change Economics

by Robert S. Pindyck

- Any economic analysis of climate change policy requires some model that describes the impact of warming on future GDP and consumption. Most integrated assessment models (IAMs) relate temperature to the level of real GDP and consumption, but there are theoretical and empirical reasons to expect temperature to affect the growth rate rather than level of GDP. Does this distinction matter in terms of implications for policy? And how does the answer depend on the nature and extent of uncertainty over future temperature change and its impact?

Robert S. Pindyck (2010). "Modeling the Impact of Warming in Climate Change Economics." NBER Working Paper No. 15692, Jan 2010.

Climate Shocks and Exports

by Benjamin F. Jones and Benjamin A. Olken

- This paper uses international trade data to examine the effects of climate shocks on economic activity. We examine panel models relating the annual growth rate of a country’s exports in a particular product category to the country’s weather in that year. We find that a poor country being 1 degree Celsius warmer in a given year reduces the growth rate of that country’s exports by between 2.0 and 5.7 percentage points, with no detectable effects in rich countries.

Jones, B.F. and B.A. Olken (2010). "Climate Shocks and Exports." NBER Working Paper No. 15711, Jan 2010.

Climate Policy Design with Correlated Uncertainties in Offset Supply and Abatement Cost

by Harrison Fell, Dallas Burtraw, Richard D. Morgenstern and Karen L. Palmer

- This paper presents a model that incorporates both uncertainties in the supply of offsets and in abatement costs. Using numerical methods we solve the model under a variety of parameter settings, including a system that includes allowance price controls. We find that as uncertainty in offsets and uncertainty in abatement costs become more negatively correlated, expected abatement plus offset purchase costs increase, as does the variability in allowance prices and emissions from the regulated sector. Imposing an allowance price collar that limits the upper and lower cost substantially mitigates cost increases as well as the variability in prices and emissions, while roughly maintaining expected environmental outcomes.

Fell, H., D. Burtraw, R.D. Morgenstern and K.L. Palmer (2010). "Climate Policy Design with Correlated Uncertainties in Offset Supply and Abatement Cost." RFF Discussion Paper 10-01, Jan 2010.

Adaptation of Forests to Climate Change: Some Estimates

by Roger A. Sedjo

- This paper is based on a World Bank-sponsored effort to develop a global estimate of adaptation costs, considering the implications of global climate change for industrial forestry. It focuses on the anticipated impacts of climate change on forests broadly, on industrial wood production in particular, and on Brazil, South Africa, and China. The aim is to identify likely damages and possible mitigating investments or activities.

Sedjo, R.A. (2010). "Adaptation of Forests to Climate Change: Some Estimates." RFF Discussion Paper 10-06, Jan 2010.

The Regime Complex for Climate Change

By Robert O. Keohane and David G. Victor

- There is no integrated, comprehensive regime governing efforts to limit the extent of climate change. Instead, there is a regime complex: a loosely coupled set of specific regimes. We describe the regime complex for climate change and seek to explain it, using functional, strategic, and organizational arguments. It is likely that such a regime complex will persist: efforts to build an effective, legitimate, and adaptable comprehensive regime are unlikely to succeed.

Keohane, R.O. and D.G. Victor (2010). "The Regime Complex for Climate Change." Discussion Paper 10-33, Harvard Project on International Climate Agreements, Belfer Center for Science and International Affairs, Jan 2010.

Theory of Adaptation to Climate Change as a Global Public Good

by S. Niggol Seo

- Policy discussions of climate change have been primarily concerned about mitigating greenhouse gases. However, when adaptation to climate change is a global public good, an efficient allocation cannot be achieved by the imposition of a carbon tax alone to abate greenhouse gases. This paper proposes an alternative policy framework in which a carbon tax is levied globally while adaptation is supported through the recycling of carbon tax revenue. The optimal level of adaptation aid is discussed.

Seo, N.S. (2010). "Theory of Adaptation to Climate Change as a Global Public Good." USAEE-IAEE WP 10-041, available at SSRN, Jan 2010.

The Cost of Pipelining Climate Change Mitigation: An Overview of the Economics of CH4, CO2 and H2 Transportation

by Koen Schoots, Rodrigo Rivera-Tinoco, Geert Verbong and Bob Van der Zwaan

- Gases like CH4, CO2 and H2 may play a key role in establishing a sustainable energy system: CH4 is the cleanest and least carbon-intensive among the fossil energy resources (that is, natural gas versus oil and coal); CO2 capture and storage can significantly reduce the climate footprint of especially fossil-based electricity generation; and the use of H2 as energy carrier could enable carbon-free automotive transportation. Yet the establishment of extensive distribution networks, required to transport these gases, is challenging. In this paper we present an overview of both the total costs and cost components of the distribution of these three gases via pipelines.

Schoots, K., R. Rivera-Tinoco, G. Verbong and B. Van der Zwaan (2010). "The Cost of Pipelining Climate Change Mitigation: An Overview of the Economics of CH4, CO2 and H2 Transportation." Available at SSRN, Jan 2010.

The Health Effects of Climate Change: A Survey of Recent Quantitative Research

by Margherita Grasso, Matteo Manera, Aline Chiabai and Anil Markandya

- In recent years there has been a large scientific and public debate on climate change and its direct as well as indirect effects on human health. In the past fifteen years a large amount of research on the effects of climate changes on human health has addressed two fundamental questions (WHO, 2003). First, can historical data be of some help in revealing how short-run or long-run climate variations affect the occurrence of infectious diseases? Second, is it possible to build more accurate statistical models which are capable of predicting the future effects of different climate conditions on the transmissibility of particularly dangerous infectious diseases? The primary goal of this paper is to review the most relevant contributions which have directly tackled those questions.

Grasso, M., M. Manera, A. Chiabai and A. Markandya (2010). "The Health Effects of Climate Change: A Survey of Recent Quantitative Research." IEFE Working Paper No. 27, Jan 2010.

Integration of the Global Emissions Trading Markets

by Bruce Mizrach

- Emissions markets have emerged in Europe, North America, and around the globe. This paper analyzes the market architecture and common factors of emission reduction instruments. Within the EU ETS, I find that the major spot and futures exchanges in Europe are cointegrated. The spot and futures prices for both Phase I and Phase II EUA are also cointegrated, but the futures curve beyond the calendar year evolves independently. While registry linkage has narrowed spreads, EUA and CER spot and futures instruments are not cointegrated.

Mizrach, B. (2010). "Integration of the Global Emissions Trading Markets." Available at SSRN, Jan 2010.

The Economics of Adaptation to Extreme Weather Events in Developing Countries

by Brian Blankespoor, Susmita Dasgupta, Benoit Laplante and David Wheeler

- This paper contributes by assessing the economics of adaptation to extreme weather events. We address several questions that are relevant for the international discussion: How will climate change alter the incidence of these events, and how will their impact be distributed geographically? How will future socioeconomic development, notably an increased focus on education and empowerment for women and girls, affect the vulnerability of affected communities? And, of primary interest to negotiators and donors, how much would it cost to neutralize the threat of additional losses in this context?

Blankespoor, B., S. Dasgupta, B. Laplante and D. Wheeler (2010). "The Economics of Adaptation to Extreme Weather Events in Developing Countries." Center for Global Development Working Paper No. 199, Jan 2010.

Climate Policy without Commitment

by Rolf Golombek, Mads Greaker and Michael Hoel

- Climate mitigation policy should be imposed over a long period, and spur development of new technologies in order to make stabilization of green house gas concentrations economically feasible. The government may announce current and future policy packages that stimulate current R&D in climate-friendly technologies. However, once climate-friendly technologies have been developed, the government may have no incentive to implement the pre-announced future policies, that is, there may be a time inconsistency problem. We show that if the government can optimally subsidize R&D today, there is no time inconsistency problem. Thus, lack of commitment is not an argument for higher current R&D subsidies.

Golombek, R., M. Greaker and M. Hoel (2010). "Climate Policy without Commitment." CESifo Working Paper No. 2909, Jan 2010.

Unilateral Climate Policy, Asymmetric Backstop Adoption, and Carbon Leakage in a Two-Region Hotelling Model

by Edwin van der Werf

- We study backstop adoption and carbon dioxide emission paths in a two-region model with unilateral climate policy and non-renewable resource consumption. The regions have an equal endowment of the internationally tradable resource and a backstop technology. We first study the case of a unilateral stock constraint (e.g. a 450 ppmv carbon dioxide concentration target), and show that the non-abating region makes the final switch to the backstop before the abating region does, though the latter region has two disjoint phases of backstop use if its marginal cost is sufficiently low. Furthermore, we show that the abating region has an inverse N-shaped emission path, with growing emissions in the period for which the ceiling is binding. We also show that unilateral climate policy does not lead to international carbon leakage.

van der Werf, E. (2010). "Unilateral Climate Policy, Asymmetric Backstop Adoption, and Carbon Leakage in a Two-Region Hotelling Model." CESifo Working Paper No. 2907, Jan 2010.

Trade in 'Virtual Carbon': Empirical Results and Implications for Policy

by Giles Atkinson, Kirk Hamilton, Giovanni Ruta, and Dominique Van Der Mensbrugghe

- The fact that developing countries do not have carbon emission caps under the Kyoto Protocol has led to the current interest in high-income countries in border taxes on the "virtual" carbon content of imports. The authors use Global Trade Analysis Project data and input-output analysis to estimate the flows of virtual carbon implicit in domestic production technologies and the pattern of international trade.

Giles Atkinson, Kirk Hamilton, Giovanni Ruta, and Dominique Van Der Mensbrugghe (2010). "Trade in 'Virtual Carbon': Empirical Results and Implications for Policy." World Bank Policy Research working paper no. WPS 5194, Jan 2010.

The Economics of Renewable Energy Expansion in Rural Sub-Saharan Africa

by Uwe Deichmann, Craig Meisner, Siobhan Murray, and David Wheeler

- Accelerating development in Sub-Saharan Africa will require massive expansion of access to electricity -- currently reaching only about one-third of households. This paper explores how essential economic development might be reconciled with the need to keep carbon emissions in check. The authors develop a geographically explicit framework and use spatial modeling and cost estimates from recent engineering studies to determine where stand-alone renewable energy generation is a cost effective alternative to centralized grid supply.

Deichmann, U., C. Meisner, S. Murray and D. Wheeler (2010). "The Economics of Renewable Energy Expansion in Rural Sub-Saharan Africa." World Bank Policy Research Working Paper no. WPS 5193, Jan 2010.

Economic Insights from Modeling Analyses of H.R. 2454: the American Clean Energy and Security Act (Waxman-Markey)

by the Pew Center on Global Climate Change

- Economic models are an important tool for evaluating the potential impact of proposed legislation on our economy. This brief compares modeling analyses of the House-passed clean energy and climate bill (H.R. 2454) conducted by seven different groups including government agencies, non-governmental organizations, and an academic institution. It identifies key similarities and differences among these analyses.

Pew Center on Global Climate Change (2010). "Economic Insights from Modeling Analyses of H.R. 2454: the American Clean Energy and Security Act (Waxman-Markey)." the Pew Center on Global Climate Change, Jan 2010.

Long Live the Kyoto Protocol

by Richard S.J. Tol

- Most feel the Copenhagen summit on climate change failed. This column argues for a “plan B” – to go back to Kyoto. The Kyoto Protocol has the tools needed for international policy. Future negotiations should focus on refining existing agreements instead of trying to impress voters at home.

Tol, R.S.J. (2009). "Long Live the Kyoto Protocol." Voxeu, www.voxeu.org, 23 January 2010.

Copenhagen: Good News and Bad News

by Carlo Carraro and Emanuele Massetti

- This short article presents estimates of GHG emissions at 2020, including the emissions reductions targets to which major economies informally committed at COP15. The expected impact on global emissions is not negligible if measured with respect to BaU, but it is still insufficient to curb emissions below 2005 levels by 2020, a necessary condition to contain global warming within safe levels. However, if all the Copenhagen Green Climate Fund is used to finance cheap, additional, mitigation actions in developing countries, this would make global emissions peak before 2020.

Carraro, C. and E. Massetti (2010). "Copenhagen: Bad News and Good News." Voxeu, 15 January 2010.

Heterogeneous Harm vs. Spatial Spillovers: Environmental Federalism and US Air Pollution

by H. Spencer Banzhaf and B. Andrew Chupp

- The economics of environmental federalism identifies two book-end departures from the first-best, which equates marginal costs and benefits in all local jurisdictions. Local governments may respond to local conditions, but ignore inter-jurisdictional spillovers. Alternatively, central governments may internalize spillovers, but impose uniform regulations ignoring local hetero-geneity. We provide a simple model that demonstrates that the choice of policy depends crucially on the shape of marginal abatement costs.

Banzhaf, H.S. and B.A. Chupp (2010). "Heterogeneous Harm vs. Spatial Spillovers: Environmental Federalism and US Air Pollution." NBER Working Paper No. 15666, Jan 2010.

Did Frederick Brodie Discover the World's First Environmental Kuznets Curve? Coal Smoke and the Rise and Fall of the London Fog

by Karen Clay and Werner Troesken

- In a paper presented to the Royal Meteorological Society, Brodie (1905) presented a data series that presaged the modern Environmental Kuznets Curve: in the decades leading up to 1890, the number of foggy days in London rose steadily, but after 1891, the fogs began to subside. Brodie attributed the rise and fall of the London fog to variation in emissions of coal smoke, arguing that before 1890 Londoners burned excessive amounts of soft coal, while in the years following, a series of legal, demographic, and technological changes mitigated the production of coal smoke.

Clay, K. and W. Troesken (2010). "Did Frederick Brodie Discover the World's First Environmental Kuznets Curve? Coal Smoke and the Rise and Fall of the London Fog." NBER Working Paper No. 15669, Jan 2010.

A Note on the Economic Cost of Climate Change and the Rationale to Limit it Below 2°C

by Stephane Hallegatte, Patrice Dumas and Jean-Charles Hourcade

- This note highlights a major reason to limit climate change to the lowest possible levels. This reason follows from the large increase in uncertainty associated with high levels of warming. This uncertainty arises from three sources: the change in climate itself, the change of impacts at the sector level, and their macroeconomic costs.

Hallegatte, S., P. Dumas and J-C Hourcade (2010). "A Note on the Economic Cost of Climate Change and the Rationale to Limit it Below 2°C." World Bank Policy Research Working Paper, no. WPS 5179, Jan 2010.

Taxes and Caps as Climate Policy Instruments with Domestic and Imported Fuels

by Jon Strand

- This paper develops a global model of climate policy, focusing on the choice between tax and cap-and-trade solutions. The analysis assumes that the world can be split into two regions, with two fuels that both lead to carbon emissions. A fuel-consuming and importing region that determines a climate policy will typically prefer to set a carbon tax, instead of setting a carbon emissions cap. The main reason is that a tax is more efficient than a cap at extracting rent from fuel (oil) exporters.

Strand, J. (2010). "Taxes and Caps as Climate Policy Instruments with Domestic and Imported Fuels." World Bank Policy Research Working Paper no. WPS 5171, Jan 2010.

The Inter-Linkages Between Rapid Growth in Livestock Production, Climate Change, and the Impacts on Water Resources, Land Use, and Deforestation

by Philip K. Thornton and Mario Herrero

- Livestock systems globally are changing rapidly in response to human population growth, urbanization, and growing incomes. This paper discusses the linkages between burgeoning demand for livestock products, growth in livestock production, and the impacts this may have on natural resources, and how these may both affect and be affected by climate change in the coming decades.

Thornton, P.K. and M. Herrero (2010). "The Inter-Linkages Between Rapid Growth in Livestock Production, Climate Change, and the Impacts on Water Resources, Land Use, and Deforestation." World Bank Policy Research Working Paper no. WPS 5178, Jan 2010.

Social Impacts of Climate Change in Chile: a Municipal Level Analysis of the Effects of Recent and Future Climate Change on Human Development and Ineq

by Lykke E. Andersen and Dorte Verner

- This paper uses municipality level data to estimate the general relationship between climate, income, and life expectancy in Chile. The analysis finds that incomes are negatively related to temperature, while life expectancy is not significantly related to average temperatures. Both incomes and life expectancy are greater in areas with either very little rain or a lot of rain. The authors use the estimated relationships to simulate the effects of both past (1958-08) and future (2008-58) climate change.

Andersen, L.E. and D. Verner (2010). "Social Impacts of Climate Change in Chile: a Municipal Level Analysis of the Effects of Recent and Future Climate Change on Human Development and Inequality." World Bank Policy Research Working Paper: no. WPS 5170.

National Drought Insurance for Malawi

by Joanna Syroka and Antonio Nucifora

- Malawi has experienced several catastrophic droughts over the past few decades. The impact of these shocks has been far reaching, and the resulting macroeconomic instability has been a major constraint to growth and poverty reduction in Malawi. This paper describes a weather risk management tool that has been developed to help the government manage the financial impact of drought-related national maize production shortfalls. The instrument is an index-based weather derivative contract designed to transfer the financial risk of severe and catastrophic national drought that adversely impacts the government's budget to the international risk markets.

Syroka, J. and A. Nucifora (2010). "National Drought Insurance for Malawi." Workd Bank Policy Research Working Paper no. WPS 5169, Jan 2010.

Climate Policy Design with Correlated Uncertainties in Offset Supply and Abatement Cost

by Harrison Fell, Dallas Burtraw, Richard D. Morgenstern and Karen L. Palmer

- Current and proposed greenhouse gas cap-and-trade systems allow regulated entities to offset abatement requirements by paying unregulated entities to abate. These offsets from unregulated entities are believed to contain system costs and stabilize allowance prices. However, the supply of offsets is highly uncertain. Furthermore, the offset supply uncertainty may be correlated with other sources of uncertainty in emissions trading systems. This paper presents a model that incorporates both uncertainties in the supply of offsets and in abatement costs.

Fell, H., D. Burtraw, R.D. Morgenstern and K.L. Palmer (2010). "Climate Policy Design with Correlated Uncertainties in Offset Supply and Abatement Cost." RFF Discussion Paper 10-01, Jan 2010.

Estimating the Cobenefits of the Clean Development Mechanism

by Junjie Zhang and Can Wang

- This paper investigates how the Clean Development Mechanism (CDM) affects local sulfur dioxide emissions. We use an engineering model to establish the link between carbon dioxide and sulfur dioxide emission reductions. Exploiting this relationship, we propose a semiparametric approach to evaluate whether the CDM activities lead to lower sulfur dioxide emissions. Using China's municipal emission as an empirical case, it is found that this hypothesis can not be confirmed. This result may suggest that these CDM activities would have happened otherwise.

Zhang, J. and C. Wang (2010). "Estimating the Cobenefits of the Clean Development Mechanism." Available at SSRN, Jan 2010.

Contrasting Future Paths for an Evolving Global Climate Regime

by Scott Barrett and Michael Toman

- This paper explores two different conceptions of how an emerging climate regime might evolve to strengthen incentives for more vigorous cooperation in mitigating global climate change. One is the paradigm that has figured most prominently in negotiations to this point: the establishment of targets and timetables for countries to limit their aggregate greenhouse gas emissions. The other approach consists of a variety of loosely coordinated smaller scale agreements, each one of which addresses a different aspect of the challenge, and is enforced in its own way. The primary conclusion is that an agreement of the first type may be more cost-effective, but that a system of agreements of the second type would likely sustain more abatement overall.

Barrett, S. and M. Toman (2010). "Contrasting Future Paths for an Evolving Global Climate Regime." World Bank Policy Research working paper no. WPS 5164, Jan 2010.

"Green Stimulus," Economic Recovery, and Long-Term Sustainable Development

by Jon Strand and Michael Toman

- This paper discusses short-run and long-run effects of "green stimulus" efforts, and compares these effects with "non-green" fiscal stimuli. A number of recently enacted national stimulus packages contain sizeable "green" components. The authors categorize effects according to their a) short-run employment effects, b) long-run growth effects, c) effects on carbon emissions, and d) "co-benefit" effects (on the environment, natural resources, and for other externalities).

Strand, J, and M. Toman (2010). ""Green Stimulus," Economic Recovery, and Long-Term Sustainable Development." World Bank Policy Research working paper no. WPS 5163, Jan 2010.

Implementing the EU Climate and Energy Package with the Economic Crisis

by Cécile Kerebel

- The reinforcement of European Union’s climate policy in the decade to come was prepared and decided in 2007-2008 via the EU Climate and Energy Package. But in the meantime, the economic conditions have radically changed. This new study released by Ifri analyzes how the economic downturn in Europe will affect the EU’s greenhouse gases emissions and its ability to reach its 20% emission reduction's target by 2020 compared to 1990.

Kerebel, C. (2009). "Implementing the EU Climate and Energy Package with the Economic Crisis." Note de l'Ifri, Dec 2009.

Government Failure and Market Failure: On the Inefficiency of Environmental and Energy Policy

by David Anthoff and Robert W. Hahn

- There are three key contributions of this paper. The first is to synthesize a large literature on energy and environmental policy in a way that can be easily digested by both non-experts and experts. The second contribution is to suggest that, if history is a guide, then we should not expect many interventions in these policy areas to come close to maximizing net economic benefits. The third is to suggest what might be needed for the development of more efficient energy and environmental policies.

Anthoff, D. and R.W. Hahn (2009). "Government Failure and Market Failure: On the Inefficiency of Environmental and Energy Policy." Smith School Working Paper Series, Working Paper No. 005, Available at SSRN. Nov 2009.

Neoclassical Growth, Environment and Technological Change: The Environmental Kuznets Curve

by S.J. Rubio, J.R. García and J.L. Hueso

- The paper investigates socially optimal patterns of economic growth and environmental quality in a neoclassical growth model with endogenous technological progress. In the model, the environmental quality affects positively not only to utility but also to production. However, cleaner technologies can be used in the economy if a part of the output is used in environmentally oriented R&D. In this framework, if the initial level of capital is low then the shadow price of a cleaner technology is low relative to the cost of developing it given by the marginal utility of consumption and it is not worth investing in R&D.

Rubio, S.J., J.R. García and J.L. Hueso (2009). "Neoclassical Growth, Environment and Technological Change: The Environmental Kuznets Curve." FEEM Working Paper 2009.125, Dec 2009.

At Home and Abroad: An Empirical Analysis of Innovation and Diffusion in Energy-Efficient Technologies

by Elena Verdolini and Marzio Galeotti

- This paper contributes to the induced innovation literature by extending the analysis of supply and demand determinants of innovation in energy-efficient technologies to account for international knowledge flows and spillovers. Our results confirm the role of demand-pull effects, as proxied by energy prices, as well as that of technological opportunity, as proxied by the knowledge stocks. In particular, this paper provides evidence that spillovers between countries have a significant positive impact on further innovation in energy-efficient technologies.

Verdolini, E. and M. Galeotti (2009). "At Home and Abroad: An Empirical Analysis of Innovation and Diffusion in Energy-Efficient Technologies." FEEM Working Paper 2009.123, Dec 2009.

Distributional Impacts of Carbon Pricing Policies in the Electricity Sector

by Dallas Burtraw, Margaret A. Walls, Joshua Blonz

- The introduction of a price on carbon dioxide will have important effects on the U.S. economy, and especially important effects on the electricity sector, which currently accounts for about 40 percent of carbon dioxide emissions. This paper examines alternative approaches to the distribution of allowance value to the sector, including free allocation to consumers through electricity and natural gas local distribution companies (LDCs).

Burtraw, D., M.A. Walls and J. Blonz (2009). "Distributional Impacts of Carbon Pricing Policies in the Electricity Sector." RFF Discussion Paper 09-43, Dec 2009.

Climate Change Governance: Boundaries and Leakage

by Michael P. Vandenbergh and Mark A Cohen

- We demonstrate how governments and non-governmental organizations can use expanded corporate carbon reporting boundaries and product carbon disclosure to harness social norms in developed countries. This informal social license pressure, in turn, will create incentives for firms to seek emissions reductions from their domestic and global supply chains. The private market pressure conveyed through supply chains will reduce leakage from developed countries, create new incentives for developing country firms and national governments, and play a surprisingly important role in the formation and implementation of a successful post-Kyoto global policy architecture.

Vandenbergh, M.P. and M.A. Cohen (2009). "Climate Change Governance: Boundaries and Leakage." RFF Discussion Paper 09-51, Dec. 2009.

REDD in Design Assessment of Planned First-Generation Activities in Indonesia

by Erin Madeira

- Much of the guidance about potential impacts of reduce emissions from deforestation and degradation (REDD) speculates how efforts would be implemented and draws lessons from other mechanisms, such as payments for ecosystem services (PES). However, with few REDD activities underway, little evidence indicates whether REDD projects are meeting these expectations. This article examines 17 REDD interventions under development in Indonesia, reports trends in project design, and assesses the extent to which interventions follow the model of pro-poor PES schemes.

Madeira, E. (2009). "REDD in Design Assessment of Planned First-Generation Activities in Indonesia." RFF Discussion Paper 09-49, Dec 2009.

Greenhouse Gas Regulation under the Clean Air Act: Does Chevron Set the EPA Free?

by Nathan Richardson

- The EPA is likely to face a big legal problem on the path to regulating greenhouse gases under the Clean Air Act (CAA). Actions the agency is taking now will likely set it on a mandatory path to regulation of GHGs under the comprehensive "National Ambient Air Quality Standards" (NAAQS) program, a scheme that almost everyone who has studied the CAA thinks is a very poor fit for GHG regulation and which blocks use of arguably more effective schemes within the CAA.

Richardson, N. (2009). "Greenhouse Gas Regulation under the Clean Air Act: Does Chevron Set the EPA Free?" RFF Discussion Paper 09-50, Dec 2009.

Sharing the Load: A Multi-country Survey of the Willingness to Pay for Slowing Climate Change

by Alan J. Krupnick and Thomas Sterner

- A rencet survey shows that 92% of Swedes and 71% of Americans are willing to pay for climate change mitigation efforts. Average amount: $306/year in Sweden and $204/year in the United States, amounting to 2-3% of the respondents’ per-capita income.

Alan J. Krupnick and Thomas Sterner (2009). "Sharing the Load: A Multi-country Survey of the Willingness to Pay for Slowing Climate Change." Resources for the Future Issue Brief, Dec 2009.

Sharing the Reduction Effort to Limit Global Warming to 2°C

by Michel den Elzen and Niklas Höhne

- In order to stabilise long-term greenhouse gas concentrations at 450 ppm CO2 eq or less, developed countries as a group should reduce emissions by 25 to 40% below 1990 levels, by 2020, while developing countries need to reduce by around 15 to 30%, relative to their baseline levels, according to the IPCC and our earlier work. These studies concerned different allocation approaches, according to equity principles.

Michel den Elzen and Niklas Höhne (2009). "Sharing the Reduction Effort to Limit Global Warming to 2°C." Dec, 2009.

Meeting the 2 Degree Target. From Climate Objective to Emission Reduction Measures

by D.P. van Vuuren, A.F. Hof and M.G.J. den Elzen

- This PBL report gives an overview of the implications of the 2°C target, by systematically presenting information along the causal chain of climate change. One element is that the increase in global greenhouse gas emissions will need to be halted and turned into a decrease by around 2020. In 2050, global emissions would need to be reduced by 35-55% compared to 1990.

Vuuren, D.P. van, A.F. Hof and M.G.J. den Elzen (2009). "Meeting the 2 Degree Target. From Climate Objective to Emission Reduction Measures." PBL Report No. 500114012, Dec 2009.

Too Hot to Handle? The Emission Surplus in the Copenhagen Negotiations

by M.G.J. den Elzen, M. Roelfsema and S. Slingerland

- This report analyses the effects of various strategies of dealing with surplus emission allowances or assigned amount units (AAUs), often known as 'hot air', in the Copenhagen negotiations. The environmental, financial and negotiation consequences of 'hot air' are analyzed. This high-profile topic in the Copenhagen negotiations is relevant, in particular, with respect to the Russian negotiation position, as this country is by far the largest holder of AAUs.

Elzen, M.G.J. den, M. Roelfsema and S. Slingerland (2009). "Too Hot to Handle? The Emission Surplus in the Copenhagen Negotiations." PBL Report no. 500114016, Dec 2009.

Sharing Developed Countries' Post-2012 Greenhouse Gas Emission Reductions Based on Comparable Efforts

by M.G.J. den Elzen, N. Hohne, M. Hagemann and J. van Vliet

- This study analyses comparable reduction efforts according to fundamentally different effort-sharing approaches for the individual industrialised (Annex I) countries for achieving an aggregated total reduction target for Annex I of 30% below 1990 levels. For the EU and Japan, only the more ambitious pledge would be just in line with the comparable effort reduction range. For the United States, their proposed reduction target is less ambitious than the calculated reduction range.

Elzen, M.G.J. den, N. Hohne, M. Hagemann and J. van Vliet (2009). "Sharing Developed Countries' Post-2012 Greenhouse Gas Emission Reductions Based on Comparable Efforts." PBL Report no. 500114014, Dec 2009.

Calculating the Benefits of Climate Policy: Examining the Assumptions of Integrated Assessment Models

by Michael D. Mastrandrea

- Policy-relevant results of Integrated Assessment Models (IAMs) are sensitive to a number of uncertain assumptions that govern model simulation of the climate, society, and the policy response to climate change. Uncertainties remain in understanding of the rate and magnitude of climate change, the nature and severity of climate impacts, and the ability to cope with those impacts. Methods for quantifying and comparing climate damages across different regions and different time periods are fiercely debated. This paper examines assumptions that are central to model estimates of the benefits of climate policy in three well-known IAMs,

Mastrandrea, M.D. (2009). "Calculating the Benefits of Climate Policy: Examining the Assumptions of Integrated Assessment Models." Pew Climate Center, Dec 2009.