December 28, 2007

Economics, Ethics and Climate Change.

Climate change raises challenging questions in the economics of risk, space, time and in broader aspects of human well-being. Many of these are normative questions, which cannot be addressed without engaging with difficult ethical issues. Welfare economics is just one perspective, and the standard 'workhorse' model, while powerful, has a particularly restrictive structure. Coherent analysis requires the integration of economics with moral and political philosophy, a theme in much of Amartya Sen's work.

Dietz, S., C.J. Hepburn and N. Stern. "Economics, Ethics and Climate Change." Dec 2007. Available at SSRN.

Ranking Port Cities with High Exposure and Vulnerability to Climate Extremes: Exposure Estimates.

The impact of climate change and urban development could more than triple the number of people around the world exposed to coastal flooding by 2070, according to a new report by the OECD, co-authored by experts from academia and the private sector.

OECD (2007). "Ranking Port Cities with High Exposure and Vulnerability to Climate Extremes: Exposure Estimates." OECD, Environment Directorate, Dec 2007. Full Report. Executive Summary.

Rare Disasters, Asset Prices, and Welfare Costs.

A representative-consumer model with Epstein-Zin-Weil preferences and i.i.d. shocks, including rare disasters, accords with key asset-pricing observations. The match with major features of asset pricing suggests that the model is a reasonable candidate for assessing the welfare cost of aggregate consumption uncertainty. In the baseline simulation, the welfare cost of disaster risk is large -- society would be willing to lower real GDP by as much as 20% each year to eliminate the small chance of major economic collapses.

Barro, R.J. (2008). "Rare Disasters, Asset Prices, and Welfare Costs." NBER Working Paper No. 13690, Dec 2007.

Climate change: the cost of inaction and the cost of adaptation.

This technical report reviews, analyses and discusses the methodological issues regarding cost of inaction and cost of adaptation to climate change modelling. Possible cost impacts of climate change in the European economic sectors are also studied.

EEA. "Climate change: the cost of inaction and the cost of adaptation." European Environmental Agency Technical Report No 13/2007, Dec 2007.

Towards an integrated multi-track climate framework.

Bodansky, D. and E: Diringer. "Towards an integrated multi-track climate framework." Pew Center on Global Climate Change, Dec 2007.

Bali Climate Change Conference: Key Takeaways.

Stavins, R.N. . "Bali Climate Change Conference: Key Takeaways." Cambridge, Mass.: Harvard Project on International Climate Agreements, Dec 2007.

The Clean Development Mechanism and the International Diffusion of Technologies: An Empirical Study.

This paper provides an assessment of the technology transfers that take place through the CDM using a unique data set of 644 registered projects. It provides a detailed description of the transfers (frequency, type, by sector, by host country, etc.). It also includes an econometric analysis of their drivers.

Glachant, M., A. Dechezleprêtre, Y. Ménière. "The Clean Development Mechanism and the International Diffusion of Technologies: An Empirical Study." FEEM Working Papers 105.07, Dec 2007.

Evaluating Temporary Certified Emission Reductions in Reforestation and Afforestation Programs.

This paper investigates the social efficiency of creating temporary certified emissions reductions to internalize the carbon sequestration function of the forest under the Clean Development Mechanism of the Kyoto Protocol. The authors derive an optimal harvest tax during each rotation to obtain the socially optimal rotation interval in conjunction with the current regulation generating temporary certified emission reductions.

Galinato, G.I. and S. Uchida. "Evaluating Temporary Certified Emission Reductions in Reforestation and Afforestation Programs." Available at SSRN, Dec 2007.

December 22, 2007

From H20 to C02: Lessons of Water Rights for Carbon Trading.

Interest in climate change has generated many proposals for cap-and-trade programs to control greenhouse gases. Longstanding American water rights regimes may have some lessons for these new proposals. Nineteenth century eastern water law focused on the cap - keeping water instream - and particularly illustrates the importance of mobilized constituencies in any program that entails capping resource use. Western water law focused on individualized and supposedly tradable rights, and its experience shows especially the significance of rights-definition both for the content and for the tradability of rights.

Rose, C.M. "From H20 to C02: Lessons of Water Rights for Carbon Trading." Arizona Legal Studies Discussion Paper No. 07-26, Dec 2007.

Regional Impacts of Climate Change: Four Case Studies in the United States.

Four essays which assess the impacts of climate change in the United States: (1) The Heat is On: Climate Change & Heatwaves in the Midwest; (2) The Importance of Climate Change for Future Wildfire Scenarios in the Western United States; (3) Gulf Coast Wetland Sustainability in a Changing Climate; (4) Ramifications of Climate Change for Chespeake Bay Hypoxia.

Ebi, K.L., G.A. Meehl,D. Bachelet, R.R. Twilley and D.F. Boesch. "Regional Impacts of Climate Change: Four Case Studies in the United States." Pew Center on Global Climate Change, Dec 2007.

'Water' in the U.S. Ethanol Tax Credit and Mandate: Implications for Rectangular Deadweight Costs and the Corn-Oil Price Relationship.

The relationship between ethanol, corn and oil prices are analyzed under two alternative situations, depending on whether or not consumers purchase ethanol on the basis of its contribution to mileage. In all cases, market prices of ethanol can be above or below the consumer price paid for ethanol. The paper extends de Gorter and Just's concept of "water" in the tax credit to include the premium due to a binding mandate. The resulting rectangular deadweight costs are estimated for the past 25 years and are found to dwarf standard triangular deadweight cost measures of traditional farm subsidies.

De Gorter, H. and D.R. Just. "'Water' in the U.S. Ethanol Tax Credit and Mandate: Implications for Rectangular Deadweight Costs and the Corn-Oil Price Relationship." Available at SSRN, Dec 2007.

Uncertainty in Greenhouse Gas Inventories.

This briefing highlights some of the issues and challenges arising from uncertainty in estimates of greenhouse gas (GHG) emissions and removals, explores how this uncertainty can be dealt with through uncertainty analysis techniques and improvements to science, and points to the implications of uncertainty analysis for policymakers working to reduce human impacts on the global climate.

IIASA. "Uncertainty in Greenhouse Gas Inventories." IIASA, Policy Brief #01, Dec 2007.