November 22, 2009

Imperfections in the Economics of Public Policy, Imperfections in Markets, and Climate Change

by Nicholas Stern

- In the last twenty years economics has created much of lasting value and real potential: it has been a very fertile period. But economics has also suffered from what I shall term "collective amnesia" covering whole areas of public policy. I use the example of climate change to illustrate some of the consequences of the amnesia, as well as of the political influence.

Stern, N. (2009). "Imperfections in the Economics of Public Policy, Imperfections in Markets, and Climate Change." FEEM Working Papers No. 106.09, Nov 2009.

An Integrated Assessment of Climate Change, Air Pollution, and Energy Security Policy

by Bob van der Zwaan, Johannes Bollen and Sebastiaan Hers

- This article presents an integrated assessment of climate change, air pollution, and energy security policy. Basis of our analysis is the MERGE model, designed to study the interaction between the global economy, energy use, and the impacts of climate change. For our purposes we expanded MERGE with expressions that quantify damages incurred to regional economies as a result of air pollution and lack of energy security.

van der Zwaan, B., J. Bollen and S. Hers (2009). "An Integrated Assessment of Climate Change, Air Pollution, and Energy Security Policy." FEEM Working Papers No. 105.09, Nov 2009.

Time-separable Utility, Leisure and Human Capital Accumulation: What New Implications for the Environment-Growth Nexus?

by Xavier Pautrel

- Using a time-separable utility function where leisure is introduced through the disutility of working time and is adjusted for quality, as measured by human capital to capture home-production, we demonstrate that the environmental policy is harmful for growth. A tighter environmental tax reduces the incentives to educate by increasing leisure time and lowers the steady-state growth rate and lifetime welfare, whatever the source of pollution.

Pautrel, X. (2009). "Time-separable Utility, Leisure and Human Capital Accumulation: What New Implications for the Environment-Growth Nexus?" FEEM Working Papers No. 104.09, Nov 2009.

Nuclear versus Coal plus CCS: A Comparison of Two Competitive Base-load Climate Control Options

by Massimo Tavoni and Bob van der Zwaan

- In this paper we analyze the relative importance and mutual behavior of two competing base-load electricity generation options that each are capable of contributing significantly to the abatement of global CO2 emissions: nuclear energy and coal-based power production complemented with CO2 capture and storage (CCS).

Tavoni, M. and B. van der Zwaan (2009). "Nuclear versus Coal plus CCS: A Comparison of Two Competitive Base-load Climate Control Options." FEEM Working Papers No 100.09, Nov 2009.

Distributional Impacts of a U.S. Greenhouse Gas Policy: A General Equilibrium Analysis of Carbon Pricing

by Sebastian Rausch, Gilbert E. Metcalf, John M. Reilly and Sergey Paltsev

- We develop a new model of the U.S., the U.S. Regional Energy Policy (USREP) model that is resolved for large states and regions of the U.S. and by income class and apply the model to investigate a $15 per ton CO2 equivalent price on greenhouse gas emissions. Previous estimates of distributional impacts of carbon pricing have been done outside of the model simulation and have been based on energy expenditure patterns of households in different regions and of different income levels.

Rausch, S., G. Metcalf, J.M. Reilly and S. Paltsev (2009). "Distributional Impacts of a U.S. Greenhouse Gas Policy: A General Equilibrium Analysis of Carbon Pricing." MIT Joint Program Report Series, Report 182, Nov 2009.

German Car Buyers' Willingness to Pay to Reduce Co2 Emissions

by Martin Achtnicht

- This paper examines whether CO2 emissions per kilometre is a relevant attribute in car choices. Based on a stated preference experiment among potential car buyers from Germany, different mixed logit specifications are estimated. In addition, distributions of willingness to pay measures for an abatement of CO2 emissions are obtained. The results suggest that the emissions performance of a car matters substantially, but its consideration varies heavily across the sampled population.

Achtnicht, M. (2009). "German Car Buyers' Willingness to Pay to Reduce Co2 Emissions." ZEW - Centre for European Economic Research Discussion Paper No. 09-058, Nov 2009.

Statistical Evaluation of Biofuel Role in Land Use Change

by Kobi Ako Abayomi, Valerie Thomas and Dexin Luo

- We investigate the effect of biofuels on land use change through a case study of U.S. corn production. Determination of the influence of biofuel production on other uses of the biofuel feedstock - such as for food or animal feed - cannot be evaluated with standard statistical methods because the uses of an agricultural crop are constrained: total crop use is always the sum of the constituents. We develop a general method for these compositional distributions, and apply this method to determine competition between biofuel feedstock production and other uses of the same feedstock.

Abayomi, K.A., V. Thomas and D. Luo (2009). "Statistical Evaluation of Biofuel Role in Land Use Change." Available at SSRN, Nov 2009.

Malapportionment, Gasoline Taxes, and the United Nations Framework Convention on Climate Change

by J. Lawrence Broz and Daniel Maliniak

- Malapportionment results in a "rural bias" such that the political system disproportionately represents rural voters. We argue that malapportionment of the electoral system affects both the rate at which governments tax gasoline and the extent to which governments participate in global efforts to ameliorate climate change. Since rural voters in industrialized countries rely more heavily on fossil fuels than urban voters, our prediction is that malapportioned political systems will have lower gasoline taxes, and less commitment to climate change amelioration, than systems with equitable representation of constituents.

Broz, J.L. and D. Maliniak (2009). "Malapportionment, Gasoline Taxes, and the United Nations Framework Convention on Climate Change." Available at SSRN, Nov 2009.

Emissions Targets and the Real Business Cycle: Intensity Targets versus Caps or Taxes

by Carolyn Fischer and Michael R. Springborn

- For reducing greenhouse gas emissions, intensity targets are attracting interest as a flexible mechanism that would better allow for economic growth than emissions caps. For the same expected emissions, however, the economic responses to unexpected productivity shocks differ. Using a real business cycle model, we find that certainty-equivalent intensity targets maintain higher levels of labor, capital, and output than other policies, with lower expected costs and no more volatility than with no policy.

Fischer, C. and M.R. Springborn (2009). "Emissions Targets and the Real Business Cycle: Intensity Targets versus Caps or Taxes." RFF Discussion Paper 09-47, Nov 2009.

The Unholy Trinity: Fat Tails, Tail Dependence, and Micro-Correlations

by Carolyn Kousky and Roger M. Cooke

- Recent events in the financial and insurance markets, as well as the looming challenges of a globally changing climate point to the need to re-think the ways in which we measure and manage catastrophic and dependent risks. Management can only be as good as our measurement tools. To that end, this paper outlines detection, measurement, and analysis strategies for fat-tailed risks, tail dependent risks, and risks characterized by micro-correlations.

Kousky, C. and R.M. Cooke (2009). "The Unholy Trinity: Fat Tails, Tail Dependence, and Micro-Correlations." RFF Discussion Paper 09-36-REV, Nov 2009.

To Trade or Not to Trade: Firm-Level Analysis of Emissions Trading in Santiago, Chile

by Jessica Coria, Åsa Lofgren and Thomas Sterner

- Whether tradable permits are appropriate for transition and developing economies is much debated. We conducted interviews and surveyed a sample of firms subject to emissions trading programs in Santiago, Chile, one of the first cities outside the OECD that has implemented such trading. The information gathered allowed us to study which factors affect the performance of the trading programs in practice and the challenges and advantages of applying tradable permits in less developed countries.

Coria, J., Å. Lofgren and T. Sterner (2009). "To Trade or Not to Trade: Firm-Level Analysis of Emissions Trading in Santiago, Chile." RFF Discussion Paper EfD 09-25, Nov 2009.

Fuel Tax Incidence in Developing Countries: The Case of Costa Rica

by Allen Blackman, Rebecca Osakwe, Francisco Alpízar

- We use household survey data and income-outcome coefficients to analyze fuel tax incidence in Costa Rica. We conclude that distributional concerns need not rule out using fuel taxes to address pressing public health and safety problems, particularly if gasoline and diesel taxes can be differentiated.

Blackman, A., R. Osakwe and F. Alpízar (2009). "Fuel Tax Incidence in Developing Countries: The Case of Costa Rica." RFF Discussion Paper 09-37, Oct 2009.

The Role of the States in a Federal Climate Program: Issues and Options

by Katherine N. Probst and Sarah Jo F Szambelan

- This paper provides an overview of some of the key isuses regarding state-federal roles in a federal climate program and identifies four possible mechanisms that have been suggested for allowing states to set more stringent reduction targets.

Katherine N. Probst and Sarah Jo F Szambelan (2009). "The Role of the States in a Federal Climate Program: Issues and Options." RFF Discussion Paper 09-46, Nov 2009.

Economic Impacts of S. 1733: The Clean Energy Jobs and American Power Act of 2009

by the U.S. Environmental Protection Agency

- On September 30, 2009, Senators Kerry and Boxer introduced the Clean Energy Jobs and American Power Act of 2009 (S. 1733). The counterpart bill in the House of Representatives is the American Clean Energy and Security Act of 2009 (H.R. 2454), for which EPA developed cost estimates on June 23, 2009. This paper presents a discussion of how some of the key provisions in the Senate bill compare to the House bill, particularly with respect to the likely economic impacts of the bill.

EPA (2009). "Economic Impacts of S. 1733: The Clean Energy Jobs and American Power Act of 2009." Environmental Protection Agency, Oct 2009.

Addressing Biofuel GHG Emissions in the Context of a Fossil-Based Carbon Cap

by John M. DeCicco

- This paper explores ways to close the gaps in cap-based emissions accounting for biofuels while mitigating the associated leakages. To remedy the situation without an additional layer of regulation, a cap-and-trade system can be refined through the following three-part approach: (1) correct specification of the transportation sector point of regulation with careful carbon accounting at the point of finished fuel distribution; (2) voluntary fuel and feedstock GHG accounting standards; and (3) a land protection fund for purchasing international forest carbon offsets to mitigate leakage.

DeCicco, J.M. (2009). "Addressing Biofuel GHG Emissions in the Context of a Fossil-Based Carbon Cap." School of Natural Resources and Environment, University of Michigan, Oct 2009.

November 15, 2009

National and Sectoral GHG Mitigation Potential: A Comparison Across Models

by Christa Clapp, Katia Karousakis, Barbara Buchner and Jean Chateau

- This paper focuses on mitigation potential to provide a comparative assessment across key economies. GHG mitigation potential is defined here to be the level of GHG emission reductions that could be realised, relative to the projected emission baseline in a given year, for a given carbon price. Estimates of GHG mitigation potential projected in the future can be obtained via models.

Clapp, C., K. Karousakis, B. Buchner and J. Chateau (2009). "National and Sectoral GHG Mitigation Potential: A Comparison Across Models." OECD/IEA, November 2009.

Greenhouse Gas Emission Trends and Projections in Europe 2009

by the European Environmental Agency

- This report presents an assessment of the current and projected progress of EU Member States, EU candidate countries and other EEA member countries towards their respective targets under the Kyoto Protocol and of progress towards the EU target for 2020. This is based on their past greenhouse gas emissions between 1990 and 2007, and the projected greenhouse gas emissions of these countries during the Kyoto commitment period 2008-2012 and for 2020, derived from data and related information they provided before 1 June 2009.

EEA (2009). "Greenhouse Gas Emission Trends and Projections in Europe 2009." EEA Report No 9/2009, Nov 2009. [5.7 MB]

Also available the Summary and the Annex

Regulation, Allocation, and Leakage in Cap-and-Trade Markets for CO2

by James B. Bushnell and Yihsu Chen

- The allocation of emissions allowances is among the most contentious elements of the design of cap-and-trade systems. In this paper we develop a detailed representation of the US western electricity market to assess the potential impacts of various allocation proposals. These allocation proposals are designed with the goals of limiting the pass-through of carbon costs to product prices, mitigating leakage, and of mitigating costs to high-emissions firms.

Bushnell, J.B. and Y. Chen (2009). "Regulation, Allocation, and Leakage in Cap-and-Trade Markets for CO2." NBER Working Paper No. 15495, Nov 2009.

Responding to Threats of Climate Change Mega-Catastrophes

by Carolyn Kousky, Olga Rostapshova, Michael Toman and Richard Zeckhauser

- The authors present a qualitative analysis of three options for mitigating the risk of climate mega-catastrophes - drastic abatement of greenhouse gas emissions, development and implementation of geoengineering, and large-scale ex ante adaptation - against the criteria of efficacy, cost, robustness, and flexibility. They discuss the composition of a sound portfolio of initial investments in reducing the risk of climate change mega-catastrophes.

Kousky, C., O. Rostapshova, M. Toman and R. Zeckhauser (2009). "Responding to Threats of Climate Change Mega-Catastrophes." World Bank Policy Research Working Paper no. WPS 5127, Nov 2009.

Reconciling Climate Change and Trade Policy

by Aaditya Mattoo, Arvind Subramanian, Dominique van der Mensbrugghe and Jianwu He

- A key factor affecting the impact of any border taxes is whether they are based on the carbon content of imports or the carbon content in domestic production. Border tax adjustment based on the carbon content in domestic production, especially if applied to both imports and exports, would broadly address the competitiveness concerns of producers in high income countries and less seriously damage developing country trade.

Mattoo, A., A. Subramanian, D. van der Mensbrugghe and J. He (2009). "Reconciling Climate Change and Trade Policy." World Bank Policy Research Working Paper no. WPS 5123, Nov 2009.

Can Global De-Carbonization Inhibit Developing Country Industrialization?

by Aaditya Mattoo, Arvind Subramanian, Dominique van der Mensbrugghe and Jianwu He

- Most economic analyses of climate change have focused on the aggregate impact on countries of mitigation actions. The authors depart first in disaggregating the impact by sector, focusing particularly on manufacturing output and exports because of the potential growth consequences. Second, they decompose the impact of an agreement on emissions reductions into three components: the change in the price of carbon due to each country's emission cuts per se; the further change in this price due to emissions tradability; and the changes due to any international transfers (private and public).

Mattoo, A., A. Subramanian, D. van der Mensbrugghe and J. He (2009). "Can Global De-Carbonization Inhibit Developing Country Industrialization?" World Bank Policy Research Working Paper no. WPS 5121, Nov 2009.

Climate Volatility and Poverty Vulnerability in Tanzania

by Syud Amer Ahmed et al

- This study assesses the vulnerability of Tanzania's population to poverty to changes in climate variability between the late 20th century and early this century. Future climate scenarios with the largest increases in climate volatility are projected to make Tanzanians increasingly vulnerable to poverty through its impacts on the production of staple grains. Extreme poverty-increasing outcomes are also found to be greater in the future under certain climate scenarios.

Ahmed, S.A., N.S. Diffenbaugh, T.W. Hertel, D.B. Lobell, N. Ramankutty, A.R. Rios and P. Rowhani (2009). "Climate Volatility and Poverty Vulnerability in Tanzania." World Bank Policy Research Working Paper no. WPS 5117, Nov 2009.

The Economics of 350: The Benefits and Costs of Climate Stabilization

by Frank Ackerman et al

- This report demonstrates that the 'go slow' recommendations are unjustified. A number of economic analyses, informed by recent scientific findings and using reasonable assumptions, suggest that more ambitious targets and quicker action make good economic sense.

Ackerman, F., E.A. Stanton, S.J. DeCanio, E. Goodstein, R.B. Howarth, R.B. Norgaard, C.S. Norman and K.A. Sheeran (2009). "The Economics of 350: The Benefits and Costs of Climate Stabilization." Economics for Equity and the Environment, Oct 2009.

Beyond Kyoto: Flexible Carbon Pricing for Global Cooperation

by Steven E. Stoft

- This short book starts from Nature’s critique of the "targets and timetables" approach to international agreement and describes an international policy structure that expands on the ideas of Joseph E. Stiglitz, William D. Nordhaus and James E. Hansen. The design reflects their two key objectives, first, to implement a global price for carbon, and second, to avoid the antagonisms and gaming opportunities engendered by attempts to impose national caps.

Stoft, S.E. (2009). "Beyond Kyoto: Flexible Carbon Pricing for Global Cooperation." Global Energy Policy Center Research Paper No. 09-05, Available at SSRN, Oct 2009.

November 8, 2009

RECIPE - The Economics of Decarbonization

by Ottmar Edenhofer, Carlo Carraro, Jean-Charles Hourcade and Karsten Neuhoff et al

- RECIPE ( Report on Energy and Climate Policy in Europe ) outlines roadmaps towards a low-carbon world economy. Three structurally different energy-economy models were used to explore possible future development paths under a range of different assumptions about the nature of the low-carbon transition.
RECIPE shows that stabilizing atmospheric CO2 concentrations at 450 ppm is technically feasible and economically affordable.

Edenhofer, O., C. Carraro, J.-C. Hourcade, K. Neuhoff, G. Luderer, C. Flachsland, M. Jakob, A. Popp, J. Steckel, J. Strohschein, N. Bauer, S. Brunner, M. Leimbach, H. Lotze-Campen, V. Bosetti, E. de Cian, M. Tavoni, O. Sassi, H. Waisman, R. Crassous-Doerfler, S. Monjon, S. Dröge, H. van Essen, P. del Río, A. Türk (2009). "RECIPE - The Economics of Decarbonization." Synthesis Report, Nov 2009.

For working papers describing the models used by RECIPE go to the RECIPE website.

How Can Each Sector Contribute to 2C?

by RECIPE Project

- These top-down analyses of RECIPE were complemented by four in-depth bottom-up sectoral studies for Europe until 2030. The following sectors have been covered: (i) power and heat, (ii) transport, (iii) industry (iron and steel, cement) and (iv) agriculture. The aim is to show implications for the sectors in more detail that the models due to their top-down approach are not able to deliver. For each sector key mitigation options are analyzed, specific barriers are investigated and policy instruments targeting the sector are explored.

Bodirsky, B., R. Crassous-Doerfler, H. van Essen, J.-C. Hourcade, B. Kampman, H. Lotze-Campen, A. Markowska, S. Monjon, K. Neuhoff, S. Noleppa, A. Popp, P. del Río González, S. Spielmans, J. Strohschein, H. Waisman (2009). "How can each sector contribute to 2C?" RECIPE Working paper, Nov 2009.

Translating Model Results to Economic Policies

by RECIPE Project

- This paper aims to draw insights for policy design from RECIPE project results. The models ignore important factors that influence investment, innovation, production and consumption decisions. After all, managers and consumers make these decisions in a reality that is characterised by: incomplete information, uncertainty, limited trust in continuity or announced policy schemes, concerns about technology spillover, constrained access to capital, administrative barriers, and institutional mismatches. These factors need to be considered when designing and implementing policy instruments to deal with the real world.

Neuhoff, K., S, Dröge, O. Edenhofer, C. Flachsland, H. Held, M. Ragwitz, J. Strohschein, A. Türk and A. Michaelowa (2009). "Translating model results to economic policies." RECIPE Working Paper, Nov 2009.

Why have CO2 Emissions Increased in the Transport Sector in Asia? Underlying Factors and Policy Options

by Govinda R. Timilsina and Ashish Shrestha

- This study analyzes the factors responsible for transport sector CO2 emissions growth in selected developing Asian countries during 1980-2005. The analysis splits the annual emissions growth into components representing economic development; population growth; shifts in transportation modes; and changes in fuel mix, emission coefficients, and transportation energy intensity. The study also reviews existing government policies to limit CO2 emissions growth, particularly various fiscal and regulatory policy instruments.

Timilsina G.R. and A. Shrestha (2009). "Why have CO2 Emissions Increased in the Transport Sector in Asia? Underlying Factors and Policy Options." World Bank Policy Research working paper, no. WPS 5098, Nov 2009.

Climate Finance

by The Harvard Project on International Climate Agreements

- The finance of climate mitigation and adaptation in developing countries represents a key challenge in the negotiations on a post-2012 international climate agreement. Finance mechanisms are important because stabilizing the climate will require significant emissions reductions in both the developed and the developing worlds, and therefore large-scale investments in energy infrastructure. The current state of climate finance has been criticized for its insufficient scale, relatively low share of private-sector investment, and insufficient institutional framework. This policy brief presents options for improving and expanding climate finance.

HPICA (2009). "Climate Finance." The Harvard Project on International Climate Agreements, Policy Brief 2009-02, Nov 2009.

Green Serves the Dirtiest: On the Interaction between Black and Green Quotas

by Christoph Böhringer and Knut Einar Rosendahl

- Tradable black (CO2) and green (renewables) quotas gain in popularity and stringency within climate policies of many OECD countries. The overlapping regulation through both instruments, however, may have important adverse economic implications. Based on stylized theoretical analysis and substantiated with numerical model simulations for the German electricity market, we show that a green quota imposed on top of a black quota does not only induce substantial excess cost but serves the dirtiest power technologies as compared to a black quota regime only.

Böhringer, C. and K.E. Rosendahl (2009). "Green Serves the Dirtiest: On the Interaction between Black and Green Quotas." CESifo Working Paper No. 2837, Oct 2009.

The Implications of Heterogeneous Resource Intensities on Technical Change and Growth

by Karen Pittel and Lucas Bretschger

- We analyze an economy in which sectors are heterogeneous with respect to the intensity of natural resource use. Long-term dynamics are driven by resource prices, sectoral composition, and directed technical change. We study the balanced growth path and determine stability conditions. Technical change is found to be biased towards the resource-intensive sector. Resource taxes have no impact on dynamics except when the tax rate varies over time.

Pittel, K. and L. Bretschger (2009). "The Implications of Heterogeneous Resource Intensities on Technical Change and Growth." ETH Working Paper 09/120, Oct 2009.

An assessment of the Costs of the French Nuclear PWR Program 1970-2000.

by Arnulf Grubler

- The paper reviews the history and the economics of the French PWR program, which is arguably the most successful nuclear-scale up experience in an industrialized country. Key to this success was a unique institutional framework that allowed for centralized decision making, a high degree of standardization, and regulatory stability, all epitomized by comparatively short reactor construction times. Drawing on largely unknown public records, the paper reveals for the first time both absolute as well as specific reactor costs and their evolution over time.

Grubler, A. (2009). "An assessment of the Costs of the French Nuclear PWR Program 1970-2000." IIASA Interim Report IR-09-036, Oct 2009.

Energy and Carbon Dioxide Emission Data Uncertainties

by Jordan Macknick

- Organizations that report carbon dioxide emissions utilize different methods and produce data that are not directly comparable with each other, making verification of national inventories and climate modeling efforts difficult and potentially misleading. To facilitate improved understanding of uncertainties and different methodologies of reporting organizations, this paper introduces an online database that consolidates energy and carbon emission reports and allows users to view all organizations' data in consistent units side-by-side. Furthermore, the database offers the ability to apply consistent methodological assumptions to all organizations' data.

Macknick, J. (2009). "Energy and Carbon Dioxide Emission Data Uncertainties." IIASA Interim Report IR-09-032, Aug 2009.

Mitigation of Methane Emissions: A Rapid and Cost-Effective Response to Climate Change

by Claudia Kemfert and Wolf-Peter Schill

- In this report, we analyze methane emission abatement options in five different sectors and identify economic mitigation potentials for different CO2 prices. While mitigation potentials are generally large, there are substantial potentials at low marginal abatement costs. Drawing on different assumptions on the social costs of carbon, we calculate benefit/cost ratios for different sectors and mitigation levels.

Claudia Kemfert and Wolf-Peter Schill (2009). "Mitigation of Methane Emissions: A Rapid and Cost-Effective Response to Climate Change." DIW Berlin Discussion Paper No. 918, Aug 2009.

The World Trade Organization and Climate Change: Challenges and Options

by Gary Clyde Hufbauer and Jisun Kim

- Controlling greenhouse gas emissions promises to be a top priority for both national and international agendas, and special attention must be given to the relationship between the WTO and the emerging international regime on climate change. This working paper examines the nexus of the WTO and climate change and discusses challenges and options.

Hufbauer, G.C. and J. Kim (2009). "The World Trade Organization and Climate Change: Challenges and Options." Peterson Institute for International Economics Working Paper No. 09-9, Sept 2009.

November 1, 2009

Social Impacts of Climate Change in Peru: a District Level Analysis of the Effects of Recent and Future Climate Change on Human Development and Inequa

by Lykke E. Andersen, Addy Suxo and Dorte Verner

- This paper uses district level data to estimate the general relationship between climate, income and life expectancy in Peru. The analysis finds that both incomes and life expectancy show hump-shaped relationships, with optimal average annual temperatures around 18-20ºC. These estimated relationships were used to simulate the likely effects of both past (1958-2008) and future (2008-2058) climate change.

Andersen, L.E., A. Suxo and D. Verner (2009). "Social Impacts of Climate Change in Peru: a District Level Analysis of the Effects of Recent and Future Climate Change on Human Development and Inequality." World Bank Policy Research working paper no. WPS 5091, Oct 2009.

Social Impacts of Climate Change in Bolivia

by Lykke E. Andersen and Dorte Verner

- This paper analyzes the direct evidence of climate change in Bolivia during the past 60 years, and estimates how these changes have affected life expectancy and consumption levels for each of the 311 municipalities in Bolivia. The estimations indicate that the 1°C cooling experienced in the already cold highlands over the past five decades likely has reduced consumption possibilities by about 2-3 percent in these areas.

Andersen, L.E. and D. Verner (2009). "Social Impacts of Climate Change in Bolivia : a Municipal Level Analysis of the Effects of Recent Climate Change on life Expectancy, Consumption, Poverty and Inequality." World Bank Policy Research working paper no. WPS 5092, Oct 2009.

A Polycentric Approach for Coping with Climate Change

by Elinor Ostrom

- The author, who won the 2009 Nobel Prize in Economic Sciences, argues that single policies adopted only at a global scale are unlikely to generate sufficient trust among citizens and firms so that collective action can take place in a comprehensive and transparent manner that will effectively reduce global warming. As an alternative, the paper proposes a polycentric approach at various levels with active oversight of local, regional, and national stakeholders to reduce free-riding effects that can limit, for example, REDD and CDM.

Ostrom, E. (2009). "A Polycentric Approach for Coping with Climate Change." World Bank Policy Research working paper no. WPS 5095, Oct 2009.

Achieving Urban Climate Adaptation in Europe and Central Asia

by JoAnn Carmin and Yan Zhang

- Many cities across Europe and Central Asia are experiencing the impacts of climate change, but most have not integrated climate adaptation into their agendas. This paper examines the threats faced and measures that can be taken by cities in the region to protect buildings, heritage sites, municipal functions, and vulnerable urban populations.

Carmin, J. and Y. Zhang (2009). "Achieving Urban Climate Adaptation in Europe and Central Asia." World Bank, Policy Research working paper no. WPS 5088, Oct 2009.

An International Survey on Time Discounting

by Mei Wang, Oliver Rieger and Thorsten Hens

- We present results from an international survey on time discounting in 45 countries/regions. Consistent with the pattern predicted by the hyperbolic discounting model, most participants discount the near future more than the long-term future. The tendency to wait and the subjective discount rates are highly heterogeneous on a cross-country level and this cannot simply be explained by economic variables such as interest or inflation rates.

Wang, M., O. Rieger and T. Hens (2009). "An International Survey on Time Discounting." Available at SSRN, Oct 2009.

Can Carbon Based Import Tariffs Effectively Reduce Carbon Emissions?

by Michael Hübler

- We estimate CO2 implicitly contained in traded commodities based on the GTAP 7 data: While net carbon imports into the industrialized countries amount to 15% of their total emissions, net carbon exports of the developing countries amount to 12% of their total emissions, and net carbon exports of China amount to 24% of China's total emissions.

Hübler, M. (2009). "Can Carbon Based Import Tariffs Effectively Reduce Carbon Emissions?" Kiel Institute for the World Economy, Oct 2009.

The EU 20/20/2020 Targets: An Overview of the EMF22 Assessment

by Christoph Böhringer, Thomas F. Rutherford and Tol, Richard S J

- Three computable general equilibrium models are used to estimate the economic implications of a stylized version of EU climate policy. If implemented at the lowest possible cost, the 20% emissions reduction would lead to a welfare loss of 0.5-2.0% by 2020. Second-best policies increase costs. A policy with two carbon prices (one for the ETS, one for the non-ETS) could increase costs by up to 50%. The renewables standard could raise the costs of emissions reduction by 90%. Overall, the inefficiencies in policy lead to a cost that is 100-125% too high.

Böhringer, C., T.F. Rutherford and R.S.J. Tol (2009). "The EU 20/20/2020 Targets: An Overview of the EMF22 Assessment." ESRI Working Paper 325, Oct 2009.

Counting Only the Hits? The Risk of Underestimating the Costs of Stringent Climate Policy

by Massimo Tavoni and R.S.J. Tol

- We argue that a straightforward review of integrated assessment models results produces biased estimates for the more ambitious climate objectives such as those compatible with the 2°C of the European Union and the G8. The magnitude and range of estimates are significantly reduced because only the most optimistic results are reported for such targets. We suggest a procedure that addresses this partiality. The results show highly variable costs for the most difficult scenarios.

Tavoni, M. and R.S.J. Tol (2009). "Counting Only the Hits? The Risk of Underestimating the Costs of Stringent Climate Policy." ESRI Working Paper 324, Oct 2009.

Subsidising Carbon Capture. Effects on Energy Prices and Market Shares in the Power Market

by Finn Roar Aune, Gang Liu, Knut Einar Rosendahl and Eirik Lund Sagen

- This paper examines how ambitious climate policies and subsidies to carbon capture may affect international energy prices and market shares in the power market. A detailed numerical model of the international energy markets is used. We first conclude that an ambitious climate policy alone will have substantial effects in the power market, with considerable growth in renewable power production and eventually use of carbon capture.

Aune, F.R., G. Liu, K.E. Rosendahl and E.L. Sagen (2009). "Subsidising Carbon Capture. Effects on Energy Prices and Market Shares in the Power Market." Discussion Papers 595 - Statistics Norway, Oct 2009.

Climate Change and Damage from Extreme Weather Events

by Robert Repetto and Robert Easton

- The risks of extreme weather events are typically being estimated, by federal agencies and others, with historical frequency data assumed to reflect future probabilities. These estimates may not yet have adequately factored in the effects of past and future climate change, despite strong evidence of a changing climate. They have relied on historical data stretching back as far as fifty or a hundred years that may be increasingly unrepresentative of future conditions.

Robert Repetto and Robert Easton (2009). "Climate Change and Damage from Extreme Weather Events." PERI, University of Massachussets Working Papers 207, Oct 2009.

Technology Roadmap: Carbon Capture and Storage

by the International Energy Agency

- This roadmap on CCS identifies, for the first time, a detailed scenario for the technology’s growth from a handful of large-scale projects today to over three thousand projects by 2050. It finds that the next decade is a key "make or break" period for CCS; governments, industry and public stakeholders must act rapidly to demonstrate CCS at scale around the world in a variety of settings.

IEA (2009). "Technology Roadmap: Carbon Capture and Storage." Oct 2009.

Carbon Leakage from the Clean Development Mechanism

by Knut Einar Rosendahl and Jon Strand

- This paper analyzes how CDM projects may lead to leakage of emissions elsewhere in Non-Annex B countries, taking into account also potential (negative) leakage effects from less emission reductions in Annex B. Leakage occurs because emissions reductions under a CDM project may affect market equilibrium in regional and/or global energy and product markets, and thereby increase emissions elsewhere.

Rosendahl, K.E. and J. Strand (2009). "Carbon Leakage from the Clean Development Mechanism." Discussion Papers 591 - Statistics Norway, Sept 2009.

Who Owns Our Low Carbon Future? Intellectual Property and Energy Technologies

by Bernice Lee, Ilian Iliev and Felix Preston

- This report examines two issues: patent ownership of climate-friendly technologies, and the rate of technology diffusion. A polarized debate continues between proponents of strengthening intellectual property rights (IPR) regimes to encourage innovation of climate technologies on the one hand, and those calling for more IP-related flexibilities to ensure access to key technologies by developing countries on the other.

Lee, B., I. Iliev and F. Preston (2009). "Who Owns Our Low Carbon Future? Intellectual Property and Energy Technologies." Chatham House, Sept 2009.

A Copenhagen Collar: Achieving Comparable Effort Through Carbon Price Agreements

by Warwick J. McKibbin, Adele Morris and Peter J. Wilcoxen

- To improve the political stability of any policy agreement emerging from this December’s annual meeting on the U.N. Framework Convention on Climate Change (UNFCCC) in Copenhagen, and to ensure the comparability of commitments and ease the inclusion of developing countries, the authors propose that the UNFCCC supplement emissions targets with a price collar. This paper outlines an example that shows that a price collar can have a negligible expected impact on the outcome that matters most for the climate-increasing emissions.

Warwick J. McKibbin, Adele Morris and Peter J. Wilcoxen (2009). "A Copenhagen Collar: Achieving Comparable Effort Through Carbon Price Agreements." The Brookings Institution, Aug 2009.

Personal Carbon Trading: a Critical Examination of Proposals for the UK

by Gill Seyfang, Irene Lorenzoni and Michael Nye

- This conceptual paper aims to critically examine personal carbon trading (PCT) by questioning the assumptions underlying this proposal and identifying the gaps in current thinking. The paper first discusses the origins and development of the PCT ideas, identifies key players and proponents of the proposals, and examines their economic bases.

Seyfang, G., I. Lorenzoni and N. Michael (2009). "Personal Carbon Trading: a Critical Examination of Proposals for the UK." Tyndall Working Paper 136, Aug 2009.

An Inventory of Adaptation to Climate Change in the UK: Challenges and Findings

by E.L. Tompkins, E. Boyd, S.A. Nicholson-Cole, K.Weatherhead, N.W Arnell and W.N. Adger

- While there has been an increasing investment in the ‘science of adaptation’, there has been less, if any, attention paid to the ‘practice of adaptation’, i.e. is adaptation occurring, and if so, how, where and why? There is now a clear demand from policy makers to answer these questions and specifically to answer them with relation to actions in the UK. The objective of the DEFRA-funded project ‘Linking adaptation research and practice’, is to develop a systematic categorisation of observed adaptation in the UK in both the private and the public sectors.

Tompkins, E.L., E. Boyd, S.A. Nicholson-Cole, K.Weatherhead, N.W Arnell and W.N. Adger (2009). "An Inventory of Adaptation to Climate Change in the UK: Challenges and Findings." Tyndall Working Paper 135, Jul 2009.