1,721,152 research outputs found
On the optimal management of environmental stock externalities
Full text linkEmissions of a broad range of greenhouse gases of varying lifetimes contribute to global climate change. Carbon dioxide displays exceptional persistence that renders its warming nearly irreversible for more than 1,000 y. Here we show that the warming due to non-CO2 greenhouse gases, although not irreversible, persists notably longer than the anthropogenic changes in the greenhouse gas concentrations themselves. We explore why the persistence of warming depends not just on the decay of a given greenhouse gas concentration but also on climate system behavior, particularly the timescales of heat transfer linked to the ocean. For carbon dioxide and methane, nonlinear optical absorption effects also play a smaller but significant role in prolonging the warming. In effect, dampening factors that slow temperature increase during periods of increasing concentration also slow the loss of energy from the Earth’s climate system if radiative forcing is reduced. Approaches to climate change mitigation options through reduction of greenhouse gas or aerosol emissions therefore should not be expected to decrease climate change impacts as rapidly as the gas or aerosol lifetime, even for short-lived species; such actions can have their greatest effect if undertaken soon enough to avoid transfer of heat to the deep ocean
The economics of non-point-source pollution
No full textNon-point-source (NPS) pollution refers to a form of pollution in which neither the source nor the size of specific emissions can be observed or identified with sufficient accuracy. In NPS pollution the ambient concentration of pollutants associated with the individually unobserved emissions is typically observed. NPS pollution due to agricultural runoff is a major source of water pollution, eutrophication, and hypoxia. Due to informational asymmetries and stochastic effects, the use of traditional environmental policy instruments such as emissions taxes or tradable quotas to regulate NPS pollution is very difficult. This article reviews the main theoretical approaches, up to the present, to the regulation of NPS pollution-input-based schemes, ambient schemes, and endogenous monitoring-and discusses issues associated with NPS pollution regulation and their relation to the theoretically proposed instruments. © 2011 by Annual Reviews. All rights reserved
Regulation and Evolution of Compliance in Common Pool Resources
No full textThe evolution of compliance with regulation and the evolution of a CPR stock are modeled jointly in a setup where replicator dynamics describing compliance with harvesting rules are combined with resource stock dynamics. This evolutionary approach suggests that in long-run equilibrium, coexistence of both cooperative and non-cooperative rules is possible under regulation. Stock effects on profits and a certain structure of auditing probabilities could imply the emergence of a limit cycle in areas of low stock levels, as an equilibrium outcome. It might be easier for the regulator to obtain full compliance under precommitment to fixed auditing probabilities. Copyright The editors of the "Scandinavian Journal of Economics", 2005 .
Cooperation and Competition in Climate Change Policies: Mitigation and Climate Engineering when Countries are Asymmetric
Full text linkWe study a dynamic game of climate policy design in terms of emissions and solar radiation management (SRM) involving two heterogeneous countries or group of countries. Countries emit greenhouse gasses (GHGs), and can block incoming radiation by unilateral SRM activities, thus reducing global temperature. Heterogeneity is modelled in terms of the social cost of SRM, the environmental damages due to global warming, the productivity of emissions in terms of generating private benefits, the rate of impatience, and the private cost of geoengineering. We determine the impact of asymmetry on mitigation and SRM activities, concentration of GHGs, and global temperature, and we examine whether a tradeoff actually emerges between mitigation and SRM. Our results could provide some insights into a currently emerging debate regarding mitigation and SRM methods to control climate change, especially since asymmetries seem to play an important role in affecting incentives for cooperation or unilateral actions
Temperature targets, deep uncertainty and extreme events in the design of optimal climate policy
Full text linkWe study optimal climate policy consistent with the constraint that average global temper- ature remains below 1.5 ◦C relative to pre-industrial levels. We consider a holistic repre- sentation of uncertainty including traditional risk, deep uncertainty and stochastic arrivals of climate-related disasters. Using robust control methods, we derive optimal emission and carbon tax paths and calculate when temperature exceeds the target in the absence of the constraint. We show that policy under deep uncertainty requires strong action now rela- tive to pure risk but the policy stringency is reversed later. Preliminary estimates suggest that the COVID-19 impact on attainment of the temperature target is negligible
Monetary policy stabilization in a new Keynesian model under climate change
No full textWe address the question of whether monetary policy is affected by the detrimental impact of
climate change on an economy’s productivity and, if so, whether policymakers should take it into
account when designing policies to stabilize the business cycle. To do this, we develop a new
Keynesian dynamic stochastic general equilibrium model of a closed economy which incorporates
a climate module that interacts with the economy. In this framework, monetary authorities choose
the nominal interest rate on government bonds. The model is solved numerically using parameter
values calibrated to the US economy. Our results, which are robust to both extensions and a large
number of sensitivity checks, suggest non-trivial implications for the design of optimal monetary
policy irrespectively of whether the shocks hitting the economy are standard economic shocks,
climate shocks, or shocks to the price of energy
Transboundary capital and pollution flows and the emergence of regional inequalities
Full text linkspatial heterogeneity, pollution flow, Solow modelWe seek to explain the emergence of spatial heterogeneity regarding development and pollution on the basis of interactions associated with the movement of capital and polluting activities from one economy to another. We use a simple dynamical model describing capital accumulation along the lines of a fixed-savings-ratio Solow-type model capable of producing endogenous growth and convergence behavior, and pollution accumulation in each country with pollution diffusion between countries or regions. The basic mechanism underlying the movements of capital across space is the quest for locations where the marginal productivity of capital is relatively higher than the productivity at the location of origin. The notion that capital moves to locations of relatively higher productivity but not necessarily from locations of high concentration to locations of low concentration, does not face difficulties associated with the Lucas paradox. We show that, for a wide range of capital and pollution rates of flow, spatial heterogeneity emerges even between two economies with identical fundamental structures. These results can be interpreted as suggesting that the neoclassical convergence hypothesis might not hold under differential rates of flow of capital and polluting activities among countries of the same fundamental structure
Managing Interacting Populations under Time Scale Separation
No full textAbstract. Renewable resource modeling is usually characterized by Q2
different time scales where some state variables such as biomass may evolve
relatively faster than other state variables such as carrying capacity. A strong
form of time scale separation (STSS) means that a slowly changing variable
is treated as constant over time. Management rules that assume STSS do
not account for a time scale externality and this may induce inefficiencies in
resource management. In the current work, we study multispecies resource
management under time scale separation by adopting the framework of singular
perturbation reduction methods. By extending recent work by Vardas and
Xepapadeas [2015] to interacting populations, we study regulation with full
internalization of the time scale externality. We further study regulation and
noncooperative outcomes under STSS and identify deviations in harvesting
and biomass paths among these cases. Deviations indicate the inefficiencies
associated with adopting STS
On the Evolution of Compliance and Regulation with Tax Evading Agents
No full textWe study the evolution of compliance and regulation with tax-
evading agents, allowing for imitation rather than rationality in the evolution
of available strategies distribution in the population. The general framework
of the approach combines a classical model for tax evasion where agents are
imitators rather than rational optimizers and form an endogenized subjective
probability of audit. A regulator chooses values to available policy instruments,
either myopically or optimally -within an optimal control setup-, always with
respect to the behavior of agents. A comparison is drawn between the evolu-
tionary and rational case in order to evaluate the dierences that occur
Atmospheric pollution in rapidly growing industrial cities: spatial policies and land use patterns
Full text linkpeer reviewedWe study the optimal and equilibrium distribution of industrial and residential land in a given region. The trade-off between agglomeration and dispersion forces in the form of pollution from stationary forces, production externalities and commuting costs, determines the emergence of industrial and residential clusters across space. In this context, we define two kinds of spatial policies that can be used in order to close the gap between optimal and market allocations. More specifically, we show that the joint implementation of a site-specific environmental tax and a site-specific labor subsidy can reproduce the optimum as an equilibrium outcome. The methodological approach followed in this article allows for an endogenous determination of land use patterns
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