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on Project, Program and Portfolio Management |
| By: | Johansson, Per-Olov (CERE and HHS) |
| Abstract: | There are di fferent views with respect to the treatment of tradable permits for greenhouse gases in cost-benefi t analysis. This note aims at illustrating numerically within a simple general equilibrium model how to treat tradable permits in economic evaluations of projects. The note looks at a cost-benefi t rule for a large project providing a public good interpreted as a shortcut for infrastructure, using a fossil fuel and a renewable as inputs. The paper also evaluates a small or marginal project involving the same output and inputs. In addition, it illustrates the Samuelson condition for the optimal provision of the public good. The note is a supplement to CERE Working Paper No 2015:11 and SSE Working Paper in Economics No 2015:3. The model used here may also be useful in advanced courses to illustrate general equilibrium cost-benefi t analysis. |
| Keywords: | Cost{bene t analysis; greenhouse gases; tradable permits; general equilibrium; Samuelson condition; numerical illustration |
| JEL: | H21 H23 H41 H43 I30 L13 |
| Date: | 2016–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2016_014&r=ppm |
| By: | Johansson, Per-Olov (CERE and HHS) |
| Abstract: | There are conflicting views on how to handle permits for greenhouse gases in cost-bene fit analysis. This paper aims at clarifying within a simple general equilibrium model how to treat di fferent kinds of tradable permits in economic evaluations of projects. Within a framework that reminds of the EU Emissions Trading System (EU ETS), the paper looks at cost-benefi t rules for a small project providing a public good, interpreted as a shortcut for infrastructure, using a fossil fuel and a renewable as inputs. In addition, it illustrates the Samuelson condition for the optimal provision of the public good, discusses briefly how to assess the EU permit system for sectors not covered under the EU ETS, as well as taxes and permits used to combat acid rain, and provides an illustration of the magnitude of the bias incurred if permits are valued at the marginal damage cost. The paper also introduces electricity ("green") certi ficates, a cousin to tradable permits, as well as well as energy savings ("white") certi ficates. Finally, a cap on the output of a commodity is considered. |
| Keywords: | Cost-benefit analysis; greenhouse gases; emissions trading; tradable permits; general equilibrium; Samuelson condition; EU ETS; non-ETS; acid rain; electricity certificates; renewable portfolio standards; energy savings certificates; output cap |
| JEL: | H21 H23 H41 H43 I30 L13 |
| Date: | 2016–08–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2016_013&r=ppm |
| By: | Erasmus Kersting (Department of Economics, Villanova School of Business, Villanova University); Christopher Kilby (Department of Economics, Villanova School of Business, Villanova University) |
| Abstract: | World Bank projects sometimes receive supplemental loans months or years after initial project approval. The number of supplemental loans has surged after 2006, in some years accounting for 30% of all new loans. Supplemental loans can be sizeable yet come without the long approval and disbursement delays associated with new projects. In addition, they are more common for zero-interest IDA credits, making them a particularly valuable source of development finance. This paper explores the political economy of supplemental loans. We find nonpermanent United Nations Security Council membership is a strong determinant, supporting the hypothesis that fast-moving supplemental loans are particular useful for short-run incentives where time is of the essence. |
| Keywords: | World Bank; Geopolitics of Aid; UNSC |
| JEL: | F35 F53 O19 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:vil:papers:30&r=ppm |
| By: | Gerhard Toews; Pierre-Louis Vezina |
| Abstract: | This paper examines the effect of large oil and gas discoveries on foreign direct investment in developing economies using a new project-level dataset. We document a large increase in non-resource FDI in the 2 years following a giant discovery, an event which is unpredictable due to the uncertain nature of exploration. We find that the value and the number of FDI projects increase by 30% following a discovery and that the number of source countries and target sectors increase by 14%. We interpret this FDI response as evidence for the news-driven business-cycle hypothesis within a developing country setting and highlight FDI bonanzas as an important development channel for resource rich economies. |
| Keywords: | giant discoveries, news shocks, investment |
| JEL: | F21 F23 Q32 Q33 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:oxcrwp:177&r=ppm |
| By: | Dreher, Axel; Langlotz, Sarah; Marchesi, Silvia |
| Abstract: | We investigate the degree of leeway donors of foreign aid should grant to recipient governments when their preferences over how to implement the aid are different, and both the donor and recipient possess some private information about the most effective policies. Intuitively, our model shows that donors should stay in control of how their aid is spent when their own private information is more important than the private information of the recipient. Less obviously, an increase in the difference of preferences between donors and recipients can increase rather than decrease the leeway that donors should grant the recipients, as the recipients' information gains in importance relative to those of the donors, and recipients become less likely to communicate truthfully. We test the model using dyadic data for 28 bilateral aid donors and 112 recipients, over the 1995-2010 period. Our proxy for "centralized" aid is project aid, while budget aid leaves more leeway to the recipient and thus proxies for "decentralized" aid. In line with the model, misaligned interests and informational asymmetries indeed influence the shares of aid given as budget and project aid. |
| Keywords: | communication; delegation; foreign aid; ownership |
| JEL: | C23 D82 F33 O1 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11443&r=ppm |