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on Regulation |
| By: | Gagnepain, Philippe; Ivaldi, Marc |
| Abstract: | We consider a framework of contractual interactions between urban transport authorities and transport operators. We estimate simultaneously the choice of contract by the authorities and the effect of regulation on the cost reducing activity of the operators. We test whether regulatory schemes currently implemented in the industry are the observable items of a more general menu of second best contracts. We suggest that the generation process of the data we have in hand is better explained by the political aspects of regulation. Moreover, the cost reducing effort of the operators is greater under fixed-price regimes, compared to the cost-plus case. |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:22667&r=reg |
| By: | Soham Baksi; Pinaki Bose (Department of Economics, The University of Winnipeg) |
| Abstract: | We analyze the e¢ cacy of environmental regulation in the presence of an endoge- nous informal sector. Firms in an imperfectly competitive formal sector produce a .nal good using a polluting intermediate good. The .rms can either produce the intermediate good or purchase it from a price-taking informal sector. An en- vironmental regulator sets the emission intensity of the intermediate good that all formal sector .rms implement honestly but informal sector .rms seek, and are sometimes able, to evade. We show that, depending on the stringency of the reg- ulation and its enforcement, the informal sector can act as a source of pollution leakage. Stricter regulation can increase (when the .composition e¤ect.of regula- tion dominates its .scale e¤ect.) or decrease total pollution, and may even have a non-monotonic impact. Further, price discrimination by the formal sector, when it purchases the intermediate good from the informal sector, can worsen regulatory compliance by the informal sector and lead to lower welfare. |
| JEL: | Q56 O17 K42 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:win:winwop:2010-03&r=reg |
| By: | Ojo, Marianne |
| Abstract: | Developments since the introduction of the 1988 Basel Capital Accord have resulted in growing realisation that new forms of risks have emerged and that previously existing and managed forms require further redress. The revised Capital Accord, Basel II, evolved to a form of meta regulation – a type of regulation which involves the risk management of internal risks within firms. The 1988 Basel Accord was adopted as a means of achieving two primary objectives: Firstly, “…to help strengthen the soundness and stability of the international banking system – this being facilitated where international banking organisations were encouraged to supplement their capital positions; and secondly, to mitigate competitive inequalities.” As well as briefly outlining various efforts and measures which have been undertaken and adopted by several bodies in response to the recent Financial Crisis, this paper considers why efforts aimed at developing a new framework, namely, Basel III, have been undertaken and global developments which have promulgated the need for such a framework. Further, it attempts to evaluate the strengths and flaws inherent in the present and future regulatory frameworks by drawing a comparison between Basel II and the enhanced framework which will eventually be referred to as Basel III. |
| Keywords: | capital; cyclicality; buffers; risk; regulation; internal controls; equity; liquidity; losses; forward looking provisions; silent participations; Basel III |
| JEL: | E0 K2 E32 E58 E44 |
| Date: | 2010–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25291&r=reg |
| By: | Ana Espinola-Arredondo; Felix Munoz-Garcia (School of Economic Sciences, Washington State University) |
| Abstract: | This paper examines the two externalities that a country's environmental regulation imposes on other country's welfare: an environmental externality, due to transboundary pollution, and a competitive advantage externality, as regulations affect domestic firms' abatement costs, which impact the profits of their foreign competitors. We first analyze the emission standards that countries independently set under different market structures and then compare them with the standards set under international environmental agreements that internalize one or both types of externalities. The paper hence disentangles the effect of each externality. We show that firms’ profits increase when countries participate in international treaties if the environmental damage from pollution is relatively low and such pollution is not significantly transboundary. We hence demonstrate that international environmental agreements can serve as cooperative devices firms use to ameliorate overproduction and increase profits, without the need to form collusive agreements. |
| Keywords: | Transboundary pollution, strategic environmental policy, international environmental agreement, market structure |
| JEL: | C72 F12 H23 Q28 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:wsu:wpaper:munoz-5&r=reg |
| By: | Bardey, David; Canta, Chiara; Lozachmeur, Jean-Marie |
| Abstract: | This paper analyzes the regulation of payment schemes for health care providers competing in both quality and product differentiation of their services. The regulator uses two instruments: a prospective payment per patient and a cost reimbursement rate. When the regulator can only use a prospective payment, the optimal price involves a trade-off between the level of quality provision and the level of horizontal differentiation. If this pure prospective payment leads to underprovision of quality and overdifferentiation, a mixed reimbursement scheme allows the regulator to improve the allocation efficiency. This is true for a relatively low level of patients’transportation costs. We also show that if the regulator cannot commit to the level of the cost reimbursement rate, the resulting allocation can dominate the one with full commitment. In particular, some cost reimbursement might be optimal even for higher levels of transportation costs. |
| JEL: | I18 L51 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:22781&r=reg |
| By: | Luis Garicano; Rosa Lastra |
| Abstract: | In this paper we use insights from organizational economics and financial regulation to studythe optimal architecture of supervision. We suggest that the new architecture should revolvearound the following principles: (i) banking, securities and insurance supervision should befurther integrated; (ii) macro prudential supervisory function must be in the hands of thecentral bank; (iii) the relation between macro and micro supervisors must be articulatedthrough a management by exception system involving direct authority of the macrosupervisor over enforcement and allocation of tasks; (iv) given the difficulty of measuringoutput on supervisory tasks, the systemic risk supervisor must necessarily be moreaccountable and less independent than Central Banks are on their monetary task; (v) thesupervisory agency cannot rely on high powered incentives to motivate supervisors, and mustrely on culture instead; (vi) the supervisor must limit its reliance on self regulation; and (vii)the international system should substitute the current loose, networked structure for a morecentralized and hierarchical one. |
| Keywords: | Banks, international financial markets, systematic risk |
| JEL: | E61 G21 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:cepdps:dp0990&r=reg |
| By: | Daron Acemoglu (Massachusetts Institute of Technology and Canadian Institute for Advanced Research); Philippe Aghion (Harvard University, Stockholm School of Economics and Canadian Institute for Advanced Research); Leonardo Bursztyn (Harvard University); David Hemous (Harvard University) |
| Abstract: | This paper introduces endogenous and directed technical change in a growth model with environmental constraints. A unique final good is produced by combining inputs from two sectors. One of these sectors uses "dirty" machines and thus creates environmental degradation. Research can be directed to improving the technology of machines in either sector. We characterize dynamic tax policies that achieve sustainable growth or maximize intertemporal welfare. We show that: (i) in the case where the inputs are sufficiently substitutable, sustainable long-run growth can be achieved with temporary taxation of dirty innovation and production; (ii) optimal policy involves both “carbon taxes” and research subsidies, so that excessive use of carbon taxes is avoided; (iii) delay in intervention is costly: the sooner and the stronger is the policy response, the shorter is the slow growth transition phase; (iv) the use of an exhaustible resource in dirty input production helps the switch to clean innovation under laissez-faire when the two inputs are substitutes. Under reasonable parameter values and with sufficient substitutability between inputs, it is optimal to redirect technical change towards clean technologies immediately and optimal environmental regulation need not reduce long-run growth. |
| Keywords: | Environment, Exhaustible Resources, Directed Technological Change, Innovation |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.93&r=reg |
| By: | Gérard Mondello (University of Nice Sophia Antipolis, CREDECO, GREDEG, UMR 6727, CNRS) |
| Abstract: | This paper studies the delegation of activities that pose serious risks to health and the environment in an economy regulated by strict liability schemes. Strict liability induces judgment-proof possibilities. Two civil liability regimes are then compared: a strict liability scheme and a capped strict liability one. The argument is led under a twofold asymmetric information assumption between the principal and the agent: the efficiency level in effort for safety and the agent’s level of wealth. The paper shows that standard strict liability under information asymmetries deters the efficient agent to compete and favors adverse selection. Then, under conditions, a capped strict liability regime is a better regime than a standard strict liability one because it induces the efficient agent to supply the level of safety effort equivalent to the first best solution. The counterpart is the perception of an informational rent by the efficient agent. At the optimum, this rent is minimized by the efficient contract supplied by the principal. |
| Keywords: | Environment, Strict Liability, Ex-Ante Regulation, Ex-Post Liability, Judgment-Proof, Environment Law, CERCLA, Environmental Liability |
| JEL: | K0 K32 Q01 Q58 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.103&r=reg |
| By: | Alain-Désiré Nimubona (Department of Economics, University of Waterloo); Bernard Sinclair-Desgagné (International Economics and Governance Chair, HEC Montreal) |
| Abstract: | To comply with laws, regulations and social demands, polluting firms increasingly purchase the needed means from specialized suppliers. This paper an- alyzes this relatively recent phenomenon. We show how environmental regulation, the size of the output market, the elasticity of demand for abatement goods and services, and the fact that in-house and outsourced abatement expenses are substitutes or complements can influence a polluter's make-or-buy decision. Specific features of abatement outsourcing are highlighted, qualifications and refinements of the theory of vertical integration are then proposed, and some consequences for environmental policy are briefly discussed. |
| JEL: | L23 L24 Q52 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:wat:wpaper:1009&r=reg |
| By: | Youri Chassin; Marcelin Joanis |
| Abstract: | With assertion of collusive behavior in public construction projects, this report looks at the best practices meant to detect and to deter collusion in procurement. Based on regulatory frameworks, an overview of actual processes in public procurement and of construction industry regulation is explored. The economic analysis of tender as a bidding process, and of a cartel's internal logic, helps understand the impact of collusive behavior in public procurement. Also, drawing on best practices, this report suggests the means to detect and to deter collusion with improvements to the Québec's public procurement framework. <P>Dans la foulée d'allégations de collusion dans les contrats publics en construction, le présent rapport s'intéresse aux meilleures pratiques visant à détecter et prévenir la collusion dans les marchés publics. Sur la base des cadres réglementaires spécifiques, un survol des pratiques actuelles dans les marchés publics et de l'organisation du secteur de la construction est proposé. L'analyse économique de l'appel d'offres comme forme d'enchère, et du fonctionnement d'un cartel, permet aussi de mieux comprendre l'impact de la collusion dans les marchés publics. Ce rapport propose finalement, à partir d'un ensemble de pratiques reconnues, les moyens de détecter et de prévenir la collusion et des pistes d'action à mettre en place dans le cadre des marchés publics québécois. |
| Keywords: | Collusion, cartel, construction, contracts, public bodies, public procurement, tenders, bidding, competition, best practices, bid-rigging, formation., Collusion, cartel, construction, contrats, organismes publics, marchés publics, appel d'offres, enchère, concurrence, meilleures pratiques, truquage d'offres, soumissions concertées, formation |
| Date: | 2010–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirpro:2010rp-13&r=reg |
| By: | Lawrence H. Goulder (Stanford University National Bureau of Economic Research Resources for the Future); Robert N. Stavins (John F. Kennedy School of Government, Harvard University, Resources for the Future National Bureau of Economic Research) |
| Abstract: | Federal action addressing climate change is likely to emerge either through new legislation or via the U.S. EPA’s authority under the Clean Air Act. The prospect of federal action raises important questions regarding the interconnections between federal efforts and state-level climate policy developments. In the presence of federal policies, to what extent will state efforts be cost-effective? How does the co-existence of state- and federal-level policies affect the ability of state efforts to achieve emissions reductions? This paper addresses these questions. We find that state-level policy in the presence of a federal policy can be beneficial or problematic, depending on the nature of the overlap between the two systems, the relative stringency of the efforts, and the types of policy instruments engaged. When the federal policy sets limits on aggregate emissions quantities, or allows manufacturers or facilities to average performance across states, the emission reductions accomplished by a subset of U.S. states may reduce pressure on the constraints posed by the federal policy, thereby freeing facilities or manufacturers to increase emissions in other states. This leads to serious “emissions leakage” and a loss of cost-effectiveness at the national level. In contrast, when the federal policy sets prices for emissions or does not allow manufactures to average performance across states, these difficulties are usually avoided. Even in circumstances involving problematic interactions, there may be other attractions of state-level climate policy. We evaluate a number of arguments that have been made to support state-level climate policy in the presence of federal policies, even when problematic interactions arise. |
| Keywords: | Global Climate Change, Federalism, Cap-And-Trade, Carbon Tax, Regulation |
| JEL: | H11 H77 K32 L51 Q48 Q54 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.98&r=reg |
| By: | Ana Espinola-Arredondo; Felix Munoz-Garcia (School of Economic Sciences, Washington State University) |
| Abstract: | TThis paper investigates a signaling entry deterrence model under learning-by-doing. We show that a monopolist’s practice of entry deterrence imposes smaller welfare losses (or larger welfare gains) when learning effects are present than when they are absent, making the intervention of antitrust authorities less urgent. If, however, the welfare loss associated to entry deterrence is still significant, and thus intervention is needed, our paper demonstrates that the incumbent’s practice of entry deterrence is easier to detect by a regulator who does not have access to accurate information about the incumbent’s profit function. Learning-by-doing hence facilitates the regulator’s ability to detect entry deterrence, thus suggesting its role as an “ally” of antitrust authorities. |
| Keywords: | Learning-by-doing, Entry deterrence, Incomplete information, Spillovers |
| JEL: | L12 D82 D83 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:wsu:wpaper:espinola-6&r=reg |
| By: | Jamasb, T.; Orea, L.; Pollitt, M.G. |
| Abstract: | Incentive regulation and efficiency analysis of network utilities often need to take the effect of important external factors, such as the weather conditions, into account. This paper presents a method for estimating the effect of weather conditions on the costs of electricity distribution networks using parametric techniques. It examines whether the use of popular statistical variable reduction techniques is conceptually and econometrically sound for analyzing the effect of weather on the network costs. In this paper we estimate cost functions with the whole set of weather variables, identifying, when necessary, a subset of variables that can accurately reflect the effects of weather conditions. We show that weather conditions significantly affect distribution costs and the absence of weather variables has a downward biased impact on the effect of quality on costs. Also, the performance of statistical weather composites to capture this effect is poor. Finally, we show that there is a distinction between the effects of persistent and time varying weather conditions. |
| Keywords: | Electricity distribution cost, separability, weather composites, instrumental variable estimator |
| JEL: | L15 L51 L94 |
| Date: | 2010–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1042&r=reg |
| By: | Ambec, Stefan; Crampes, Claude |
| Abstract: | The paper analyzes the interaction between a reliable source of electricity production and intermittent sources such as wind or solar power. We first characterize the first-best dispatch and investment in the two types of energy. We put the accent on the availability of the intermittent source as a major parameter of optimal capacity investment. We then analyze decentralization through competitive market mechanisms. We show that decentralizing first best requires to price electricity contingently on wind or solar availability. By contrast, traditional meters impose a second-best uniform pricing, which distorts the optimal mix of energy sources. Decentralizing the either cross-subsidy from the intermittent source to the reliable source of energy or structural integration of the two types of technology. |
| Keywords: | Renewable resources, wind electricity, solar energy, global warming |
| JEL: | D24 D61 Q27 Q32 Q42 |
| Date: | 2010–03–24 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:22631&r=reg |
| By: | Valeria Costantini (University of Roma III); Massimiliano Mazzanti (University of Ferrara, University of Bologna and CERIS-CNR); Anna Montini (University of Bologna) |
| Abstract: | The achievement of positive environmental performance at national level could strongly depend on differences in local capabilities of both institutions and the private business sector. Environmental regulation alone is a weak instrument if the institutional and business environment cannot transform regulation strengths into opportunities. In this paper, we use the new environmental accounting matrix for polluting emissions now available for the 20 Italian Regions that covers 24 sectors and combines a shift-share approach with spatial econometric modelling. We provide evidence of the role played by internal innovation, innovation spillovers and regional policies in shaping the geographical distribution of environmental performance achievements. |
| Keywords: | Environmental Performance, Technological Innovation, Regional Spillovers, Polluting Emissions, Italian Regions |
| JEL: | Q53 Q55 Q56 R15 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.108&r=reg |
| By: | Léautier, Thomas-Olivier |
| Abstract: | One of the main purposes of the restructuring of the electric power industry in the 1990s was to "push to the market" decisions and risks associated with generation investment. Yet, markets appear to have failed to deliver "optimal" generation capacity, hence policy makers around the world are implementing various capacity provision arrangements to remedy this market failure. This articles provides a systematic analysis of these arrangements. It first examines "single market" designs, and finds that average Value of Lost Load pricing, implemented in Texas, does not restore investment incentives unless generation is perfectly competitive. Even more surprising, it finds that Operating Reserves pricing can worsen the underinvestment problem. It then examines "dual markets" designs, and finds that the two most commonly advocated approaches, the "capacity markets" and "reliability options" approaches both restore optimal investment incentives. Furthermore, both coincide if the "technical" parameters selected by the System Operator also coincide. |
| Date: | 2010–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:22641&r=reg |
| By: | LEFOUILI, Yassine (Center for Operations Research and Econometrics (CORE), Université catholique de Louvain (UCL), Louvain la Neuve, Belgium); ROUX, Catherine (University of Lausanne, Faculty of Business and Economics, CH-1015 Lausanne-Dorigny, Switzerland) |
| Abstract: | We examine the effect of the Amnesty Plus policy on the incentives of firms to engage in cartel activities. Amnesty Plus is aimed at attracting amnesty applications by encouraging firms, convicted in one market, to report their collusive agreements in other markets. It has been vigorously advertised that Amnesty Plus weakens cartel stability. We show to the contrary that Amnesty Plus may not have this desirable effect, and, if improperly designed, may even stabilize a cartel. We suggest a simple discount-setting rule to avoid this anticompetitive effect. |
| Keywords: | Amnesty Plus, Leniency program, multimarket contact, antitrust policy |
| JEL: | K21 K42 L41 |
| Date: | 2010–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:cor:louvco:2010021&r=reg |
| By: | Valeria Costantini (University of Roma Tre); Massimiliano Mazzanti (University of Ferrara, and CERIS-CNR) |
| Abstract: | This paper aims to explore how the competitiveness of the EU economy, here captured by export dynamics over the medium run (1996-2007), has been affected by environmental regulation both on the public and private sector side. The strong and weak versions of the Porter hypothesis are tested by specifying the export dynamics of five aggregated manufacturing sectors classified by their technological or environmental content using a dynamic panel data estimator applied to a theoretically-based gravity model. When testing the strong version on export performances of manufacturing sectors, the overall effect of environmental policies does not conflict with export competitiveness. When testing the weak version using export flows of environmental goods, environmental policies, as well as innovation activities, all foster competitive advantages of green exports. Public policies and private innovation patterns trigger higher efficiency in the production process, thus turning the perception of environmental protection actions as a production cost into a net benefit. These results constitute useful advice for policy makers involved in the new wave of environmental tax reforms and green recovery packages currently debated at European Union level. |
| Keywords: | Environmental Policies, Porter Hypothesis, Technological Innovation, Export Performances, Gravity Model, European Union |
| JEL: | F14 O14 Q43 Q56 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.94&r=reg |
| By: | Sauvagnat, Julien |
| Abstract: | We present a model where the Antitrust Authority is privately informed about the strength of the case against a given cartel. In this context, the Antitrust Authority may obtain cartel members' confessions even when it opens an investigation knowing that it has no chance to find hard evidence. More generally, we show that offering leniency allows to raise the conviction rate, which in turn enhances cartel desistance and cartel deterrence. A second contribution of the paper is to show that the optimal leniency scheme involves a single informant rule. That is, amnesty should be given only if a unique cartel member reports information. |
| Keywords: | Antitrust law and policy; Cartels; Collusion; Self-reporting |
| JEL: | K21 K42 L41 |
| Date: | 2010–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:23201&r=reg |
| By: | Stavins, Robert N. |
| Abstract: | The problem of the commons is more important to our lives and thus more central to economics than a century ago when Katharine Coman led off the first issue of the American Economic Review. As the U.S. and other economies have grown, the carrying-capacity of the planet — in regard to natural resources and environmental quality — has become a greater concern, particularly for common-property and open-access resources. The focus of this article is on some important, unsettled problems of the commons. Within the realm of natural resources, there are special challenges associated with renewable resources, which are frequently characterized by open access.An important example is the degradation of open-access fisheries. Critical commons problems are also associated with environmental quality. A key contribution of economics has been the development of market-based approaches to environmental protection. These instruments are key to addressing the ultimate commons problem of the twenty-first century — global climate change. |
| Keywords: | common-property resource, open-access resource, fisheries, global climate change |
| JEL: | Q22 Q28 Q50 Q54 Q58 |
| Date: | 2010–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-46&r=reg |
| By: | Carlos A. Chavez (Departamento de Economia, Universidad de Concepcion Chile); John K. Stranlund (Department of Resource Economics, University of Massachusetts Amherst); Walter Gomez (Departamento de Ingenieria Matematica, Universidad de la Frontera Chile) |
| Abstract: | We examine the control of air pollution caused by households burning wood for heating and cooking in the developing world. Since the problem is one of controlling emissions from nonpoint sources, regulations are likely to be directed at household choices of wood consumption and combustion technologies. Moreover, these choices are subtractions from, or contributions to, the pure public good of air quality. Consequently, the efficient policy design is not independent of the distribution of household income. Since it is unrealistic to assume that environmental authorities can make lump sum income transfers part of control policies, efficient control of air pollution caused by wood consumption entails a higher tax on wood consumption and a higher subsidy for more efficient combustion technologies for higher income households. Among other difficulties, implementing a policy to promote the adoption of cleaner combustion technologies must overcome the seemingly paradoxical result that efficient control calls for higher technology subsidies for higher income households. |
| Keywords: | efficiency, urban air pollution, nonpoint pollution, environmental policy, uncertainty |
| JEL: | L51 H23 Q28 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:dre:wpaper:2010-2&r=reg |
| By: | John K. Stranlund (Department of Resource Economics, University of Massachusetts Amherst); James J. Murphy (Department of Economics, University of Alaska Anchorage); John M. Spraggon (Department of Resource Economics, University of Massachusetts Amherst) |
| Abstract: | Two important design elements for emission trading programs are whether and to what extent firms are able to bank emissions permits, and how these programs are to be enforced. In this paper we present results from laboratory emissions markets designed to investigate enforcement and compliance when these markets allow permit banking. Banking is motivated by a decrease in the aggregate permit supply in the middle of multi-period trading sessions. Consistent with theoretical insights, our experiments suggest that high permit violation penalties have little deterrence value in dynamic emissions markets, and that the main challenge of enforcing these programs is to motivate truthful self-reports of emissions. |
| Keywords: | compliance, enforcement, emissions trading, laboratory experiments, permit markets, permit banking |
| JEL: | C91 L51 Q58 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:dre:wpaper:2010-3&r=reg |
| By: | Joëlle Noailly (CPB Netherlands Bureau for Economic Policy Analysis The Hague) |
| Abstract: | This paper investigates the impact of alternative environmental policy instruments on technological innovations aiming to improve energy-efficiency in buildings. The empirical analysis focuses on three main types of policy instruments, namely regulatory energy standards in buildings codes, energy taxes as captured by energy prices and specific governmental energy R&D expenditures. Technological innovation is measured using patent counts for specific technologies related to energy-efficiency in buildings (e.g. insulation, high-efficiency boilers, energy-saving lightings). The estimates for seven European countries over the 1989-2004 period imply that a strengthening of 10% of the minimum insulation standards for walls would increase the likelihood to file additional patents by about 3%. In contrast, energy prices have no significant effect on the likelihood to patent. Governmental energy R&D support has a small positive significant effect on patenting activities. |
| Keywords: | Innovation, Technological Change, Patents, Energy-Efficiency, Buildings, Environmental Policy |
| JEL: | O31 O34 Q55 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2010.106&r=reg |
| By: | Newbery, D. |
| Abstract: | Concerns over future oil scarcity might not be so worrying but for the high carbon content of substitutes, and the limited capacity of the atmosphere to absorb additional CO2 from burning fuel. The paper argues that the tools of economics are helpful in understanding some of the key issues in pricing fossil fuels, the extent to which pricing can be left to markets, the need for, and design of, international agreements on corrective carbon pricing, and the potential prisoners’ dilemma in reaching such agreements, partly mitigated in the case of oil by current taxes and the likely incidence of carbon taxes on the oil price. The ‘Green Paradox’ in which carbon pricing exacerbates climate change is theoretically possible, but empirically unlikely. |
| Keywords: | exhaustible resources, climate change, carbon prices, prisoners’ dilemma, international agreement, Green Paradox |
| JEL: | Q32 Q54 H23 L71 |
| Date: | 2010–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1045&r=reg |