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on Regulation |
| By: | Karp, Larry; Rezai, Armon |
| Abstract: | Currently living people might reduce carbon emissions to protect themselves, their wealth, or future generations from climate damage. An overlapping generations climate model with endogenous asset priceand investment levels disentangles these incentives. Asset markets capitalize the future e¤ects of policy, regardless of people’s concern for future generations. These markets can lead self-interested agents to undertake signi…cant abatement. A small climate policy that raises the price of capital increases welfare of old agents and also increases welfare of young agents with a high intertemporal elasticity of sub-stitution. Climate policy can also have subtle distributional e¤ects across the currently living generations. |
| Keywords: | Social and Behavioral Sciences, Climate externality, overlapping generations, climate pol- icy, generational con‡ict, dynamic bargaining, Markov perfection, ad- justment costs. |
| Date: | 2017–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:agrebk:qt6fx579fp&r=reg |
| By: | Thomas Stoerk |
| Abstract: | This research evaluates China's main air pollution control policy. In 2005, China decided on a 10% SO2 emissions reduction goal as part of the 11th Five-Year Plan (2006-2010). I study the effect of this policy on pollution outcomes, using both the offcial, misreporting-prone indicator and independent NASA SO2 satellite data in a differences-in-differences strategy that exploits variation in target stringency at the province level. I find that results from the offcial and the satellite data differ initially when the Chinese government lacked the ability to effectively monitor SO2 pollution. Ultimately, however, the policy worked and reduced air pollution by 11%. The regulated provincial governments react through rhetorical compliance, measured by a unique dataset of quantified political statements, and by shutting down small, ineffcient thermal units. Rhetorical compliance increases, especially before the government gained the ability to monitor SO2 in 2008. Real compliance sets in through the shutdown of small, ineffcient thermal units. Next, I compute detailed marginal abatement cost curves for SO2 for each province in China, thus illustrating the large heterogeneity in abatement cost across provinces. I use those curves to construct the counterfactual cost-effcient allocation of SO2 reduction targets across provinces. Using this benchmark, I find that the cost-effcient allocation would increase effciency by 49% at the margin, by lowering marginal abatement cost from 658e/tSO2 to 338e/tSO2. This finding is robust to inclusion of a back-of-the-envelope measure for the marginal benefits of abatement. I conclude that a market-based allocation of SO2 reduction targets would have doubled the effciency of China's main air pollution control policy. Contrary to the US experience, I find that a mandate on scrubbers would reap most of those effciency gains. |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp273&r=reg |
| By: | Paul J Burke; Tsendsuren Batsuuri; Muhammad Halley Yudhistira |
| Abstract: | Indonesia has serious traffic jams. This study uses data from 19 Indonesian toll roads over 2008-2015 to calculate the effects of Indonesia's historic recent fuel subsidy reforms on motor vehicle travel. The timing of the reforms was determined by budgetary and political factors, providing a suitable setting for estimating a causal effect. We control for a broad set of other factors potentially influencing traffic flows. Estimates using monthly data suggest an immediate fuel price elasticity of motor vehicle flows on the roads in our study of -0.1, increasing to -0.2 when responses over a year are considered. We estimate that Indonesia's fuel subsidy reforms of 2013 and 2014 had reduced traffic pressure on these roads in the second half of 2015 by around 10% relative to the counterfactual without reform. A move to an adequate fuel excise system could contribute to more free-flowing traffic, while generating revenue for infrastructure and other investment. |
| Keywords: | fuel subsidy, gasoline, price, elasticity, transport, Indonesia |
| JEL: | R41 R48 H20 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2017-10&r=reg |
| By: | Billari, Francesco C. (Bocconi University); Giuntella, Osea (University of Pittsburgh); Stella, Luca (Bocconi University) |
| Abstract: | The spread of high-speed Internet epitomizes the digital revolution, affecting several aspects of our life. Using German panel data, we test whether the availability of broadband Internet influences fertility choices in a low-fertility setting, which is well-known for the difficulty to combine work and family life. We exploit a strategy devised by Falck et al. (2014) to obtain causal estimates of the impact of broadband on fertility. We find positive effects of high-speed Internet availability on the fertility of high-educated women aged 25 and above. Effects are not statistically significant both for men, low-educated women, and under 25. We also show that broadband access significantly increases the share of women reporting teleworking or part-time working. Furthermore, we find positive effects on time spent with children and overall life satisfaction. Our findings are consistent with the hypothesis that high-speed Internet allows high-educated women to conciliate career and motherhood, which may promote fertility with a "digital divide". At the same time, higher access to information on the risks and costs of early pregnancy and childbearing may explain the negative effects on younger adults. |
| Keywords: | Internet, low fertility, work and family, teleworking |
| JEL: | J11 J22 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp10935&r=reg |
| By: | Heather Taylor from the Macroeconomic Policy and Financing for Development Division. (United Nations Economic and Social Commission for Asia and the Pacific) |
| Abstract: | The small island developing States (SIDS) of the Pacific face unique development challenges because of their small size, remoteness from major markets, limited export base and exposure to global environmental challenges. Energy security and diversification of the energy mix have been major drivers for renewable policies and targets in the Pacific islands. This policy brief focuses on the targets for electricity generation from renewables set by Pacific SIDS and discusses the key policy considerations and challenges related to those targets. In particular, it highlights the importance of creating a conducive environment for the development of renewables and emphasizes the need to shift policy discourses from focusing on output to prioritizing access. |
| URL: | http://d.repec.org/n?u=RePEc:unt:pbmpdd:pb42&r=reg |
| By: | Rohan Best; Paul J Burke |
| Abstract: | Electricity is a vital factor underlying modern living standards, but there are many developing countries with low levels of electricity access and use. We seek to systematically identify the crucial elements underlying transitions toward greater electrification in developing countries. We use a cross-sectional regression approach with national-level data up to 2012 for 135 low- and middle-income countries. The paper finds that the effectiveness of governments is the most important governance attribute for encouraging the transition to increased electrification in developing countries, on average. The results add to the growing evidence on the importance of governance for development outcomes. Donors seeking to make more successful contributions to electrification may wish to target countries with more effective governments. |
| Keywords: | electricity transitions, developing countries, government effectiveness |
| JEL: | O13 O20 Q40 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2017-11&r=reg |
| By: | Bo Chen (Southern Methodist University, USA); Yu Chen (University of Graz, Austria); David Rietzke (Lancaster University, UK) |
| Abstract: | We consider a general framework for multitask moral hazard problems with observable and hidden actions. Ideally, the principal in our framework can design optimal contracts that depend on both observable (and verifiable) actions and realized outcomes. Given a mild assumption on the existence of a punishment scheme, we identify a general equivalence result, dubbed the "forcing principle", which states that every optimal contract in our framework is strategically equivalent to a simple forcing contract that is essentially outcome-contingent. The forcing contract only specifies an outcome-contingent reward scheme and an action profile, and the agent receives the outcome-contingent reward only if he follows the recommended observable actions (and is otherwise punished severely). The forcing principle has useful implications: It confers analytic advantage for the existence and computation of optimal contracts in our setting. It also highlights the importance of the existence of the punishment scheme in characterizing first-best benchmarks in moral hazard problems, which is typically ignored in the literature. |
| Keywords: | First-best Benchmark; Forcing Contract; Forcing Principle; Moral Hazard; Multitask; Observable Actions |
| JEL: | C61 C62 D82 D86 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:grz:wpaper:2017-07&r=reg |