nep-res New Economics Papers
on Resource Economics
Issue of 2019‒12‒16
three papers chosen by
Maximo Rossi
Universidad de la República

  1. Leakage in Regional Climate Policy? Implications of Electricity Market Design By Brittany Tarufelli; Ben Gilbert
  2. Efficiency of road pricing schemes with endogenous workplace locations in a polycentric city By Romain Gaté
  3. Carbon Taxation: A Tale of Three Countries By Patrick Criqui; Mark Jaccard; Thomas Sterner

  1. By: Brittany Tarufelli (Louisiana State University); Ben Gilbert (Division of Economics and Business, Colorado School of Mines)
    Abstract: We study how the expansion of a centralized real-time electricity market affects emissions leakage from a regional cap-and-trade program. We find the expansion caused modest leakage increases, despite relatively small trading volumes. Natural gas plants just outside the cap-and-trade region increasingly balance intermittent renewables. Generation from these plants increases at night when average wind generation is high. These same plants systematically ramp down in response to unexpected solar generation because of friction between how the day-ahead and real-time markets commit resources. Our results suggest that reduced transactions costs in trade between regulated and unregulated regions may exacerbate leakage.
    Keywords: Electricity market design, Carbon leakage, Emissions, Solar power
    JEL: L1 H23 Q48 Q52
    Date: 2019–11
  2. By: Romain Gaté (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - UNIV-RENNES - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper aims to measure the efficiency of different road pricing schemes (Pigouvian tax, flat tax and cordon toll) to address congestion externalities when the locations of jobs and dwellings within a city are endogenous. The model captures the fact that commuters face a trade-off between taking advantage of the wage premium in the Central Business District (CBD) and being stuck in traffic. I find that the Pigouvian tax strategy is not a social optimum due to the presence of two market failures in the urban economy: congestion and misallocation of jobs within the city. A Pigouvian tax on commuters cannot solve two different problems simultaneously, namely, reducing the congestion level given the locations of jobs and reaching the optimal spatial allocation of firms. Without regulation, the number of jobs in the CBD is too high (and the congestion cost is excessive), while the Pigouvian tax generates a CBD that is too small. In addition, a flat tax is not necessarily worse than a Pigouvian tax, in contrast to the cordon toll.
    Keywords: Polycentric city,Second-best policies,Congestion,Welfare,Urban land use
    Date: 2019–10–18
  3. By: Patrick Criqui (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes); Mark Jaccard (School of Resource and Environmental Management - - Simon Fraser University); Thomas Sterner (GU - University of Gothenburg)
    Abstract: Carbon pricing is considered by most economists as a central dimension to any climate policy. It is assumed to bring simple, transparent, and cost-effective means to change investment and consumption behaviors. The most straightforward method is carbon taxation, but its implementation is more complex. This study provides a comparative analysis of carbon taxation in three countries-Sweden, Canada, and France-aimed at drawing lessons for the future of carbon taxation. Comparing the experience of the three countries reveals that carbon taxes, once in place, do have the intended effect. In this sense, they work well. However, the analysis also reveals very different situations in terms of advances, difficulties, and results, which highlights the need to carefully consider the social and political conditions for the acceptance and effective implementation of such economic instruments. Against this background, the comparative analysis yields four main insights that deserve further research from economics and social scientists: the ability to combine pure economic instruments and other regulation or policies and measures; the management of lobbies and vested interests; the identification of a clear strategy for the recycling of the carbon revenues, whether earmarked or not; and finally, the importance of these three dimensions of carbon taxes in the new settings of zero net emission policies.
    Keywords: GHG abatement,environmental policy,economic instruments,carbon tax,cost-effectiveness,acceptability
    Date: 2019–11

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