Article published in Journal of Environmental Economics and Management – Oct 2017.
We study pollution permit markets in which a fraction of permits are allocated to firms based on their output. Output-based allocations, which are receiving increasing attention in the design of carbon markets around the world (e.g., Europe, California, New Zealand), are shown to be optimal under demand and supply volatility despite the output distortions they may create. In a market that covers multiple sectors, the optimal design combines auctioned permits with output-based allocations that are specific to each sector and increasing in its volatility. When firms are better informed about the latter or must self select, the regulator resorts to some free (i.e., lump-sum) allocations to sort firms out.
The cattle sector, both emissions- and land-intensive, represents a great opportunity for mitigation through reforestation. In this paper, we study the efficiency of land-use regulation. Our analytical results indicate that the subsidy is the best alternative policy to emissions tax, provided that the elasticities of land use and emissions to cattle feeding are close. Interestingly,...
The workshop aims to identify the key uncertainties and debates regarding the role of bioenergy in a climate neutral economy, at national and global scales, and the challenges for the design of climate policies. Speakers and precise time will be confirmed soon.