Cross-country comparisons, Multiple imputation, Resource curse, Resource extraction, Resource stocks, Rule of law,

The environmental Kuznets curve (EKC), an inverted-U relationship between pollution and income, is an influential generalization about the way environmental quality changes as a country makes the transition from poverty to relative affluence. The EKC predicts that pollution will first increase, but subsequently decline if income growth proceeds far enough. We examine withincountry time series data on air pollution and income for a sample of individual countries to see if this generalized prediction is commonly borne out. The empirical approach employs robust, nonparametric methods and a recently available data set on SO 2 , smoke, and particulate air pollution. In most cases examined, the within-country income-pollution patterns we observe do not differ significantly from what would be expected to occur by chance. Where incomepollution relationships are consistent with EKC predictions, the patterns involved are also consistent with a much simpler hypothesis.

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a b s t r a c tWe consider a simulation of risk-averse producers when making investment decisions in a competitive energy market, who face uncertainty about future regulation of carbon dioxide emissions. Investments are made under regulatory uncertainty; then the regulatory state is revealed and producers realize returns. We consider anticipated taxes, grandfathered permits and auctioned permits and show that some anticipated policies increase investment in the relatively dirty technology. Beliefs about the policy instrument that will be used to price carbon may be as important as certainty that carbon will be priced. More generally, a failure to consider risk aversion may bias policy analysis for the power sector.

We analyze the economics of granting temporary exceptions to the phaseout of methyl bromide (MeBr) under the Montreal Protocol on Substances that Deplete the Ozone Layer. The protocol allows such exceptions based on technical or economic “feasibility” through a critical use exemption (CUE) process. Data compiled under the protocol make it possible to set forth criteria for the exceptions based on estimation of the benefits of compliance in terms of “willingness to pay” to abate the externality, as well as costs to the users creating the externality. We estimate a political willingness to pay and show that market and supply effects would reduce losses to MeBr users below estimates of such losses provided in CUE nominations. This suggests that the phaseout of MeBr can proceed with considerably fewer CUEs than requested by the parties. (JEL Q1, Q2, Q3, H8)