Creating an Earth Atmospheric Trust

Barnes, P; Costanza, Robert; Hawken, Paul; Orr, David W.; Остром, Элинор; Umana, Alvaro; Young, Oran R.

doi:10.1126/science.319.5864.724b

Cited by 64 publications

(35 citation statements)

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“…9 This instrument leans on the atmospheric trust proposal by Barnes et al (2008). It considers an emissions trading scheme where the revenues from auctioning are partly used to promote renewable energy technologies.…”

Section: Policy Instruments and Evaluation Criteriamentioning

confidence: 99%

Renewable energy subsidies: Second-best policy or fatal aberration for mitigation?

Kalkuhl

Edenhofer

Lessmann

2013

Resource and Energy Economics

161

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SummaryThis paper evaluates the consequences of renewable energy policies on welfare, resource rents and energy costs in a world where carbon pricing is imperfect and the regulator seeks to limit emissions to a (cumulative) target. We use a global general equilibrium model with an intertemporal fossil resource sector. We calculate the optimal second-best renewable energy subsidy and compare the resulting welfare level with an efficient first-best carbon pricing policy. If carbon pricing is permanently missing, mitigation costs increase by a multiple (compared to the optimal carbon pricing policy) for a wide range of parameters describing extraction costs, renewable energy costs, substitution possibilities and normative attitudes. Furthermore, we show that small deviations from the second-best subsidy can lead to strong increases in emissions and consumption losses. This confirms the rising concerns about the occurrence of unintended side effects of climate policy { a new version of the green paradox. We extend our second-best analysis by considering two further types of policy instruments: (1) temporary subsidies that are displaced by carbon pricing in the long run and (2) revenue-neutral instruments like a carbon trust and a feed-in-tariff scheme. Although these instruments cause small welfare losses, they have the potential to ease distributional conflicts as they lead to lower energy prices and higher fossil resource rents than the optimal carbon pricing policy. Abstract This paper evaluates the consequences of renewable energy policies on welfare, resource rents and energy costs in a world where carbon pricing is imperfect and the regulator seeks to limit emissions to a (cumulative) target. We use a global general equilibrium model with an intertemporal fossil resource sector. We calculate the optimal second-best renewable energy subsidy and compare the resulting welfare level with an efficient first-best carbon pricing policy. If carbon pricing is permanently missing, mitigation costs increase by a multiple (compared to the optimal carbon pricing policy) for a wide range of parameters describing extraction costs, renewable energy costs, substitution possibilities and normative attitudes. Furthermore, we show that small deviations from the second-best subsidy can lead to strong increases in emissions and consumption losses. This confirms the rising concerns about the occurrence of unintended side effects of climate policy -a new version of the green paradox. We extend our second-best analysis by considering two further types of policy instruments: (1) temporary subsidies that are displaced by carbon pricing in the long run and (2) revenue-neutral instruments like a carbon trust and a feed-in-tariff scheme. Although these instruments cause small welfare losses, they have the potential to ease distributional conflicts as they lead to lower energy prices and higher fossil resource rents than the optimal carbon pricing policy. Keywords

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Section: Policy Instruments and Evaluation Criteriamentioning

confidence: 99%

Renewable energy subsidies: Second-best policy or fatal aberration for mitigation?

Kalkuhl

Edenhofer

Lessmann

2013

Resource and Energy Economics

161

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“…Many of the most serious problems faced by society today, ranging from climate change to developing green technologies, can be modeled as prisoners' dilemmas, which are best solved through cooperation [45,71]. If people evolved to be highly cooperative, if different economic institutions elicit different degrees of cooperation, and if markets can elicit selfish behavior, then it becomes obvious that we must explore a variety of allocative mechanisms in addition to markets [22,72], such as strategies based on shared production and common ownership [71,[73][74][75][76][77]. If people are inherently social, then we must question the methodological individualism that underlies most microeconomic analysis.…”

Section: Are People Purely Self-interested?mentioning

confidence: 99%

Seeking Consilience for Sustainability Science: Physical Sciences, Life Sciences, and the New Economics

Farley

2014

CiS

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Abstract:The human system, driven largely by economic decisions, has profoundly affected planetary ecosystems as well as the energy supplies and natural resources essential to economic production. The challenge of sustainability is to understand and manage the complex interactions between human systems and the rest of nature. This conceptual article makes the case that meeting this challenge requires consilience between the natural sciences, social sciences and humanities, which is to say that their basic assumptions must be mutually reinforcing and consistent. This article reviews the extent to which economics is pursuing consilience with the sciences of human behavior, physics and ecology, and the impact full consilience would have on the field. The science of human behavior would force economists to redefine what is desirable, while physics and ecology redefine what is possible. The challenges posed by ecological degradation can be modeled as prisoner's dilemmas, best solved through cooperation, not competition. Fortunately, science reveals that humans may be among the most cooperative of all species. While much of the mainstream economic theory that still dominates academic and the policy discourse continues to ignore important findings from other sciences, several sub-fields of economics have made impressive strides towards consilience in recent decades, and these are likely to change mainstream theory eventually. The question is whether these changes can proceed rapidly enough to solve the most serious problems we currently face.

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“…The countries keep control over their investments (r i,t ) +∞ t=0 and seek to maximize their individual welfare given in (3). We distinguish between the case where the SEA has commitment power so that it can announce and implement the entire family of sequences…”

Section: Delegation To a Benevolent Authoritymentioning

confidence: 99%

“…3 Note that an alternative interpretation of our model is that of an environmental protection agency (EPA) which has the power to impose emission standards on firms on a national level. Due to the global nature of climate change, however, we prefer the to think of the authority as a supranational one.…”

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confidence: 99%

Delegating climate policy to a supranational authority: a theoretical assessment

Pichler

Sorger

2018

European Economic Review

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in September 2016Abstract This paper studies the delegation of climate policy to a supranational environmental authority. We develop a simple model of a world consisting of a large number of countries, which derive utility from energy consumption but suffer both from pollution caused by the emission of greenhouse gases as well as from the external effects caused by climate change. The countries decide individually on investments in clean technologies for energy production, whereas a supranational environmental authority decides for each country on the maximally permitted amount of emissions of greenhouse gases. We demonstrate that the authority faces a dynamic inconsistency problem that leads to welfare losses.These losses can be kept small if the mandate for the authority penalizes the local cost of emissions very heavily but puts little or no weight at all on the cost of climate change.However, the design of such an authority leads to another dynamic inconsistency, as countries face a recurrent incentive to modify the authority's mandate over time.JEL classification: F53, H87, O33, O44, Q43, Q54Keywords: Climate change; supranational environmental authority; dynamic inconsistency; optimal delegation. * We would like to thank Bård Harstad and Franz Wirl for helpful discussions and comments.

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Creating an Earth Atmospheric Trust

Cited by 64 publications

References 0 publications

Renewable energy subsidies: Second-best policy or fatal aberration for mitigation?

Renewable energy subsidies: Second-best policy or fatal aberration for mitigation?

Seeking Consilience for Sustainability Science: Physical Sciences, Life Sciences, and the New Economics

Delegating climate policy to a supranational authority: a theoretical assessment

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