Preventing Environmental Disasters: Market-Based vs. Command-and-Control Policies

Lamperti, Francesco; Napoletano, Mauro; Roventini, Andrea

doi:10.2139/ssrn.2709577

Cited by 9 publications

(12 citation statements)

References 30 publications

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“…In the next future, we are planning to extend our impact analysis to include health and mortality. However, even at the current stage our results thus provide a clear support to the hypothesis that the current estimates of economic losses produced by climate shocks are biased downwards (see also Hallegatte et al, 2007;Stern, 2016) and that, in view of the increasing magnitude and variance in impacts, timing for climate policy is crucial (see also Lamperti et al, 2015).…”

Section: Discussion and Concluding Remarkssupporting

confidence: 79%

Faraway, So Close: Coupled Climate and Economic Dynamics in an Agent-based Integrated Assessment Model

Lamperti

Dosi

Napoletano

et al. 2018

Ecological Economics

148

111

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In this paperwe develop the first agent-based integrated assessment model, which offers an alternative to standard, computable general-equilibrium frameworks. The Dystopian Schumpeter meeting Keynes (DSK) model is composed of heterogeneous firms belonging to capital-good, consumption-good and energy sectors. Production and energy generation lead to greenhouse gas emissions, which affect temperature dynamics in a non-linear way. Increasing temperature triggers climate damages hitting, at the micro-level, workers' labor productivity, energy efficiency, capital stock and inventories of firms. In that, aggregate damages are emerging properties of the out-of-equilibrium interactions among heterogeneous and boundedly rational agents. We find the DSK model is able to account for a wide ensemble of micro and macro empirical regularities concerning both economic and climate dynamics. Moreover, different types of shocks have heterogeneous impact on output growth, unemployment rate, and the likelihood of economic crises. Finally, we show that the magnitude and the uncertainty associated to climate change impacts increase over time, and that climate damages much larger than those estimated through standard IAMs. Our results point to the presence of tipping points and irreversible trajectories, thereby suggesting the need of urgent policy interventions.

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Section: Discussion and Concluding Remarkssupporting

confidence: 79%

Faraway, So Close: Coupled Climate and Economic Dynamics in an Agent-based Integrated Assessment Model

Lamperti

Dosi

Napoletano

et al. 2018

Ecological Economics

148

111

View full text Add to dashboard Cite

show abstract

“…Table 1 presents the articles reviewed. (Gupta & Mason, 2016) (Bodansky & Rajamani, 2013) (Ventura, et al, 2015) (Stewart, et al, 2013) (Moncel & Asselt, 2012) (Otto, et al, 2014) (Marcucci & Turton, 2013) (Kriegler, et al, 2015) (Riahi, et al, 2015) (Arroyo-Currás, et al, 2015) (Briner & Prag, 2013) (Chaturvedi, 2015) (Glomsrød, et al, 2013) (Gilley & Kinsella, 2015) Carbon tax 10 (Strand, 2013) (Alton, et al, 2014) (Wang & Li, 2015) (Gale, et al, 2013) ) (Elliott & Fullerton, 2013) (Sundar, et al, 2016) (Brooks, 2015) (Pezzey & Jotzo, 2013) (Lamperti, et al, 2015) Emission trading, trade, carbon markets 10 (Perthuis & Trotignon, 2013) (Uddin & Holtedahl, 2013) (Anon., 2013) ) (Lutz, et al, 2013) (Rabe, 2016) (Stiglitz, 2015) (Cormier, 2013) (Erickson, et al, 2014) (Sreekanth, et al, 2014) Carbon tax and cap-and trade 5 (Goulder & Schein, 2013) (Lui, 2016) (Sewalk, 2013) (Repetto, 2013) Minilateralism 8 (Debaere, et al, 2014) (Falkner, 2015) (Hjerpe & Nasiritousi, 2015) …”

Section: Resultsmentioning

confidence: 99%

“…This means basically any mechanism that puts a price for carbon. Lamperti (2015) included taxes and subsidies into the definition of the market based policies.…”

Section: Market Based Approachmentioning

confidence: 99%

“…However Erickson et al (2014) came into conclusion that the net emission reduction derived from the CDM projects are difficult to assess. Lamperti et al (2015) stated that market-based policies are not always successful to redirect technical change from the dirty to the green sector like government lead regulation also called the -command and control‖ policies.…”

Section: Market Based Approachmentioning

confidence: 99%

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Institutional Analysis of the Global Climate Change Regime: Literature Review of International Climate Negotiations

Havukainen¹

2017

International Conference on Climate Change

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Abstract:Climate change is the biggest challenge for humanity and international climate negotiation have been put in place to deal with the challenge. However, the international climate negotiations have not been able to achieve the global binding climate agreement to limit the warming under 2 0 C during this century. Previously the literature has covered the impacts, costs, benefits and the efficiency in terms of greenhouse gas emission reduction, sustainable development, climate justice and technology transfer. However less focus has been put on the institutional aspect of international climate negotiations. The aim of the paper is to describe the outcome of the international climate negotiations by institutional analysis and development framework. We conducted a literature review of the international climate negotiations including unilateralism, multilateralism, minilateralism and carbon markets. The results assist to clarify the role of climate governance approaches in tackling climate change.

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“…Dafermos et al (2017)) and Agent-Based Models (Lamperti et al, 2017) highlighted the economic cost (in terms of GDP) of climate policies. However, recent analyses show that win-win options could arise from the introduction of either fiscal or monetary policies aimed to mitigate climate change and to support the low-carbon transition (Lamperti et al, 2016;Ponta et al, 2016;Monasterolo and Raberto, 2018).…”

Section: Related Workmentioning

confidence: 99%

A Financial Macro-Network Approach to Climate Policy Evaluation

2017

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Existing approaches to assess the economic impact of climate policies tend to overlook the financial sector and to focus only on direct effects of policies on the specific institutional sector they target, neglecting possible feedbacks between sectors, thus, underestimating the overall policy effect. To fill in this gap, we develop a methodology based on financial networks, which allows for analyzing the transmission throughout the economy of positive or negative shocks induced by the introduction of specific climate policies. We apply the methodology to empirical data of the Euro Area to identify the feedback loops between the financial sector and the real economy both through direct and indirect chains of financial exposures across multiple financial instruments. By focusing on climate policy-induced shocks that affect directly either the banking sector or non-financial firms, we analyze the reinforcing feedback loops that could amplify the effects of shocks on the financial sector and then cascade on the real economy. Our analysis helps to understand the conditions for virtuous or vicious cycles to arise in the climate-finance nexus and to provide a comprehensive assessment of the economic impact of climate policies.

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Preventing Environmental Disasters: Market-Based vs. Command-and-Control Policies

Cited by 9 publications

References 30 publications

Faraway, So Close: Coupled Climate and Economic Dynamics in an Agent-based Integrated Assessment Model

Faraway, So Close: Coupled Climate and Economic Dynamics in an Agent-based Integrated Assessment Model

Institutional Analysis of the Global Climate Change Regime: Literature Review of International Climate Negotiations

A Financial Macro-Network Approach to Climate Policy Evaluation

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