This paper studies incentives to develop advanced pollution abatement technology when technology may spillover across agents and pollution abatement is a public good. We are motivated by a variety of pollution control issues where solutions require the development and implementation of new pollution abatement technologies. We show that at the Nash equilibrium of a simultaneous-move game with R&...

This paper examines how water quality trading interacts with nonpoint-source abatement cost sharing (e.g., as currently practiced by the National Resource Conservation Service through its Environmental Quality Incentives Program (EQIP)) to promote the participation of nonpoint sources in a water quality market; participation that has thus far been noticeably lacking nationwide. As such, an idea...

Under the Kyoto Protocol the European Union agreed to reduce emissions of greenhouse gases by 8 percent. The Burden-Sharing Agreement (BSA) redistributes the reduction target among the member states. The purpose of this paper is to evaluate the BSA. To determine if cost efficiency was considered, marginal abatement costs (MACs) are first calculated based on an estimation of the directional outp...

In this paper, we present a dynamic model modified with emission permit banking and pollution abatement, and investigate the effect of emission permit banking and pollution abatement on the production–inventory strategy of the firm. After introducing emission permit banking and pollution abatement, the cost function consists of the inventory holding and production costs, the cost of investment ...

Reducing greenhouse gas emissions not only lowers expected damages from climate change but also reduces the risk of catastrophic impacts. However, estimates of the social cost of carbon, which measures the marginal value of carbon dioxide abatement, often do not capture this risk reduction benefit. Risk-averse individuals are willing to pay a risk premium, an additional amount beyond the differ...

This note considers the treatment of risk and uncertainty in the recently established ‘social cost of carbon’ (SCC) for analysis of federal regulations in the United States. It argues that the analysis of the US Interagency Working Group on Social Cost of Carbon did not go far enough into the tail of low-probability, high-impact scenarios, and, via its approach to discounting, it mis-estimated ...

The authors present a graphical framework to evaluate the implied CO2 abatement costs that can be used by policymakers and resource planners to provide clarity on cost-effective policy design, and on the implications of planning decisions for meeting future de-carbonization goals. The framework would allow for comparison of alternative investments, while distinguishing the extent, type and timi...

This paper explores the significance of policy-induced technological change for the design of carbon-abatement policies. We derive analytical expressions characterizing optimal CO2 abatement and carbon tax profiles under different specifications for the channels through which technological progress occurs. We consider both R&D-based and learning-by-doing-based knowledge accumulation, and examin...