Template-Type: ReDIF-Paper 1.0 Number: 2012.01 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-001.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.01 Title: The Future Prospect of PV and CSP Solar Technologies: An Expert Elicitation Survey Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and CMCC Author-Name: Michela Catenacci Author-X-Name-First: Michela Author-X-Name-Last: Catenacci Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Giulia Fiorese Author-X-Name-First: Giulia Author-X-Name-Last: Fiorese Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Dipartimento di Elettronica e Informazione, Politecnico di Milano Author-Name: Elena Verdolini Author-X-Name-First: Elena Author-X-Name-Last: Verdolini Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and CMCC Abstract: In this paper we present and discuss the results of an expert elicitation survey on solar technologies. Sixteen leading European experts from the academic world, the private sector and international institutions took part in this expert elicitation survey on Photovoltaic (PV) and Concentrated Solar Power (CSP) technologies. The survey collected probabilistic information on (1) how Research, Development and Demonstration (RD&D) investments will impact the future costs of solar technologies and (2) the potential for solar technology deployment both in OECD and non-OECD countries. Understanding the technological progress and the potential of solar PV and CPS technologies is crucial to draft appropriate energy policies. The results presented in this paper are thus relevant for the policy making process and can be used as better input data in integrated assessment and energy models. Keywords: Expert Elicitation, Research, Development and Demonstration, Solar Technologies Classification-JEL: Q42, Q55 Creation-Date: 201201 Template-Type: ReDIF-Paper 1.0 Number: 2012.02 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-002.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.02 Title: Assessing the Economic Impacts of Climate Change. An Updated CGE Point of View Author-Name: Francesco Bosello Author-X-Name-First: Francesco Author-X-Name-Last:Bosello Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, University of Milan and Euro-Mediterranean Center for Climate Change Author-Name: Fabio Eboli Author-X-Name-First: Fabio Author-X-Name-Last: Eboli Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Euro-Mediterranean Center for Climate Change Author-Name: Roberta Pierfederici Author-X-Name-First: Roberta Author-X-Name-Last: Pierfederici Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Euro-Mediterranean Center for Climate Change Abstract: The present research describes a climate change integrated impact assessment exercise, whose economic evaluation is based on a CGE approach and modeling effort. Input to the CGE model comes from a wide although still partial set of up-to-date bottom-up impact studies. Estimates indicate that a temperature increase of 1.92°C compared to pre-industrial levels in 2050 could lead to global GDP losses of approximately 0.5% compared to a hypothetical scenario where no climate change is assumed to occur. Northern Europe is expected to benefit from the evaluated temperature increase (+0.18%), while Southern and Eastern Europe are expected to suffer from the climate change scenario under analysis (-0.15% and -0.21% respectively). Most vulnerable countries are the less developed regions, such as South Asia, South-East Asia, North Africa and Sub-Saharan Africa. In these regions the most exposed sector is agriculture, and the impact on crop productivity is by far the most important source of damages. It is worth noting that the general equilibrium estimates tend to be lower, in absolute terms, than the bottom-up, partial equilibrium estimates. The difference is to be attributed to the effect of market-driven adaptation. This partly reduces the direct impacts of temperature increases, leading to lower damage estimates. Nonetheless these remain positive and substantive in some regions. Accordingly, market-driven adaptation cannot be the solution to the climate change problem. Keywords: Computable General Equilibrium Modeling, Impact Assessment, Climate Change Classification-JEL: C68, Q51, Q54 Creation-Date: 201201 Template-Type: ReDIF-Paper 1.0 Number: 2012.03 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-003.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.03 Title: Brown Sunsets and Green Dawns in the Industrial Sector: Environmental Innovations, Firm Behavior and the European Emission Trading Author-Name: Simone Borghesi Author-X-Name-First: Simone Author-X-Name-Last: Borghesi Author-WorkPlace-Name: Department of Law, Economics and Government, University of Siena Author-Name: Giulio Cainelli Author-X-Name-First: Giulio Author-X-Name-Last: Cainelli Author-WorkPlace-Name: Department of Economics, University of Padova Author-Name: Massimiliano Mazzanti Author-X-Name-First: Massimiliano Author-X-Name-Last: Mazzanti Author-WorkPlace-Name: Department of Economics, Institutions and Territory, University of Ferrara Abstract: We study the driving forces behind the adoption of environmental innovations (EI) in the Italian industry over 2006-2008 through analyses of the new wave of Community Innovation Survey (CIS) data that covered for the first time environmental innovation adoptions. We investigate whether the first phase of EU ETS has exerted some effects on environmental innovations by using a very large sample of italian manufcturing firms. Estimates show that external forces and complementarity with other management practices are particularly relevant to increase the adoption of relatively new and radical technologies: relationships with other firms and institutions, local public funding, group membership are the key factors. The role of ETS on EI seems instead to be weak: it drives innovation if we compare ETS and non ETS firms, but the stringency itself does not matter, due to sector idiosyncratic factors and to the fact that stability of policy also matters. Keywords: Environmental Innovation, Industrial Sectors, ETS, Innovation Drivers, CIS Data Classification-JEL: C21, L2, O33, Q38, Q55 Creation-Date: 201201 Template-Type: ReDIF-Paper 1.0 Number: 2012.04 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-004.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.04 Title: Ambiguous Aggregation of Expert Opinions: The Case of Optimal R&D Investment Author-Name: Stergios Athanassoglou Author-X-Name-First: Stergios Author-X-Name-Last: Athanassoglou Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Euro-Mediterranean Center for Climate Change Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: VBosetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Euro-Mediterranean Center for Climate Change Author-Name: Gauthier de Maere d'Aertrycke Author-X-Name-First: Gauthier Author-X-Name-Last: de Maere d'Aertrycke Author-WorkPlace-Name:Fondazione Eni Enrico Mattei and Euro-Mediterranean Center for Climate Change, Italy Abstract: How should a decision-maker allocate R&D funds when a group of experts provides divergent estimates on a technology's potential effectiveness? To address this question, we propose a simple decision-theoretic framework that takes into account ambiguity over the aggregation of expert opinion and a decision-maker's attitude towards it. In line with the paper's focus on R&D investment, decision variables in our model may affect experts' subjective probability distributions of the future potential of a technology. Using results from convex optimization, we are able to establish a number of analytical results including a closed-form expression of our model's value function, as well as a thorough investigation of its differentiability properties. We apply our framework to original data from a recent expert elicitation survey on solar technology. The analysis suggests that more aggressive investment in solar technology R&D is likely to yield significant dividends even, or rather especially, after taking ambiguous aggregation into account. Keywords: Aggregation, Ambiguity, R&D, Expert Opinions, Convex/Conic Optimization Classification-JEL: C61, D81, Q42 Creation-Date: 201201 Template-Type: ReDIF-Paper 1.0 Number: 2012.05 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-005.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.05 Title: Energy Balance Climate Models and the Spatial Structure of Optimal Mitigation Policies Author-Name: William Brock Author-X-Name-First: William Author-X-Name-Last: Brock Author-WorkPlace-Name: University of Wisconsin, Department of Economics Author-Name: Gustav Engstrom Author-X-Name-First: Gustav Author-X-Name-Last: Engstrom Author-WorkPlace-Name: The Beijer Institute of Ecological Economics and University of Stockholm Author-Name: Anastasios Xepapadeas Author-X-Name-First: Anastasios Author-X-Name-Last: Xepapadeas Author-WorkPlace-Name: Athens University of Economics and Business Abstract: We develop a one-dimensional energy balance climate model with heat transportation across locations. We introduce the concept of potential world GDP at time t, and we introduce, through the temperature function, spatial characteristics into the damage function which make damages latitude dependent. We solve the social planner’s problem and characterize the competitive equilibrium. We define optimal taxes on fossil fuels and profit taxes on firms that extract fossil fuels. Our results suggest that if the implementation of international transfers across latitudes is not possible, then optimal taxes are spatially non homogeneous and tend to be lower at the poor latitudes. The degree of spatial differentiation of optimal taxes depend on heat transportation. We also locate sufficient conditions for optimal mitigation policies to have rapid ramp-up initially and then decrease over time. By employing the properties of the spatial model and approximating solutions, we show how to study the impact of thermal transport across latitudes on welfare inequality. Keywords: Energy Balance Climate Models, Heat Diffusion, Temperature Distribution, Spatial Optimal Taxes Classification-JEL: Q54, Q58 Creation-Date: 201201 Template-Type: ReDIF-Paper 1.0 Number: 2012.06 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-006.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.06 Title: The SO2 Allowance Trading System and the Clean Air Act Amendments of 1990: Reflections on Twenty Years of Policy Innovation Author-Name: Gabriel Chan Author-X-Name-First: Gabriel Author-X-Name-Last: Chan Author-WorkPlace-Name: Harvard Kennedy School Author-Name: Robert Stavins Author-X-Name-First: Robert Author-X-Name-Last: Stavins Author-WorkPlace-Name: Harvard Kennedy School Author-Name: Robert Stowe Author-X-Name-First: Robert Author-X-Name-Last: Stowe Author-WorkPlace-Name: Harvard Kennedy School Author-Name: Richard Sweeney Author-X-Name-First: Richard Author-X-Name-Last: Sweeney Author-WorkPlace-Name: Harvard Kennedy School Abstract: The introduction of the U.S. SO2 allowance-trading program to address the threat of acid rain as part of the Clean Air Act Amendments of 1990 is a landmark event in the history of environmental regulation. The program was a great success by almost all measures. This paper, which draws upon a research workshop and a policy roundtable held at Harvard in May 2011, investigates critically the design, enactment, implementation, performance, and implications of this path-breaking application of economic thinking to environmental regulation. Ironically, cap and trade seems especially well suited to addressing the problem of climate change, in that emitted greenhouse gases are evenly distributed throughout the world’s atmosphere. Recent hostility toward cap and trade in debates about U.S. climate legislation may reflect the broader political environment of the climate debate more than the substantive merits of market-based regulation. Keywords: Cap-and-Trade, Market-Based Environmental Policy, Acid Rain, Sulfur Dioxide, Clean Air Act Amendments Classification-JEL: Q520, Q550, Q580 Creation-Date: 201202 Template-Type: ReDIF-Paper 1.0 Number: 2012.07 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-007.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.07 Title: Oil Price Dynamics, Macro-Finance Interactions and the Role of Financial Speculation Author-Name: Claudio Morana Author-X-Name-First: Claudio Author-X-Name-Last: Morana Author-WorkPlace-Name: Università di Milano Bicocca, CeRP-Collegio Carlo Alberto, Fondazione Eni Enrico Mattei and International Centre for Economic Research Abstract: What is the role of financial speculation in determining the real oil price? We find that while macroeconomic shocks have been the major upward driver of the real oil price since the mid 1980s, also financial shocks have sizably contributed since the early 2000s, and at a much larger extent since the mid 2000s: over the period 2004:1 through 2010:3, the real oil price increased 65%; of the latter, 33% is related to fundamental financial shocks, 11% to non fundamental financial shocks, with macroeconomic and oil market supply side shocks contributing with a 5% and 3% increase, respectively. Yet, it would be inaccurate describing the third oil price shock as a purely financial episode: macroeconomic shocks largely accounted for the 65% real oil price run up over the 2007(2)-2008 (2) period, and similarly for the -67% and -31% contractions in 2008(4) and 2009(1); only over the 2009(2) through 2009(4) period macroeconomic and financial shocks equally contributed to the 54% real oil price increase. Hence, while we find support to the demand side view of real oil price determination, we also find a much larger role for financial shocks than previously noted in the literature. Keywords: Oil Price, Financial speculation, Macro-finance Interface, International Business Cycle, Factor Vector Autoregressive Models Classification-JEL: C22, E32, G12 Creation-Date: 201202 Template-Type: ReDIF-Paper 1.0 Number: 2012.08 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-008.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.08 Title: The Equivalence of Strict Liability and Negligence Rule: A « Trompe l'œil » Perspective Author-Name: Gérard Mondello Author-X-Name-First: Gérard Author-X-Name-Last: Mondello Author-WorkPlace-Name: University of Nice Sophia Antipolis, CREDECO, GREDEG, UMR 7321, CNRS Abstract: This paper analyzes the difficulties of comparing the respective effectiveness of two among the most important liability regimes in tort law: rule of negligence and strict liability. Starting from the standard Shavellian unilateral accident scheme, I show that matching up liability regime on their capacity to provide the highest level of safety is ineffective. This demonstration lies on two components. The first one gathers some results drawn from literature that introduces uncertainty. The second one takes into consideration the beliefs of agents and their aversion to ambiguity. The model applies uncertainty to the level of maximum damage. This demonstration reinforces the previous result. Hence, both regimes apply on specific tort question and comparing their individual efficiency needs to call for other components as the transaction costs associated to the burden of evidence, the fairness between victims and injurers, etc. Keywords: Strict Liability, Negligence Rule, Ambiguity Theory, Uncertainty, Accident Model Classification-JEL: K0, K32,Q01, Q58 Creation-Date: 201202 Template-Type: ReDIF-Paper 1.0 Number: 2012.09 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-009.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.09 Title: REMIND-D: A Hybrid Energy-Economy Model of Germany Author-Name: Eva Schmid Author-X-Name-First: Eva Author-X-Name-Last: Schmid Author-WorkPlace-Name: Potsdam Institute for Climate Impact Research Author-Name: Brigitte Knopf Author-X-Name-First: Brigitte Author-X-Name-Last: Knopf Author-WorkPlace-Name: Potsdam Institute for Climate Impact Research Author-Name: Nico Bauer Author-X-Name-First: Nico Author-X-Name-Last: Bauer Author-WorkPlace-Name: Potsdam Institute for Climate Impact Research Abstract: This paper presents a detailed documentation of the hybrid energy-economy model REMIND-D. REMIND-D is a Ramsey-type growth model for Germany that integrates a detailed bottom-up energy system module, coupled by a hard link. The model provides a quantitative framework for analyzing long-term domestic CO2 emission reduction scenarios. Due to its hybrid nature, REMIND-D facilitates an integrated analysis of the interplay between technological mitigation options in the different sectors of the energy system as well as overall macroeconomic dynamics. REMIND-D is an intertemporal optimization model, featuring optimal annual mitigation effort and technology deployment as a model output. In order to provide transparency on model assumptions, this paper gives an overview of the model structure, the input data used to calibrate REMIND-D to the Federal Republic of Germany, as well as the techno-economic parameters of the technologies considered in the energy system module. Keywords: Hybrid Model, Germany, Energy System, Domestic Mitigation Classification-JEL: O41, O52, Q43 Creation-Date: 201202 Template-Type: ReDIF-Paper 1.0 Number: 2012.10 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-010.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.10 Title: The Linkage Between Income Distribution and Clean Energy Investments: Addressing Financing Cos Author-Name: Nadia Ameli Author-X-Name-First: Nadia Author-X-Name-Last: Ameli Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Italy, and Energy and Resources Group, University of California, Berkeley, USA Author-Name: Daniel M. Kammen Author-X-Name-First: Daniel M. Author-X-Name-Last: Kammen Author-WorkPlace-Name: Energy and Resources Group, University of California, Berkeley, USA Abstract: With a focus on alternative methods for accelerating clean energy policy adoption, this study introduces an innovative financing scheme for renewable and energy efficiency deployment. Financing barriers represent a notable obstacle for energy improvements and this is particularly the case for low-income households. Limited access to credit, due to socio-economic status and the lack of guarantees, are key issues related to financing barriers. Implementing a policy such as PACE – Property Assessed Clean Energy – allows for the provision of up-front funds for residential property owners to install electric and thermal solar systems and make energy-efficiency improvements to their buildings. This paper will inform the design of better policies tailored to the creation of the appropriate conditions for such investments to occur, especially when the lack of access to capital tends to stall them. Keywords: Financing Barriers, Energy Efficiency, Solar PV, Energy Investments Classification-JEL: Q42, Q55 Creation-Date: 201202 Template-Type: ReDIF-Paper 1.0 Number: 2012.11 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-011.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.11 Title: Light Duty Vehicle Transportation and Global Climate Policy: The Importance of Electric Drive Vehicles Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: VBosetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Euro-Mediterranean Center for Climate Change Author-Name: Thomas Longden Author-X-Name-First: Thomas Author-X-Name-Last: Longden Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Euro-Mediterranean Center for Climate Change Abstract: With a focus on establishing whether climate targets can be met under different personal transport scenarios we introduce a transport sector representing the use and profile of light domestic vehicles (LDVs) into the integrated assessment model WITCH. In doing so we develop long term projections of light domestic vehicle use and define potential synergies between innovation in the transportation sector and the energy sector. By modelling the demand for LDVs, the use of fuels, and the types of vehicles introduced we can analyse the potential impacts on the whole economy. We find that with large increases in the use of vehicles in many regions around the globe, the electrification of LDVs is important in achieving cost effective climate targets and minimising the impact of transportation on other sectors of the economy. Keywords: Light Duty Vehicles, Transportation, Climate Change Policy, Electric Drive Vehicles, Research and Development Classification-JEL: Q54, R41, O3 Creation-Date: 201203 Template-Type: ReDIF-Paper 1.0 Number: 2012.12 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-012.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.12 Title: Development Finance for Universal Energy Access Author-Name: Giorgio Gualberti Author-X-Name-First: Giorgio Author-X-Name-Last: Gualberti Author-WorkPlace-Name: Instituto Superior Técnico, Lisbon, Portugal Author-Name: Morgan Bazilian Author-X-Name-First: Morgan Author-X-Name-Last: Bazilian Author-WorkPlace-Name: United Nations Industrial Development Organization, Vienna, Austria Author-Name: Erik Haites Author-X-Name-First: Erik Author-X-Name-Last: Haites Author-WorkPlace-Name: Margaree Consultants,Toronto, Canada Author-Name: Maria da Graça Carvalho Author-X-Name-First: Maria da Graça Author-X-Name-Last: Carvalho Author-WorkPlace-Name: Instituto Superior Técnico, Lisbon, Portugal Abstract: The United Nations General Assembly declared 2012 the “International Year of Sustainable Energy for All”, officially recognising the urgent need to put energy at the centre of the global development agenda. In parallel, a strong international policy effort is being made to achieve the goal of universal energy access to modern energy services by 2030. To support these efforts, a dramatic scaling-up of financing to the energy sector will be required through official development aid, other official flows, climate financing and various private flows. In this paper we analyse the recent evolution of development policies and finance for the energy sector using both descriptive and analytical tools. We find that, although development finance for the energy sector rose considerably during the past decade, the financial flows have not been directed towards the countries with the lowest levels of energy access. Keywords: Development Finance, Energy Policy, Energy Access Classification-JEL: F35, Q40, O20 Creation-Date: 201203 Template-Type: ReDIF-Paper 1.0 Number: 2012.13 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-013.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.13 Title: Fossil Fuel Extraction and Climate Policy: A Review of the Green Paradox with Endogenous Resource Exploration Author-Name: Ines Österle Author-X-Name-First: Ines Author-X-Name-Last: Österle Author-WorkPlace-Name: Centro di Economia Regionale, dei Trasporti e del Turismo CERTeT - Bocconi Abstract: Policies aimed at reducing emissions from fossil fuels may increase climate damages. This “Green Paradox” emerges if resource owners increase near-term extraction in fear of stricter future policy measures. Hans-Werner Sinn (2008) showed that the paradox occurs when increasing resource taxes are applied within a basic exhaustible resource model. This article highlights that the emergence of the Green Paradox within this framework relies on the non-existence of a backstop technology and fixed fossil fuel resources. In doing this, it initially presents a basic exhaustible resource model which includes a backstop technology and shows that the implementation of a specific sales tax path is effective in mitigating global warming. Secondly, it considers the case of costly exploration activities being introduced within the basic model and accounts for the real world condition that the location of fossil fuels is unknown. Under this condition, an increasing cash flow tax is effective in dealing with climate change if policy makers commit to a high initial tax level and to a specific range of growth rates. Keywords: Green Paradox, Supply-side dynamics, Climate Policy, Exhaustible Resources, Fossil Fuels, Exploration Classification-JEL: Q31, Q54, Q58, H23, H32 Creation-Date: 201203 Template-Type: ReDIF-Paper 1.0 Number: 2012.14 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-014.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.14 Title: Combined Effects of Load Factors and Booking Time on Fares: Insights from the Yield Management of a Low-Cost Airline Author-Name: Marco Alderighi Author-X-Name-First: Marco Author-X-Name-Last: Alderighi Author-WorkPlace-Name: Università della Valle d'Aosta and Università Bocconi Author-Name: Marcella Nicolini Author-X-Name-First: Marcella Author-X-Name-Last: Nicolini Author-WorkPlace-Name: Università di Pavia and FEEM, Milan Author-Name: Claudio A. Piga Author-X-Name-First: Claudio A. Author-X-Name-Last: Piga Author-WorkPlace-Name: Loughborough University and Rimini Centre Economic Analysis Abstract: Based on two strands of theoretical research, this paper provides new evidence on how fares are jointly affected by in-flight seat availability and purchasing date. As capacity-driven theories predict, it emerges that fares monotonically and substantially increase with the flights occupancy rate. Moreover, as suggested in the literature on intertemporal price discrimination, the adoption of advance purchase discounts is widespread as the departure date nears, but it may be part of a U-shaped temporal profile, where discounts are preceded by periods of relatively higher fares. Finally, the intervention of yield management analysts appears to play a substantial role. Keywords: Pricing policy, Panel Data, Ryanair, Yield Management Classification-JEL: D22, L11, L93 Creation-Date: 201203 Template-Type: ReDIF-Paper 1.0 Number: 2012.15 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-015.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.15 Title: The Market Value of Variable Renewables Author-Name: Lion Hirth Author-X-Name-First: Lion Author-X-Name-Last: Hirth Author-WorkPlace-Name: Vattenfall Europe AG Abstract: The income that wind and solar power receive on the market is affected by the variability of their output. At times of high availability of the primary energy source, they supply electricity at zero marginal costs, shift the supply curve (merit-order curve) to the right and thereby reduce the equilibrium price of electricity during that hour. The size of this merit-order effect depends on the amount of installed renewable capacity, the slope of the merit-order curve, and the intertemporal flexibility of the electricity system. Thus the price of wind power falls with higher penetration rates, even if the average electricity price remains constant. This work quantifies the effect of variability on the market value of renewables using a calibrated model of the European electricity market. The relative price of German wind power (value factor) is estimated to fall from 110% of the average electricity price to 50% as generation increases from zero to 30% of total consumption. For solar power, the drop is even sharper. Hence competitiveness for large-scale renewables deployment will be more difficult to accomplish than often believed. Keywords: Wind Power, Solar Power, Electricity Market, Power Generation Economics, Renewables, Value Factor, Numerical Modelling Classification-JEL: Q42, O13, D24, D61 Creation-Date: 201203 Template-Type: ReDIF-Paper 1.0 Number: 2012.16 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-016.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.16 Title: The Nexus Land-Use Model, an Approach Articulating Biophysical Potentials and Economic Dynamics to Model Competition for Land-Uses Author-Name: F. Souty Author-X-Name-First: F. Author-X-Name-Last: Souty Author-WorkPlace-Name: Laboratoire des Sciences du Climat et de l'Environnement Author-Name: T. Brunelle Author-X-Name-First: T. Author-X-Name-Last: Brunelle Author-WorkPlace-Name: Centre International de Recherche sur l'Environnement et le Développement Author-Name: P. Dumas Author-X-Name-First: P. Author-X-Name-Last: Dumas Author-WorkPlace-Name: Centre International de Recherche sur l'Environnement et le Développement and Centre de Coopération Internationale en Recherche Agronomique pour le Développement Author-Name: B. Dorin, Author-X-Name-First: B. Author-X-Name-Last: Dorin Author-WorkPlace-Name: Centre International de Recherche sur l'Environnement et le Développement and Centre de Coopération Internationale en Recherche Agronomique pour le Développement Author-Name: P. Ciais Author-X-Name-First: P. Author-X-Name-Last: Ciais Author-WorkPlace-Name: Laboratoire des Sciences du Climat et de l'Environnement Author-Name: R. Crassous Author-X-Name-First: R. Author-X-Name-Last: Crassous Author-WorkPlace-Name: Laboratoire des Sciences du Climat et de l'Environnement Abstract: Interactions between food demand, biomass energy and forest preservation are driving both food prices and land-use changes, regionally and globally. This study presents a new model called Nexus Land-Use which describes these interactions through a generic representation of agricultural intensification mechanisms. The Nexus Land-Use model equations combine biophysics and economics into a single coherent framework to calculate crop yields, food prices, and resulting pasture and cropland areas within 12 regions inter-connected with each other by international trade. The representation of cropland and livestock production systems in each region relies on three components: (i) a biomass production function derived from the crop yield response function to inputs such as industrial fertilisers ; (ii) a detailed representation of the livestock production system subdivided into an intensive and an extensive component, and (iii) a spatially explicit distribution of potential (maximal) crop yields prescribed from the Lund-Postdam-Jena global vegetation model for managed Land (LPJmL). The economic principles governing decisions about land-use and intensification are adapted from the Ricardian rent theory, assuming cost minimisation for farmers. The land-use modelling approach described in this paper entails several advantages. Firstly, it makes it possible to explore interactions among different types of demand for biomass for food and animal feed, in a consistent approach, including indirect effects on land-use change resulting from international trade. Secondly, yield variations induced by the possible expansion of croplands on less suitable marginal lands are modelled by using regional land area distributions of potential yields, and a calculated boundary between intensive and extensive production. The model equations and parameter values are first described in detail. Then, idealised scenarios exploring the impact of forest preservation policies or rising energy price on agricultural intensification are described, and their impacts on pasture and cropland areas are investigated. Keywords: Land-use Change, Modelling, Global Biomass Projections Classification-JEL: Q11, Q15 Creation-Date: 201203 Template-Type: ReDIF-Paper 1.0 Number: 2012.17 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-017.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.17 Title: River Sharing and Water Trade Author-Name: Erik Ansink Author-X-Name-First: Erik Author-X-Name-Last: Ansink Author-WorkPlace-Name: Institute for Environmental Studies (IVM), VU University Amsterdam Author-Name: Michael Gengenbach Author-X-Name-First: Michael Author-X-Name-Last: Gengenbach Author-WorkPlace-Name: Department of Social Sciences, Wageningen University Author-Name: Hans-Peter Weikard Author-X-Name-First: Hans-Peter Author-X-Name-Last: HWeikard Author-WorkPlace-Name: Department of Social Sciences, Wageningen University Abstract: We analyse river sharing games in which a set of agents located along a river shares the available water. Using coalition theory, we find that the potential benefits of water trade may not be sufficient to make all agents in the river cooperate and acknowledge property rights as a prerequisite for trade. Specifically, a complete market for river water may not emerge if there are four or more agents along the river. Instead, a partial market may emerge where a subset of agents trades river water, with the possibility that other agents take some of the river water that passes their territory. Keywords: River Sharing, Water Trade, Market Emergence, Property Rights, Coalition Stability Classification-JEL: C72, D74, H23, Q25 Creation-Date: 201203 Template-Type: ReDIF-Paper 1.0 Number: 2012.18 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-018.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.18 Title: Human Capital, Innovation, and Climate Policy: An Integrated Assessment Author-Name: Carlo Carraro Author-X-Name-First: Carlo Author-X-Name-Last: Carraro Author-WorkPlace-Name: University of Venice, Fondazione Enrico Mattei, CEPR, CESifo and CMCC Author-Name: Enrica De Cian Author-X-Name-First: Enrica Author-X-Name-Last: De Cian Author-WorkPlace-Name: Fondazione Enrico Mattei and CMCC Author-Name: Massimo Tavoni Author-X-Name-First: Massimo Author-X-Name-Last: Tavoni Author-WorkPlace-Name: Fondazione Enrico Mattei and CMCC Abstract: This paper looks at the interplay between human capital and innovation in the presence of climate and educational policies. Using recent empirical estimates, human capital and general purpose R&D are introduced in an integrated assessment model that has been extensively applied to study climate change mitigation. Our results suggest that climate policy stimulates general purpose as well as clean energy R&D but reduces the incentive to invest in human capital formation. Human capital increases the productivity of labour and the complementarity between labour and energy drives its pollution-using effect (direct effect). When human capital is an essential input in the production of generic and energy dedicated knowledge, the crowding out induced by climate policy is mitigated, thought not completely offset (indirect effect). The pollution-using implications of the direct effect prevail over the indirect contribution of human capital to the creation of new and cleaner knowledge. A policy mix that combines educational as well as climate objectives offsets the human capital crowding-out with a moderate, short-term consumption loss. Human capital is complement to all forms of innovation and an educational policy stimulates both energy and general purpose innovation. This result has important policy implications considering the growing concern that effective climate policy is conditional on solid economic development and therefore it needs to be supplemented by other policy targets. Keywords: Climate Policy, Innovation, Human capital Classification-JEL: O33, O41, Q43 Creation-Date: 201203 Template-Type: ReDIF-Paper 1.0 Number: 2012.19 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-019.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.19 Title: Improving Land-use Modelling within CGE to Assess Forest-based Mitigation Potential and Costs Author-Name: Melania Michetti Author-X-Name-First: Melania Author-X-Name-Last: Michetti Author-WorkPlace-Name: Centro Euro-mediterraneo per i Cambiamenti Climatici (CMCC), Fondazione Eni Enrico Mattei (FEEM), Università Cattolica del Sacro Cuore di Milano Author-Name: Ramiro Parrado Author-X-Name-First: Ramiro Author-X-Name-Last: Parrado Author-WorkPlace-Name: Centro Euro-mediterraneo per i Cambiamenti Climatici (CMCC), Fondazione Eni Enrico Mattei (FEEM), Università Ca’ Foscari di Venezia Abstract: We present a computable general equilibrium model properly modified to analyse the potential role of the European forestry sector within climate mitigation. Improvements on database and modelling frameworks allow accounting for land heterogeneity across and within regions and for land transfers between agriculture, grazing, and forestry. The forestry sector has been modified to track carbon mitigation potential from both intensive and extensive forest margins, which have been calibrated according to a forest sectoral model. Two sets of climate policies are simulated. In a first scenario, Europe is assumed to commit unilaterally to reduce CO2 emissions by 20% and 30%, by 2020. In a second scenario, in addition to the emissions quotas, progressively higher forest sequestration subsidies are paid to European firms to foster the implementation of forestry practices. Results show that including forest carbon in the compliance strategy decreases European policy costs and carbon price, while it does not lead to significant reductions in carbon leakage. We conclude that while European forests can reinforce other mitigation measures, their contribution as a stand-alone abatement strategy results insufficient to comply with emissions reduction targets. Additionally, carbon sinks provided by European temperate forests do not offer considerable mitigation potential if compared with other forest biomes around the world. A much higher forest mitigation would require other regions to take part in a climate stabilization agreement, especially those where old-growth forests exist. Keywords: Climate Change, Climate Mitigation, General Equilibrium Modelling, Forestry Classification-JEL: D58, Q23, Q54, Q58 Creation-Date: 201203 Template-Type: ReDIF-Paper 1.0 Number: 2012.20 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-020.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.20 Title: Energy Balance Climate Models, Damage Reservoirs and the Time Profile of Climate Change Policy Author-Name: William Brock Author-X-Name-First: William Brock Author-X-Name-Last: Brock Author-WorkPlace-Name: University of Wisconsin, Department of Economics Author-Name: Gustav Engstrom Author-X-Name-First: Gustav Author-X-Name-Last: Engstrom Author-WorkPlace-Name: Beijer Institute of Ecological Economics Author-Name: Anastasios Xepapadeas Author-X-Name-First: Anastasios Author-X-Name-Last: Xepapadeas Author-WorkPlace-Name: Athens University of Economics and Business Abstract: A simplified energy balance climate model is considered with the global mean temperature as the state variable, and an endogenous ice line. The movements of the ice line towards the Poles are associated with damage reservoirs where initial damages are high and then eventually vanish as the ice caps vanish and the damage reservoir is exhausted. We couple this climate model with a simple economic growth model and we show that the endogenous ice line induces a nonlinearity. This nonlinearity when combined with two sources of damages - the conventional damages due to temperature increase and the reservoir damages - generates multiple steady states and Skiba points. It is shown that the policy ramp implied by this model calls for high mitigation now. Simulation results suggest that the policy ramp could be U-shaped instead of the monotonically increasing with low starting mitigation gradualist policy ramp. Keywords: Energy Balance Climate Models, Damage Reservoir, Ice Line, Permafrost, Heat Diffusion, Policy Ramp, Skiba Points Classification-JEL: Q54, Q58 Creation-Date: 201203 Template-Type: ReDIF-Paper 1.0 Number: 2012.21 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-021.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.21 Title: Cross-Border Intellectual Property Rights: Contract Enforcement and Absorptive Capacity Author-Name: Alireza Naghavi Author-X-Name-First: Alireza Author-X-Name-Last: Naghavi Author-WorkPlace-Name: Department of Economics, University of Bologna, Italy Author-Name: Yingyi Tsai Author-X-Name-First: Yingyi Author-X-Name-Last: Tsai Author-WorkPlace-Name: Department of Applied Economics, National University of Kaohsiung, Taiwan Abstract: This paper studies cross-border intellectual property rights (IPR) as a North-South contract using a Nash bargaining approach and distinguishes between the outcome and its actual enforcement. The absorptive capacity of the Southern country to exploit technology transfer plays a key role in the negotiated level of IPRs and its post-treaty enforcement. The optimal level of IPR protection relates positively to absorptive capacity. This provides a rationale for the longer time-frame provided to least developed countries in Article 66 of TRIPS to implement its provisions. In addition, monitoring is only effective in preventing contract violation up to a critical level of absorptive capacity. We relate this to the US Trade Representative “Special 301” report, which flags countries that deny adequate IPR protection as “priority watch list”. While disputes with less developed economies are promptly resolved, emerging economies, where most losses from copyright piracy originates from, continue to remain on the list. Keywords: Intellectual Property Rights, TRIPS, Nash Bargaining, Contract Enforcement, Development, Absorptive Capacity, Monitoring Classification-JEL: O34 , F13, F53, D78, L10, O33, C70 Creation-Date: 201204 Template-Type: ReDIF-Paper 1.0 Number: 2012.22 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-022.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.22 Title: Environmental Policy and Directed Technological Change: Evidence from the European Carbon Market Author-Name: Raphael Calel Author-X-Name-First: Raphael Author-X-Name-Last: Calel Author-WorkPlace-Name: Grantham Research Institute on Climate Change and the Environment, London School of Economics Author-Name: Antoine Dechezleprêtre Author-X-Name-First: Antoine Dechezleprêtre Author-X-Name-Last: Dechezleprêtre Author-WorkPlace-Name: Centre for Economic Performance, London School of Economics Abstract: The European Union Emissions Trading Scheme (EU ETS) has aimed to encourage the development of low-carbon technologies by putting a price on carbon emissions. Using a newly constructed data set that links 8.5 million European companies with their patenting history and their regulatory status under EU ETS, we investigate the hypothesis that the EU ETS has encouraged development of low-carbon technologies. Exploratory data analysis reveals a rapid increase in low-carbon patenting activities at the EPO since 2005, especially among EU ETS regulated companies during the Scheme's second phase. Naive estimates obtained by comparing EU ETS and non-EU ETS firms suggest that the Scheme may be responsible for up to 30% of the increase in low-carbon patenting of regulated companies. However, more refined estimates that combine matching methods with difference-in-differences provide evidence that the EU ETS has not impacted the direction of technological change. This finding appears to be robust to a number of stability and sensitivity checks. While we cannot completely rule out the possibility that the EU ETS has impacted only large companies for which suitable unregulated comparators cannot be found, our findings suggest that the EU ETS so far has had at best a very limited impact on low-carbon technological change. Keywords: Directed Technological Change, EU Emissions Trading Scheme, Policy Evaluation Classification-JEL: Q54, Q58 Creation-Date: 201204 Template-Type: ReDIF-Paper 1.0 Number: 2012.23 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-023.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.23 Title: Returns in Commodities Futures Markets and Financial Speculation: A Multivariate GARCH Approach Author-Name: Matteo Manera Author-X-Name-First: Matteo Author-X-Name-Last: Manera Author-WorkPlace-Name: University of Milan-Bicocca, Milan and Fondazione Eni Enrico Mattei, Milan Author-Name: Marcella Nicolini Author-X-Name-First: Marcella Author-X-Name-Last: Nicolini Author-WorkPlace-Name: University of Pavia, Pavia and Fondazione Eni Enrico Mattei, Milan Author-Name: Ilaria Vignati Author-X-Name-First: Ilaria Author-X-Name-Last: Vignati Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Milan Abstract: This paper analyses futures prices for four energy commodities (light sweet crude oil, heating oil, gasoline and natural gas) and five agricultural commodities (corn, oats, soybean oil, soybeans and wheat), over the period 1986-2010. Using CCC and DCC multivariate GARCH models, we find that financial speculation is poorly significant in modelling returns in commodities futures while macroeconomic factors help explaining returns in commodities futures. Moreover, spillovers between commodities are present and the conditional correlations among commodities are high and time-varying. Keywords: Energy, Commodities, Futures Markets, Financial Speculation, Multivariate GARCH Classification-JEL: C32, G13, Q11, Q43 Creation-Date: 201204 Template-Type: ReDIF-Paper 1.0 Number: 2012.24 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-024.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.24 Title: Oil Revenues, Ethnic Fragmentation and Political Transition of Authoritarian Regimes Author-Name: Alessandro Cologni Author-X-Name-First: Alessandro Author-X-Name-Last: Cologni Author-WorkPlace-Name: Edison Trading, Edison S.p.A., Italy Author-Name: Matteo Manera Author-X-Name-First: Matteo Author-X-Name-Last: Manera Author-WorkPlace-Name: Department of Statistics, University of Milan-Bicocca and Fondazione Eni Enrico Mattei, Italy Abstract: Natural resources are generally associated to negative effects on the political environment of a country. This paper explores the impact that oil revenues have on the establishment of a given political system. Based on previous literature, a political economy perspective is employed. A simple game theoretical approach in order to explain the relationships between oil revenues, political instability (conflicts) and emergence of different political systems is presented. The implementation of particular redistributive fiscal policies together with the possibility that paternalistic or “predatory" autocracies emerge are considered. Under certain circumstances, a process of full democratization is argued not to represent an optimal choice for the oil-rich authoritarian nations. Since governments prefer to remain nondemocratic, in order to prevent internal conflicts from occurring, authoritarian countries have to undertake redistributive activities. Under other assumptions, governments of oil-rich nations prefer to introduce large military sectors. The present analysis determines how the emergence of redistributive of predatory policies depends on relevant parameters related to initial income, oil revenues and social inequality. Finally, we study the importance of socio-ethnical fragmentation in determining the political transition of oil producing nations. Keywords: Natural Resources, Rentier States, Conflict and Endogenous Political Regimes Classification-JEL: C72, D74, O13, P16 Creation-Date: 201204 Template-Type: ReDIF-Paper 1.0 Number: 2012.25 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-025.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.25 Title: Energy-Based Economic Development: Mapping the Developing Country Context Author-Name: Sanya Carley Author-X-Name-First: Sanya Author-X-Name-Last: Carley Author-WorkPlace-Name: School of Public and Environmental Affairs, Indiana University Author-Name: Sameeksha Desai Author-X-Name-First: Sameeksha Author-X-Name-Last: Desai Author-WorkPlace-Name: School of Public and Environmental Affairs, Indiana University Author-Name: Morgan Bazilian Author-X-Name-First: Morgan Author-X-Name-Last: Bazilian Author-WorkPlace-Name: United Nations Industrial Development Organization Abstract: Energy-based economic development (EBED) can provide economic, social and environmental benefits related to national economic development and sustainable growth activities. As both policy and research interests in responsible mechanisms for economic development grow, EBED benefits are becoming increasingly attractive to planners in both developed and developing countries. The incentives, trade-offs, and payoffs for developing countries, however, are not well documented. To help address that gap, this paper identifies the general scope and role of EBED in a developing economy context, and outlines opportunities and challenges for decision-makers. Keywords: Economic Development; Energy, Developing Countries, Sustainable Development Classification-JEL: O10, O13, O21, Q48 Creation-Date: 201204 Template-Type: ReDIF-Paper 1.0 Number: 2012.26 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-026.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.26 Title: The Role of Oscillatory Modes in U.S. Business Cycles Author-Name: Andreas Groth Author-X-Name-First: Andreas Author-X-Name-Last: Groth Author-WorkPlace-Name: Geosciences Department, Ecole Normale Supérieure, Paris, France, Environmental Research & Teaching Institute, Ecole Normale Supérieure Author-Name: Michael Ghil Author-X-Name-First: Michael Author-X-Name-Last: MGhil Author-WorkPlace-Name: Geosciences Department, Ecole Normale Supérieure, Paris, France, Environmental Research & Teaching Institute, Ecole Normale Supérieure, Paris, France Department of Atmospheric & Oceanic Sciences and Institute of Geophysics & Planetary Physics, University of California Author-Name: Stéphane Hallegatte Author-X-Name-First: Stéphane Author-X-Name-Last: Hallegatte Author-WorkPlace-Name: Centre International de Recherche sur l'Environnement et le Développement, Nogent-sur-Marne, France, Ecole Nationale de la Météorologie, Météo France Author-Name: Patrice Dumas Author-X-Name-First: Patrice Author-X-Name-Last: Dumas Author-WorkPlace-Name: Centre International de Recherche sur l'Environnement et le Développement, Nogent-sur-Marne Abstract: We apply the advanced time-and-frequency-domain method of singular spectrum analysis to study business cycle dynamics in a set of nine U.S. macroeconomic indicators. This method provides a robust way to identify and reconstruct shared oscillations, whether intermittent or modulated. We address the problem of spurious cycles generated by the use of detrending filters and present a Monte Carlo test to extract significant oscillations. Finally, we demonstrate that the behavior of the U.S. economy changes significantly between episodes of growth and recession; these variations cannot be generated by random shocks alone, in the absence of endogenous variability. Keywords: Advanced Spectral Methods, Comovements, Frequency Domain, Monte Carlo testing, Time Domain Classification-JEL: C15, C60, E32 Creation-Date: 201205 Template-Type: ReDIF-Paper 1.0 Number: 2012.27 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-027.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.27 Title: Technology Spillovers Embodied in International Trade: Intertemporal, regional and sectoral effects in a global CGE Author-Name: Enrica De Cian Author-X-Name-First: Enrica Author-X-Name-Last: De Cian Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM), and Centro Euro-mediterraneo per i Cambiamenti Climatici (CMCC) Author-Name: Ramiro Parrado Author-X-Name-First: Ramiro Author-X-Name-Last: Parrado Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM), Centro Euro-mediterraneo per i Cambiamenti Climatici (CMCC) and Ca’ Foscari University of Venice Abstract: This paper uses a dynamic CGE model to assess the intertemporal and spatial dimension of technology spillovers embodied in international trade within a climate and trade policy framework. Three are the main contributions of the study. First, to include endogenous factor-biased technical change based on trade flows in a CGE model, particularly for energy and capital. Second, to analyse the implications of specific spillovers embodied in trade of capital goods (machinery and equipment), and third, to highlight the implications of accounting for indirect effects induced by spillovers. We find that explicitly modelling trade spillovers reveals significant effects thanks to the transmission mechanisms underlying imports of capital commodities. We then assess the net contribution of modelling trade spillovers within three policy scenarios. The aggregated net effects of spillovers are rather small confirming findings from previous studies. However, there are important international and intersectoral redistribution effects due to technology transfers represented as embodied spillovers. Keywords: Computable General Equilibrium Models, Climate Change, Economic Growth, Technological Spillovers Classification-JEL: C68, E27, O12, Q54, Q56, O33 Creation-Date: 201205 Template-Type: ReDIF-Paper 1.0 Number: 2012.28 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-028.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.28 Title: The Oil price-Macroeconomy Relationship since the Mid- 1980s: A global perspective Author-Name: Claudio Morana Author-X-Name-First: Claudio Morana Author-X-Name-Last: Morana Author-WorkPlace-Name: Università di Milano Bicocca, CeRP-Collegio Carlo Alberto, Italy, Fondazione Eni Enrico Mattei, Italy and International Centre for Economic Research, ICER Abstract: In this paper the oil price-macroeconomy relationship is investigated from a global perspective, by means of a large scale macro-financial-econometric model. In addition to real activity, fiscal and monetary policy responses and labor and financial markets are considered as well. We find that oil market shocks would have contributed to slowing down economic growth since the first Persian Gulf War episode. Among oil market shocks, supply side disturbances were the largest contributor to macro-financial fluctuations, accounting for up to 12% of real activity variance. The latter shocks would have exercised recessionary effects during the first and second Persian Gulf War and 2008 oil price episodes; preferences, speculative and volatility shocks would have also contributed to exacerbate the recessionary episodes. As long as oil supply will keep expanding at a lower pace than required by demand conditions, a recessionary bias, determined by higher and more uncertain real oil prices, may then be expected to persist also in the near future. Keywords: Oil Price, Oil Price-Macroeconomy Relationship, Macro-finance Interface, International Business Cycle, Factor Vector Autoregressive Models Classification-JEL: C22, E32, G12 Creation-Date: 201205 Template-Type: ReDIF-Paper 1.0 Number: 2012.29 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-029.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.29 Title: Conceptualizing Urban Adaptation to Climate Change Findings from an Applied Adaptation Assessment Framework Author-Name: Katie Johnson Author-X-Name-First: Katie Author-X-Name-Last: Johnson Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Margaretha Breil Author-X-Name-First: Margaretha Author-X-Name-Last: Breil Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: Urban areas have particular sensitivities to climate change, and therefore adaptation to a warming planet represents a challenging new issue for urban policy makers in both the developed and developing world. Further to climate mitigation strategies implemented in various cities over the past 20 years, more recent efforts of urban management have also included actions taken to adapt to increasing temperatures, sea level and extreme events. Through the examination and comparison of seven cities, this paper identifies the various levels of administrative adaptation planning, the tools and information used in making policy choices, and the roles of governance and finance in urban adaptation to climate change. Lessons learned from these seven cases are presented to better inform the next generation of cities adapting to climate change. Keywords: Cities, Urban Areas, Adaptation, Climate Change, Governance Classification-JEL: Q54, Q58 Creation-Date: 201205 Template-Type: ReDIF-Paper 1.0 Number: 2012.30 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-030.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.30 Title: The Possibilities for the Development of Tourism in the Appennino Lucano Val d'Agri Lagonegrese National Park: A Participative Qualitative-Quantitative Approach Author-Name: Angelo Bencivenga Author-X-Name-First: Angelo Author-X-Name-Last: Bencivenga Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Margaretha Breil Author-X-Name-First: Margaretha Author-X-Name-Last: Breil Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Mariaester Cassinelli Author-X-Name-First: Mariaester Author-X-Name-Last: Cassinelli Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Livio Chiarullo Author-X-Name-First: Livio Author-X-Name-Last: Chiarullo Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Annalisa Percoco Author-X-Name-First: Annalisa Author-X-Name-Last: Percoco Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: Protected areas can represent a strategic laboratory for the realisation of initiatives capable of promoting sustainable economic development models at a local level. One of the duties of national parks is to provide value and promote, even for tourism purposes, natural, historical and cultural resources subject to restrictions in the territory. This contribution describes the research process activated for the definition of a tourism development strategy in the youngest Italian national parks, the Appennino Lucano Val d'Agri Lagonegrese located in Basilicata. This is a protected area which has not yet been developed from a tourism point of view and it has an "eclectic" naturalist value characterised by flora on one hand and significant fauna on the other, as well as a subsoil rich in hydrocarbons (the largest deposit on continental Europe). In light of this typicality for the area, research favoured a participative type qualitative-quantitative approach, involving both local stakeholders, for exploration of the area's potential and definition of possible tourism development scenarios, and actual or potential users interested in the area, for assessment of the proposed alternatives. The information and data collected allowed, on one hand, the identification of major critical areas which currently make tourism in the area an activity that is still economically marginal with respect to the local structured economic system, and on the other hand, identification of some themes around which to build a competitive tourism product in line with market demands in observance of sustainability. Through a contingent assessment exercise it was possible to understand what the preferences are with respect to different hypotheses of the tourism offer in the area for current and potential tourists involved in the survey and, at the same time, to identify some elements to examine in order to improve attractiveness. Keywords: Tourism, Basilicata Region Classification-JEL: Q2, Q26 Creation-Date: 201205 Template-Type: ReDIF-Paper 1.0 Number: 2012.31 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-031.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.31 Title: Regulating Global Biodiversity: What is the Problem? Author-Name: Tim Swanson Author-X-Name-First: Tim Author-X-Name-Last: Swanson Author-WorkPlace-Name: Andre Hoffmann Chair of Environmental Economics, Graduate Institute- Geneva, and Director of the Centre for International Environmental Studies Author-Name: Ben Groom Author-X-Name-First: Ben Author-X-Name-Last: Groom Author-WorkPlace-Name: School for Oriental and Asian Studies, University of London Abstract: We distinguish between local problems of biodiversity loss and global ones, where international cooperation is required. Global biodiversity regulation involves choosing the optimal stopping rule regarding global land conversions, in order to ensure that some areas of unconverted natural reserves remain to support the production sector that exists on converted lands. The basic difficulty with implementing a solution to this global problem lies in the asymmetry in endowments between those states that have previously converted, and those that have not. We demonstrate that the fundamental problem of global biodiversity regulation is similar to the bargaining problem analysed by Nash, Rubinstein and others. There are benefits from global land conversion, and there must be agreement on their distribution before the conversion process can be halted. Since the institutions addressing global biodiversity problems are either highly ineffectual (benefit sharing agreements, prior informed consent clauses) or very extreme (incremental cost contracts), the biodiversity bargaining problem remains unresolved. For this reason we anticipate that suboptimal conversions will continue to occur, as a way of protesting the ineffective and unfair approaches employed in addressing this problem to date. Keywords: Global Biodiversity, International Environmental Policy, Nash Bargaining, Rational Threats Classification-JEL: Q240, Q280 Creation-Date: 201205 Template-Type: ReDIF-Paper 1.0 Number: 2012.32 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-032.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.32 Title: Adaptive Policy Mechanisms for Transboundary Air Pollution Regulation: Reasons and Recommendations Author-Name: J. Andrew Kelly Author-X-Name-First: J. Andrew Author-X-Name-Last: Kelly Author-WorkPlace-Name: AP EnvEcon, NovaUCD Author-Name: Herman R.J. Vollebergh Author-X-Name-First: Herman R.J. Author-X-Name-Last: Vollebergh Author-WorkPlace-Name: PBL Netherlands Environmental Assessment Agency and CentER and Tilburg Sustainability Center, Tilburg University Abstract: In the context of transboundary air pollution policy the broad ambition is to achieve reductions in the level of environmental and societal damage associated with certain pollutant concentrations and exposure rates in a cost effective manner. Policy formulation and legislative frameworks in this field, such as the current National Emissions Ceiling Directive in the European Union, are challenged by the degree of scientific complexity involved, the dispersed sources of emissions, and the inherent uncertainties associated with long range forecasting under these conditions. This paper identifies the reasons why varied forms of adaptive policy mechanisms (also termed flexibilities) are necessary and valuable in this arena, presents the critical considerations for their design and operation, reviews a selection of the more prominent options currently considered in the associated transboundary research community, and concludes with recommendations for the next set of transboundary air pollution policy frameworks. Keywords: Transboundary Air Pollution, Emission Ceilings, Flexibility, Adaptive Policy, Integrated Assessment Modelling Classification-JEL: Q52, Q53, Q58 Creation-Date: 201205 Template-Type: ReDIF-Paper 1.0 Number: 2012.33 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-033.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.33 Title: Regulatory Distance and the Transfer of New Environmentally Sound Technologies: Evidence from the Automobile Sector Author-Name: Antoine Dechezleprêtre Author-X-Name-First: Antoine Author-X-Name-Last: Dechezleprêtre Author-WorkPlace-Name: Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science Author-Name: Richard Perkins Author-X-Name-First: Richard Author-X-Name-Last: Perkins Author-WorkPlace-Name: Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science and Department of Geography and Environment, London School of Economics and Political Science Author-Name: Eric Neumayer Author-X-Name-First: Eric Author-X-Name-Last: Neumayer Author-WorkPlace-Name: Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science and Department of Geography and Environment, London School of Economics and Political Science Abstract: This article examines the impact of environmental regulation within countries as well as regulatory distance between countries on international technology transfer. We employ a recently-assembled dataset of automobile emission standards and corresponding data on non-resident patent filing of automotive environmentally sound technologies (ESTs) in 49 countries between 1992 and 2007. Our analysis shows that an important factor shaping transfers is relative regulatory distance in that countries are more likely to receive newly-innovated technologies from source countries whose regulatory standards are “closer” to their own. Absolute stringency matters as well, consistent with conventional wisdom, although raising domestic environmental standards as such only leads to higher inflows of ESTs in developing countries. Novel to the literature, we show that regulatory standards in the third markets of a country's trading partners also influence transfers: countries receive more ESTs from a specific source country where they export more to markets whose regulatory standards are similar to those of the source country of the transferred technologies. As concerns both domestic regulation and regulation in a country’s major export markets, it is therefore regulatory distance that matters most rather than absolute regulatory levels. Keywords: Pollution Control Technologies, Environmental Regulation, International Technology Diffusion Classification-JEL: O33, Q53, Q55 Creation-Date: 201205 Template-Type: ReDIF-Paper 1.0 Number: 2012.34 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-034.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.34 Title: What Social Cost of Carbon? A Mapping of the Climate Debate Author-Name: Baptiste Perrissin Fabert Author-X-Name-First: Baptiste Author-X-Name-Last: Perrissin Fabert Author-WorkPlace-Name: Centre International de Recherche sur l’Environnement et le Développement (CIRED) Author-Name: Patrice Dumas Author-X-Name-First: Patrice Author-X-Name-Last: Dumas Author-WorkPlace-Name: CIRED/CIRAD Author-Name: Jean-Charles Hourcade Author-X-Name-First: Jean-Charles Author-X-Name-Last: Hourcade Author-WorkPlace-Name: CIRED Abstract: Given disparate beliefs about economic growth, technical change and damage caused by climate change, this paper starts with the seeming impossibility of determining a unique time profile of the social costs of carbon as a benchmark for climate negotiations and for infrastructure decisions that need to be made now in the absence of an inclusive international accord on climate policies. The paper demonstrates that determining a workable range of the social costs of carbon is however possible in a sequential decision-making framework that permits revising initial decisions in the light of new information. To do so, the paper exploits the results of a stochastic optimal control model run for more than 2000 scenarios that represent the set of beliefs presented about key uncertain parameters in the literature. The paper provides a heuristic mapping of the climate debate in the form of six “clubs of opinions” and shows the possibility of determining a range of social costs of carbon that might permit a compromise between the maximum range of “clubs” and those most likely to emerge in the future. Keywords: Optimal control, Mitigation, Social Cost of Carbon, Uncertainty Classification-JEL: Q540, Q21, O41, D81 Creation-Date: 201205 Template-Type: ReDIF-Paper 1.0 Number: 2012.35 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-035.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.35 Title: Return on Investment from Industrial Energy Efficiency: Evidence from Developing Countries Author-Name: Ludovico Alcorta Author-X-Name-First: Ludovico Author-X-Name-Last: Alcorta Author-WorkPlace-Name: United Nations Industrial Development Organization Author-Name: Morgan Bazilian Author-X-Name-First: Morgan Author-X-Name-Last: Bazilian Author-WorkPlace-Name: United Nations Industrial Development Organization Author-Name: Giuseppe De Simone Author-X-Name-First: Giuseppe Author-X-Name-Last: De Simone Author-WorkPlace-Name: United Nations Industrial Development Organization Author-Name: Ascha Pedersen Author-X-Name-First: Ascha Author-X-Name-Last: Pedersen Author-WorkPlace-Name: United Nations Industrial Development Organization Abstract: Energy efficiency is a foundation of any good energy policy. The economic, security, and environmental benefits of energy efficiency have been recognized for decades. We explore energy efficiency policy insights derived from survey work in developing countries in 119 projects across nine manufacturing sub-sectors. The methodology utilises financial return calculations to highlight gaps and opportunities for meeting the potential of energy efficiency projects in the manufacturing sector. We find a generally very high level of internal rates of return at a project level - with payback periods ranging from 0.9 to 2.9 years; but note that these metrics do not always appropriately influence corporate decision-making for a number of well-understood reasons. Keywords: Energy Efficiency, Energy Investment, Energy And Development, Industrial Development Classification-JEL: O14, Q41, E22, C58 Creation-Date: 201205 Template-Type: ReDIF-Paper 1.0 Number: 2012.36 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-036.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.36 Title: Scanning for Global Greenhouse Gas Emissions Reduction Targets and their Distributions Author-Name: Stefan P. Schleicher Author-X-Name-First: Stefan P. Author-X-Name-Last: Schleicher Author-WorkPlace-Name: Wegener Center for Climate and Global Change at the University of Graz Author-Name: Angela Köppl Author-X-Name-First: Angela Author-X-Name-Last: Köppl Author-WorkPlace-Name: Austrian Institute of Economic Research Abstract: If dangerous and irreversible climatic events are to be avoided, global average temperature should not increase by more than 2°C above pre-industrial levels. In order to achieve such a global target, a mitigation pathway has to limit global emissions to about 50 percent below 1990 levels by 2050. We want to investigate in this paper the radical change of the energy system that would be needed for entering the pathway for halving emission levels by applying a global analytical tool. A comprehensive data base with a global coverage including socio-economic data as well as data on energy and emissions has been set up. By dividing the world into six countries and regions which account for two thirds of global emissions and a region for the rest of the world we investigate in an analytical framework the key drivers and parameters of the energy system which refer to population dynamics, economic activity, energy and carbon intensity. Based on assumptions about the diffusion and convergence of these key parameters we derive implications for long-term emission reduction targets. Keywords: Greenhouse Gas Emissions Reduction Targets, Energy Forecasts Classification-JEL: Q54, Q47 Creation-Date: 201205 Template-Type: ReDIF-Paper 1.0 Number: 2012.37 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-037.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.37 Title: Identity, Homophily and In-Group Bias Author-Name: Sergio Currarini Author-X-Name-First: Sergio Author-X-Name-Last: Currarini Author-WorkPlace-Name: Department of Economics, University of Bristol and Dipartimento di Economia, Universita' Ca' Foscari di Venezia Author-Name: Friederike Menge Author-X-Name-First: Friederike Author-X-Name-Last: Menge Author-WorkPlace-Name: School of Economics, University of Nottingham, University Park Campus and Department of Economics (AE1), Maastricht University Abstract: School of Economics, University of Nottingham, University Park Campus and Department of Economics (AE1), Maastricht University Keywords: In-Group Bias, Homophily, Endogenous Matching, Experiments, Game Theory Classification-JEL: D03, D01, C91, C92, C7 Creation-Date: 201205 Template-Type: ReDIF-Paper 1.0 Number: 2012.38 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-038.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.38 Title: Coalition Formation in Generalized Apex Games Author-Name: Dominik Karos Author-X-Name-First: Dominik Author-X-Name-Last: Karos Author-WorkPlace-Name: Department of Economics and Statistics, Saarland University Abstract: The class of games with one apex player is generalized to the class of games with a collection of apex sets. These simple games, together with a power index, canonically induce a hedonic coalition formation game. A monotonicity property of solutions is introduced and its meaning for the induced hedonic game is analyzed. Necessary and sufficient conditions for the existence of core stable partitions are stated and core stable partitions are characterized. Keywords: Apex Games, Core Stability, Hedonic Games, Strong Monotonicity Classification-JEL: C71 Creation-Date: 201205 Template-Type: ReDIF-Paper 1.0 Number: 2012.39 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-039.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.39 Title: Criminal Networks: Who is the Key Player? Author-Name: Xiaodong Liu Author-X-Name-First: Xiaodong Author-X-Name-Last: Liu Author-WorkPlace-Name: University of Colorado at Boulder Author-Name: Eleonora Patacchini Author-X-Name-First: Eleonora Author-X-Name-Last: Patacchini Author-WorkPlace-Name: La Sapienza University of Rome, EIEF and CEPR Author-Name: Yves Zenou Author-X-Name-First: Yves Author-X-Name-Last: Zenou Author-WorkPlace-Name: Stockholm University, Research Institute of Industrial Economics (IFN) and GAINS Author-Name: Lung-Fei Lee Author-X-Name-First: Lung-Fei Author-X-Name-Last: Lee Author-WorkPlace-Name: The Ohio State University Abstract: We analyze delinquent networks of adolescents in the United States. We develop a dynamic network formation model showing who the key player is, i.e. the criminal who once removed generates the highest possible reduction in aggregate crime level. We then structurally estimate our model using data on criminal behaviors of adolescents in the United States (AddHealth data). Compared to other criminals, key players are more likely to be male, have less educated parents, are less attached to religion and feel socially more excluded. We also find that, even though some criminals are not very active in criminal activities, they can be key players because they have a crucial position in the network in terms of betweenness centrality. Keywords: Crime, Bonacich Centrality, Dynamic Network Formation, Crime Policies Classification-JEL: A14, D85, K42, Z13 Creation-Date: 201205 Template-Type: ReDIF-Paper 1.0 Number: 2012.40 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-040.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.40 Title: On the Private Provision of Public Goods on Networks Author-Name: Nizar Allouch Author-X-Name-First: Nizar Author-X-Name-Last: Allouch Author-WorkPlace-Name: Queen Mary, University of London, School of Economics and Finance Abstract: This paper analyzes the private provision of public goods where consumers interact within a fixed network structure and may benefit only from their direct neighbors’ provisions. We present a proof for existence and uniqueness of a Nash equilibrium with general best-reply functions. Our uniqueness result simultaneously extends similar results in Bergstrom, Blume, and Varian (1986) on the private provision of public goods to networks and Bramoullé, Kranton, and D'Amours (2011) on games of strategic substitutes to nonlinear best-reply functions. In addition, we investigate the neutrality result of Warr (1983) and Bergstrom, Blume, and Varian (1986) whereby consumers are able to offset income redistributions and tax-financed government contributions. To this effect, we establish that the neutrality result has a limited scope of application beyond regular networks. Keywords: Public Goods, Uniqueness Of Nash Equilibrium, Network Games, Neutrality, Bonacich Centrality, Main Eigenvalue Classification-JEL: C72, D31, H41 Creation-Date: 201205 Template-Type: ReDIF-Paper 1.0 Number: 2012.41 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-041.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.41 Title: On Sharing the Benefits of Communication Author-Name: Efthymios Athanasiou Author-X-Name-First: Efthymios Author-X-Name-Last: Athanasiou Author-WorkPlace-Name: Dep. of Philosophy, CMU Author-Name: Santanu Dey Author-X-Name-First: Santanu Author-X-Name-Last: Dey Author-WorkPlace-Name: ISYE, Georgia Tech Author-Name: Giacomo Valleta Author-X-Name-First: Giacomo Author-X-Name-Last: Valletta Author-WorkPlace-Name: Dep. of Economics, Maastricht Abstract: We put forward a model of private goods with externalities. Agents derive benefit from communicating with each other. In order to communicate they need to have a language in common. Learning languages is costly. In this setting no individually rational and feasible Groves mechanism exists. We characterize the best-in-class feasible Groves mechanism and the best-in-class individually rational Groves mechanism. Keywords: Groves Mechanisms, Externality, Budget Surplus or Deficit, Pareto Undominated Mechanisms Classification-JEL: D70, D62, C60 Creation-Date: 201205 Template-Type: ReDIF-Paper 1.0 Number: 2012.42 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-042.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.42 Title: Intermediation in Networks Author-Name: Jan-Peter Siedlarek Author-X-Name-First: Jan-Peter Author-X-Name-Last: Siedlarek Author-WorkPlace-Name: Department of Economics, European University Institute Abstract: This paper studies bargaining and exchange in a networked market with intermediation. Possibilities to trade are restricted through a network of existing relationships and traders bargain over the division of available gains from trade along different feasible routes. Using a stochastic model of bargaining, I characterize stationary equilibrium payoffs as the fixed point of a set of intuitive value function equations and study efficiency and the relationship between network structure and payoffs. In equilibrium, trade is never unduly delayed but it may take place too early and in states where delay would be efficient. The inefficiency arises from a hold-up threat and the inability of bargaining parties credibly to commit to a split in a future period. The model also shows how with competing trade routes as trade frictions go to zero agents that are not essential to a trade opportunity receive a payoff of zero. Keywords: Stochastic Games, Bargaining, Random Matching, Middlemen, Network Classification-JEL: C73, C78, L14 Creation-Date: 201205 Template-Type: ReDIF-Paper 1.0 Number: 2012.43 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-043.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.43 Title: Post-Durban Climate Policy Architecture Based on Linkage of Cap-and-Trade Systems Author-Name: Matthew Ranson Author-X-Name-First: Matthew Author-X-Name-Last: Ranson Author-WorkPlace-Name: Harvard University, Harvard Kennedy School Author-Name: Robert N. Stavins Author-X-Name-First: Robert N. Author-X-Name-Last: Stavins Author-WorkPlace-Name: John F. Kennedy School of Government, Harvard University Abstract: The outcome of the December 2011 United Nations climate negotiations in Durban, South Africa, provides an important new opportunity to move toward an international climate policy architecture that is capable of delivering broad international participation and significant global CO2 emissions reductions at reasonable cost. We evaluate one important component of potential climate policy architecture for the post-Durban era: links among independent tradable permit systems for greenhouse gases. Because linkage reduces the cost of achieving given targets, there is tremendous pressure to link existing and planned cap-and-trade systems, and in fact, a number of links already or will soon exist. We draw on recent political and economic experience with linkage to evaluate potential roles that linkage may play in post-Durban international climate policy, both in a near-term, de facto architecture of indirect links between regional, national, and sub-national cap-and-trade systems, and in longer-term, more comprehensive bottom-up architecture of direct links. Although linkage will certainly help to reduce long-term abatement costs, it may also serve as an effective mechanism for building institutional and political structure to support a future climate agreement. Keywords: Global Climate Change, Market-Based Instruments, Cap-and-Trade, Carbon Pricing, Carbon Taxes, Linkage, International Climate Policy Architecture Classification-JEL: Q540, Q580, Q400, Q480 Creation-Date: 201205 Template-Type: ReDIF-Paper 1.0 Number: 2012.44 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-044.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.44 Title: Beyond GDP: Modelling Labour Supply as a ‘Free Time’ Trade-off in a Multiregional Optimal Growth Model Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: FEEM, Fondazione Eni Enrico Mattei, and CMCC Centro Euro-Mediterraneo per i Cambiamenti Climatici Author-Name: Frédéric Ghersi Author-X-Name-First: Frédéric Author-X-Name-Last: Ghersi Author-WorkPlace-Name: CIRED – Centre International de Recherche sur l’Environnement et le Développement Abstract: In this paper we develop the standard utility function of a Ramsey-type optimal growth model to account for a ‘market-time’ vs. ‘free-time’ trade-off. To do so, we introduce a free-time preference coefficient that measures the utility gained by deviating from a maximum labour supply defined as the combination of a 95% labour force participation rate for the 20 to 69 year-old population, and 3000 annual working hours (50 effective 60-hour weeks). We calibrate this free-time preference coefficient for 12 world regions on statistical and projected data from the United Nations, the International Labour Organisation and the OECD. We illustrate a prospective use of this modelling development by comparing the consequences of convergence of the free-time preference coefficients of all world regions to the contrasted Western European vs. United States value. Over the 21st century, compared to a business-as-usual trajectory defined by maintained regional disparities in free time preference, convergence to US free time preference induces a 0.3% decrease in global discounted labour market time, but a 4.2% increase in discounted global GDP sustained by a 2.5% increase in primary energy consumption that translates into a 1.7% increase in cumulated CO2-equivalent emissions; convergence to Western European free time preference decreases labour market time by 13.8%, GDP by 11.7%, primary energy consumption by 10.7% and cumulated CO2-equivalent emissions by 9.1%. Keywords: Ramsey Growth Model, Endogenous Labour Supply. Utility of Leisure, Beyond GDP Welfare Valuation Classification-JEL: C0, O4 Creation-Date: 201206 Template-Type: ReDIF-Paper 1.0 Number: 2012.45 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-045.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.45 Title: Procurement with Unenforceable Contract Time and the Law of Liquidated Damages Author-Name: Cesare Dosi Author-X-Name-First: Cesare Author-X-Name-Last: Dosi Author-WorkPlace-Name: Department of Economics and Management, University of Padova Author-Name: Michele Moretto Author-X-Name-First: Michele Author-X-Name-Last: Moretto Author-WorkPlace-Name: Department of Economics and Management, University of Padova, Centro Studi Levi Cases, Fondazione Eni Enrico Mattei Abstract: Time overruns are common in public works and are not confined to inherently complex tasks. One explanation advanced in this paper is that bidders can undergo unpredictable changes in production costs which generate an option value of waiting. By exploiting the real-option approach, we examine how the inability to force sellers to meet the contract time influences their bidding behaviour, and how this can ultimately affect the parties’ expected payoffs. Further, we examine the outcome of the bidding process when legal rules prevent the promisee from contracting for damage measures which would grant more than her lost expectation. We show that when the pre-agreed compensatory payments prove insufficient to discourage delayed orders, setting a liquidated damages clause would not lead to a Pareto superior outcome with respect to the no-damage-for delay condition. While such a clause would increase the seller’s expected payoff, the buyer’s expected payoff is lower than when the contract does not provide for any compensation for late-delivery. Keywords: Public Procurement, Fixed-Price Contracts, Cost Uncertainty, Time Overruns, Liquidated Damages, Real Options Classification-JEL: C61, D44, D86, K12 Creation-Date: 201206 Template-Type: ReDIF-Paper 1.0 Number: 2012.46 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-046.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.46 Title: Modelling Land Use, Land-Use Change, and Forestry in Climate Change: A Review of Major Approaches Author-Name: Melania Michetti Author-X-Name-First: Melania Author-X-Name-Last: Michetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM), Centro Euro-mediterraneo per i Cambiamenti Climatici (CMCC) Abstract: The rapid development of climate policies and the need to understand the dynamics of climate change have highlighted and shaped the role of land use, land-use change and forestry dynamics (LULUCF), making it an issue of global importance. As a consequence, LULUCF has become a central topic in economic theory and in environmental sciences. The attention is focused on creating and expanding comprehensive global land-use datasets and on improving the modelling strategies allowing for an extensive representation of the land-use system. However, this is a relatively new research field and the development of this challenging process is likely to require greater effort in the years to come. By adopting a straightforward model classification, this paper provides a broad, but detailed, overview of the most representative methods and models developed to date. This summary will guide a critical discussion on relevant methodological aspects related to the global modelling of land use and its changes. An additional focus is placed on the representation of forest-carbon sequestration within climate mitigation, which represents one of the most demanding issues from a modelling perspective. Keywords: Land, Land-Use Change Modelling, Agriculture, Forestry Classification-JEL: Q23, Q24, Q51, Q54 Creation-Date: 201206 Template-Type: ReDIF-Paper 1.0 Number: 2012.47 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-047.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.47 Title: Trade in a 'Green Growth' Development Strategy Global Scale Issues and Challenges Author-Name: Jaime de Melo Author-X-Name-First: Jaime Author-X-Name-Last: de Melo Author-WorkPlace-Name: University of Geneva and FERDI Abstract: The paper surveys the state of knowledge about the trade-related environmental consequences of a country’s development strategy along three channels: (i) direct trade-environment linkages (overexploitation of natural resources and trade-related transport costs);(ii) ‘virtual trade’ in emissions resulting from production activities; (iii) the product mix attributes of a ‘green-growth’ strategy (environmentally preferable products and goods for environmental management). Main conclusions are the following. Trade exacerbates over-exploitation of natural resources in weak institutional environments, but there is little evidence that differences in environmental policies across countries have led to significant ‘pollution havens’. Trade policies to ‘level the playing field’ would be ineffective and result in destructive conflicts in the WTO. Lack of progress at the Doha round suggests the need to modify the current system of global policy making. Keywords: Environmental Goods, Natural Resources, Green Growth, Trade and Climate Classification-JEL: F18, Q56 Creation-Date: 201206 Template-Type: ReDIF-Paper 1.0 Number: 2012.48 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-048.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.48 Title: Why Are the Stakes So High? Misconceptions and Misunderstandings in China’s Global Quest for Energy Security Author-Name: ZhongXiang Zhang Author-X-Name-First: ZhongXiang Author-X-Name-Last: Zhang Author-WorkPlace-Name: Center for Energy Economics and Strategy Studies, Fudan University, China Institute of Policy and Management, Chinese Academy of Sciences, China, Research Program, East-West Center Abstract: China’s global quest for resources, in particular oil and natural gas, has received unprecedented worldwide attention and scrutiny. This is partly because of China’s own high-profile, active energy diplomacy, its national oil companies’ acquisitions in the key exporting regions of oil and natural gas and some debatable issues about the management and operation of these companies. But why the stakes are raised unnecessarily high is mainly because of the growing politicization of Chinese energy security as a result of misconceptions and misunderstandings of China’s quest for energy security both inside and outside China. This paper aims to de-politicize the debate on China’s global quest for energy resources and to put discussions on that issue into perspective. To that end, the paper first categorizes the main features of China’s energy mix and discusses why energy security in China equates to a large extent to oil security. The paper then pays special attention to misconceptions and misunderstandings regarding the hypothesized U.S.-led oil blockade against China; the Chinese policy banks and their oil and natural gas-based loans; and the role of Chinese investments in oil and gas fields overseas in discussions on China’s global quest for energy resources. Finally, the paper ends with some concluding remarks on a more constructive way forward. Keywords: Energy Security, Global Quest for Resources, U.S.-Led Oil Blockade Against China, Loan-for-Oil and -Gas Deals, Equity Oil Production, Chinese Policy Banks, Going-Out Policies, National Oil Companies Classification-JEL: O13, O53, Q34, Q37, Q41, Q43, Q48 Creation-Date: 201206 Template-Type: ReDIF-Paper 1.0 Number: 2012.49 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-049.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.49 Title: Should We Be Worried About the Green Paradox? Announcement Effects of the Acid Rain Program Author-Name: Corrado Di Maria Author-X-Name-First: Corrado Author-X-Name-Last: Di Maria Author-WorkPlace-Name: University of Birmingham Author-Name: Ian Lange Author-X-Name-First: Ian Author-X-Name-Last: Lange Author-WorkPlace-Name: University of Stirling Author-Name: Edwin van der Werf Author-X-Name-First: Edwin Author-X-Name-Last: van der Werf Author-WorkPlace-Name: Wageningen University Abstract: This paper presents the first empirical test of the green paradox hypothesis, according to which well-intended but imperfectly implemented policies may lead to detrimental environmental outcomes due to supply side responses. We use the introduction of the Acid Rain Program in the U.S. as a case study. The theory predicts that owners of coal deposits, expecting future sales to decline, would supply more of their resource between the announcement of the Acid Rain Program and its implementation; moreover, the incentive to increase supply would be stronger for owners of high-sulfur coal. This would, all else equal, induce an increase in sulfur dioxide emissions. Using data on prices, heat input and sulfur content of coal delivered to U.S. power plants, we find strong evidence of a price decrease, some indication that the amount of coal used might have increased, and no evidence that the announcement of the Acid Rain Program led the use of higher sulfur coal. Overall, our evidence suggests that while the mechanism indicated by the theory might be at work, market conditions and concurrent regulation prevented a green paradox from arising. These results have implications for the design of climate policies. Keywords: Green Paradox, Implementation Lags, Announcement Effects, Climate Policy, Acid Rain Policy Classification-JEL: Q31, Q38, Q53, Q54, Q58 Creation-Date: 201206 Template-Type: ReDIF-Paper 1.0 Number: 2012.50 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-050.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.50 Title: Constructing the FEEM Sustainability Index: A Choquet-Integral Application Author-Name: Caterina Cruciani Author-X-Name-First: Caterina Author-X-Name-Last: Cruciani Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Ca’ Foscari University of Venice Author-Name: Silvio Giove Author-X-Name-First: Silvio Author-X-Name-Last: Giove Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Ca’ Foscari University of Venice Author-Name: Mehmet Pinar Author-X-Name-First: Mehmet Author-X-Name-Last: Pinar Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Matteo Sostero Author-X-Name-First: Matteo Author-X-Name-Last: Sostero Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Ca’ Foscari University of Venice Abstract: This paper presents an application of a multi-attribute aggregation methodology to the construction of a sustainability index. Sustainability is a multi-faceted issue, in which synergies or conflicts may arise among the different components, thus making it a complex concept to which multi attribute methods can be applied. This paper addresses the development of the FEEM Sustainability Index (FEEM SI), a composite index including 19 different indicators grouped in the three classical pillars of sustainability ?economic, social and environmental. We present the relevance of multi-attribute aggregation methodologies when dealing with such complex concepts and provide an aggregation methodology used for this case study, the Choquet-integral aggregation. In particular, since this methodology requires the assignment of weights on indicators and their coalitions, an ad hoc questionnaire is implemented to assess the importance of sustainability indicators through expert elicitation. After computing consensus weights for the Choquet-integral aggregation procedure the overall sustainability index, the FEEM SI is calculated. This paper also conducts robustness analysis and discusses the main implications of the aggregation methodology used. Keywords: Sustainability Indices, Composite Indicators, Choquet Integral, Multiattribute Value Theory Classification-JEL: C43, C44, Q01, Q56 Creation-Date: 201206 Template-Type: ReDIF-Paper 1.0 Number: 2012.51 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-051.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.51 Title: The Evolution of Renewable Energy Policy in OECD Countries: Aggregate Indicators and Determinants Author-Name: Francesco Nicolli Author-X-Name-First: Francesco Author-X-Name-Last: Nicolli Author-WorkPlace-Name: University of Ferrara Author-Name: Francesco Vona Author-X-Name-First: Francesco Author-X-Name-Last: Vona Author-WorkPlace-Name: OFCE Sciences-Po and Skema Business School Abstract: This paper proposes different methods to aggregate heterogeneous policies for renewable energy. We compare time-varying indicators built using principal component analysis with average-based indicators. The main goal of the paper is to account for the evolution of both types of policy indicators with a set of common variables. Our empirical results are consistent with predictions of political-economy models of environmental policies as lobbying, income and, to a less extent, inequality have expected effects on policy. The brown lobbying power, proxied by entry barriers in the energy sector, has negative influence on the policy indicators even when taking into account endogeneity in its effect. The results are also robust to dynamic panel specifications and to the exclusion of groups of countries. Interestingly, too, corruption has only an indirect effect on policy mediated by entry Keywords: Renewable Energy Policy, Political Economy, Product Market Regulation, Lobbying, Policy Indicators Classification-JEL: Q42, Q48, D72, O38 Creation-Date: 201207 Template-Type: ReDIF-Paper 1.0 Number: 2012.52 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-052.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.52 Title: Building SSPs for Climate Policy Analysis: A Scenario Elicitation Methodology to Map the Space of Possible Future Challenges to Mitigation and Adaptation Author-Name: Julie Rozenberg Author-X-Name-First: Julie Author-X-Name-Last: JRozenberg Author-WorkPlace-Name: CIRED Author-Name: Céline Guivarch Author-X-Name-First: Céline Author-X-Name-Last: CGuivarch Author-WorkPlace-Name: CIRED Author-Name: Robert Lempert Author-X-Name-First: Robert Author-X-Name-Last: Lempert Author-WorkPlace-Name: RAND Corporation, Santa Monica Office Author-Name: Stéphane Hallegatte Author-X-Name-First: Stéphane Author-X-Name-Last: Hallegatte Author-WorkPlace-Name: World Bank and Météo France Abstract: The scientific community is now developing a new set of scenarios, referred to as Shared Socio-economic Pathways (SSPs) to replace the SRES scenarios. To be used to investigate adaptation and mitigation, SSPs need to be contrasted along two axes: challenges to mitigation, and challenges to adaptation. This paper proposes a methodology to develop SSPs with a “backward” approach. The methodology is based on (i) an a priori identification of potential drivers of mitigation and adaptation challenges; (ii) a modelling exercise to transform these drivers into a large set of scenarios; (iii) an a posteriori selection of a few SSPs among these scenarios, such that they cover the uncertainty space in terms of challenges to adaptation and mitigation. This methodology is applied to the selection of a few SSPs, but it could also be applied to any specific decisions faced by decision-makers. From a large database of runs built by many models, the methodology would allow selecting the most relevant scenarios for a specific decision, i.e. scenarios that best predict when the analyzed choice performs poorly or well. Keywords: Socio-Economic Scenarios, Climate Policy, Mitigation, Adaptation, Shared Socio-Economic Pathways, Scenario Elicitation Methodology Classification-JEL: Q42, Q48, D72, O38 Creation-Date: 201207 Template-Type: ReDIF-Paper 1.0 Number: 2012.53 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-053.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.53 Title: Does Corporate Social Responsibility Affect the Performance of Firms? Author-Name: Nicola Comincioli Author-X-Name-First: Nicola Author-X-Name-Last: Comincioli Author-WorkPlace-Name: University of Brescia Author-Name: Laura Poddi Author-X-Name-First: Laura Author-X-Name-Last: Poddi Author-WorkPlace-Name: University of Ferrara Author-Name: Sergio Vergalli Author-X-Name-First: Sergio Author-X-Name-Last: Vergalli Author-WorkPlace-Name: University of Brescia and FEEM Abstract: Over the last two decades in OECD countries an increasing number of firms are obtaining certification as Socially Responsible (CSR is the acronym for Corporate Social Responsibility). Several studies (including Preston and O’Bannon, 1997; Waddock and Graves, 1997; McWilliams and Sieger, 2001; Ullman, 1985) have sought to test whether there is a relation between Social Responsibility certification and firm performance. Our work builds a CSR index that intersects two of the three main international indices (Domini 400 Social Index, Dow Jones Sustainability World Index, FTSE4Good Index), in order to overcome some problems related to the multiplicity of CSR definitions and certifications. By using this database in a panel framework, our work shows that some performance indicators are affected by a firm’s social responsible behaviour and certifications. The main results seem to support the idea that CSR firms, which are more virtuous, have better long-run performance: even if they have initial costs due to the certification, they achieve higher sales volumes and profits, thanks to the reputation effect, a reduction in long-run costs and increased social responsible demand. Keywords: Corporate Social Responsibility, Growth Classification-JEL: M14, C23, O10 Creation-Date: 201207 Template-Type: ReDIF-Paper 1.0 Number: 2012.54 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-054.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.54 Title: Variation in Risk Seeking Behavior in a Natural Experiment on Large Losses Induced by a Natural Disaster Author-Name: Lionel Page Author-X-Name-First: Lionel Author-X-Name-Last: Page Author-WorkPlace-Name: Queensland University of Technology Author-Name: David Savage Author-X-Name-First: David Author-X-Name-Last: Savage Author-WorkPlace-Name: Queensland University of Technology Author-Name: Benno Torgler Author-X-Name-First: Benno Author-X-Name-Last: Torgler Author-WorkPlace-Name: Queensland University of Technology Abstract: This study explores people's risk attitudes after having suffered large real-world losses following a natural disaster. Using the margins of the 2011 Australian floods (Brisbane) as a natural experimental setting, we find that homeowners who were victims of the floods and face large losses in property values are 50% more likely to opt for a risky gamble {a scratch card giving a small chance of a large gain ($500,000) {than for a sure amount of comparable value ($10). This finding is consistent with prospect theory predictions of the adoption of a risk-seeking attitude after a loss. Keywords: Decision under Risk, Large Losses, Natural Experiment Classification-JEL: D03, D81, C93 Creation-Date: 201207 Template-Type: ReDIF-Paper 1.0 Number: 2012.55 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-055.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.55 Title: Citation Success Over Time: Theory or Empirics? Author-Name: David W. Johnston Author-X-Name-First: David W. Author-X-Name-Last: Johnston Author-WorkPlace-Name: Centre for Health Economics, Monash University, Australia Author-Name: Marco Piatti Author-X-Name-First: Marco Author-X-Name-Last: Piatti Author-WorkPlace-Name: School of Economics and Finance, Queensland University of Technology, Australia Author-Name: Benno Torgler Author-X-Name-First: Benno Author-X-Name-Last:Torgler Author-WorkPlace-Name: School of Economics and Finance, Queensland University of Technology, Australia, CREMA Center for Research in Economics, Management and the Arts, Switzerland, CESifo, Germany, and the National Centre for Econometric Research, Australia Abstract: This study investigates the citation patterns of theoretical and empirical papers over a period of almost 30 years, while also exploring the determinants of citation success. The results indicate that empirical papers attract more citation success than theoretical studies. However, the pattern over time is very similar with yearly mean citations peaking after around 4 years. Moreover, among empirical papers it appears that the cross-country studies are more successful than single country studies focusing on North America data or other regions. Keywords: Citations, Theory, Empirics, Cross-Country, North America Classification-JEL: A11, B40, C0, N01, Z0 Creation-Date: 201207 Template-Type: ReDIF-Paper 1.0 Number: 2012.56 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-056.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.56 Title: The Effect of Fair Trade Affiliation on Child Schooling: Evidence from a Sample of Chilean Honey Producers Author-Name: Leonardo Becchetti Author-X-Name-First: Leonardo Author-X-Name-Last: Becchetti Author-WorkPlace-Name: Università degli Studi di Roma Tor Vergata, Italy Author-Name: Stefano Castriota Author-X-Name-First: Stefano Author-X-Name-Last: Castriota Author-WorkPlace-Name: Università degli Studi di Roma Tor Vergata, Italy Author-Name: Melania Michetti Author-X-Name-First: Melania Author-X-Name-Last: Michetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Centro-Euro Mediterraneo sui Cambiamenti Climatici, Italy Abstract: We evaluate the impact of fair trade (FT) affiliation on child schooling within a sample of Chilean honey producers with a retrospective panel data approach. From a theoretical point of view we argue that FT should have a positive effect on child schooling since it generates a short run pure income effect together with a medium run productivity effect on both adult and child wages. On the other hand, because of the higher productivity generated by the medium run effect, the opportunity cost of child education increases if they work with their parents. The direction of the impact of FT affiliation on child schooling is therefore uncertain and requires empirical testing. Our econometric findings document a positive and significant impact of affiliation years on child schooling after controlling for endogeneity and heterogeneity between the treatment and control sample. Keywords: Fair Trade, Child Schooling, Impact Study Classification-JEL: O19, O22, D64, J22 Creation-Date: 201209 Template-Type: ReDIF-Paper 1.0 Number: 2012.57 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-057.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.57 Title: Integrating Water Resources into Computable General Equilibrium Models - A Survey Author-Name: Roberto Ponce Author-X-Name-First: Roberto Author-X-Name-Last: Ponce Author-WorkPlace-Name: Department of Economics, Ca’ Foscari University, Italy Author-Name: Francesco Bosello Author-X-Name-First: Francesco Author-X-Name-Last: Bosello Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Italy Author-Name: Carlo Giupponi Author-X-Name-First: Carlo Giupponi Author-X-Name-Last: Carlo Giupponi Author-WorkPlace-Name: Department of Economics, Ca’ Foscari University, Italy Abstract: Water resources are facing several stresses in terms of quantity and quality. These pressures are closely related to the human interventions in fields like: agriculture, land-use/land use change, construction/management of reservoirs, pollutant emissions, and water /wastewater treatment, among others. Considering the critical role that water plays for agricultural production, any shock in water availability will have great implications for agricultural production, and through agricultural markets these impacts will reach the whole economy with economy-wide consequences. The aim of this report is to present a literature review about the state of the art methodology regarding the study of water issues using the CGE approach at global and national scale. The analysis of the different studies confirms the economy wide consequences of changes in water allocation, irrigation policies, and climate change, among others water related issues. Keywords: Computable General Equilibrium Models, Water, Irrigation, Agricultural Policy, Water Allocation Classification-JEL: C68, Q18, Q25, Q54 Creation-Date: 201209 Template-Type: ReDIF-Paper 1.0 Number: 2012.58 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-058.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.58 Title: The Push Factors for Corporate Social Responsibility: A Probit Analysis Author-Name: Paolo Cominetti Author-X-Name-First: Paolo Author-X-Name-Last: Cominetti Author-WorkPlace-Name: FEEM, Fondazione Eni Enrico Mattei, Italy Author-Name: Laura Poddi Author-X-Name-First: Laura Author-X-Name-Last: Poddi Author-WorkPlace-Name: University of Ferrara, Italy Author-Name: Sergio Vergalli Author-X-Name-First: Sergio Author-X-Name-Last: Vergalli Author-WorkPlace-Name: University of Brescia, Department of Economics, and FEEM, Fondazione Eni Enrico Mattei, Italy Abstract: In the last two decades in OECD countries there has been increased development of Social Responsible (CSR is the acronym of Corporate Social Responsibility) certified firms. This certification is assigned by public and private companies which guarantee that the behaviour of a certain firm is environmentally and sociologically correct. The first part of our work is devoted to establishing a certification index defined as the intersection of two of the three main international indices (Domini 400 Social Index, Dow Jones Sustainability World Index, FTSE4Good Index). The purpose of this is to overcome certain problems related to the multiplicity of CSR definitions and certifications. The sample obtained is a data panel of 417 enterprises (317 CSR firms and 100 firms as a control sample) belonging mainly to OCSE countries. The core of our analysis makes some probit analyses in order to study the structural causes that push enterprises towards social certification. The descriptive statistics, combined and supported by probit analysis, seem to stress the focal role of economic development as one of the main causes of social certification. Moreover, we have also studied the role of industrial sectors in social certification and other variables such as critical consumption and the structural production system of the enterprises. Keywords: Corporate Social Responsibility, Growth Classification-JEL: M14, C23, O10 Creation-Date: 201209 Template-Type: ReDIF-Paper 1.0 Number: 2012.59 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-059.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.59 Title: Mapping Ecosystem Services’ Values: Current Practice and Future Prospects Author-Name: Jan Philipp Schägner Author-X-Name-First: Jan Philipp Author-X-Name-Last: JSchägner Author-WorkPlace-Name: Institute for Environment and Sustainability (IES), Joint Research Centre (JRC), European Commission, Italy Author-Name: Luke Brander Author-X-Name-First: Luke Author-X-Name-Last: Brander Author-WorkPlace-Name: Institute for Environmental Studies (IVM), VU University Amsterdam,The Netherlands Author-Name: Joachim Maes Author-X-Name-First: Joachim Author-X-Name-Last: Maes Author-WorkPlace-Name: Institute for Environment and Sustainability (IES), Joint Research Centre (JRC), European Commission, Italy Author-Name: Volkmar Hartje Author-X-Name-First: Volkmar Author-X-Name-Last: Hartje Author-WorkPlace-Name: Technische Universität Berlin, Institute of Landscape Architecture and Environmental Planning, Germany Abstract: Mapping of ecosystem services’ (ESS) values means valuing ESS in monetary terms across a relatively large geographical area and assessing how values vary across space. Thereby, mapping of ESS values reveals additional information as compared to traditional site-specific ESS valuation, which is beneficial for designing land use policies for maintaining ESS supply. Since the well-known article by Costanza et al. (1997), who mapped global ESS values, the number of publications mapping ESS values has grown exponentially, with almost 60% being published after 2007. Within this paper, we analyse and review articles that map ESS values. Our findings show that methodologies, in particular how spatial variations of ESS values are estimated, their spatial scope, rational and ESS focus differ widely. Still, most case studies rely on relatively simplistic approaches using land use/cover data as a proxy for ESS supply and its values. However, a tendency exists towards more sophisticated methodologies using ESS models and value functions, which integrate a variety of spatial variables and which are validated against primary data. Based on our findings, we identify current practices and developments in the mapping of ESS values and provide guidelines and recommendations for future applications and research. Keywords: Ecosystem Service Assessment, Ecosystem Service Mapping, Ecosystem Service Valuation, Ecosystem Service Modelling, Value Transfer, Land use Policy Assessment Classification-JEL: Q5 Creation-Date: 201209 Template-Type: ReDIF-Paper 1.0 Number: 2012.60 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-060.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.60 Title: The SO2 Allowance Trading System: The Ironic History of a Grand Policy Experiment Author-Name: Richard Schmalensee Author-X-Name-First: Richard Author-X-Name-Last: Schmalensee Author-WorkPlace-Name: Howard W. Johnson Professor of Economics and Management, Emeritus at the Massachusetts Institute of Technology, and a Research Associate of the National Bureau of Economic Research Author-Name: Robert N. Stavins Author-X-Name-First: Robert N. Author-X-Name-Last: Stavins Author-WorkPlace-Name: Albert Pratt Professor of Business and Government at the Harvard Kennedy School, a University Fellow of Resources for the Future, and a Research Associate of the National Bureau of Economic Research Abstract: Two decades have passed since the Clean Air Act Amendments of 1990 launched a grand experiment in market-based environmental policy: the SO2 cap-and-trade system. That system performed well but created four striking ironies. First, by creating this system to reduce SO2 emissions to curb acid rain, the government did the right thing for the wrong reason. Second, a substantial source of this system’s cost-effectiveness was an unanticipated consequence of earlier railroad deregulation. Third, it is ironic that cap-and-trade has come to be demonized by conservative politicians in recent years, since this market-based, cost-effective policy innovation was initially championed and implemented by Republican administrations. Fourth, court decisions and subsequent regulatory responses have led to the collapse of the SO2 market, demonstrating that what the government gives, the government can take away. Keywords: Market-based Instruments, Cap-and-trade, Clean Air Act Amendments of 1990, Sulfur Dioxide, Acid Rain Classification-JEL: Q540, Q580, Q400, Q480 Creation-Date: 201209 Template-Type: ReDIF-Paper 1.0 Number: 2012.61 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-061.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.61 Title: Disentangling the Stern/Nordhaus Controversy: Beyond the Discounting Clash Author-Name: Etienne Espagne Author-X-Name-First: Etienne Author-X-Name-Last: Espagne Author-WorkPlace-Name: Centre International de Recherche sur l’Environnement et le Développement (CIRED) Author-Name: Baptiste Perrissin Fabert Author-X-Name-First: Baptiste Author-X-Name-Last: Perrissin Fabert Author-WorkPlace-Name: CIRED Author-Name: Antonin Pottier Author-X-Name-First: Antonin Author-X-Name-Last: Pottier Author-WorkPlace-Name: CIRED Author-Name: Franck Nadaud Author-X-Name-First: Franck Author-X-Name-Last: Nadaud Author-WorkPlace-Name: CIRED Author-Name: Patrice Dumas Author-X-Name-First: Patrice Author-X-Name-Last: Dumas Author-WorkPlace-Name: Centre International de Recherche Agronomique pour le Développement Abstract: The Stern/Nordhaus controversy has polarized the widely disparate beliefs about what to do in order to tackle the climate challenge. To explain differences in results and policy recommendations, comments following the publication of the Stern Review have mainly focused on the role played by the discount rate. A closer look at the actual drivers of the controversy reveals however that Stern and Nordhaus also disagree on two other parameters: technical progress on abatement costs and the climate sensitivity. This paper aims at appraising the relative impacts of such key drivers of the controversy on the social cost of carbon and climate policy recommendations. To this end, we use the flexible integrated assessment model RESPONSE which allows us to compare very diverse worldviews, including Stern and Nordhaus’ ones within the same modelling framework and map the relative impacts of beliefs on the three key drivers of the controversy. Furthermore we appraise quantitatively, by means of a linear statistical model, the impacts on results of an extended set of core parameters of RESPONSE. We show that beliefs on long term economic growth, technical progress, the form of the climate damage function and the climate sensitivity have an impact as important as beliefs on pure time preference. Hence, we can qualify the role played by the discount rate in the Stern/Nordhaus controversy and more broadly in the definition of climate policies. Keywords: Integrated Assessment Model, Discount Rate, Social Cost of Carbon, Abatement Policy, Worldview Classification-JEL: Q54, Q58, C61 Creation-Date: 201209 Template-Type: ReDIF-Paper 1.0 Number: 2012.62 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-062.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.62 Title: The “Doomsday” Effect in Climate Policies. Why is the Present Decade so Crucial to Tackling the Climate Challenge? Author-Name: Baptiste Perrissin Fabert Author-X-Name-First: Baptiste Perrissin Author-X-Name-Last: Fabert Author-WorkPlace-Name: Centre International de Recherche Agronomique pour le Développement Author-Name: Etienne Espagne Author-X-Name-First: Etienne Author-X-Name-Last: Espagne Author-WorkPlace-Name: CIRED Author-Name: Antonin Pottier Author-X-Name-First: Antonin Author-X-Name-Last: Pottier Author-WorkPlace-Name: CIRED Author-Name: Patrice Dumas Author-X-Name-First: Patrice Author-X-Name-Last: Dumas Author-WorkPlace-Name: Centre International de Recherche Agronomique pour le Développement Abstract: Despite growing scientific evidence that passing a 2°C temperature increase may trigger tipping points in climate dynamics, most Integrated Assessment Models (IAM) based on Cost Benefit Analysis (CBA) with smooth quadratic damage functions are unable to account for the possibility of strong increase in climate damage. Our IAM RESPONSE makes it possible to bridge this gap by integrating a threshold effect damage function which sets a threshold of temperature increase from which climate damages increase significantly. To fit with on-going climate negotiations, this threshold is set at 2°C. Regardless of the bleak prospect of passing the threshold, it turns out that among a broad set of scenarios accounting for the diversity of worldviews in the climate debate, overshooting the 2°C target and then facing the resulting damage may become an optimal strategy for many economic agents who are struck by what we call a “doomsday effect”. We show that this effect happens for any level of jump in damage and dramatically increases if the beginning of mitigation efforts is postponed till the decade 2010-2020 on. In light of these results, we believe that any further delay in reaching a clear international agreement will close the window of opportunity for meeting the 2°C target with a reasonable chance of diplomatic success. Keywords: Integrated Assessment Model, Non Linear Effect, Doomsday Effect, 2°C Target Classification-JEL: C61, Q54, Q58 Creation-Date: 201209 Template-Type: ReDIF-Paper 1.0 Number: 2012.63 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-063.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.63 Title: Relaxing Constraints as a Conservation Policy Author-Name: Ben Groom Author-X-Name-First: Ben Author-X-Name-Last: Groom Author-WorkPlace-Name: Senior Lecturer in Economics, Department of Economics, School of Oriental and African Studies, UK Author-Name: Charles Palmer Author-X-Name-First: Charles Author-X-Name-Last: Palmer Author-WorkPlace-Name: Lecturer in Environment and Development, Department of Geography and Environment, London School of Economics, UK Abstract: Eco-entrepreneurs in developing countries are often subject to market or institutional constraints, e.g. via credit rationing or missing markets. Conservation interventions which relax constraints may be both cost-effective and poverty reducing. A simulation using data from an intervention in Madagascar to relax the technological constraints of forest honey production investigates this possibility. Cost-effectively achieving dual environment-development goals is shown to depend on the severity of constraints, relative prices and, importantly, the nature of technology. Success is more likely for technologies exhibiting close to constant returns to scale or high input complementarity. Forest honey does not meet these requirements, whereas sustainable forest management may well do. Ultimately, where market or institutional constraints are present, knowledge of the recipient technology is required for more informed, efficient and perhaps, more politically-acceptable conservation policy. Keywords: Payments for Environmental Services (PES), Market Constraints, Cost-Effectiveness, Efficiency Classification-JEL: H21, Q28 Creation-Date: 201209 Template-Type: ReDIF-Paper 1.0 Number: 2012.64 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-064.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.64 Title: Optimal Agglomerations in Dynamic Economics Author-Name: William A. Brock Author-X-Name-First: William A. Author-X-Name-Last: Brock Author-WorkPlace-Name: Department of Economics, University of Wisconsin, USA Author-Name: Anastasios Xepapadeas Author-X-Name-First: Anastasios Author-X-Name-Last: AXepapadeas Author-WorkPlace-Name: Department of International and European Economic Studies, Greece Author-Name: Athanasios N. Yannacopoulos Author-X-Name-First: Athanasios N. Author-X-Name-Last: Yannacopoulos Author-WorkPlace-Name: Department of Statistics Athens University of Economics and Business, Greece Abstract: We study rational expectations equilibrium problems and social optimum problems in infinite horizon spatial economies in the con- text of a Ramsey type capital accumulation problem with geographical spillovers. We identify sufficient local and global conditions for the emergence (or not) of optimal agglomeration, using techniques from monotone operator theory and spectral theory in infinite dimensional Hilbert spaces. Our analytical methods can be used to systematically study optimal potential agglomeration and clustering in dynamic economics. Keywords: Agglomeration, Spatial Spillovers, Spillover Induced Instability, Rational Expectations Equilibrium, Social Optimum, Monotone Operators Classification-JEL: C61, R11 Creation-Date: 201209 Template-Type: ReDIF-Paper 1.0 Number: 2012.65 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-065.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.65 Title: Can Numerical Models Estimate Indirect Land-use Change? Author-Name: Thierry Brunelle Author-X-Name-First: Thierry Author-X-Name-Last: Brunelle Author-WorkPlace-Name: Centre International de Recherche sur l'Environnement et le Développement Author-Name: Patrice Dumas Author-X-Name-First: Patrice Author-X-Name-Last: Dumas Author-WorkPlace-Name: Centre International de Recherche sur l'Environnement et le Développement and Centre de Coopération Internationale en Recherche Agronomique pour le Développement Abstract: Motivated by the conclusions from various modelling studies, modifications to the bioenergy sector regulations are under way in Europe and in the USA to account for emissions from indirect land-use change (ILUC). Despite their influence on the policy-making, evaluations of the capacity of numerical models to estimate ILUC are sparse. To address this void, this paper reviews recent developments in land-use modelling, with a particular focus on the solutions adopted to estimate ILUC due to biofuel production. As indirect effects of bioenergy result from the interplay of various mechanisms, their modelling is a major challenge for land-use science. In recent years, numerical models have been significantly upgraded to provide a more comprehensive vision of the agricultural system. This has been performed by improving the representation of land supply and the biofuel production process in general equilibrium models (e.g., GTAP, MIRAGE, DART). At the same time, modelling systems coupling partial equilibrium models with CGE (e.g., KLUM@GTAP) or economic modules with spatially explicit models (e.g., MAgPIE, GLOBIOM, LEITAP), and modelling architecture combining land-use and life-cycle assessment models (e.g., FASOM/FAPRI/GREET) have been developed. In spite of these advances, some limitations remain and uncertainties are still numerous. Keywords: Indirect, Land-Use Change, Modelling, Biofuel Classification-JEL: O13, Q15, Q16, Q17, Q18, D58 Creation-Date: 201209 Template-Type: ReDIF-Paper 1.0 Number: 2012.66 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-066.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.66 Title: The Rise of Turkey and the New Mediterranean Challenges and Opportunities for Energy Cooperation in a Region in Transition Author-Name: Simone Tagliapietra Author-X-Name-First: Simone Author-X-Name-Last: Tagliapietra Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: This paper, presenting a wide range of issues related to the role of Turkey in the Mediterranean energy context, aims to provide a comprehensive framework of understanding of the growing strategic relevance of Turkey for both the European Union and the overall Euro-Mediterranean region. In particular, the paper focuses on the EU-Turkey energy relations and outlines the crucial role of natural gas in enhancing energy cooperation between the two players. In 2010 about 80% of EU gas imports derived from only three suppliers: Russian Federation, Norway and Algeria. This heavy dependence on such a few suppliers stimulated the European Commission to make the concept of diversification a cornerstone of its energy policy and to launch the concept of the Southern Gas Corridor, an initiative aimed to develop a natural gas transit corridor from Caspian and Middle Eastern gas-rich regions to Europe, in order to ease the dependency on the natural gas imported from the Russian Federation. An initiative that could shift the "centre of gravity" of the regional gas transit from the north to the south of the Black Sea, allowing Turkey to become a key transit country in the future European gas market; a pivotal element in the European gas security of supply architecture. Furthermore, the paper also considers the enormous renewable energy potential of Southern and Eastern Mediterranean Countries, to which Turkey could greatly contribute in terms of technology transfer and manufacturing know-how. Turkey’s involvement in the Union for the Mediterranean offers a great opportunity for energy cooperation both between the EU and Turkey and within the overall Euro-Mediterranean region. Such large-scale renewable energy projects could greatly contribute to the economic development of the overall Mediterranean region, and also to its social and political stability. Considering the lack of a wide and comprehensive EU-Turkey energy cooperation scheme, the paper proposes a series of policy priorities pointed to enhance this bilateral relationship and also the wider Euro-Mediterranean integration process. Keywords: Turkey, Mediterranean, EU Security of Supply, Energy geopolitics Classification-JEL: Q40, Q42, Q48 Creation-Date: 201209 Template-Type: ReDIF-Paper 1.0 Number: 2012.67 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-067.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.67 Title: Advanced Biofuels: Future Perspectives from an Expert Elicitation Survey Author-Name: Giulia Fiorese Author-X-Name-First: Giulia Author-X-Name-Last: Fiorese Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Dipartimento di Elettronica e Informazione, Politecnico di Milano Author-Name: Michela Catenacci Author-X-Name-First: Michela Author-X-Name-Last: Catenacci Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Elena Verdolini Author-X-Name-First: Elena Author-X-Name-Last: Verdolini Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Centro Euro-Mediterraneo per i Cambiamenti Climatici Abstract: This paper illustrates the main results of an expert elicitation survey on advanced (second and third generation) biofuel technologies. The survey focuses on eliciting probabilistic information on the future costs of advanced biofuels and on the potential role of RD&D (Research, Development and Demonstration) efforts in reducing these costs and in supporting the deployment of biofuels in OECD and non-OECD countries. Fifteen leading experts from different EU member states provide insights on the future potential of advanced biofuel technologies both in terms of costs and diffusion. This information results in a number of policy recommendations with respect to public RD&D strategies and is an important contribution to the integrated assessment modelling community. Keywords: Expert Elicitation, Research, Development and Demonstration, Biofuels Classification-JEL: Q42, Q55 Creation-Date: 201209 Template-Type: ReDIF-Paper 1.0 Number: 2012.68 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-068.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.68 Title: Multicultural Cities, Communication and Transportation Improvements. An Empirical Analysis for Italy Author-Name: Cristina Cattaneo Author-X-Name-First: Cristina Author-X-Name-Last: Cattaneo Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) Abstract: The paper investigates the determinants of cosmopolitan cities. The hypothesis tested empirically is whether gradual improvements in distant communication boost the generation of ethnically heterogeneous cities. Consequently to easier communication, movers increasingly rely on an enlarged community for identity transmission, rather than on localized peer effects of segregated environment. The empirical estimation provides support to the prediction of the model. A better access to the airports as well as improvements in internet communications are found to increase city ethnic diversity. Keywords: Multicutural Cities, Ethnic Diversity, Productivity Classification-JEL: R11, F22 Creation-Date: 201209 Template-Type: ReDIF-Paper 1.0 Number: 2012.69 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-069.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.69 Title: Migration, Cultural Diversity and Innovation: A European Perspective Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and CMCC Author-Name: Cristina Cattaneo Author-X-Name-First: Cristina Author-X-Name-Last: Cattaneo Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and CMCC Author-Name: Elena Verdolini Author-X-Name-First: Elena Author-X-Name-Last: Verdolini Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and CMCC Abstract: This paper analyses the effect of skilled migration on two measures of innovation, patenting and citations of scientific publications, in a panel of 20 European countries. Skilled migrants positively contribute to the knowledge formation in host countries as they add to the pool of skills in destination markets. Moreover, they positively affect natives' productivity, as new ideas are likely to arise through the interaction of diverse cultures and diverse approaches in problem solving. The empirical findings we present support this prediction. Greater diversity in the skilled professions are associated with higher levels of knowledge creation, measured either by the number of patents applied for through the Patent Cooperation Treaty or by the number of citations to published articles. This finding is robust to the use of different proxies for both the explanatory variables and the diversity index in the labour force. Specifically, we first measure diversity with a novel indicator which uses information on the skill level of foreigners’ occupations. We then check our results by following the general literature, which measures skills by looking at the foreigners’ level of education. We show that cultural diversity consistently increases the innovation performance of European Countries. Keywords: Cultural Diversity, Innovation, Skilled Migration, Knowledge Production Function, Europe Classification-JEL: F22, J24, O31 Creation-Date: 201209 Template-Type: ReDIF-Paper 1.0 Number: 2012.70 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-070.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.70 Title: Bounded Rationality and Voting Decisions Exploring a 160-Year Period Author-Name: David Stadelmann Author-X-Name-First: David Author-X-Name-Last: Stadelmann Author-WorkPlace-Name: University of Fribourg, Department of Economics, CREMA—Center for Research in Economics, Management and the Arts Author-Name: Benno Torgler Author-X-Name-First: Benno Author-X-Name-Last: Torgler Author-WorkPlace-Name: School of Economics and Finance, Queensland University of Technology, EBS Universität für Wirtschaft und Recht, EBS Business School, CREMA—Center for Research in Economics, Management and the Arts Abstract: Using a natural voting experiment in Switzerland that encompasses a 160-year period (1848–2009), we investigate whether a higher level of complexity leads to increased reliance on expert knowledge. We find that when more referenda are held on the same day, constituents are more likely to refer to parliamentary recommendations in making their decisions. This finding holds true even when we narrow our focus to referenda with a relatively lower voter turnout on days on which more than one referendum was held. We also show that when constituents face a higher level of complexity, they listen to parliament rather than interest groups. Keywords: Bounded Rationality, Voting, Referenda Attention, Rules of Thumb Classification-JEL: D03, D72, D83, H70 Creation-Date: 201209 Template-Type: ReDIF-Paper 1.0 Number: 2012.71 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-071.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.71 Title: Deviations in Kilometres Travelled: The Impact of Different Mobility Futures on Energy Use and Climate Author-Name: Thomas Longden Author-X-Name-First: Thomas Author-X-Name-Last: Longden Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Euro-Mediterranean Center for Climate Change Abstract: The importance of a focus on mobility and the kilometres travelled using light duty vehicles is reflected in the persistence of strong demand for personal mobility and emissions that tend to be linked with population and economic growth. Simulation results using the WITCH model show that changes in the kilometres driven per year using light duty vehicles have a notable impact on investments in alternate transport options. As a result, different mobility futures have notably different optimal vehicle fleet compositions. As climate policy becomes more stringent, achieving abatement with increased mobility implies large investments in battery related technologies and less investments in technologies related to the conversion of biofuel from biomass. Climate policy consistent with a 2°C temperature increase above pre-industrial levels in 2100 leads to a quick transition to plug-in hybrid drive vehicles. Without decreases in mobility trends the cost effective achievement of such a target results in the electrification of passenger vehicles commencing between 2020 and 2035. Keywords: Light Duty Vehicles, Transportation, Mobility, Climate Change Policy, Electric Drive Vehicles, Research and Development Classification-JEL: Q54, R41, O3 Creation-Date: 201210 Template-Type: ReDIF-Paper 1.0 Number: 2012.72 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-072.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.72 Title: Controlling for Biases in Primary Valuation Studies: A Meta-analysis of International Coral Reef Values Author-Name: Sabah Abdullah Author-X-Name-First: Sabah Author-X-Name-Last: Abdullah Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Italy, University of Bath, Department of Economics, United Kingdom Author-Name: Randall S. Rosenberger Author-X-Name-First: Randall S. Author-X-Name-Last: Rosenberger Author-WorkPlace-Name: Oregon State University, College of Forestry, USA Abstract: This paper updates the existing meta-analysis in coral reef recreation taking into account the previous work of Brander et al. (2007) but considering some stated preference biases and/or effects. The present meta-analysis uses twice the number of observations as the previous one and sheds more light in understanding the influence of these common biases and/or effects found in valuations. The results show the common biases/effects in varied methodology types significantly influence the willingness to pay (WTP) estimates and in turn this has implications in welfare and benefit transfer at local, regional and global levels. Keywords: Meta-analysis, Coral Ecosystem, Valuation, Willingness to Pay, Biases Classification-JEL: Q54, Q57 Creation-Date: 201210 Template-Type: ReDIF-Paper 1.0 Number: 2012.73 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-073.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.73 Title: The Energy Sector in Mediterranean and MENA Countries Author-Name: Marcella Nicolini Author-X-Name-First: Marcella Author-X-Name-Last: Nicolini Author-WorkPlace-Name: University of Pavia, and Fondazione Eni Enrico Mattei, Italy Author-Name: Simona Porcheri Author-X-Name-First: Simona Author-X-Name-Last: Porcheri Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Italy Abstract: This paper describes the energy sector in the Mediterranean and MENA (Middle East and North Africa) countries. It first analyses the production of energy by fossil and renewable sources and discusses the increasing demand in the area and its consequences. It describes the policy frameworks to promote renewable energy as well as fossil-fuel subsidies, which are still abundant in the MENA area. It presents some avenues for integration across the Mediterranean and finally it discusses the implications of the Arab spring on energy production in the next future. Keywords: Energy, Mediterranean Countries, MENA Countries, Subsidies Classification-JEL: Q42, Q43, Q48 Creation-Date: 201210 Template-Type: ReDIF-Paper 1.0 Number: 2012.74 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-074.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.74 Title: Spatial Climate-Economic Models in the Design of Optimal Climate Policies Across Locations Author-Name: William A. Brock Author-X-Name-First: William A. Author-X-Name-Last: Brock Author-WorkPlace-Name: Department of Economics, University of Wisconsin Author-Name: Gustav Engström Author-X-Name-First: Gustav Author-X-Name-Last: Engström Author-WorkPlace-Name: The Beijer Institute of Ecological Economics and University of Stockholm Author-Name: Anastasios Xepapadeas Author-X-Name-First: Anastasios Author-X-Name-Last:Xepapadeas Author-WorkPlace-Name: Athens University of Economics and Business Abstract: We couple a one-dimensional energy balance climate model with heat transportation across latitudes, with an economic growth model. We derive temperature and damage distributions across locations and optimal taxes on fossil fuels which, in contrast to zero-dimensional Integrated Assessment Models, account for cross latitude externalities. We analyse the impact of welfare weights on the spatial structure of optimal carbon taxes and identify conditions under which these taxes are spatially nonhomogeneous and are lower in latitudes with relatively lower per capita income populations. We show the way that heat transportation affects local economic variables and taxes, and locate sufficient conditions for optimal mitigation policies to have rapid ramp-up initially and then decrease over time. Keywords: One-dimensional Energy Balance Model, Heat Transport, Latitudes, Temperature Distribution, Damage Distribution, Social Planner, Competitive Equilibrium, Local Welfare Weights, Optimal Taxes Classification-JEL: Q54, Q58, R11 Creation-Date: 201210 Template-Type: ReDIF-Paper 1.0 Number: 2012.75 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-075.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.75 Title: The Carousel Value-added Tax Fraud in the European Emission Trading System Author-Name: Maria Berrittella Author-X-Name-First: Maria Author-X-Name-Last: Berrittella Author-WorkPlace-Name: Dipartimento di Scienze Economiche, Aziendali e Finanziarie, Università degli Studi di Palermo Author-Name: Filippo Alessandro Cimino Author-X-Name-First: Filippo Alessandro Author-X-Name-Last: FCimino Author-WorkPlace-Name: Facoltà di Scienze Economiche e Giuridiche, Università Kore di Enna Abstract: In this article, we analyse the effects of the carousel value-added tax fraud in the European carbon market and the legislative measures that the EU Member States could adopt to deal with this phenomena. We use a computable general equilibrium model, called GTAP-E and the version 6 of the GTAP database to evaluate the economy-wide and terms of trade effects. The policy test has been designed for five European countries: Belgium, France, Germany, Italy, Netherlands and the United Kingdom. According to our findings, the legislative measures aimed to remove the VAT fraud in the European Emission Trading System will have positive effects in terms of GDP and welfare in the selected EU Member States. Keywords: Domestic Emission Trading, General Equilibrium Analysis, Legislative Measures, Value-added Tax Fraud, Welfare Classification-JEL: C68, H26, K34, Q58 Creation-Date: 201210 Template-Type: ReDIF-Paper 1.0 Number: 2012.76 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-076.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.76 Title: Domestic Politics and the Formation of International Environmental Agreements Author-Name: Simon Dietz Author-X-Name-First: Simon Author-X-Name-Last: Dietz Author-WorkPlace-Name: Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science, Department of Geography and Environment, London School of Economics and Political Science Author-Name: Carmen Marchiori Author-X-Name-First: Carmen Author-X-Name-Last: Marchiori Author-WorkPlace-Name: Department of Geography and Environment, London School of Economics and Political Science Author-Name: Alessandro Tavoni Author-X-Name-First: Alessandro Author-X-Name-Last: Tavoni Author-WorkPlace-Name: Grantham Research Institute on Climate Change and the Environment, London School of Economics and Political Science Abstract: The theory of international environmental agreements overwhelmingly assumes that governments engage as unitary agents. Each government makes choices based on benefits and costs that are simple national aggregates, and similarly on a single set of national-level motivations, together drawing a strong analogy with the behaviour of an individual or firm in other strategic contexts. In reality, however, various domestic special interests shape environmental policy, including how national governments cooperate on cross-border issues. Therefore in this paper we introduce to a classic model of international environmental cooperation the phenomenon of domestic political competition, whereby lobby groups seek to influence policy by offering to fund political campaigning. We use the model to establish some general conditions for the effects of lobbying on the stringency of policy and the size of coalitions cooperating to provide an environmental good. Using specific functional forms, we obtain a range of further results, including circumstances in which the omission of lobbying results in environmental protection being underestimated. Keywords: Game Theory, International Environmental Agreements, Lobbying, Special-Interest Groups, Strategic Cooperation Classification-JEL: C7, H41, K33, Q2, Q54 Creation-Date: 201210 Template-Type: ReDIF-Paper 1.0 Number: 2012.77 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-077.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.77 Title: Corporate Social Responsibility and Firms’ Performance: A Stratigraphical Analysis Author-Name: Nicola Comincioli Author-X-Name-First: Nicola Author-X-Name-Last: Comincioli Author-WorkPlace-Name: University of Brescia Author-Name: Laura Poddi Author-X-Name-First: Laura Author-X-Name-Last: Poddi Author-WorkPlace-Name: University of Ferrara Author-Name: Sergio Vergalli Author-X-Name-First: Sergio Author-X-Name-Last: Vergalli Author-WorkPlace-Name: University of Brescia and FEEM Abstract: Over the last two decades in OECD countries an increasing number of firms are obtaining certification as Socially Responsible (CSR is the acronym for Corporate Social Responsibility). Several studies (including Preston and O’Bannon, 1997; Waddock and Graves, 1997; McWilliams and Sieger, 2001; Ullman, 1985) have sought to test whether there is a relation between Social Responsibility certification and the firms’ performance. Our work builds a CSR index that intersects two of the three main international indices (Domini 400 Social Index, Dow Jones Sustainability World Index, FTSE4Good Index), in order to overcome some problems related to the multiplicity of CSR definitions and certifications. By using this database, our work carries out a stratigraphical analysis in order to verify whether some variables are statistically different in the CSR group with respect to the benchmark case (non-CSR). The main results show that there are several interesting differences in some economic indicators between CSR and non-CSR firms and between USA and EU, and among different industrial sectors. Keywords: Corporate Social Responsibility, Growth Classification-JEL: M14, C23, O10 Creation-Date: 201210 Template-Type: ReDIF-Paper 1.0 Number: 2012.78 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-078.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.78 Title: Time Overruns as Opportunistic Behavior in Public Procurement Author-Name: Chiara D’Alpaos Author-X-Name-First: Chiara Author-X-Name-Last: D’Alpaos Author-WorkPlace-Name: University of Padua, Department of Civil, Architectural and Environmental Engineering Author-Name: Michele Moretto Author-X-Name-First: Michele Author-X-Name-Last: Moretto Author-WorkPlace-Name: University of Padua, Department of Economics, Fondazione Eni Enrico Mattei and Centro Studi Levi-Cases Author-Name: Paola Valbonesi Author-X-Name-First: Paola Author-X-Name-Last: Valbonesi Author-WorkPlace-Name: University of Padua, Department of Economics and Management Author-Name: Sergio Vergalli Author-X-Name-First: Sergio Author-X-Name-Last: Vergalli Author-WorkPlace-Name: University of Brescia, Department of Economics and Fondazione Eni Enrico Mattei Abstract: This paper considers the supplier’s strategic delivery lead time in a public procurement setting as the result of the firm’s opportunistic behaviour on the optimal investment timing. In the presence of uncertainty on construction costs, we model the supplier’s option to defer the contract’s execution as a Put Option. We include in the model both the discretion of the court of law in enforcing contractual clauses (i.e. a penalty for delays) and the "quality" of the judicial system. Then, we calibrate the model using parameters that mimic the Italian procurement for public works and calculate the maximum amount that a firm is "willing to pay" (per day) to postpone the delivery date and infringe the contract provisions. Our results show that the incentive to delay is greater the higher the construction costs and their volatility, and the weaker the penalty enforcement by the courts of law. Keywords: Strategic Time Overruns, Public Procurement, Real Options Classification-JEL: D81, H54, H57, L51 Creation-Date: 201210 Template-Type: ReDIF-Paper 1.0 Number: 2012.79 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-079.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.79 Title: ETS and Technological Innovation: A Random Matching Model Author-Name: Angelo Antoci Author-X-Name-First: Angelo Author-X-Name-Last: Antoci Author-WorkPlace-Name: University of Sassari Author-Name: Simone Borghesi Author-X-Name-First: Simone Author-X-Name-Last: Borghesi Author-WorkPlace-Name: University of Siena Author-Name: Mauro Sodini Author-X-Name-First: Mauro Author-X-Name-Last: Sodini Author-WorkPlace-Name: University of Pisa Abstract: The present paper investigates the functioning of an Emission Trading System (ETS) and its impact on the diffusion of environmental-friendly technological innovation in the presence of firms’ strategic behaviours and sanctions to non-compliant firms. For this purpose, we study an evolutionary game model with random matching, namely, a context in which a population of firms interact through pairwise random matchings. We assume that each firm has to decide whether to adopt a new clean technology or keep on using the old technology that requires pollution permits to operate and that the strategy whose expected payoff is greater than the average payoff spreads within the population at the expense of the alternative strategy (the so-called replicator dynamics). We investigate the technological dynamics and the stationary states that emerge from the model. From the analysis of the model, we show that by properly modifying the penalty on non-compliant firms, it is possible to shift from one dynamic regime to another and that an increase in permits trade can promote the diffusion of innovative pollution-free technologies. Keywords: Emissions Trading, Technological Innovation, Random Matching, Evolutionary Game, Penalty System, Strategic Behaviour Classification-JEL: C62, C63, C73, C78, O33, Q55, Q58 Creation-Date: 201210 Template-Type: ReDIF-Paper 1.0 Number: 2012.80 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-80.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.80 Title: Competitiveness and Leakage Concerns and Border Carbon Adjustments Author-Name: ZhongXiang Zhang Author-X-Name-First: ZhongXiang Author-X-Name-Last: Zhang Author-WorkPlace-Name: School of Economics, Fudan University, Center for Energy Economics and Strategy Studies, Fudan University Abstract: This paper provides a review of the literature on competitiveness and leakage concerns associated with differentiated climate abatement commitments among countries. The literature reviewed is not exhausted, but it is sufficient to provide a balanced view of both academics and policy circles. Section 2 discusses how to identify the sectors at a risk of carbon leakage. Section 3 examines ex ante estimates of potential carbon leakage rates, and explains why they differ from ex post results of environmental tax reforms and greenhouse gas emissions trading schemes that have been implemented in the European Union. Section 4 discusses broad policy options to address competitiveness and leakage concerns, and compares which anti-leakage policy, border adjustments or output-based allocation, is more effective to limiting carbon leakages or mitigating production loss in the sectors affected. Given that border carbon adjustment measures are incorporated in the U.S. proposed congressional climate bills to level the carbon playing field and could have potential conflicts with World Trade Organization (WTO) provisions and practical difficulties associated with their implementation, Section 5 discuses in great detail the WTO consistency, the effectiveness and methodological challenges of border carbon adjustment measures. The paper ends with some concluding remarks. Keywords: Emission Trading, Competitiveness, Carbon Leakage, Emissions Allowance Requirements, Carbon Tariffs, Border Carbon Adjustments, Grandfathering, Output-Based Allocation, World Trade Organization Classification-JEL: F18, F47, O13, O24, O31, O44, Q37, Q42, Q43, Q48, Q54, Q55, Q56, Q58, R13, R15 Creation-Date: 201210 Template-Type: ReDIF-Paper 1.0 Number: 2012.81 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-081.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.81 Title: Civic Capital and the Size Distribution of Plants: Short-Run Dynamics and Long-Run Equilibrium Author-Name: Matthias Bürker Author-X-Name-First: Matthias Author-X-Name-Last: Bürker Author-WorkPlace-Name: Centre for Entrepreneurship, SMEs and Local Development, OECD Author-Name: G. Alfredo Minerva Author-X-Name-First: G. Alfredo Author-X-Name-Last: Minerva Author-WorkPlace-Name: Department of Economics, University of Bologna Abstract: We characterize how the size distribution of plants, within narrowly defined industries, changed in Italy over a ten-year time span, and relate this to the stock of civic capital at the provincial level. Data on plant size come from the 1991 and 2001 Italian censuses. Civic capital turns out to have a positive effect on both the average and standard deviation of size. Looking at several precise points of the plant size distribution, we find that it shifts toward the right and becomes more dispersed where civic capital is high. The potential endogeneity of current civic capital is addressed by instrumenting it with historical variables. Our main conclusion is that the geographic variation in the stock of civic capital poses substantial constraints on plants’ ability to expand. Understanding this is the key for the implementation of effective industrial policies. Keywords: Civic Capital, Cooperation, Opportunism, Plant Size Distribution, Trust Classification-JEL: A13, D23, L20, R12 Creation-Date: 201211 Template-Type: ReDIF-Paper 1.0 Number: 2012.82 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-082.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.82 Title: Redistribution Effects of Energy and Climate Policy: The Electricity Market Author-Name: Lion Hirth Author-X-Name-First: Lion Author-X-Name-Last: Hirth Author-WorkPlace-Name: Potsdam-Institute for Climate Impact Research, Vattenfall GmbH Author-Name: Falko Ueckerdt Author-X-Name-First: Falko Author-X-Name-Last: Ueckerdt Author-WorkPlace-Name: Potsdam-Institute for Climate Impact Research Abstract: Energy and climate policies are usually seen as measures to internalize externalities. However, as a side effect, these policies redistribute wealth between consumers and producers, and within these groups. While redistribution is seldom the focus of the academic literature in energy economics, it plays a central role in real world policy debates. This paper compares the redistribution effects of two major electricity policies: support schemes for renewable energy sources, and CO2 pricing. We find that the redistribution effects of both policies are large, and they work in opposed directions: while renewables support transfers wealth from producers to consumers, carbon pricing does the opposite. More specifically, we show that moderate amounts of wind subsidies leave consumers better off even if they bear the costs of subsidies. In the case of CO2 pricing, we find that while suppliers as a whole benefit even without free allocation of emission certificates, large amounts of producer surplus are redistributed between different types of producers. These findings are derived from an analytical model of electricity markets, and a calibrated numerical model of the Northwestern European integrated power system. Our findings imply that a society with a preference for avoiding large redistribution might prefer a mix of policies, even if CO2 pricing alone is the first best climate policy in terms of allocative efficiency. Keywords: Carbon Tax, Emission Trading, Redistribution, Consumer Surplus, Producer Surplus, Wind Power Generation, Electricity Market Modelling Classification-JEL: Q42, Q48, L94, H23, D61, D62, C61, C63 Creation-Date: 201211 Template-Type: ReDIF-Paper 1.0 Number: 2012.83 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-083.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.83 Title: A Ricardian Analysis of the Impact of Climate Change on European Agriculture Author-Name: Steven Van Passel Author-X-Name-First: Steven Author-X-Name-Last: Van Passel Author-WorkPlace-Name: Hasselt University, Faculty of Business Economics, Centre for Environmental Sciences, Agoralaan, Yale University, School of Forestry and Environmental Studies Author-Name: Emanuele Massetti Author-X-Name-First: Emanuele Author-X-Name-Last: Massetti Author-WorkPlace-Name: Yale University, School of Forestry and Environmental Studies, Fondazione Eni Enrico Mattei Author-Name: Robert Mendelsohn Author-X-Name-First: Robert Author-X-Name-Last: Mendelsohn Author-WorkPlace-Name: Yale University, School of Forestry and Environmental Studies Abstract: This research estimates the impact of climate on European agriculture using a continental scale Ricardian analysis. Data on climate, soil, geography and regional socio-economic characteristics were matched for 37 612 individual farms across the EU-15. Farmland values across Europe are sensitive to climate. Even with the adaptation captured by the Ricardian technique, farms in Southern Europe are predicted to suffer sizeable losses (8% -13% per degree Celsius) from warming. In contrast, agriculture in the rest of Europe is likely to see only mixed impacts. Increases (decreases) in rain will increase (decrease) average farm values by 3% per centiliter of precipitation. Aggregate impacts by 2100 vary depending on the climate model scenario from a loss of 8% in a mild scenario to a loss of 44% in a harsh scenario. Keywords: Ricardian Analysis, Climate Change, European Agriculture, Climate Change Economics Classification-JEL: Q54, Q51, Q15 Creation-Date: 201211 Template-Type: ReDIF-Paper 1.0 Number: 2012.84 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-084.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.84 Title: Profit, Productivity and Price Performance Changes in The English and Welsh Water and Sewerage Companies Author-Name: Alexandros Maziotis Author-X-Name-First: Alexandros Author-X-Name-Last: Maziotis Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Euro-Mediterranean Centre on Climate Change (CMCC) Author-Name: David S. Saal Author-X-Name-First: David S. Author-X-Name-Last: Saal Author-WorkPlace-Name: Aston University Author-Name: Emmanuel Thanassoulis Author-X-Name-First: Emmanuel Author-X-Name-Last: Thanassoulis Author-WorkPlace-Name: Aston University Abstract: The purpose of this paper is to assess the impact of regulation in the financial performance of the Water and Sewerage companies (WaSCs) in England and Wales. We apply a panel index approach across WaSCs over time to decompose unit-specific (temporal) index number based profitability growth as a function of the profitability, productivity and price performance growth achieved by benchmark firms, and the catch-up to the benchmark firm achieved by less productive firms. The results indicated that the steady decline in average price performance, gains in productivity and relatively stable economic profitability after 2000, suggest that Ofwat is now more focused on passing productivity benefits to consumers, and maintaining stable profitability than it was in earlier regulatory periods. This technique is of great interest for regulators to evaluate the effectiveness of regulation and companies to identify the determinants of profit change and improve future performance, even if sample sizes are limited. Keywords: Profit Decomposition, Productivity, Price Performance, Panel Index Numbers, Regulation, Water and Sewerage Industry Classification-JEL: Q5 Creation-Date: 201211 Template-Type: ReDIF-Paper 1.0 Number: 2012.85 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-085.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.85 Title: Output Quality and Sources of Profit Change in the English and Welsh Water and Sewerage Companies Author-Name: Alexandros Maziotis Author-X-Name-First: Alexandros Author-X-Name-Last: Maziotis Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Euro-Mediterranean Centre on Climate Author-Name: David S. Saal Author-X-Name-First: David S. Author-X-Name-Last: Saal Author-WorkPlace-Name: Aston University Author-Name: Emmanuel Thanassoulis Author-X-Name-First: Emmanuel Author-X-Name-Last: Thanassoulis Author-WorkPlace-Name: Aston University Abstract: This paper investigates the determinants of profit change over the period 1991-2008 for the Water and Sewerage Companies (WaSCs) in the English and Welsh water and sewerage industry. We firstly apply an input oriented profit decomposition approach following the approach of De Witte & Saal (2010). Then, we make allowances for differences in the quality of output, by decomposing the output effect into high quality and low quality output effect. We decompose profit changes into various factors such as quantity and price effect, technical change, efficiency change, resource mix, product mix and scale effect, without and after controlling for quality. In both cases, the positive impact on profit changes came from substantial improvements in technical change, the cost efficient allocation of resources by substituting labour with capital and small improvements in efficiency gains. The input price and scale effect had a significant negative impact on profit changes. This technique is of great interest for regulators to evaluate the effectiveness of regulation and companies to identify the determinants of profit change and improve future performance, even if sample sizes are limited. Keywords: Profit Decomposition, Productivity, Index Numbers, DEA, Regulation, Water and Sewerage Industry Classification-JEL: Q5 Creation-Date: 201211 Template-Type: ReDIF-Paper 1.0 Number: 2012.86 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-086.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.86 Title: Are all High-Skilled Cohorts Created Equal? Unemployment, Gender, and Research Productivity Author-Name: John P. Conley Author-X-Name-First: John P. Author-X-Name-Last: Conley Author-WorkPlace-Name: Vanderbilt University Author-Name: Ali Sina Önder Author-X-Name-First: Ali Author-X-Name-Last: Sina Önder Author-WorkPlace-Name: Uppsala University Author-Name: Benno Torgler Author-X-Name-First: Benno Author-X-Name-Last: Torgler Author-WorkPlace-Name: Queensland University of Technology and EBS Business School Abstract: Using life cycle publication data of 9,368 economics PhD graduates from 127 U.S. institutions, we investigate how unemployment in the U.S. economy prior to starting graduate studies and at the time of entry into the academic job market affect economics PhD graduates’ research productivity. We analyze the period between 1987 and 1996 and find that favorable conditions at the time of academic job search have a positive effect on research productivity (measured in numbers of publications) for both male and female graduates. On the other hand, unfavourable employment conditions at the time of entry into graduate school affects female research productivity negatively, but male productivity positively. These findings are consistent with the notion that men and women differ in their perception of risk in high skill occupations. In the specific context of research-active occupations that require high skill and costly investment in human capital, an ex post poor return on undergraduate educational investment may cause women to opt for less risky and secure occupations while men seem more likely to “double down” on their investment in human capital. Further investigation, however, shows that additional factors may also be at work. Keywords: Research Productivity, Human Capital, Graduate Education, Gender Differences Classification-JEL: J16, J24 Creation-Date: 201211 Template-Type: ReDIF-Paper 1.0 Number: 2012.87 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-087.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.87 Title: Policy-relevant Assessment Method of Socio-economic Impacts of Floods: An Italian Case Study Author-Name: Fabio Farinosi Author-X-Name-First: Fabio Author-X-Name-Last: Farinosi Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Euro-Mediterranean Center for Climate Change, “Ca’ Foscari” University Author-Name: Lorenzo Carrera Author-X-Name-First: Lorenzo Author-X-Name-Last: Carrera Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, “Ca’ Foscari” University, Italy Author-Name: Alexandros Maziotis Author-X-Name-First: Alexandros Author-X-Name-Last: Maziotis Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Euro-Mediterranean Center for Climate Change Author-Name: Jaroslav Mysiak Author-X-Name-First: Jaroslav Author-X-Name-Last: Mysiak Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Euro-Mediterranean Center for Climate Change Author-Name: Fabio Eboli Author-X-Name-First: Fabio Author-X-Name-Last: Eboli Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Euro-Mediterranean Center for Climate Change Author-Name: Gabriele Standardi Author-X-Name-First: Gabriele Author-X-Name-Last: Standardi Author-WorkPlace-Name: Fondazione Eni Enrico Mattei, Euro-Mediterranean Center for Climate Change, Italy Abstract: This paper estimates the direct and indirect socio-economic impacts of the 2000 flood that took place in the Po river basin (Italy) using a combination of Computable General Equilibrium (CGE) model and Spatial and Multi-Criteria Analysis. A risk map for the whole basin is generated as a function of hazard, exposure and vulnerability. The indirect economic losses are assessed using the CGE model, whereas the direct social and economic impacts are estimated with spatial analysis tools combined with Multi-Criteria Analysis. The social impact is expressed as a function of physical characteristics of the extreme event, social vulnerability and adaptive capacity. The results indicate that the highest risk areas are located in the mountainous and in the most populated portions of the basin, which are consistent with the high values of hazard and vulnerability. Considerably economic damages occurred to the critical infrastructure of all the sectors with the industry/commercial sector having the biggest impact. A negative variation in the country and industry Gross Domestic Product (GDP) was also reported. Our study is of great interest to those who are interested in estimating the economic impact of flood events. It can also assist decision makers in pinpointing factors that threaten the sustainability and stability of a risk-prone area and more specifically, to help them understand how to reduce social vulnerability to flood events. Keywords: Risk Assessment, Flood, Economic Impacts, Social Impact, Impact Assessment Classification-JEL: Q2, Q25 Creation-Date: 201211 Template-Type: ReDIF-Paper 1.0 Number: 2012.88 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-088.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.88 Title: Bioenergy and CO2 Sequestration: Climate Policies Beyond Technological Constraints Author-Name: Ruben Bibas Author-X-Name-First: Ruben Author-X-Name-Last: Bibas Author-WorkPlace-Name: CIRED – International Research Center on Environment and Development Author-Name: Aurélie Méjean Author-X-Name-First: Aurélie Author-X-Name-Last: AMéjean Author-WorkPlace-Name: CIRED – International Research Center on Environment and Development Abstract: This paper examines the role of electricity production from biomass with and without carbon capture and storage in sustaining low CO2 emission pathways to 2100. It quantifies the effect of the availability of biomass resources and technologies within a general equilibrium framework. Biomass-fed integrated gasification combined cycle technology is introduced into the electricity module of IMACLIM-R, a hybrid general equilibrium model. We assess the robustness of this technology, with and without carbon capture and storage, as a way of reaching the 550 ppm stabilization target. The impact of a uniform CO2 tax on energy prices and world GDP is examined, together with the structure of the electricity mix. The influence of additional climate mitigation policies, such as alternative recycling of tax revenues and infrastructure policies is also discussed. Keywords: General Equilibrium Model, Macro-Economic Cost, Low Emission Objective, Electricity From Biomass, Carbon Capture and Storage, Negative Emissions Classification-JEL: C68, F0, H23, Q01, Q4, Q5 Creation-Date: 201211 Template-Type: ReDIF-Paper 1.0 Number: 2012.89 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-089.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.89 Title: North / South Contractual Design through the REDD+ Scheme Author-Name: Mireille Chiroleu-Assouline Author-X-Name-First: Mireille Author-X-Name-Last: Chiroleu-Assouline Author-WorkPlace-Name: Paris School of Economics (PSE) - Université Paris 1 Panthéon-Sorbonne, Centre d'Economie de la Sorbonne Author-Name: Jean-Christophe Poudou Author-X-Name-First: Jean-Christophe Author-X-Name-Last: Poudou Author-WorkPlace-Name: Université Montpellier 1, UMR5474 LAMETA Author-Name: Sébastien Roussel Author-X-Name-First: Sébastien Author-X-Name-Last: Roussel Author-WorkPlace-Name: Université Montpellier 3 Paul Valéry & Université Montpellier 1, UMR5474 LAMETA Abstract: In this paper we aim at theoretically grounding the Reducing Emissions from Deforestation and Forest Degradation + (REDD+) scheme as a contractual relationship between countries in the light of the theory of incentives. Considering incomplete information about reference levels of deforestation as well as exogenous implementation and transaction costs, we compare two types of contracts: a deforestation performance-based contract and a conditional avoided deforestation-based contract. Because of the implementation and transaction costs, each kind of REDD+ contract implies a dramatically different information rent/efficiency trade-off. If the contract is performance-based (resp. conditionality-based), information rents are awarded to countries with the ex ante lowest (resp. highest) deforestation. In a simple quadratic setting, there is a reference level threshold in terms of efficiency towards less deforestation. In terms of expected welfare, conditional avoided deforestation-based schemes are preferred. Keywords: Conditionality, Contract, Deforestation, Hidden Information, Incentives, Performance, Reducing Emissions from Deforestation and Forest Degradation + (REDD+) Classification-JEL: D82, O13, Q23, Q54 Creation-Date: 201211 Template-Type: ReDIF-Paper 1.0 Number: 2012.90 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-090.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.90 Title: Environmental Policies, Product Market Regulation and Innovation in Renewable Energy Author-Name: Lionel Nesta Author-X-Name-First: Lionel Author-X-Name-Last: Nesta Author-WorkPlace-Name: SciencesPo, OFCE-DRIC Author-Name: Francesco Vona Author-X-Name-First: Francesco Author-X-Name-Last: Vona Author-WorkPlace-Name: SciencesPo, OFCE-DRIC Author-Name: Francesco Nicolli Author-X-Name-First: Francesco Author-X-Name-Last: Nicolli Author-WorkPlace-Name: University of Ferrara Abstract: We investigate the effectiveness of policies in favor of innovation in renewable energy under different levels of competition. Using information regarding renewable energy policies, product market regulation and high-quality green patents for OECD countries since the late 1970s, we develop a pre-sample mean count-data econometric specification that also accounts for the endogeneity of policies. We find that renewable energy policies are significantly more effective in fostering green innovation in countries with deregulated energy markets. We also find that public support for renewable energy is crucial only in the generation of high-quality green patents, whereas competition enhances the generation of green patents irrespective of their quality. Keywords: Renewable Energy Technology, Patents, Environmental Policies, Product Market Regulation, Policy Complementarity Classification-JEL: Q55, Q58, Q42, Q48, O34 Creation-Date: 201212 Template-Type: ReDIF-Paper 1.0 Number: 2012.91 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-091.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.91 Title: Can Uncertainty Justify Overlapping Policy Instruments to Mitigate Emissions? Author-Name: Oskar Lecuyer Author-X-Name-First: Oskar Author-X-Name-Last: Lecuyer Author-WorkPlace-Name: CNRS, UMR 8568 CIRED, Nogent-sur-Marne and EDF R&D, Clamart Author-Name: Philippe Quirion Author-X-Name-First: Philippe Author-X-Name-Last: Quirion Author-WorkPlace-Name: CNRS, UMR 8568 CIRED, Nogent-sur-Marne, France Abstract: This article constitutes a new contribution to the analysis of overlapping instruments to cover the same emission sources. Using both an analytical and a numerical model, we show that when the risk that the CO2 price drops to zero and the political unavailability of a CO2 tax (at least in the European Union) are taken into account, it can be socially optimal to implement an additional instrument encouraging the reduction of emissions, for instance a renewable energy subsidy. Our analysis has both a practical and a theoretical purpose. It aims at giving economic insight to policymakers in a context of increased uncertainty concerning the future stringency of the European Emission Trading Scheme. It also gives another rationale for the use of several instruments to cover the same emission sources, and shows the importance of accounting for corner solutions in the definition of the optimal policy mix. Keywords: Uncertainty, Policy Overlapping, Mitigation Policy, Energy policy, EU-ETS, Renewable Energy, Corner Solutions, Nil CO2 Price Classification-JEL: Q28, Q41, Q48, Q58 Creation-Date: 201212 Template-Type: ReDIF-Paper 1.0 Number: 2012.92 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-092.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.92 Title: Kaldor-Verdoorn's Law and Increasing Returns to Scale: A Comparison Across Developed Countries Author-Name: Emanuele Millemaci Author-X-Name-First: Emanuele Author-X-Name-Last: Millemaci Author-WorkPlace-Name: Dipartimento DESMaS “V. Pareto”, Università degli Studi di Messina, Italy Author-Name: Ferdinando Ofria Author-X-Name-First: Ferdinando Author-X-Name-Last: Ofria Author-WorkPlace-Name: Dipartimento DESMaS “V. Pareto”, Università degli Studi di Messina, Italy Abstract: The objective of this study is to investigate the validity of the Kaldor-Verdoorn’s Law in explaining the long run determinants of the labor productivity growth for the manufacturing sector of some developed economies (Western European Countries, Australia, Canada, Japan and United States). We consider the period 1973-2006 using data provided by the European Commission - Economics and Financial Affairs. Our findings suggest that the law is valid for the manufacturing as countries show increasing returns to scale. Capital growth and labor cost growth do not appear important in explaining productivity growth. The estimated Verdoorn coefficients are found to be substantially stable throughout the period. Keywords: Increasing Returns, Kaldor-Verdoorn Law, Productivity Growth, Manufacturing Sector Classification-JEL: C32, O47, O57 Creation-Date: 201212 Template-Type: ReDIF-Paper 1.0 Number: 2012.93 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-093.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.93 Title: Going Electric: Expert Survey on the Future of Battery Technologies for Electric Vehicles Author-Name: Michela Catenacci Author-X-Name-First: Michela Author-X-Name-Last: Catenacci Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Elena Verdolini Author-X-Name-First: Elena Author-X-Name-Last: Verdolini Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Centro Euro-Mediterraneo per i Cambiamenti Climatici Author-Name: Valentina Bosetti Author-X-Name-First: Valentina Author-X-Name-Last: Bosetti Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Centro Euro-Mediterraneo per i Cambiamenti Climatici Author-Name: Giulia Fiorese Author-X-Name-First: Giulia Author-X-Name-Last: Fiorese Author-WorkPlace-Name: Fondazione Eni Enrico Mattei and Dipartimento di Elettronica e Informazione, Politecnico di Milano Author-Name: Nadia Ameli Author-X-Name-First: Nadia Author-X-Name-Last: Ameli Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: The paper describes the results of a survey, carried out with leading EU experts, on the capacity of both fully electric and plug-in hybrid vehicles to reach commercial success in the next twenty years. The success of electric transport is hampered by a combination of low range, scarce efficiency and high costs of batteries. Costs are expected to decrease in response to increasing sales volume and technical improvements, and advances would result from adequate investments in research, development and demonstration (RD&D). Experts’ judgements are collected to shed light on the inherently uncertain relationship between RD&D efforts and consequent technical progress, and to assess the complex dynamics that will hinder or support the widespread diffusion of electric vehicles. The analysis of the experts’ data results in a number of important policy recommendations to guide future RD&D choices and target commitments both for the EU and its member states. Keywords: Expert Elicitation, Battery Technologies, Electric Vehicles Classification-JEL: Q5, Q55 Creation-Date: 201212 Template-Type: ReDIF-Paper 1.0 Number: 2012.94 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-094.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.94 Title: Quantifying Sustainability: A New Approach and World Ranking Author-Name: Carlo Carraro Author-X-Name-First: Carlo Author-X-Name-Last: Carraro Author-WorkPlace-Name: Ca’ Foscari University of Venice, FEEM and CMCC Author-Name: Lorenza Campagnolo Author-X-Name-First: Lorenza Author-X-Name-Last: Campagnolo Author-WorkPlace-Name: Ca’ Foscari University of Venice, FEEM and CMCC Author-Name: Fabio Eboli Author-X-Name-First: Fabio Author-X-Name-Last: Eboli Author-WorkPlace-Name: FEEM and CMCC Author-Name: Elisa Lanzi Author-X-Name-First: Elisa Author-X-Name-Last: Lanzi Author-WorkPlace-Name: FEEM and CMCC Author-Name: Ramiro Parrado Author-X-Name-First: Ramiro Author-X-Name-Last: Parrado Author-WorkPlace-Name: FEEM and CMCC Author-Name: Elisa Portale Author-X-Name-First: Elisa Author-X-Name-Last: Portale Author-WorkPlace-Name: World Bank Abstract: This paper proposes a new tool to assess sustainability and make the concept of sustainable development operational. It considers its multi-dimensional structure combining the information deriving from a selection of relevant sustainability indicators belonging to economic, social and environmental pillars. It reproduces the dynamics of these indicators over time and countries. Then, it aggregates these indicators using a new approach based on Choquet’s integrals. The main novelties of this approach are indeed: (i) the modelling framework, a recursive-dynamic computable general equilibrium used to calculate the evolution of all indicators over time throughout the world, and (ii) the aggregation methodology to reconcile them in one aggregate index to measure overall sustainability. The former allows capturing the sector and regional interactions and higher-order effects driven by background assumptions on relevant variables to depict future scenarios. The latter makes it possible to compare sustainability performances, under alternative scenarios, across countries and over time. Main results show that the current sustainability at world level differs from what the traditional measure of well-being, the GDP, depicts, highlighting the trade-offs among different components of sustainability. Moreover, in the next decade a slight decrease in world sustainability may occur, in spite of an expected increase in world domestic product. Finally, dedicated policies increase overall sustainability, showing that social and environmental benefits may be greater than the correlated economic costs. Keywords: Sustainable Development, Sustainable Indicators, Computable General Equilibrium, Millennium Development Goals, Climate Change Classification-JEL: Q54, Q56, C68 Creation-Date: 201212 Template-Type: ReDIF-Paper 1.0 Number: 2012.95 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-095.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.95 Title: Destination Image Built by the Cinema: The Case of “Basilicata Coast to Coast” Author-Name: Angelo Bencivenga Author-X-Name-First: Angelo Author-X-Name-Last: Bencivenga Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Livio Chiarulo Author-X-Name-First: Livio Author-X-Name-Last: Chiarulo Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Delio Colangelo Author-X-Name-First: Delio Author-X-Name-Last: Colangelo Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Author-Name: Annalisa Percoco Author-X-Name-First: Annalisa Author-X-Name-Last: Percoco Author-WorkPlace-Name: Fondazione Eni Enrico Mattei Abstract: Film tourism, meaning the phenomenon that is born of the desire to visit film locations, has been the object of increasing attention in recent years. This document presents the results of a field research conducted with the aim of analysing the effects of the film "Basilicata Coast to Coast", by Rocco Papaleo, on tourism in Basilicata, (a small region in the South of Italy) after its success at the box office and several Italian awards. The film, planned with the involvement of local institutions and stakeholders, pursues the objective of promoting an area that is still largely unknown to national and international tourists. The romantic and naturalistic dimension expressed by Papaleo's film seems to have stimulated the curiosity of tourists and promoted a "dreamy" but truthful image of the region. Keywords: Film Tourism, Basilicata Coast to Coast, Destination Image, Cinema, Responsible Tourism, Local Tourism Development Classification-JEL: Q2, Q26, L82, L83 Creation-Date: 201212 Template-Type: ReDIF-Paper 1.0 Number: 2012.96 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-096.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.96 Title: Innovation Benefits from Nuclear Phase-out: Can they Compensate the Costs? Author-Name: Enrica De Cian Author-X-Name-First: Enrica Author-X-Name-Last: De Cian Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Euro-Mediterranean Center on Climate Change (CMCC) Author-Name: Samuel Carrara Author-X-Name-First: Samuel Author-X-Name-Last: Carrara Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Euro-Mediterranean Center on Climate Change (CMCC) Author-Name: Massimo Tavoni Author-X-Name-First: Massimo Author-X-Name-Last: Tavoni Author-WorkPlace-Name: Fondazione Eni Enrico Mattei (FEEM) and Euro-Mediterranean Center on Climate Change (CMCC) Abstract: This paper investigates whether an inefficient allocation of abatement, due to constraints on the use of currently available low carbon mitigation options, can promote innovation in new technologies and eventually generate welfare gains. We focus on the case of nuclear power phase out, when accounting for endogenous technical change in energy efficiency and in low carbon technologies. The analysis uses the Integrated Assessment Model WITCH, which features multiple externalities due to both climate and innovation market failures. Our results show that phasing out nuclear power stimulates additional R&D investments and deployment of infant technologies with large learning potential. The innovation benefits which this would generate and that would not otherwise be captured due to intertemporal and international externalities almost completely offset the economic costs of phasing out nuclear power. The technological change benefit depends on the stringency of the climate policy and is distributed unevenly across countries. Keywords: Technological change, Climate policy, Nuclear phase-out Classification-JEL: H40, O33, Q40, Q55 Creation-Date: 201212 Template-Type: ReDIF-Paper 1.0 Number: 2012.97 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-097.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.97 Title: Unbundling Technology Adoption and tfp at the Firm Level. Do Intangibles Matter? Author-Name: Y.H. Farzin Author-X-Name-First: Y.H. Author-X-Name-Last: Farzin Author-WorkPlace-Name: Department of Agricultural and Resource Economics, University of California Author-Name: C.A. Bond Author-X-Name-First: C.A. Author-X-Name-Last: Bond Author-WorkPlace-Name: RAND Corporation Abstract: When it comes to environmental quality preferences, it is popularly believed that Democrats (and more generally, liberals) are “green” while Republicans” (conservatives) are “brown”. Does empirical evidence support this popular belief? We test the hypothesis that regional political identification leads to differences in concentration outcomes for several measures of California air pollution indicators, including CO, NO2, SO2, O3, PM10, and PM2.5 concentrations. We employ two alternative identification strategies on county-level cluster and year panel data that include proxy variables for political party preferences of the local populace, as well as controlling for the political party affiliations at the state-level legislative and executive branches. In general, we do not find a consistent and statistically significant relationship between pollution outcomes and political variables for California. The popular belief is empirically supported only for NO2 and O3, but not for any of the other pollutants, and even in these two cases the relationship only holds at the local regulatory level and not at the state policymaking level. At the state level, for most of the pollutants no significant effect of party affiliation is identified, and in the rare cases where such an effect exists, it is either too weak to be conclusive or is even counter to popular belief. Keywords: Political Party Affiliation, Environmental Regulation, Air Pollution Classification-JEL: Q51, Q58, D78 Creation-Date: 201212 Template-Type: ReDIF-Paper 1.0 Number: 2012.98 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-098.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.98 Title: Unbundling Technology Adoption and tfp at the Firm Level. Do Intangibles Matter? Author-Name: Michele Battisti Author-X-Name-First: Michele Author-X-Name-Last: Battisti Author-WorkPlace-Name: University of Palermo, CeLEG LUISS Guido Carli and RCEA Author-Name: Filippo Belloc Author-X-Name-First: Filippo Author-X-Name-Last: Belloc Author-WorkPlace-Name: “G. d'Annunzio” University Author-Name: Massimo Del Gatto Author-X-Name-First: Massimo Author-X-Name-Last: Del Gatto Author-WorkPlace-Name: “G. d'Annunzio” University and CRENoS Abstract: We use a panel of European firms to investigate the relationship between intangible assets and productivity. We disentangle between tfp and technology adoption, while available studies so far have considered only a notion of productivity conflating the two effects. To this aim, we estimate production function parameters allowing, within each sector, for the existence of multiple technologies. We find that intangible assets both push the firm towards better technologies (technology adoption effects) and allow for a more efficient exploitation of a given technology (tfp effects). Keywords: TFP, Intangible Assets, Heterogeneity, Firm Selection, Technology Adoption, Mixture Models Classification-JEL: C29, D24, F12, O32 Creation-Date: 201212 Template-Type: ReDIF-Paper 1.0 Number: 2012.99 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-099.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.99 Title: Carbon Taxes, Path Dependency and Directed Technical Change: Evidence from the Auto Industry Author-Name: Philippe Aghion Author-X-Name-First: Philippe Author-X-Name-Last: Aghion Author-WorkPlace-Name: Harvard University Author-Name: Antoine Dechezleprêtre Author-X-Name-First: Antoine Author-X-Name-Last: Dechezleprêtre Author-WorkPlace-Name: Grantham Research Institute on Climate Change and the Environment and Centre for Economic Performance, London School of Economics Author-Name: David Hemous Author-X-Name-First: David Author-X-Name-Last: Hemous Author-WorkPlace-Name: INSEAD Author-Name: Ralf Martin Author-X-Name-First: Ralf Author-X-Name-Last: Martin Author-WorkPlace-Name: Imperial College Business School and Centre for Economic Performance, London School of Economics Author-Name: John Van Reenen Author-X-Name-First: John Author-X-Name-Last: Van Reenen Author-WorkPlace-Name: Centre for Economic Performance, London School of Economics and NBER Abstract: Can directed technical change be used to combat climate change? We construct new firm-level panel data on auto industry innovation distinguishing between “dirty” (internal combustion engine) and “clean” (e.g. electric and hybrid) patents across 80 countries over several decades. We show that firms tend to innovate relatively more in clean technologies when they face higher tax-inclusive fuel prices. Furthermore, there is path dependence in the type of innovation both from aggregate spillovers and from the firm's own innovation history. Using our model we simulate the increases in carbon taxes needed to allow clean to overtake dirty technologies. Keywords: Climate Change, Innovation, Directed Technical Change, Automobiles Classification-JEL: Creation-Date: 201212 Template-Type: ReDIF-Paper 1.0 Number: 2012.100 File-URL: https://feem-media.s3.eu-central-1.amazonaws.com/wp-content/uploads/NDL2012-100.pdf File-Format: application/pdf Handle: RePEc:fem:femwpa:2012.100 Title: An Econometric Analysis of the Effectiveness of Development Finance for the Energy Sector Author-Name: Giorgio Gualberti Author-X-Name-First: Giorgio Author-X-Name-Last: Gualberti Author-WorkPlace-Name: Instituto Superior Técnico, Technical University of Lisbon Author-Name: Luis Filipe Martins Author-X-Name-First: Luis Filipe Author-X-Name-Last: Martins Author-WorkPlace-Name: ISCTE Business School, Lisbon Author-Name: Morgan Bazilian Author-X-Name-First: Morgan Author-X-Name-Last: Bazilian Author-WorkPlace-Name: International Institute for Applied Systems Analysis, Laxenburg Abstract: Reaching the objective of universal access to modern energy services will require large investments in infrastructure in developing countries. An important part of funding will be provided in the form of development finance and its effectiveness in producing positive impacts is crucial for this achievement. This paper presents a panel analysis of the relationship between the installed capacity of electricity generation, the development finance committed for the energy sector, and the gross fixed capital formation. We tested four models with a large dataset and found development finance to have, in most cases, a positive influence on installed base. Keywords: International Aid, Energy Access, Aid Effectiveness Classification-JEL: O19, O21, Q40 Creation-Date: 201212