Public evaluation of large projects : variational inequialities, bilevel programming and complementarity. A survey

Large projects evaluation rises well known difficulties because -by definition- they modify the current price system; their public evaluation presents additional difficulties because they modify too existing shadow prices without the project. This paper analyzes -first- the basic methodologies applied until late 80s., based on the integration of projects in optimization models or, alternatively, based on iterative procedures with information exchange between two organizational levels. New methodologies applied afterwards are based on variational inequalities, bilevel programming and linear or nonlinear complementarity. Their foundations and different applications related with project evaluation are explored. As a matter of fact, these new tools are closely related among them and can treat more complex cases involving -for example- the reaction of agents to policies or the existence of multiple agents in an environment characterized by common functions representing demands or constraints on polluting emissions

Analyzing the Impacts of Policy Supports and Incentive Programs on Resource Management

Feedstock-based renewable fuels, and ecosystem restoration practices such as afforestation are long-term solutions to mitigating greenhouse gas (GHG) emissions. This dissertation aligns with assessing the effects of policy supports and voluntary incentive programs on renewable fuel production and forest-based carbon sequestration.Higher investment risks and novelty of the feedstock-based conversion technologies hinder large-scale deployment of renewable fuels at present. In the first essay, a two-stage stochastic model is employed to evaluate the impact of federal subsidies in designing a switchgrass-based bioethanol supply chain in west Tennessee wherein decisions driven by minimized expected and Conditional Value-at-Risk of system cost reflected the risk-neutral and risk-averse perspective of the biofuel sector, respectively. Major contribution of this study is the impact assessment of Biomass Crop Assistance Program (BCAP) on investment decisions (including land allocation) of a risk-sensitive biofuel industry under feedstock supply uncertainty.In the second essay, impacts of renewable jet fuel (RJF) production from switchgrass on farmland allocation, processing facility configuration, and GHG emissions are estimated in response to fulfilling the RJF demand at the Memphis International Airport in Tennessee. Importantly, a potential carbon market is used to explore the impact of hypothetical carbon credits on the GHG emissions reduction and net supply-chain welfare while addressing the economic motives of the supply-chain participants. Considering the attention paid by the Unites States aviation sector with respect to GHG emissions, this study highlights the importance of Renewable Identification Number (RIN) credits and tradable carbon credits in achieving the desired economic viability and emission abatement goals through a Stackelberg interaction between the feedstock suppliers and the feedstock processor.In the third essay, discriminatory-price auction and agent-based model are used to examine the cost-efficiency of cost-ranked and cost-benefit-ranked auction-based payment designs for forest-based carbon sequestration with varying degree of correlation between opportunity costs of afforestation and carbon sequestration capacities, when bidders learn in multi-round procurement auctions. Simulation outcomes are expected to guide decision makers in choosing an optimal payment design that ensures efficiency gains for auction-based payments compared to fixed-rate payments, and more importantly ensures minimal loss in cost-efficiency in a dynamic setting

Climate policies : what if emerging country baseline were not so optimistic? - a case study related to India

One of the current main objective of international negotiations on climate change aims at enlarging the coordination regime to developing countries (DCs), and particularly to emerging countries. The international coordination system built at the Kyoto Conference relies on a coordination system based on a purely climate centric approach which shows irreconcilable contradictions between climate and development issues. This article aims at evaluatingpossible pathways implementing synergies between climate policies and development policies in order to create an incentive towards DCs to take part in climate mitigation. We focus on an illustrative example on India.When most reference scenarios postulate rapid energy decoupling of the GDP and rapid decarbonisation of DCs economies in the future, this article elaborates, with the IMACLIM-R model, a baseline taking into account weaknesses and current disequilibria of the Indian technico-economic system such as the high dependency on imported energy, or the structural shortage in electricity. We show why a purely climate centric approach (quota allocation), adopted to commit with a world objective of tabilization to 550ppm, induce very high transition costs in spite of significant financial transfers. On the contrary, a strategy based on the research of synergies between the reduction of these disequilibria, and the mitigation of GHG emissions is investigated in the power sector, which presents the biggest potential of no-regret measures. This permits to drop down transition costs applied to the Indianeconomy by improving the overall energy efficiency. An economic and environmental evaluation of this alternative scenario is lead

Climate policies : what if emerging country baseline were not so optimistic? - a case study related to India

One of the current main objective of international negotiations on climate change aims at enlarging the coordination regime to developing countries (DCs), and particularly to emerging countries. The international coordination system built at the Kyoto Conference relies on a coordination system based on a purely climate centric approach which shows irreconcilable contradictions between climate and development issues. This article aims at evaluatingpossible pathways implementing synergies between climate policies and development policies in order to create an incentive towards DCs to take part in climate mitigation. We focus on an illustrative example on India.When most reference scenarios postulate rapid energy decoupling of the GDP and rapid decarbonisation of DCs economies in the future, this article elaborates, with the IMACLIM-R model, a baseline taking into account weaknesses and current disequilibria of the Indian technico-economic system such as the high dependency on imported energy, or the structural shortage in electricity. We show why a purely climate centric approach (quota allocation), adopted to commit with a world objective of tabilization to 550ppm, induce very high transition costs in spite of significant financial transfers. On the contrary, a strategy based on the research of synergies between the reduction of these disequilibria, and the mitigation of GHG emissions is investigated in the power sector, which presents the biggest potential of no-regret measures. This permits to drop down transition costs applied to the Indianeconomy by improving the overall energy efficiency. An economic and environmental evaluation of this alternative scenario is lead.India, domestic policies and measures, climate policies, long term scenarios, international egotiations, power sector, climate regime, policies and measures, energy efficiency, realistic baselines, peak-oil

Gas models and three difficult objectives

Competition, security of supply and sustainability are at the core of EU energy policy. The Commission argues that making the European gas market more competitive (completing the internal gas market) will be instrumental in the pursuit of these objectives. We examine the question through the eyes of existing models of the European gas market. Can model tell us anything on this problem? Do they confirm or infirm the analysis of the Commission appearing in fundamental documents such the Green Paper, the Sector Inquiry or the new legislation package? We argue that results of existing models contradict a fundamental finding (paragraph 77) of the Sector Inquiry. We further elaborate on the basis of the economic assumption underlying the models, that changing the assumptions implicitly contained in paragraph 77 cast doubts on a large part of the reasoning justifying the completion of the internal gas market. We also explain that models could help arriving at a better definition of the relevant market, which is so important in the reasoning of the Commission. Last we also find model results that question the effectiveness of ownership unbundling. As to security of supply, we explain that models can also contribute to assess the value of additional infrastructure in the context of security of supply, but this potential seems largely untapped. Last we note that sustainability has not yet penetrated models of gas markets. We conclude by suggesting other area of immediate concern, possibly of higher technical difficulty, that modellers could address in future research.

Modeling trade and environmental interactions

Interactions between trade and the environment have been studied extensively as a reaction to the pressure that the accelerated pace of globalization is placing on environment and trade. Distinguishing itself from previous studies, this research addresses issues, methods and policy implications concerning the interrelationship between trade and environment first in a comprehensive literature survey, and then focuses on a modeling analysis on the interactions between trade and the environment in China.;The literature review provides a perspective on received and future research by employing a dual approach: not only are major issues concerning trade and environment analyzed, but also progress in the methods necessary to examine those issues is assessed. In both parts, the attempt has been to suggest new possibilities for research and policy goals.;To investigate the interactions between trade and the environment in the Chinese case, a nonlinear simultaneous equations trade and environment model (TEM) is developed. The theoretical framework of the TEM is an expansion of Dean\u27s (1999) four equation model by adding international trade and foreign direct investment relationships. This model can be used not only to analyze the trade impact of an environmental policy and the environmental impact of trade, but also to identify the sources of those influences. In addition, the nonlinear specification of the relationship between emissions and economic scales allows for an explicit test of the environmental Kuznets curve.;The TEM is estimated with a Chinese provincial panel data set. The empirical results suggest that there may indeed have existed a tradeoff between economic growth and environmental protection in China\u27s development. That is, increased trade and rapid economic growth may have led to more pollution emissions on the one hand, while environmental policies may have led to reduced economic growth and reduced trade on the other. Policy alternatives to mitigate these negative impacts are also explored here