Carbon price and optimal extraction of a polluting fossil fuel with restricted carbon capture

Among technological options to mitigate greenhouse gas (GHG) emissions, Carbon Capture and Storage technology (CCS) seems particularly promising. This technology allows to keep on extracting polluting fossil fuels without drastically increasing CO2 atmospheric concentration. We examine here a two-sector model with two primary energy resources, a polluting exhaustible resource and an expensive carbon-free renewable resource, in which an environmental regulation is imposed through a cap on the atmospheric carbon stock. We assume that only the emissions from one sector can be captured. Previous literature, based on one-sector models in which all emissions are capturable, finds that CCS technology should not be used before the threshold has been reached. We find that, when technical constraints make it impossible to capture emissions from both sectors, this result does not always hold. CCS technology should be used before the ceiling is reached if non capturable emissions are large enough. In that case, we find that energy prices paths must differ between sectors reflecting the difference of social cost of the resource according to its use. Numerical exercise show that, when the ceiling is set at 450ppm CO2, the initial carbon tax should equal 52$/tCO2 and that using CCS before the ceiling is optimal.dynamic models ; global warming ; externalities ; nonrenewable resources ; carbon capture ; energy markets

Peace, War and International Security: Economic Theories (trial entry)

This paper considers the economic theories that are relevant for the study of peace war and international security . It presents different levels of generality, starting with the big questions of international security, which are usually the domain of international relations, before moving to general economic theoretical perspectives and then focusing on some specific developments in economics and security. More specifically it reviews the economics of security, distinguishing neoclassical theories, Keynesian and institutional, Marxist, and monopoly capital, before discussing the issues involved in the debate between the schools of thought. The economics of conflict is then considered, starting with the approach economists have taken –mainly neoclassical, before considering more general political economy perspectives.Economics; Peace; war; security;

The Evolution of the Economic Thought Confronted with World War I and the Reparations’ Issue

International audienc

Peace, War and International Security: Economic Theories

This paper considers the economic theories that are relevant for the study of peace war and international security . It presents different levels of generality, starting with the big questions of international security, which are usually the domain of international relations, before moving to general economic theoretical perspectives and then focusing on some specific developments in economics and security. More specifically it reviews the economics of security, distinguishing neoclassical theories, Keynesian and institutional, Marxist, and monopoly capital, before discussing the issues involved in the debate between the schools of thought. The economics of conflict is then considered, starting with the approach economists have taken –mainly neoclassical, before considering more general political economy perspectives.Economics; Peace; war; security;

Carbon price and optimal extraction of a polluting fossil fuel with restricted carbon capture

Among technological options to mitigate greenhouse gas (GHG) emissions, Carbon Capture and Storage technology (CCS) seems particularly promising. This technology allows to keep on extracting polluting fossil fuels without drastically increasing CO2 atmospheric concentration. We examine here a two-sector model with two primary energy resources, a polluting exhaustible resource and an expensive carbon-free renewable resource, in which an environmental regulation is imposed through a cap on the atmospheric carbon stock. We assume that only the emissions from one sector can be captured. Previous literature, based on one-sector models in which all emissions are capturable, finds that CCS technology should not be used before the threshold has been reached. We find that, when technical constraints make it impossible to capture emissions from both sectors, this result does not always hold. CCS technology should be used before the ceiling is reached if non capturable emissions are large enough. In that case, we find that energy prices paths must differ between sectors reflecting the difference of social cost of the resource according to its use. Numerical exercise show that, when the ceiling is set at 450ppm CO2, the initial carbon tax should equal 52$/tCO2 and that using CCS before the ceiling is optimal.Parmi les technologies disponibles pour lutter contre l'accumulation des gaz à effet de serre dans l'atmosphère, la capture et la séquestration du CO2 semble particulièrement prometteuse. Elle permet de déconnecter le flux des émissions anthropiques de CO2 de l'utilisation des combustibles fossiles. Nous proposons un modèle à deux secteurs dans lequel deux sources d'énergie primaire sont disponibles : une ressource épuisable dont l'utilisation génère du CO2 et une ressource renouvelable "propre". Une régulation environnementale est introduite sous la forme d'un plafond que la concentration de CO2 dans l'atmosphère ne doit pas dépasser. Nous supposons que seules les émissions provenant d'un secteur peuvent être capturées. Dans la littérature précédente, toutes les émissions sont techniquement capturables : dans ce cas, il n'est jamais optimal d'utiliser cette technologie avant que le plafond ne soit atteint. Lorsque les contraintes techniques limitent le champ d'application de la capture de CO2, nous trouvons que cette technologie est employée avant le plafond si les émissions non capturables sont suffisamment importantes. Les chemins optimaux des prix de l'énergie doivent alors différer entre les secteurs car le coût social de la production énergétique varie selon ces secteurs. En supposant un plafond fixé à 450 ppm de CO2, la calibration du modèle indique que la taxe carbone devrait être fixée à environ 52$ la tonne de CO2 et qu'il est optimal de commencer à capture le CO2 avant que ce plafond ne soit atteint

The Grey Paradox: How Oil Owners Can Benefit From Carbon Regulation

This paper studies how oil owners can benefit from carbon taxation. We build a Hotelling-like model with three energy resources: oil (exhaustible, polluting), coal (non exhaustible, very polluting) and solar energy (non exhaustible, non polluting). The CO2 concentration must be kept under a carbon ceiling. The optimal extraction path is decentralized by a tax on emissions, and tax revenues are not redistributed. We characterize the different extraction paths. We focus on the case where both oil and coal are extracted and oil gets exhausted. When oil is cheaper to extract than coal, if oil is sufficiently scarce, or if the extraction cost of oil is close enough to the extraction cost of coal or if its pollution content is low enough, or if the demand elasticity is low enough, the profits of oil owners will increase when the carbon regulation is tightened. When oil is more expensive to extract than coal, and both resources are used and oil exhausted, tightening the carbon regulation increases the oil profits.Cet article théorique étudie comment les pétroliers peuvent bénéficier de la taxation du carbone. Nous construisons un modèle d'extraction à la Hotelling, avec trois sources d'énergie: le pétrole (épuisable, polluant), le charbon (non épuisable, très polluant) et le solaire (non épuisable, non polluant). Un plafond de CO2 est introduit sous lequel la concentration de CO2 doit être maintenue. L'extraction optimale des ressources énergétiques est décentralisée par une taxe sur les émissions, et les recettes fiscales ne sont pas redistribuées. Nous déterminons les conditions sur les paramètres pour obtenir les différents sentiers d'extraction. Nous nous intéressons aux sentiers où le pétrole et le charbon sont extraits et le pétrole épuisé. Quand le pétrole est moins cher à extraire que le charbon, si le pétrole est suffisamment rare, ou si le coût d'extraction du pétrole est suffisamment proche du coût d'extraction du charbon ou si son coefficient de pollution est assez faible, ou encore si l'élasticité de la demande est assez faible, les profits des pétroliers vont augmenter lorsque le plafond de CO2 est diminué. Quand le pétrole est plus coûteux à extraire que le charbon, et que ces deux ressources sont utilisées et le pétrole épuisé, resserrer la contrainte de plafond de CO2 augmente les profits des pétroliers

Economic Interventionism, Armament Industries and the Keynesian Theory: The economists debates in France and Great Britain, 1936-1940

International audienceThe crisis of the 1930s led to the establishment of public interventionist policies, in the United States and Great Britain in particular. These measures significantly changed the economic environment of the companies: thus, in 1931 the American president Hoover pleaded, among other measures, for a more vigorous enforcement of antitrust laws to end destructive industrial competition, as well as for work-sharing programs that would supposedly reduce unemployment. With the New Deal, Roosevelt's administration made significant investments and allowed access to financial resources through various government agencies. What were the effects of these policies on businesses? What were the economic analyzes of this public intervention in the sphere of the private economy? During the interwar period, international relations were marked by debates on interallied debts and German reparations. Keynes' thought was deeply nourished by his participation in international negotiations, in particular as adviser at the British Treasury. If he could perceive war as a laboratory of experimentation to test the validity of his theory of the effect of public stimulus spending, he can in no way be considered as a supporter of "military Keynesianism", i.e. the use of military spending as a privileged instrument of economic policy (justified notably by the expected technological spin-offs from military investments). Keynes was openly hostile to militarism and war, convinced that they were contrary to human nature. After the Second World War, Keynes wrote an open letter to President Roosevelt, but despite the seemingly Keynesian character of New Deal economic measures, there was deep dissension between the two men. If Roosevelt favoured social measures, he remained hostile to the organization of a state interventionism financed by borrowing, a solution nevertheless advocated by Keynes, to revive purchasing power. Our article aims to understand the birth of policies to support business investmen

From peace through free trade to interventionism for the peace: The development of J.M. Keynes’ thought from the First to the Second World War

International audienceThe expression “military Keynesianism”, much in use during the Cold war USA-USSR arms race, has contributed to feed suspicion that Keynes had sympathies for rearmament or war as instruments of economic recovery, or even for authoritarian regimes. His hostility toward free trade at a time of economic crisis gave him the image of someone who supports economic nationalism, which often goes hand in hand with militarism (cf. Friedrich List, 1840). A reading of Keynes’ works allows to challenge these assumptions. In fact, the pacifism has left its mark on his thought and his concern for the economic crisis is directly linked to his opposition to the war, though he considered it to be unavoidable, in the absence of a return to prosperity. The young Keynes is influenced by the Liberal thought and pacifism, which prevails among economists at the beginning of the 20th century. Close to conscientious objectors, he is then in accordance with the ideas developed by the future Nobel Peace Prize, Norman Angell, who advocates for an European disarmament. (Part I). Having become economic adviser to the Treasury in 1915 and therefore directly interested in the issue of war financing, Keynes actively militates against the option of a total war for Great Britain. He even almost resigned when the British government calls for conscription. We will show that his thought in the 1920’s is characterised by a radical critique of the revenge spirit and a call to international cooperation. The Economic Consequences of the Peace (1919) became extremely successful as a major critique of the Treaty of Versailles (Part II). Finally, we will show in a third part how, during the 1930’s, while the economic crisis persists and rearmament accelerates, Keynes develops an original theory, breaking from liberalism and being tested by the massive increase in European military expenditures. Keynes’ thought has changed in the interwar period, following a careful thought on war economic and financial issues. Indeed, the “Keynesian revolution” may have mainly emerged from empirical reflections on war causes and peace conditions. In Keynes’ thought, war, however detestable, enables the development of new solutions of economic policy and of international cooperation, through international institutions

Le militarisme, horizon indépassable des relations internationales dans la mondialisation économique ?

International audienceThis article questions the persistence of militarism in a globalized economy, contrary to the conclusions of the liberal economic theory. Globalization even seems to generate new sources of international conflict and new ways of waging war.Malgré les conclusions de l’analyse libérale, la guerre et le militarisme s’invitent dans les relations économiques internationales parce que les intérêts entre les Etats sont souvent divergents. Le partage des loyers des matières premières et les conditions concrètes de la concurrence économique créent de nombreuses opportunités de conflits. Dans certaines conditions, la guerre est toujours une situation intéressante et une opportunité pour certains intérêts économiques et politiques. La mondialisation des flux internationaux de biens, de capitaux, mais aussi d’informations, entraîne des risques majeurs, notamment la pénurie de denrées alimentaires et de matières premières, les crises financières systémiques et les cyberattaques mondiales

La PESD et l'industrie d'armement européenne: des ambitions à la réalité, quel bilan pour la Présidence française ?

International audienceThe handicaps of the European arms industry are mainly due to the maintaining of national market barriers and to governments’ reluctance to accept the rules of competition among member states. But several options exist for overcoming these difficulties which are more or less consensual within the European Union. The French presidency thus inherited several projects-in-progress in July 2008 within the framework of the ESDP. Institutional, economic, and strategic obstacles all came to limit ESDP’s advances. In the future, its consolidation will require a better protection of strategic assets and a collective consciousness regarding the need to develop the second pillar.Les handicaps de l’industrie de défense européenne sont avant tout liés au maintien de marchés nationaux cloisonnés et aux réticences des gouvernements à jouer le jeu de la concurrence entre pays membres. Mais plusieurs pistes existent pour surmonter ces difficultés, lesquelles sont plus ou moins consensuelles au sein de l’UE. La présidence française héritait ainsi en juillet 2008 de nombreux chantiers en cours dans le cadre de la PESD. De nombreux obstacles, à la fois institutionnels, conjoncturels et stratégiques, sont venus limiter les possibilités d’avancées de la PESD. Dans l’avenir, son approfondissement nécessitera une meilleure protection des actifs stratégiques et une prise de conscience collective dans l’UE de la nécessité de faire avancer le deuxième pilier