Leadership and self-enforcing international environmental agreements with non-negative emissions

For the widely-used linear-quadratic model of stable IEAs the key results are: (i) if the members of the IEA act in a Cournot fashion with respect to non-signatories, a stable IEA has no more than 2 signatories; (ii) if the signatories act as Stackelberg leaders, a stable IEA can have any number of signatories. These results were derived using numerical simulations and ignored the non-negativity constraint on emissions. Recent papers using analytical approaches and explicitly recognising the non-negativity constraint have suggested that with Stackelberg leadership a stable IEA has at most four signatories. Such papers have introduced non-negativity constraints by restricting parameter values to ensure interior solutions for emissions, which restricts the number of signatories. We use the more appropriate approach of directly imposing the non-negativity constraint on emissions, recognising that for some parameter values this will entail corner solutions, and show, analytically, that the key results from the literature go through

The 2006-2008 Oil Bubble and Beyond

We present an analysis of oil prices in US$ and in other major currencies that diagnoses unsustainable faster-than-exponential behavior. This supports the hypothesis that the recent oil price run-up has been amplified by speculative behavior of the type found during a bubble-like expansion. We also attempt to unravel the information hidden in the oil supply-demand data reported by two leading agencies, the US Energy Information Administration (EIA) and the International Energy Agency (IEA). We suggest that the found increasing discrepancy between the EIA and IEA figures provides a measure of the estimation errors. Rather than a clear transition to a supply restricted regime, we interpret the discrepancy between the IEA and EIA as a signature of uncertainty, and there is no better fuel than uncertainty to promote speculation!Comment: 4 pages; 4 figures, discussion of the oil supply-demand view point and uncertaintie

Different Patterns of Association of Body Fat Percent and Body Mass Index with Pre-adolescent and Adolescent Asthma: a Cross-sectional Study Amongst Cypriot Schoolchildren

IEA-EEF European Congress of Epidemiology, Porto, Portugal, September 201

Status of introductory computer education in the Netherlands: results of a survey

The International Association for the Evaluation of Educational Achievement (IEA) is conducting an international comparative study on educational computer use in more than 20 countries. This paper analyzes some of the Dutch results of the IEA survey on the use of computers in lower secondary schools. The findings show that at present computers are mainly used for introductory computer courses, but that the integration of computers into existing subjects is still limited. The main problems identified in the study are: insufficient availability of courseware and hardware, time constraints and a high need for teacher training

An infinite-horizon model of dynamic membership of international environmental agreements

Much of the literature on international environmental agreements uses static models, although most important transboundary pollution problems involve stock pollutants. The few papers that study IEAs using models of stock pollutants do not allow for the possibility that membership of the IEA may change endogenously over time. In this paper we analyse a simple infinite-horizon version of the Barrett (1994) model, in which unit damage costs increase with the stock of pollution, and countries decide each period whether to join an IEA. We show that there exists a steady-state stock of pollution with corresponding steady-state IEA membership, and that if the initial stock of pollution is below (above) steady-state then membership of the IEA declines (rises) as the stock of pollution tends to steady-state. As we increase the parameter linking damage costs to the pollution stock, initial and steady-state membership decline; in the limit, membership is small and constant over time. Keywords; self-enforcing international environmental agreements, internal and external stability, stock pollutant

The Porter Hypothesis at 20: can Environmental Regulation Enhance Innovation and Competitiveness?

Twenty years ago, Harvard Business School economist and strategy professor Michael Porter stood conventional wisdom about the impact of environmental regulation on business on its head by declaring that well designed regulation could actually enhance competitiveness. The traditional view of environmental regulation held by virtually all economists until that time was that requiring firms to reduce an externality like pollution necessarily restricted their options and thus by definition reduced their profits. After all, if there are profitable opportunities to reduce pollution, profit maximizing firms would already be taking advantage of those opportunities. Over the past 20 years, much has been written about what has since become known simply as the Porter Hypothesis (“PH”). Yet, even today, there is conflicting evidence, alternative theories that might explain the PH, and oftentimes a misunderstanding of what the PH does and does not say. This paper provides an overview of the key theoretical and empirical insights on the PH to date, draw policy implications from these insights, and sketches out major research themes going forward.Porter Hypothesis, environmental policy, innovation, performance.

A discussion of the consistency axiom in cost-allocation problems

The recent literature on cost allocation lacks consensus on what is an appropriate definition of the consistency axiom. We take this as evidence that a careful reexamination is necessary. The starting point of our critique is the widely adopted definition proposed in Moulin and Shenker (1994), which we show to be conceptually flawed. Rectifying this flaw leads to a definition of consistency which already appeared in the recent literature though without satisfactory conceptual justification. We offer a classification of the existing definitions of the consistency axiom by relating them to the definitions of consistency in cooperative games suggested in Davis and Maschler (1965) and Hart and Mas-Colell (1989). We argue that only the latter leads to a meaningful interpretation of consistency when production externalities are present.

The Costs and Benefits of Reinsurance

Purchasing reinsurance reduces insurers’ insolvency risk by stabilizing loss experience, increasing capacity, limiting liability on specific risks, and/or protecting against catastrophes. Consequently, reinsurance purchase should reduce capital costs. However, transferring risk to reinsurers is expensive. The cost of reinsurance for an insurer can be much larger than the actuarial price of the risk transferred. In this article, we analyze empirically the costs and the benefits of reinsurance for a sample of U.S. property-liability insurers. The results show that reinsurance purchase increases significantly the insurers’ costs but reduces significantly the volatility of the loss ratio. With purchasing reinsurance, insurers accept to pay higher costs of insurance production to reduce their underwriting risk.reinsurance, insolvency risk, risk management, financial intermediation, cost functions, panel data.