Watkins\u27 Patent trolls: Predatory litigation and the smothering of innovation (Book Review)

A review of Watkins, W. J., Jr. (2013). Patent trolls: Predatory litigation and the smothering of innovation. Oakland, CA: The Independent Institute. 96 pp. $17.95. ISBN 978159813170

Book Review: Jules Monchanin (1895-1957) as Seen from East and West, volumes 1 and 2

A review of Jules Monchanin (189501957) as Seen from East and West, volumes 1 and 2 edited by Thomas matus and Sister Sarananda

Contemporary Literary Theory and Chaucer

Roll 165. Mowrey-Meyer Wedding. Image 10 of 35. (6 November, 1954) [PHO 1.165.10]The Boleslaus Lukaszewski (Father Luke) Photographs contain more than 28,000 images of Saint Louis University people, activities, and events between 1951 and 1970. The photographs were taken by Boleslaus Lukaszewski (Father Luke), a Jesuit priest and member of the University's Philosophy Department faculty

How Can One Allocation Provision Undermine a Cap-and-Trade Program? Section 3902 of the Lieberman-Warner Bill Offers a Warning about Risks in the Allowance Allocation Debate

As the debate over the design of a federal greenhouse gas cap-and-trade program unfolds, the distribution (or allocation) of emission allowances will be one of the most difficult issues to resolve. The distributional implications of allocation decisions have long been appreciated. However, various proposals in Congress have made it increasingly clear that these decisions also could have a profound effect on how emissions are reduced under a cap-and-trade program, and could thereby have a substantial effect on the program's societal cost. This paper describes an important exception to the conventional wisdom that allocation decisions do not affect a cap-and-trade program's societal cost. While this wisdom holds for many types of allocations, it does not apply to conditional allocations in which the number of allowances that a firm receives is conditioned on the firm's future operational or investment decisions. To demonstrate this point, this paper examines an allocation provision in the draft of the Lieberman-Warner Climate Security Act of 2008 that was reported out of the Senate Environment and Public Works Committee in December 2007 (the Lieberman-Warner bill). This provision, Section 3902, would distribute allowances to new fossil-fuel-fired power plants on the basis of their future output. In so doing, it would dramatically reduce, and in certain cases reverse, some of the most important emission reduction incentives that a cap-and-trade program would create. Section 3902's new entrant provision would counteract the incentive that a cap-and-trade program otherwise would create for firms to shift some investments in new electric generating capacity toward non-emitting renewable or nuclear plants. The provision's effects would be so significant that, for several years, the Lieberman-Warner bill's cap-and-trade program would actually create incentives for firms to invest in low-emitting fossil-fuel-fired plants instead of non-emitting renewable or nuclear plants. Section 3902's new entrant provision also would reduce the marginal cost of generation from new fossil-fuel-fired plants relative to existing plants. As a result of this provision, electricity generation from some existing plants would be economically displaced by generation from new plants even in cases where the new plants have higher emission rates and fuel costs. An examination of Section 3902's effects highlights the need to carefully analyze the incentives that any conditional allocation provisions would create, regardless of whether those provisions are designed with the intention of creating particular incentives, or are instead designed to achieve certain distributional objectives. Otherwise, there is a real risk that much of the emission reduction measures achieved under a cap-and-trade program will be driven by allocation decisions made in the halls of Congress, rather than by the market-based incentives that a cap-and-trade program is intended to create. Such an outcome would invariably increase the cost of reducing U.S. greenhouse gas emissions.