The Effect of Allowance Allocations on Cap-and-Trade System Performance

We examine an implication of the “Coase Theorem” which has had an important impact both on environmental economics and on public policy in the environmental domain. Under certain conditions, the market equilibrium in a cap-and-trade system will be cost-effective and independent of the initial allocation of tradable rights. That is, the overall cost of achieving a given aggregate emission reduction will be minimized, and the final allocation of permits will be independent of the initial allocation. We call this the independence property. This property is very important because it allows equity and efficiency concerns to be separated in a relatively straightforward manner. In particular, the property means that the government can establish the overall pollution-reduction goal for a cap-and-trade system by setting the cap, and leave it up to the legislature – such as the U.S. Congress – to construct a constituency in support of the program by allocating the allowances to various interests without affecting either the environmental performance of the system or its aggregate social costs. Our primary objective in this paper is to examine the conditions under which the independence property is likely to hold – both in theory and in practice. A number of factors can call the independence property into question theoretically, including market power, transaction costs, non-cost-minimizing behavior, and conditional allowance allocations. We find that, in practice, there is support for the independence property in some, but not all cap-and-trade applications.Cap-and-Trade System, Tradable Permits, Coase Theorem, Allowance Allocation

An N-body Integrator for Gravitating Planetary Rings, and the Outer Edge of Saturn's B Ring

A new symplectic N-body integrator is introduced, one designed to calculate the global 360 degree evolution of a self-gravitating planetary ring that is in orbit about an oblate planet. This freely-available code is called epi_int, and it is distinct from other such codes in its use of streamlines to calculate the effects of ring self-gravity. The great advantage of this approach is that the perturbing forces arise from smooth wires of ring matter rather than discreet particles, so there is very little gravitational scattering and so only a modest number of particles are needed to simulate, say, the scalloped edge of a resonantly confined ring or the propagation of spiral density waves. The code is applied to the outer edge of Saturn's B ring, and a comparison of Cassini measurements of the ring's forced response to simulations of Mimas' resonant perturbations reveals that the B ring's surface density at its outer edge is 195+-60 gm/cm^2 which, if the same everywhere across the ring would mean that the B ring's mass is about 90% of Mimas' mass. Cassini observations show that the B ring-edge has several free normal modes, which are long-lived disturbances of the ring-edge that are not driven by any known satellite resonances. Although the mechanism that excites or sustains these normal modes is unknown, we can plant such a disturbance at a simulated ring's edge, and find that these modes persist without any damping for more than ~10^5 orbits or ~100 yrs despite the simulated ring's viscosity of 100 cm^2/sec. These simulations also indicate that impulsive disturbances at a ring can excite long-lived normal modes, which suggests that an impact in the recent past by perhaps a cloud of cometary debris might have excited these disturbances which are quite common to many of Saturn's sharp-edged rings.Comment: 55 pages, 13 figures, accepted for publication in the Astrophysical Journa

National Environmental Policy During the Clinton Years

We review major developments in national environmental policy during the Clinton Administration, defining environmental policy to include not only the statutes, regulations, and policies associated with reducing pollution, but also major issues of public lands management and species preservation. We adopt economic criteria for policy assessment and highlight a set of five themes that emerge in the economics of national environmental policy over the past decade. First, over the course of the decade, national environmental targets were made more stringent, and environmental quality improved. Most important among the new targets were the National Ambient Air Quality Standards (NAAQS) for ambient ozone and particulate matter, issued by EPA in July 1997, which could turn out to be one of the Clinton Administration's most enduring environmental legacies. Also, natural resource policy during the Clinton years was heavily weighted toward environmental protection. Environmental quality improved overall during the decade, continuing a trend that began in the 1970s, although improvements were much less than during the previous two decades. Second, the use of benefit-cost analysis for assessing environmental regulation was controversial in the Clinton Administration, while economic efficiency emerged as a central goal of the regulatory reform movement in the Congress during the 1990s. When attention was given to increased efficiency, the locus of that attention during the Clinton years was the Congress in the case of environmental policies and the Administration in the case of natural resource policies. Ironically, the increased attention given to benefit-cost analysis may not have had a marked effect on the economic efficiency of environmental regulations. Third, cost-effectiveness achieved a much more prominent position in public discourse regarding environmental policy during the 1990s. From the Bush Administration through the Clinton Administration, interest and activity regarding market-based instruments for environmental protection, particularly tradeable permit systems, continued to increase. Fourth, the Clinton Administration put much greater emphasis than previous administrations on expanding the role of environmental information disclosure and voluntary programs. While such programs can provide cost-effective ways of reaching environmental policy goals, little is known about their actual costs or effectiveness. Fifth and finally, the Environmental Protection Agency placed much less emphasis on economic analysis during the 1990s. EPA leadership was more hostile to economic analysis than it had been under the prior Bush Administration, and it made organizational changes to reflect this change in priorities.

The Effect of Allowance Allocations on Cap-and-Trade System Performance

We examine an implication of the "Coase Theorem" which has had an important impact both on environmental economics and on public policy in the environmental domain. Under certain conditions, the market equilibrium in a cap-and-trade system will be cost-effective and independent of the initial allocation of tradable rights. That is, the overall cost of achieving a given aggregate emission reduction will be minimized, and the final allocation of permits will be independent of the initial allocation. We call this the independence property. This property is very important because it allows equity and efficiency concerns to be separated in a relatively straightforward manner. In particular, the property means that the government can establish the overall pollution-reduction goal for a cap-and-trade system by setting the cap, and leave it up to the legislature--such as the U.S. Congress--to construct a constituency in support of the program by allocating the allowances to various interests without affecting either the environmental performance of the system or its aggregate social costs. Our primary objective in this paper is to examine the conditions under which the independence property is likely to hold--both in theory and in practice. A number of factors can call the independence property into question theoretically, including market power, transaction costs, non-cost-minimizing behavior, and conditional allowance allocations. We find that, in practice, there is support for the independence property in some, but not all cap-and-trade applications.

Methylation Status of Imprinted Genes and Repetitive Elements in Sperm DNA from Infertile Males

Stochastic, environmentally and/or genetically induced disturbances in the genome-wide epigenetic reprogramming processes during male germ-cell development may contribute to male infertility. To test this hypothesis, we have studied the methylation levels of 2 paternally (H19 and GTL2) and 5 maternally methylated (LIT1, MEST, NESPAS, PEG3, and SNRPN) imprinted genes, as well as of ALU and LINE1 repetitive elements in 141 sperm samples, which were used for assisted reproductive technologies (ART), including 106 couples with strictly male-factor or combined male and female infertility and 28 couples with strictly female-factor infertility. Aberrant methylation imprints showed a significant association with abnormal semen parameters, but did not seem to influence ART outcome. Repeat methylation also differed significantly between sperm samples from infertile and presumably fertile males. However, in contrast to imprinted genes, ALU methylation had a significant impact on pregnancy and live-birth rate in couples with male-factor or combined infertility. ALU methylation was significantly high-er in sperm samples leading to pregnancy and live-birth than in those that did not. Sperm samples leading to abortions showed significantly lower ALU methylation levels than those leading to the birth of a baby. Copyright (C) 2011 S. Karger AG, Base

Gauge Invariant Cutoff QED

A hidden generalized gauge symmetry of a cutoff QED is used to show the renormalizability of QED. In particular, it is shown that corresponding Ward identities are valid all along the renormalization group flow. The exact Renormalization Group flow equation corresponding to the effective action of a cutoff lambda phi^4 theory is also derived. Generalization to any gauge group is indicated.Comment: V1: 18 pages, 2 figures; V2: Discussions improved. Version accepted for publication in Physica Script