Linking a U.S. Cap-and-Trade System for Greenhouse Gas Emissions: Opportunities, Implications, and Challenges

The long-run cost of a U.S. cap-and-trade system for greenhouse gas (GHG) emissions could be significantly reduced by linking that system with other existing and emerging tradable permit systems for GHG emissions. However, along with the cost savings that it offers, linking carries with it other implications. For example, linking has distributional consequences and, under some circumstances, linked systems collectively will not achieve the same level of emission reductions as they would absent linking. Also, linking can reduce a government's control over the impacts of its tradable permit system. Thus, in considering linkages, the United States and potential linking partners may have to weigh linking's implications for potentially competing policy objectives, much as will be required in developing other elements of their respective domestic climate policies. Because linking's implications depend on the type of link that is established and the specific characteristics and design of the linked systems, in the near-term, some links will be more attractive and easier to establish than others. Importantly, those links that may be the easiest to establish - links with emission reduction credit systems such as the Clean Development Mechanism - likely can provide much of the near-term cost-saving and risk-diversifying advantages that linking can offer. Given the implications of links with other cap-and-trade systems, to facilitate such links, it may be necessary to harmonize certain elements of the design of the U.S. system and any system(s) with which it links. In particular, agreement on a unified set of measures to address cost uncertainty likely will be a necessary pre-condition for an unrestricted link with another cap-and-trade system. Also, in order to link with other cap-and-trade systems, it may be necessary to establish broader international agreements governing aspects of the design of the U.S. and linked systems beyond simply mutual recognition of allowances.

Unambiguous one-loop quantum energies of 1+1 dimensional bosonic field configurations

We calculate one-loop quantum energies in a renormalizable self-interacting theory in one spatial dimension by summing the zero-point energies of small oscillations around a classical field configuration, which need not be a solution of the classical field equations. We unambiguously implement standard perturbative renormalization using phase shifts and the Born approximation. We illustrate our method by calculating the quantum energy of a soliton/antisoliton pair as a function of their separation. This energy includes an imaginary part that gives a quantum decay rate and is associated with a level crossing in the solutions to the classical field equation in the presence of the source that maintains the soliton/antisoliton pair.Comment: Email correspondence to [email protected] ; 10 pages, 2 figures, REVTeX, BoxedEPS; v2: Fixed description of level crossing as a function of $x_0$; v3: Fixed numerical error in figure dat

Critical fields of liquids of liquid superconducting metallic hydrogen

Liquid metallic hydrogen, in a fully dissociated state, is predicted at certain densities to pass from dirty to clean and from type II to type I superconducting behavior as temperature is lowered

Linkage of Tradable Permit Systems in International Climate Policy Architecture

Cap-and-trade systems have emerged as the preferred national and regional instrument for reducing emissions of greenhouse gases throughout the industrialized world, and the Clean Development Mechanism — an international emission-reduction-credit system — has developed a substantial constituency, despite some concerns about its performance. Because linkage between tradable permit systems can reduce compliance costs and improve market liquidity, there is great interest in linking cap-and-trade systems to each other, as well as to the CDM and other credit systems. We examine the benefits and concerns associated with various types of linkages, and analyze the near-term and long-term role that linkage may play in a future international climate policy architecture. In particular, we evaluate linkage in three potential roles: as an independent bottom-up architecture, as a step in the evolution of a top-down architecture, and as an ongoing element of a larger climate policy agreement. We also assess how the policy elements of climate negotiations can facilitate or impede linkages. Our analysis throughout is both positive and normative.Linkage, Cap-and-Trade, Tradable Permits, Global Climate Change

Too Good to Be True? An Examination of Three Economic Assesssments of California Climate Change Policy

California's Global Warming Solutions Act of 2006 limits California's greenhouse gas (GHG) emissions in 2020 to their 1990 level. Global climate change is a pressing environmental problem, and the best possible public policies will be required to address it. Therefore, analyses of prospective policies must themselves be of high quality, so that policymakers can reasonably rely on them when making the critical decisions they inevitably will face. In 2006, three studies were released indicating that California can meet its 2020 target at no net economic cost , raising questions about whether opportunities truly exist to substantially reduce emissions at no cost, or whether studies reaching such conclusions may simply severely underestimate costs. This paper provides an evaluation of these three California studies. We find that although opportunities may exist for some no-cost emission reductions, these California studies substantially underestimate the cost of meeting California's 2020 target. The studies underestimate costs by omitting important components of the costs of emission reduction efforts, and by overestimating offsetting savings that some of those efforts yield through improved energy efficiency. In some cases, the studies focus on the costs of particular actions to reduce emissions, but fail to consider the effectiveness and costs of policies that would be necessary to bring about such actions. While quantifying the full extent of the resulting cost underestimation is beyond the scope of our study, the underestimation is clearly economically significant. A few of the identified flaws individually lead to underestimation of annual costs on the order of billions of dollars. Hence, these studies do not offer reliable estimates of the cost of meeting California's 2020 target. Better analyses are needed to inform policymakers. While the Global Warming Solutions Act of 2006 sets a 2020 emissions target, critical policy design decisions remain to be made that will fundamentally affect the cost of California's climate policy. For example, policymakers must determine emission targets for the years before and after 2020, the emission sources that will be regulated to meet those targets, and the policy instruments that will be employed. The California studies do not directly address the cost implications of these and other policy design decisions, and their overly optimistic findings may leave policymakers with an inadequate appreciation of the stakes associated with decisions that lie ahead. As such, California would benefit from studies that specifically assess the cost implications of alternative policy designs. Nonetheless, a careful evaluation of the California studies highlights some important policy design lessons that apply regardless of the extent to which no-cost emission reduction opportunities actually exist. In particular, policies should be designed to account for uncertainty regarding emission reduction costs, much of which will not be resolved before policies must be enacted. Also, consideration of the different market failures that lead to excessive GHG emissions makes clear that to reduce emissions cost-effectively, policymakers should adopt a market-based policy (such as a cap-and-trade system) as the core policy instrument. The presence of specific market failures that may lead to some no-cost emission reduction opportunities suggests the potential value of additional policies that act as complements, rather than alternatives, to a market-based policy. However, to develop complementary policies that efficiently target such no-cost opportunities, policymakers need better information than currently exists regarding the specific market failures that bring about those opportunities.

Too Good to Be True? Three Economic Assessments of California Climate Change Policy

California’s Global Warming Solutions Act of 2006 limits California’s greenhouse gas (GHG) emissions in 2020 to their 1990 level. Global climate change is a pressing environmental problem, and the best possible public policies will be required to address it. Therefore, analyses of prospective policies must themselves be of high quality, so that policymakers can reasonably rely on them when making the critical decisions they inevitably will face. In 2006, three studies were released indicating that California can meet its 2020 target at no net economic cost — raising questions about whether opportunities truly exist to substantially reduce emissions at no cost, or whether studies reaching such conclusions may simply severely underestimate costs. This paper provides an evaluation of these three California studies. We find that although opportunities may exist for some no-cost emission reductions, these California studies substantially underestimate the cost of meeting California’s 2020 target. The studies underestimate costs by omitting important components of the costs of emission reduction efforts, and by overestimating offsetting savings that some of those efforts yield through improved energy efficiency. In some cases, the studies focus on the costs of particular actions to reduce emissions, but fail to consider the effectiveness and costs of policies that would be necessary to bring about such actions. While quantifying the full extent of the resulting cost underestimation is beyond the scope of our study, the underestimation is clearly economically significant. A few of the identified flaws individually lead to underestimation of annual costs on the order of billions of dollars. Hence, these studies do not offer reliable estimates of the cost of meeting California’s 2020 target. Better analyses are needed to inform policymakers. While the Global Warming Solutions Act of 2006 sets a 2020 emissions target, critical policy design decisions remain to be made that will fundamentally affect the cost of California’s climate policy. For example, policymakers must determine emission targets for the years before and after 2020, the emission sources that will be regulated to meet those targets, and the policy instruments that will be employed. The California studies do not directly address the cost implications of these and other policy design decisions, and their overly optimistic findings may leave policymakers with an inadequate appreciation of the stakes associated with decisions that lie ahead. As such, California would benefit from studies that specifically assess the cost implications of alternative policy designs.Nonetheless, a careful evaluation of the California studies highlights some important policy design lessons that apply regardless of the extent to which no-cost emission reduction opportunities actually exist. In particular, policies should be designed to account for uncertainty regarding emission reduction costs, much of which will not be resolved before policies must be enacted. Also, consideration of the different market failures that lead to excessive GHG emissions makes clear that to reduce emissions cost-effectively, policymakers should adopt a market-based policy (such as a cap-and-trade system) as the core policy instrument. The presence of specific market failures that may lead to some no-cost emission reduction opportunities suggests the potential value of additional policies that act as complements, rather than alternatives, to a market-based policy. However, to develop complementary policies that efficiently target such no-cost opportunities, policymakers need better information than currently exists regarding the specific market failures that bring about those opportunities.

A_{LT} in the polarized Drell-Yan process at RHIC and HERA energies

We present a leading order (LO) estimate for the longitidinal-transverse spin asymmetry (A_{LT}) in the nucleon-nucleon polarized Drell-Yan process at RHIC and HERA-$\vec{N}$ energies in comparison with A_{LL} and A_{TT}. A_{LT} receives contribution from g_1, the transversity ditribution h_1, and the twist-3 distributions g_T and h_L. For the twist-3 contribution we use the bag model prediction evolved to a high energy scale by the large-N_c evolution equation. We found that A_{LT} (normalized by the asymmetry in the parton level) is much smaller than the corresponding A_{TT}. Twist-3 contribution given by the bag model also turned out to be negligible.Comment: 12 pages in Latex. 5 figures included as eps files using epsbox.sty. Minor corrections for typos and notations incorporate

A Heavy Fermion Can Create a Soliton: A 1+1 Dimensional Example

We show that quantum effects can stabilize a soliton in a model with no soliton at the classical level. The model has a scalar field chirally coupled to a fermion in 1+1 dimensions. We use a formalism that allows us to calculate the exact one loop fermion contribution to the effective energy for a spatially varying scalar background. This energy includes the contribution from counterterms fixed in the perturbative sector of the theory. The resulting energy is therefore finite and unambiguous. A variational search then yields a fermion number one configuration whose energy is below that of a single free fermion.Comment: 10 pages, RevTeX, 2 figures composed from 4 .eps files; v2: fixed minor errors, added reference; v3: corrected reference added in v

Effect of magnetic field and temperature on the ferroelectric loop in MnWO4

The ferroelectric properties of MnWO4 single crystal have been investigated. Despite a relatively low remanent polarization, we show that the sample is ferroelectric. The shape of the ferroelectric loop of MnWO4 strongly depends on magnetic field and temperature. While its dependence does not directly correlate with the magnetocapacitance effect before the paraelectric transition, the effect of magnetic field on the ferroelectric polarization loop supports magnetoelectric coupling.Comment: 3 pages, 4 figures, first report on ferroelectric loop in MnWO

Technological Change and the Environment

Environmental policy discussions increasingly focus on issues related to technological change. This is partly because the environmental consequences of social activity are frequently affected by the rate and direction of technological change, and partly because environmental policy interventions can themselves create constraints and incentives that have significant effects on the path of technological progress. This paper, prepared as a chapter draft for the forthcoming Handbook of Environmental Economics (North-Holland/Elsevier Science), summarizes for environmental economists current thinking on technological change in the broader economics literature, surveys the growing economic literature on the interaction between technology and the environment, and explores the normative implications of these analyses. We begin with a brief overview of the economics of technological change, and then examine three important areas where technology and the environment intersect: the theory and empirical evidence of induced innovation and the related literature on the effects of environmental policy on the creation of new, environmentally friendly technology; the theory and empirics of environmental issues related to technology diffusion; and analyses of the comparative technological impacts of alternative environmental policy instruments. We conclude with suggestions for further research on technological change and the environment.