Life’s a breach! Ensuring ‘permanence’ in forest carbon sinks under incomplete contract enforcement

As carbon sinks, forests play a critical role in helping to mitigate the growing threat from anthropogenic climate change. Forest carbon offsets transacted between GHG emitters in industrialised countries and sellers in developing countries have emerged as a useful climate policy tool. A model is developed that investigates the role of incentives in forestry carbon sequestration contracts. It considers the optimal design of contracts to ensure landowner participation and hence, permanence in forest carbon sinks in a context of uncertain opportunity costs and incomplete contract enforcement. The optimal contract is driven by the quality of the institutional framework in which the contract is executed, in particular, as it relates to contract enforcement. Stronger institutional frameworks tend to distort the seller’s effort upwards away from the full enforcement outcome. This also leads to greater amounts of carbon sequestered and higher conditional payments made to the seller. Further, where institutions are strong, there is a case for indexing the payment to the carbon market price if permanence is to be ensured. That is, as the carbon price increases, the payment could be raised and vice versa.forest carbon offsets, permanence, contract design, incomplete enforcement

Urban development and air pollution: evidence from a globalpanel of cities

We exploit a unique panel of 75 metro areas (‘cities’) across the globe and employ a cityfixed effects model to identify the determinants of within-city changes in air pollution concentration between 2005 and 2011. Increasing car and population densities significantly reduce air pollution concentration in city centers where air pollution induced health risks are greatest. These effects are largely confined to cities in non-OECD countries. Two possible mechanisms for the negative effect of car density are explored: (i) increasing car density permits a decentralization of residential and economic activity; and (ii) car usage substitutes for motorbike usage. We find limited evidence in favour of (i) and no evidence in favour of (ii). We also observe a complex relationship between income and pollution concentration as well as a general downward-trend in pollution concentration over time. Overall, our findings are indicative that densely populated polycentric cities may be ‘greener’ and ‘healthier’ than comparable monocentric ones

An Experimental Study of Auctions Versus Grandfathering to Assign Pollution Permits

We experimentally study auctions versus grandfathering in the initial assignment of pollution permits that can be traded in a secondary spot market. Low and high emitters compete for permits in the auction, while permits are assigned for free under grandfathering. In theory, trading in the spot market should erase inefficiencies due to initial mis-allocations. In the experiment, high emitters exercise market power in the spot market and permit holdings under grandfathering remain skewed towards high emitters. Furthermore, the opportunity costs of “free” permits are fully “passed through.” In the auction, the majority of permits are won by low emitters, reducing the need for spot-market trading. Auctions generate higher consumer surplus and slightly lower product prices in the laboratory arkets. Moreover, auctions eliminate the large “windfall profits” that are observed in the treatment with free, grandfathered permit allocations.market-based regulation, emissions trading, allocation, auctions, grandfathering, climate policy, windfall profits

Enforcement-proof contracts with moral hazard in precaution: ensuring ‘permanence' in carbon sequestration

Opportunistic behaviour due to imperfect contract enforcement is a risk in many economic transactions. In this paper, an enforcement-proof incentive contract is developed in which a buyer demands a guaranteed delivery of a good or service given a productive upfront payment, moral hazard in precaution, and the potential for opportunistic contract breach. Investing in a contract upfront is found to be restricted by moral hazard and opportunistic contract breach. This limits the size of investment up to a specific level even if an infinite scale-up of production were beneficial. A more severe moral hazard problem results in a smaller distortion. The framework is applied and extended to international carbon sequestration contracts. In comparison to alternative liability attributions, the current regime of buyer liability yields inefficiently low levels of investment in carbon sequestratio

Collusion in Auctions for Emission Permits: An Experimental Analysis

Environmental markets have several institutional features that provide a new context for the use of auctions and which have not been studied previously. This paper reports on laboratory experiments testing three auction forms -– uniform and discriminatory price sealed bid auctions and an ascending clock auction. We test the ability of subjects to tacitly or explicitly collude in order to maximize profits. Our main result is that the discriminatory and uniform price auctions produce greater revenues than the clock auction, both without and with explicit communication. The clock appears to be more subject to successful collusion because of its sequential structure and because it allows bidders to focus on one dimension of cooperation (quantity) rather than two (price and quantity).auctions, collusion, experiments, carbon dioxide, greenhouse gases

Price Discovery in Emissions Permit Auctions

Auctions are increasingly being used to allocate emissions allowances (“permitsâ€) for cap and trade and common-pool resource management programs. These auctions create thick markets that can provide important information about changes in current market conditions. This paper reports a laboratory experiment in which half of the bidders experienced unannounced increases in their willingness to pay for permits. The focus is on the extent to which the predicted price increase due to the demand shift is reflected in sales prices under alternative auction formats. Price tracking is comparably good for uniform-price sealed-bid auctions and for multi-round clock auctions, with or without end-of-round information about excess demand. More price inertia is observed for “pay as bid†(discriminatory) auctions, especially for a continuous discriminatory format in which bids could be changed at will during a pre-specified time window, in part because “sniping†in the final moments blocked the full effect of the demand shock.auction, greenhouse gases, price discovery, cap and trade, emission allowances, laboratory experiment

The energy costs of historic preservation

We explore the impact of historical preservation policies on domestic energy consumption. Using panel data for England from 2006 to 2013 and employing a fixed effects-strategy, we document that (i) rising national energy prices induce an increase in home energy efficiency installations and a corresponding reduction in energy consumption and (ii) this energy saving effect is significantly less pronounced in Conservation Areas and in places with high concentrations of Listed Buildings, where the adoption of energy efficiency installations is typically more costly and sometimes legally prevented altogether. Preservation policies increase private energy costs and the social cost of carbon per designated dwelling by around £8,000 and £2,550, respectively. These costs ought to be weighed against any benefits of preservatio

Atomizer for thermal management system

An atomizer for thermal management system for efficiently thermally managing one or more heat producing devices. The atomizer for thermal management system includes a housing having a coolant passage and a dispensing end, an orifice within the dispensing end, and an actuator manipulating a plunger within the housing. The plunger includes a head that is sealable within a recessed portion of the orifice to open or close the orifice. The coolant passes through the coolant passage into the orifice for spraying upon a heat producing device. The actuator may reciprocate so that the coolant spray emitted through the orifice is pulsating. The pulsing frequency may be increased to increase cooling or decreased to decrease cooling of the heat producing device

Progress Towards the ELROI\u3csup\u3eTM\u3c/sup\u3e Satellite License Plate

The ELROITM System, (Extremely Low Resource Optical Identifier), uses a beacon that could be attached to any object that goes into space and provide a persistent identifier to the space object that can be read out by a small telescope on the ground. This could alleviate the approaching crisis in Space Traffic Management caused by mass launches of small satellites and the formation of large constellations. Identification beacons on all future space objects will simplify satellite operations and greatly relieve our overstressed space tracking and traffic management infrastructure

Suicide methods in Europe: a gender-specific analysis of countries participating in the "European Alliance Against Depression"

Objective: To identify the most frequent gener-specific suicide methods in Europe. Design: Proportions of seven predominant suicide methods utilised in 16 countries participating in the European Alliance Against Depression (EAAD)were reported in total and cross-nationally. Relative risk (RR)relating to suicide methods and gender was calculated. To group countries by pattern of suicide methods, hierarchical clustering was applied. Setting and participants: Data on suicide methods for 119 122 male and 41 338 female cases in 2000-4/5 from 16 EAAD countries, covering 52% of European population were obtained. Results: Hanging was the most prevalent suicide method among both males (54.3%) and females (35.6%). For males, hanging was followed by firearms (9.7%) and poisoning by drugs (8.6%); for females, by poisoning by drugs (24.7%)and jumping from a high place (14.5%). Only in Switzerland did hanging rank as second for males after firearms. Hanging ranked first among females in eight countries, poisoning by drugs in five and jumping from a high place in three. In all countries, males had a higher risk than females of using firearms and hanging and a lower risk of poisoning by drugs, drowning and jumping. Grouping showed that countries might be divided into five main groups among males; for females, grouping did not yield clear results. Conclusions: Research on suicide methods could lead to the development of gender-specific intervention strategies. Nevertheless, other approaches, such as better identification and treatment of mental disorders and the improvement of toxicological aid should be put in place