SPIN - Progress and Prospects

I review the progress in fundamental spin physics over the past several years and the prospects for the future. The progress is striking and the prospects are excellent.Comment: A Talk Presented at SPIN2000, October 30, 2000; 21 pages, 13 figures, using aiproc.sty, BoxedEPS macros; email correspondence to [email protected]

A Perspective on Pentaquarks

Recent discoveries of manifestly exotic, narrow baryon resonances present a fundamental challenge for our theoretical understanding of low-energy QCD. This is a brief survey of their interpretation, emphasizing the possibility that diquark correlations are centrally involved. Many predictions and suggestions for future directions follow from that idea.Comment: 8 pages; Plenary talk by FW at the European Physical Society, Aachen, August 2003; proposed operator for 1/2+ pentaquark lattice simulation corrected; references adde

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.

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

A Tale of Two Market Failures: Technology and Environmental Policy

Market failures associated with environmental pollution interact with market failures associated with the innovation and diffusion of new technologies. These combined market failures provide a strong rationale for a portfolio of public policies that foster emissions reduction as well as the development and adoption of environmentally beneficial technology. Both theory and empirical evidence suggest that the rate and direction of technological advance is influenced by market and regulatory incentives, and can be cost-effectively harnessed through the use of economicincentive based policy. In the presence of weak or nonexistent environmental policies, investments in the development and diffusion of new environmentally beneficial technologies are very likely to be less than would be socially desirable. Positive knowledge and adoption spillovers and information problems can further weaken innovation incentives. While environmental technology policy is fraught with difficulties, a long-term view suggests a strategy of experimenting with policy approaches and systematically evaluating their success.technology, research and development, environment, externality, policy

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.technological change, induced innovation, environment, policy

Too Good to Be True? An Examination of 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.

The Induced Innovation Hypothesis and Energy-Saving Technological Change

We develop a methodology for testing Hick’s induced innovation hypothesis by estimating a product-characteristics model of energy-using consumer durables, augmenting the hypothesis to allow for the influence of government regulations. For the products we explored, the evidence suggests: (i) the rate of overall innovation was independent of energy prices and regulations, (ii) the direction of innovation was responsive to energy price changes for some products but not for others, (iii) energy price changes induced changes in the subset of technically feasible models that were offered for sale, (iv) this responsiveness increased substantially during the period after energy-efficiency product labeling was required, and (v) nonetheless, a sizeable portion of efficiency improvements were autonomous.