The use of a feebate system to reduce emissions from power plants

The patchwork of laws designed to control air pollution from U.S. power plants has been criticized from a variety of different perspectives. Business groups argue that the laws are too complex and burdensome to industry. Environmentalists maintain that power plant emissions need to be further reduced because of their negative health effects, to combat global warming and to eliminate haze in our national parks. Economists claim that large emission reductions could be achieved rather cheaply by focusing control efforts on the decades-old power plants in the Midwest, but Midwesterners and their political representatives are understandably resistant to having to shoulder the costs. This paper describes an economic mechanism that has been used in Sweden since 1990 to control NOx emissions and indicates how, if it were modified and expanded to include other pollutants, could be made to work much like multi-pollutant cap-and-trade — but with more flexibility and efficiency. In this feebate system, each power plant would either pay a fee or collect a rebate for each ton of emissions above, or below, their assigned "breakeven point". With the per-ton fee/rebate rate set high enough to bring the needed emission reductions and breakeven points adjusted each year so that total rebates equaled total fees, the resulting system would work like a frictionless cap-and-trade: companies having high control costs would pay fees into the system, in effect paying companies with low control costs to do some of their controlling for them. At the same time, the system would bring control costs at Midwestern plants into line with those of other plants throughout the country and would also (through the assignment of breakeven points) provide a wide range of choices of how the additional control costs could be distributed. (The views expressed in this paper are those of the author and do not necessarily reflect the views or policies of the U.S. Environmental Protection Agency.)environmental economics;cap and trade;feebate;economic mechanisms;power plants;energy;environmental regulation;externalities;environmental taxes;environmental subsidies

Fluorescence Analysis for Multi-Site Aluminum Binding to Natural Organic Matter

Natural organic matter (NOM) samples isolated from different water sources in Norway were compared using their fluorescence properties. Fluorescence surfaces were observed at pH 4.36 and deconvoluted using SIMPLISMA (Windig and Guilment 1991). There were a total of seven different fluorophores observed for these samples and each sampling site had between four and six ofthe fluorescent components. These components were observed to bind Al during titrations at the same pH. Multiresponse titration curves were fit using the method of Smith and Kramer (1998) and most of the binding strengths are similar to values for Suwannee River fulvic acid (1ogK’ between 4.8 and 5.5), but there are strong sites (IogK’ = 7) and weak sites (1ogK’ between 3 and 4) also observed. Results depended on the isolation method used; reverse osmosis and low pressure evaporation yielded different values but with no consistent trends

The value of inside and outside money: expanded version

We study dynamic economies in which agents may have incentives to hold both privately-issued (a.k.a. inside) and publicly-issued (a.k.a. outside) circulating liabilities as part of an equilibrium. Our analysis emphasizes spatial separation and limited communication as frictions that motivate monetary exchange. We isolate conditions under which a combination of inside and outside money does and does not allow the economy to achieve a first-best allocation of resources. We also study the extent to which the use of private circulating liabilities alone, or the use of public circulating liabilities alone, can address the frictions that lead to monetary exchange. We identify conditions under which both types of liabilities are essential to efficiency. However, even when these conditions are satisfied, we show that political economy considerations may lead to a prohibition against private circulating liabilities. Finally, we analyze the consequences of such a prohibition for the determinacy of equilibrium, and for endogenously arising volatility.Money ; Money theory

Intermediaries and payments instruments

We study an economy in which intermediaries have incentives to issue circulating liabilities as part of an equilibrium. We show that, with arbitrarily small transactions costs, only the liabilities of intermediaries will circulate, and not those of other private sector agents. Therefore, our model connects intermediation activity with the issuance of payments media, a connection that has not been made in earlier literature. We also describe conditions under which equilibrium outcomes may be volatile when private liabilities circulate. Finally, we use our model to suggest a resolution of the "banknote underissue puzzle" of Cagan (1993).Monetary policy ; Bank notes ; Payment systems

The value of inside and outside money

We study dynamic economies in which agents may have incentives to hold both privately-issued (a.k.a. inside) and publicly-issued (a.k.a. outside) circulating liabilities as part of an equilibrium. Our analysis emphasizes spatial separation and limited communication as frictions that motivate monetary exchange. We isolate conditions under which a combination of inside and outside money does and does not allow the economy to achieve a first-best allocation of resources. We also study the extent to which the use of private circulating liabilities alone, or the use of public circulating liabilities alone, can address the frictions that lead to monetary exchange. We identify conditions under which both types of liabilities are essential to efficiency. However, even when these conditions are satisfied, we show that political economy considerations may lead to a prohibition against private circulating liabilities. Finally, we analyze the consequences of such a prohibition for the determinacy of equilibrium, and for endogenously arising volatility.Money ; Money theory

The economic evolution of petroleum property rights in the United States.

We examine Harold Demsetz's (1967) prediction that property rights emerge and are refined as the benefits of doing so exceed the costs in the context of oil and gas resources in the U.S. Familiar influences on the development of petroleum property rights, technology, market demand, and politics, provide support for the hypothesis, and those issues are examined. Our primary contribution is to demonstrate the important role of a less familiar factor, the presence in the reservoir of both oil and gas with differentially volatile prices. This factor has affected the nature of the property rights assigned with unitization, an institutional arrangement to internalize the common pool externality. Information asymmetries and conflicting price expectations have resulted in unit agreements that would not have been predicted in a strict neo-classical sense. Our analysis provides new insights regarding the nature of voluntary unitization contracts, inherent limits to producers' ability to internalize externalities, and the welfare implications of compulsory unitization.

TROPHIC PORTFOLIOS IN MARINE FISHERIES: A STEP TOWARDS ECOSYSTEM MANAGEMENT

Marine ecologists warn that humans are "fishing down marine food webs." To explore the economic implications of this phenomenon, this paper applies portfolio theory to aggregate fisheries data. It poses two definitions of a sustainable mean-variance catch frontier. It computes a mean-variance frontier for catch using UNFAO historical fisheries data. Finally, the paper discusses the historical trend in inefficiency.Environmental Economics and Policy, Resource /Energy Economics and Policy,

Legitimating Inequality: Fooling Most of the People All of the Time

Over the three decades leading up to the crisis of 2008, inequality dramatically increased in the United States and Great Britain. What stands out, but is seldom noted, is that this occurred within democracies where the relative losers -- the overwhelming majority -- could in principle have used the political system to block or reverse rising inequality. Why did they not do so? A glance at history reveals that peoples have only very infrequently contested inequality because they were led to believe that their inferior status in terms of income, wealth, and privilege was just, that it was not really so bad, or that it was necessary for their future wellbeing. Ideological systems legitimated a status quo of inequality, or in more modern times even increasing inequality. This article surveys the manner in which inequality has been historically legitimated, first predominantly by religion, then predominately by economic thought. Attention is then focused on the manner in which contemporary economic science and its popular interpretations in the media have served to legitimate inequality in the U.S. since the mid-1970s. The paper concludes with a reflection on the unique conditions that enable the legitimation of inequality to be delegitimated.Ideology, class power, utility of poverty, trickle down, vertical social mobility

Anticipated and Actual Bequests

This paper uses data on anticipated bequests from two waves of the Health and Retirement Study and the Asset and Health Dynamics of the Oldest Old (AHEAD), and on actual bequests from AHEAD. Actual bequests were measured in exit interviews given by proxy respondents for 774 AHEAD respondents who died between waves 1 and 2. Because the exit interview is representative of the elderly population, the distribution of estate values is quite different from that obtained from estate records, which represent just a wealthy subset of the population. Anticipated bequests were measured by the subjective probability of leaving bequests. Between waves 1 and 2, increases in bequest probabilities were associated with increases in the subjective probability of surviving, increments in household wealth, and widowing while out-of-pocket medical expenses reduced the likelihood of a bequest. By comparing bequest probabilities with baseline wealth we were able to test a main prediction of the life-cycle model, that individuals will dissave at advanced old-age. The AHEAD respondents anticipate substantial dissaving before they die.