Climate Coalitions: A Theoretical and Computational Appraisal

Using an updated version of the CWS model (introduced by Eyckmans and Tulkens in Resource and Energy Economics 2003), this paper intends to evaluate with numbers the respective merits of two competing notions of coalition stability in the standard global public goods model as customarily applied to the climate change problem. After a reminder of the model structure and of the definition of the two game theoretical stability notions involved – namely, core stability and internal-external stability, the former property is shown to hold for the grand coalition in the CWS model only if resource transfers of a specific form between countries are introduced. It is further shown that while the latter property holds neither for the grand coalition nor for most large coalitions, it is nevertheless verified in a weak sense that involves transfers (dubbed “potential internal stability”) for most small coalitions. The reason for this difference is brought to light, namely the differing rationale that inspires the transfers in either case. Finally, it is shown that the stable coalitions that perform best (in terms of carbon concentration and global welfare) are always composed of both industrialized and developing countries. Two sensitivity analyses confirm the robustness of all these results.Climate Change, Coalitions, Simulation, Integrated Assessment

The price of silence: tradeable noise permits and airports

This paper presents a market design for the management of noise disturbance created by aircraft traffic around large airports. A market for tradable noise permits allows noise generators to compensate harmed residents. We show that the noise permit markets allow the achievement of the planner's optimal allocation of flights provided that she/he does not over-weight the benefit of economic activity compared to the disutility of noise disturbances. The fact that zones are likely to be strategic players does not fundamentally alter this finding. Because of the market auctioneer's information constraints, noise permits are likely to redistribute windfall gains to residents located in non-critical zones. This entices landlords to increase their land/house rents there and to design smaller houses in the long run

Adaptive model-predictive climate policies in a multi-country

The purpose of this paper is to extend the use of integrated assessment models by defining rational policies based on predictive control and adaptive behavior. The paper begins with an review of the main IAMs and their use. Then the concept of Model Predictive Nash Equilibrium (MPNE) is introduced within a general model involving heterogeneous economic agents operating in (and interfering with) a common environment. This concept captures the fact that agents do not have a perfect foresight for several ingredients of the model, including that of the environment. A version of the canonical IAM (DICE) is developed as a benchmark case. The concept of MPNE is then enhanced with adaptive learning about the environmental dynamics and the damages caused by global warming. The approach is illustrated by some numerical experiments in a two-region setting for several scenarios

Pierre PICARDThe price of silence: tradeable noise permits and airports

This paper presents a market design for the management of noise disturbance created by aircraft traffic around large airports. A market for tradable noise permits allows noise generators to compensate harmed residents. We show that the noise permit markets allow the achievement of the planner’s optimal allocation of flights provided that she/he does not over-weight the benefit of economic activity compared to the disutility of noise disturbances. The fact that zones are likely to be strategic players does not fundamentally alter this finding. Because of the market auctioneer’s information constraints, noise permits are likely to redistribute windfall gains to residents located in non-critical zones. This entices landlords to increase their land/house rents there and to design smaller houses in the long run

Focus 3 - décembre 2012

L'Agence Internationale de l'Energie (AIE) vient de publier son rapport annuel. Celui-ci présente ses perspectives du système énergétique mondial à l'horizon 2035 (il est disponible en français sur le site de l'Agence : http://www.iea.org/publications/worldenergyoutlook). Le but de ces projections n'est pas de prévoir ce que sera le futur mais d'explorer ce qu'il pourrait être (sous différents scénarios), d'identifier les défis à venir et d'ainsi pousser les décideurs (publics et privés) à réagir à ces signaux afin d'éviter les problèmes annoncés

Property rights with biological spillovers : when Hardin meets Meade

In an overlapping generations (OLG) setup we address the issue of the optimal number of property rights to allocate over a natural resource when the goal is to maximize the stock of the natural resource at the steady state. We assume that the e ect of the enforced property rights regime on the evolution of the resource is twofold: through biological spillovers and through monitoring costs. Property rights are assigned to local communities, which can decide whether to cooperate or not. The outcome in the strategic setting is hence compared to the one in the cooperative setup. A scal policy able to decentralize the cooperative outcome is studied

Focus 15 - décembre 2014

Il y a peu, la presse s'est faite l'écho d'une étude réalisée pour la Commission européenne sur le coût de la production d'électricité par différentes technologies (voir le communiqué de presse de la Commission; l'étude est accessible ici). Cette étude comparait la production par le nucléaire, le gaz, le charbon, l'éolien terrestre, l'éolien en mer et le solaire. Elle présentait le coût de production en tant que tel (le coût privé), le coût externe (le coût pour la collectivité lié à la pollution), et le coût des subventions publiques

Une évaluation objective des nuisances subjectives de l'aéroport de Bruxelles-National

Dans ce numéro de Regards économiques, nous proposons une évaluation quantitative des nuisances sonores provoquées par l'aéroport de Bruxelles- National. À la différence des mesures physiques, nous nous intéressons à la nuisance telle qu'elle est perçue par les riverains. Nous montrons que le coût global lié au bruit est relativement faible, mais qu'il est réparti de manière très inégalitaire entre les différentes zones de bruit.