Combining Price and Quantity Controls under Partitioned Environmental Regulation

This paper analyzes hybrid emissions trading systems (ETS) under partitioned environmental regulation when firms’ abatement costs and future emissions are uncertain. We show that hybrid policies that introduce bounds on the price or the quantity of abatement provide a way to hedge against differences in marginal abatement costs across partitions. Price bounds are more efficient than abatement bounds as they also use information on firms’ abatement technologies while abatement bounds can only address emissions uncertainty. Using a numerical stochastic optimization model with equilibrium constraints for the European carbon market, we find that introducing hybrid policies in EU ETS reduces expected excess abatement costs of achieving targeted emissions reductions under EU climate policy by up to 89 percent. We also find that under partitioned regulation there is a high likelihood for hybrid policies to yield sizeable ex-post cost reductions

Economic impacts of EU clean air policies assessed in a CGE framework

This paper assesses the macroeconomic and sectoral impacts of the "Clean Air Policy Package" proposed by the European Commission in December 2013. The analysis incorporates both the expenditures necessary to implement the policy by 2030 and the resulting positive feedback effects on human health and crop production. A decomposition analysis identifies the important drivers of the macroeconomic impacts. We show that while expenditure on pollution abatement is a cost for the abating sectors, it also generates an increased demand for the sectors that produce the goods required for pollution abatement. Moreover, we find that positive feedback effects, particularly those related to health can offset the resource costs associated to the clean air policy and result in positive macroeconomic impacts for the economy of the European Union

Drought effect on isoprene production and consumption in Biosphere 2 tropical rainforest

Isoprene is the most abundant of the hydrocarbon compounds emitted from vegetation and plays a major role in tropospheric chemistry. Models predict that future climate change scenarios may lead to an increase in global isoprene emissions as a consequence of higher temperatures and extended drought periods. Tropical rainforests are responsible for more than 80% of global isoprene emissions, so it is important to obtain experimental data on isoprene production and consumption in these ecosystems under control of environmental variables. We explored isoprene emission and consumption in the tropical rainforest model ecosystem of Biosphere 2 laboratory during a mild water stress, and the relationship with light and temperature. Gross isoprene production (GIP) was not significantly affected by mild water stress in this experiment because the isoprene emitters were mainly distributed among the large, canopy layer trees with deep roots in the lower soil profile where water content decreased much less than the top 30 cm. However, as found in previous leaf level and whole canopy studies, the ecosystem gross primary production was reduced by (32%) during drought, and as a consequence the percentage of fixed C lost as isoprene tended to increase during drought, from ca. 1% in wet conditions to ca. 2% when soil water content reached its minimum. GIP correlated very well with both light and temperature. Notably, soil isoprene uptake decreased dramatically during the drought, leading to a large increase in daytime net isoprene fluxes

Evidence for an Epigenetic Mechanism by which Hsp90 Acts as a Capacitor for Morphological Evolution

Morphological alterations have been shown to occur in Drosophila melanogaster when function of Hsp90 (heat shock 0-kDa protein 1α, encoded by Hsp83) is compromised during development1. Genetic selection maintains the altered phenotypes in subsequent generations1. Recent experiments have shown, however, that phenotypic variation still occurs in nearly isogenic recombinant inbred strains of Arabidopsis thaliana2. Using a sensitized isogenic D. melanogaster strain, iso-KrIf-1, we confirm this finding and present evidence supporting an epigenetic mechanism for Hsp90’s capacitor function, whereby reduced activity of Hsp90 induces a heritably altered chromatin state. The altered chromatin state is evidenced by ectopic expression of the morphogen wingless in eye imaginal discs and a corresponding abnormal eye phenotype, both of which are epigenetically heritable in subsequent generations, even when function of Hsp90 is restored. Mutations in nine different genes of the trithorax group that encode chromatin-remodeling proteins also induce the abnormal phenotype. These findings suggest that Hsp90 acts as a capacitor for morphological evolution through epigenetic and genetic mechanisms

The effect of elevated atmospheric CO2 and drought on sources and sinks of isoprene in a temperate and tropical rainforest mesocosm

Isoprene is the most abundant volatile hydrocarbon emitted by many tree species and has a major impact on tropospheric chemistry, leading to formation of pollutants and enhancing the lifetime of methane, a powerful greenhouse gas. Reliable estimates of global isoprene emission from different ecosystems demand a clear understanding of the processes of both production and consumption. Although the biochemistry of isoprene production has been studied extensively and environmental controls over its emission are relatively well known, the study of isoprene consumption in soil has been largely neglected. Here, we present results on the production and consumption of isoprene studied by measuring the following different components: (1) leaf and soil and (2) at the whole ecosystem level in two distinct enclosed ultraviolet light-depleted mesocosms at the Biosphere 2 facility: a cottonwood plantation with trees grown at ambient and elevated atmospheric CO2 concentrations and a tropical rainforest, under well watered and drought conditions. Consumption of isoprene by soil was observed in both systems. The isoprene sink capacity of litter-free soil of the agriforest stands showed no significant response to different CO2 treatments, while isoprene production was strongly depressed by elevated atmospheric CO2 concentrations. In both mesocosms, drought suppressed the sink capacity, but the full sink capacity of dry soil was recovered within a few hours upon rewetting. We conclude that soil uptake of atmospheric isoprene is likely to be modest but significant and needs to be taken into account for a comprehensive estimate of the global isoprene budget. More studies investigating the capacity of soils to uptake isoprene in natural conditions are clearly needed

Emissions of putative isoprene oxidation products from mango branches under abiotic stress

Although several per cent of net carbon assimilation can be re-released as isoprene emissions to the atmosphere by many tropical plants, much uncertainty remains regarding its biological significance. In a previous study, we detected emissions of isoprene and its oxidation products methyl vinyl ketone (MVK) and methacrolein (MACR) from tropical plants under high temperature/light stress, suggesting that isoprene is oxidized not only in the atmosphere but also within plants. However, a comprehensive analysis of the suite of isoprene oxidation products in plants has not been performed and production relationships with environmental stress have not been described. In this study, putative isoprene oxidation products from mango (Mangifera indica) branches under abiotic stress were first identified. High temperature/light and freeze-thaw treatments verified direct emissions of the isoprene oxidation products MVK and MACR together with the first observations of 3-methyl furan (3-MF) and 2-methyl-3-buten-2-ol (MBO) as putative novel isoprene oxidation products. Mechanical wounding also stimulated emissions of MVK and MACR. Photosynthesis under 13CO2 resulted in rapid (<30min) labelling of up to five carbon atoms of isoprene, with a similar labelling pattern observed in the putative oxidation products. These observations highlight the need to investigate further the mechanisms of isoprene oxidation within plants under stress and its biological and atmospheric significance. © 2013 The Author

A Note on the Different Interpretation of the Correlation Parameters in the Bivariate Probit and the Recursive Bivariate Probit

This note makes the point that, if a Bivariate Probit (BP) model is estimated on data arising from a Recursive Bivariate Probit (RBP) process, the resulting BP correlation parameter is a weighted average of the RBP correlation parameter and the parameter associated to the endogenous binary variable. Two corollaries follow this proposition: i) a zero correlation parameter in a BP model, usually interpreted as evidence of independence between the binary variables under study, may actually mask the presence of a RBP process; and ii) the interpretation of the correlation parameter in the RBP is not the same as in the BP -- i.e. the RBP correlation parameter does not necessarily reflect the correlation between the binary variables under study