Impacts of Alternative Emissions Allowance Allocation Methods under a Federal Cap-and-Trade Program

This paper examines the implications of alternative allowance allocation designs under a federal cap-and-trade program to reduce emissions of greenhouse gases. We focus on the impacts on industry profits and overall economic output, employing a dynamic general equilibrium model of the U.S. economy. The model's unique treatment of capital dynamics permits close attention to profit impacts. We find that the effects on profits depend critically on the method of allowance allocation. Freely allocating fewer than 15 percent of the emissions allowances generally suffices to prevent profit losses among the eight industries that, without free allowances or other compensation, would suffer the largest percentage losses of profit. Freely allocating 100 percent of the allowances substantially overcompensates these industries, in many cases causing more than a doubling of profits. These results indicate that profit preservation is consistent with substantial use of auctioning and the generation of considerable auction revenue. GDP costs of cap and trade depend critically on how such revenues are used. When these revenues are employed to finance cuts in marginal income tax rates, the resulting GDP costs are about 33 percent lower than when all allowances are freely allocated and no auction revenue is generated. On the other hand, when auction proceeds are returned to the economy in lump-sum fashion (for example, as rebate checks to households), the potential cost-advantages of auctioning are not realized. Our results are robust to cap-and-trade policies that differ according to policy stringency, the availability of offsets, and the extent of opportunities for intertemporal trading of allowances.

Cellular Immune Responses and Viral Diversity in Individuals Treated during Acute and Early HIV-1 Infection

Immune responses induced during the early stages of chronic viral infections are thought to influence disease outcome. Using HIV as a model, we examined virus-specific cytotoxic T lymphocytes (CTLs), T helper cells, and viral genetic diversity in relation to duration of infection and subsequent response to antiviral therapy. Individuals with acute HIV-1 infection treated before seroconversion had weaker CTL responses directed at fewer epitopes than persons who were treated after seroconversion. However, treatment-induced control of viremia was associated with the development of strong T helper cell responses in both groups. After 1 yr of antiviral treatment initiated in acute or early infection, all epitope-specific CTL responses persisted despite undetectable viral loads. The breadth and magnitude of CTL responses remained significantly less in treated acute infection than in treated chronic infection, but viral diversity was also significantly less with immediate therapy. We conclude that early treatment of acute HIV infection leads to a more narrowly directed CTL response, stronger T helper cell responses, and a less diverse virus population. Given the need for T helper cells to maintain effective CTL responses and the ability of virus diversification to accommodate immune escape, we hypothesize that early therapy of primary infection may be beneficial despite induction of less robust CTL responses. These data also provide rationale for therapeutic immunization aimed at broadening CTL responses in treated primary HIV infection

HIV-1 evades a Gag mutation that abrogates killer cell immunoglobulin-like receptor binding and disinhibits natural killer cells in infected individuals with KIR2DL2⁺/HLA-C*03: 04⁺ genotype

HIV–1 sequence variations impact binding of inhibitory killer cell immunoglobulin-like receptors (KIRs) to human leucocyte class I (HLA–I) molecules modulating NK cell function. HIV–1 strains encoding amino acids that mediate binding of inhibitory KIRs might therefore have a selective benefit in individuals expressing the respective KIR/HLA genotypes. Here we demonstrate that HIV–1 clade C avoids a p24 Gag mutation that abolishes binding of KIR2DL2 to HLA–C*03:04 and disinhibits NK cells in individual encoding for this genotype