The White House and the Kyoto Protocol: Double Standards on Uncertainties and Their Consequences

This paper compares the level of uncertainty widely reported in climate change scientific publications with the level of uncertainty of the costs estimates of implementing the Kyoto Protocol in the United States. It argues that these two categories of uncertainties were used and ignored, respectively, in the policy making process in the US so as to challenge the scientific basis on the one hand and on the other hand to assert that reducing emissions would hurt the economy by an amount stated without any qualification. The paper reviews the range of costs estimates published since 1998 on implementing the Kyoto Protocol in the US. It comments on the significance of these cost estimates and identifies a decreasing trend in the successive estimates. This implies that initially some of the most influential economic model-based assessments seem to have overestimated the costs, an overestimation that may have played a significant role in the US decision to withdraw from the Protocol. The paper concludes with advocating that future economic estimates always include uncertainty ranges, so as to be in line with a basic transparency practice prevailing in climate science.United States, Kyoto Protocol, Cost Estimates, Uncertainties

Ranking universities: How to take better account of diversity

In order to rank universities, rather than aggregating the indicators used by the Times Higher Education Supplement (THES) using weightings which, though reasonable, are at the same time arbitrary and inflexible one can compare universities in terms of dominance and hence deduce various partial or complete rankings. The resultant dominance ranking method is presented in this note. Data are recalled in Appendix 1. Appendix 2 provides full details of the dominance analysis for each university. From this analysis two listings are derived: (i) a front runners list consisting of 34 "nondominated" universities, (Table 4) and (ii) a (new) ranking of the 200 universities surveyed by the THES, based on their respective "active-passive dominance" scores (Table 5). Concluding remarks bear on limits of the data and of the exercise.

Ranking universities : how to take better account of diversity

In order to rank universities, rather than aggregating the indicators used by the Times Higher Education Supplement (THES) - using weightings which, though reasonable, are at the same time arbitrary and inflexible - one can compare universities in termes of dominance and hence deduce various partial or complete rankings. The resultant dominance ranking method is presented in this note. Data are recalled in Appendix 1. Appendix provides full details of the dominance analysis for each university. From this analysis two listings are derived : (i) a front runners list consisting of 34 ‘non-dominated’ universities (Table 4) and (ii) a (new) ranking of the 200 universities surveyed by the THES, based on their respective ‘active-passive dominance’ scores (Table 5). Concluding remarks bear on limits of the data and of the exercise.

On Cooperation in Musgravian Models of Externalities within a Federation

"Musgravian" externalities, formulated and illustrated by Musgrave in a 1966 paper on "social goods" are seen in this paper as one form of the interactions that occur between the components of a federation. The original formal apparatus is first exposed briefly. In that context, it is then considered whether and how alternative forms of federal structures are likely to achieve efficiency. Following suggestions from the literature, three such forms are dealt with: "planned", "cooperative" and "majority rule" federalisms. Next, the relevance of non cooperative equilibria is examined, in the light of an interpretation of them as "fall back" positions when disagreement occurs among members of a federation. Finally, the question is evoked of what economics and public finance may have to say on the limits to institutional decentralization, i.e. on the choice between federal, confederal and secessional structures. The paper concludes with a reminder of Musgrave's view on this issue.

The White House and the Kyoto Protocol: Double Standards on Uncertainties and Their Consequences

This paper compares the level of uncertainty widely reported in climate change scientific publications with the level of uncertainty of the costs estimates of implementing the Kyoto Protocol in the United States. It argues that these two categories of uncertainties were used and ignored, respectively, in the policy making process in the US so as to challenge the scientific basis on the one hand and on the other hand to assert that reducing emissions would hurt the economy by an amount stated without any qualification. The paper reviews the range of costs estimates published since 1998 on implementing the Kyoto Protocol in the US. It comments on the significance of these cost estimates and identifies a decreasing trend in the successive estimates. This implies that initially some of the most influential economic model-based assessments seem to have overestimated the costs, an overestimation that may have played a significant role in the US decision to withdraw from the Protocol. The paper concludes with advocating that future economic estimates always include uncertainty ranges, so as to be in line with a basic transparency practice prevailing in climate science

Cooperation, Stability and Self-Enforcement in International Environmental Agreements: A Conceptual Discussion

In essence, any international environmental agreement (IEA) implies cooperation of a form or another. The paper seeks for logical foundations of this. It first deals with how the need for cooperation derives from the public good aspect of the externalities involved, as well as with where the source of cooperation lies in cooperative game theory. In either case, the quest for efficiency is claimed to be at the root of cooperation. Next, cooperation is considered from the point of view of stability. After recalling the two competing concepts of stability in use in the IEA literature, new insights on the nature of the gamma core in general are given as well as of the Chander-Tulkens solution within the gamma core. Free riding is also evaluated in relation with the alternative forms of stability under scrutiny. Finally, it is asked whether with the often mentioned virtue of “self enforcement” any conceptual gain is achieved, different from what is meant by efficiency and stability. A skeptical answer is offered, as a reply to Barrett’s (2003) attempt at giving the notion a specific content.International Environmental Agreements, Cooperation, Stability, Self-enforcement

Simulating with RICE Coalitionally Stable Burden Sharing Agreements for the Climate Change Problem

In this paper we test empirically with the Nordhaus and Yang (1996) RICE model the core property of the transfer scheme adv ocated by Germain, Toint and Tulkens (1997). This scheme is designed to sustain full cooperation in a voluntary international environmental agreement by making all countries at least as well off as they would be by joining coalitions adopting emission abatement policies that maximize their coalition payoff; under the scheme no individual country, nor any subset of countries would have an interest in leaving the international environmental agreement. The simulations show that the transfer scheme yields an allocation in the core of the carbon emission abatement game associated with the RICE model. Finally, we discuss some practical implications of the transfer scheme for current climate negotiations.Environmental economics, climate change, burden sharing, simulations, core of cooperative games

Co-operation vs. free riding in international environmental affairs: Two approaches

Two theses on the likelihood of international co-operation for achieving international optimality in transboundary pollution problems are being confronted: a pessimistic one and an optimistic one. On the one hand a "Small Stable Coalitions" (SSC) thesis — based on the stability of coalitions literature and put forward in several papers by Barrett, Carraro and Siniscalco — holds the view that only small subsets of the countries involved in a transfrontier pollution problem can ever emerge as a group and sign a treaty among themselves; on the other hand a "Grand Stable Coalition" (GSC) thesis — inspired by classical co-operative game theory and proposed by Chander and Tulkens — presents the contents of a feasible treaty which the authors show to enjoy some "core property", that is, to be more beneficial not only for all countries taken individually, as compared to a no treaty situation, but also more beneficial for all subgroups of them, for any partial treaty they might sign among themselves. An explicit and computable cost sharing formula for joint pollution abatement is exhibited to support the second view, designed to be included in the relevant treaty. The two views are formally developed in Section III, after that a presentation is given in Section II of the common underlying economic model of international environmental externalities. Section IV then identifies and discusses several game theoretic differences and similarities between the two approaches, namely those bearing on the notion of "coalition", on the phenomenon of "free riding" in its relation with "threats" in games with externalities, on the uses of the concept of "characteristic function" in co-operative games (with a suggested extension, designed towards reconciling the two approaches), and finally on the role of transfers and "side payments" in the international pollution problem under consideration. The concluding section stresses the fact that essentially two, different notions of group stability lie at the root of these diverging views

La performance productive d’un service public. Définitions, méthodes de mesure et application à la Régie des Postes en Belgique

La notion de performance productive est ici définie par référence au fait que l’entreprise opère plus ou moins près de la frontière de son ensemble de production. Il s’agit de l’efficacité technique au sens de Koopmans. Trois méthodes de mesure de celle-ci sont proposées, et ensuite appliquées aux opérations de près de 800 bureaux de poste en Belgique en 1980 (observations portant sur un mois) et en 1983 (observations sur douze mois). Si le niveau moyen de l’efficacité technique observée s’avère relativement élevé, son évolution mensuelle au cours de l’année 1983 révèle une forte rigidité d’adaptation de la main-d’oeuvre aux pointes saisonnières du trafic postal.The notion of productive performance is defined by reference to the fact that the enterprise operates at or away from the boundary of its production set. This is also called technical efficiency, in the sense of Koopmans. Three methods are proposed for measuring it, and are applied to the activities of about 800 postal stations in Belgium in 1980 (observations pertaining to one month) and 1983 (observations over twelve months). The observed average technical efficiency appears to be relatively high; but its monthly evolution throughout 1983 reveals a strong rigidity in adapting manpower to seasonal peak-loads

"Mitigation, Adaptation, Suffering": In Search of the Right Mix in the Face of Climate Change

The usually assumed two categories of costs involved in climate change policy analysis, namely abatement and damage costs, hide the presence of a third category, namely adaptation costs. This dodges the determination of an appropriate level for them. Including adaptation costs explicitly in the total environmental cost function allows one to characterize the optimal (cost minimizing) balance between the three categories, in statics as well as in dynamics. Implications are derived for cost benefit analysis of adaptation expenditures.