Innovation under taxes versus permits : how a commonly made assumption leads to misleading recommendations

The literature on the impact of economic instruments (typically taxes and tradable permits) on the level of innovation is usually based on the assumption that innovation reduces the slope of the marginal abatement cost curve. This assumption, which usually leads to the conclusion that taxes induce higher levels of innovation than tradable permits, is however never motivated. In this short article, we analyse the assumption by introducing innovation in the production function as a polluting firm and by showing how it affects the corresponding marginal abatement cost curve. We show that the slope of the marginal abatement cost curvedoes not necessarily decrease with the level of innovation. As a consequence, previous analyses lead to misleading policy recommendations

"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.

Environmental policy and speculation on markets for emission permits

Tradable emission permits share many characteristics with financial assets. As on financial markets, speculators are likely to be active on large markets for emission permits such as those developing under the Kyoto Protocol. We show how the presence of speculators on a market for emission permits affects the price of these permits when firms face risk aversion. The agency in charge of the optimal environmental policy should account for the presence of speculators when determining the total amount of permits to issue.

Should developing countries participate in the Clean Development Mechanism under the Kyoto Protocol ? The low-hanging fruits and baseline issues

Under the Kyoto Protocol, industrialized countries committed to emission reductions may fullfil part of their obligations by implementing emission reduction projects in developing countries. In doing so, they make use of the so-called Clean Development Mechansim (CDM). Two important issues surround the implementation of the CDM. First, if the cheapest abatment measures are implemented for CDM projects, developing countries may be left with only more expensive measures when they have to meet their own commitments in the future (the so-called low-hanging fruits issue). Second, a choice must be made on the type of baseline against which emission reductions are measured : an absolute baseline or a relative (to output) one (the baseline issue). The purpose of this paper is to study the interactions between these two issues from the point of view of the developing country. Two major results are obtained. First, when possible future commitments for developing countries and irreversibility of abatement measures are taken into account, we show that the industry where CDM projects are implemented enjoys large profits under an absolute baseline than under a relative one. Second, concerning the low-hanging fruits problem, the financial compensation required by the developing country for implementing ‘too many’ CDM projects is larger under the relative baseline.

Is Kyoto fatally flawed? An analysis with MacGEM

In this paper we present some numerical simulations with the MacGEM model to evaluate the consequences for the Kyoto Protocol on the reduction of greenhouse gases of the recent Bonn agreement and the nonratification by the USA. MacGEM is a global marginal abatement cost model for carbon emissions from fossil fuel use. Marginal abatement cost functions are estimated on data generated with the GEM-E3-World general equilibrium model under the assumption that abatement is produced in a cost efficient way in every individual country/region of the model. Nonparticipation of the USA causes the equilibrium carbon price in Annex B countries to fall by approximately 50% since an important share of permit demand falls out and the global abatement objective is substantially eroded. With respect to the Bonn agreement, we focus on the Commitment Period Reserve (CPR) and carbon sinks. The CPR is a compliance mechanism requiring all Parties to maintain some fixed number of permits on their permit account. It entails a binding permit export ceiling for the former Soviet Union and central European countries. It raises the equilibrium carbon permit price by approximately 30% and generates substantial monopoly rents for permit exporters. Finally, carbon sinks enhancement activities are accounted for by assuming that they represent free abatement options. These activities enable Parties to fulfil their reduction commitment at lower compliance costs and cause the equilibrium permit price to decreases even further. We conclude that the Bonn agreement has indeed eroded completely the Kyoto Protocol's emission targets but that it has the merit to have saved the international climate change negotiation framework.environmental economics; climate change; permit trade; Kyoto Protocol; carbon sinks

Pourquoi des marchés de permis de polluer ? Les enjeux économiques et éthiques de Kyoto

Dans le cadre du Protocole de Kyoto, la Belgique s’est engagée à réduire ses émissions de gaz à effet de serre de 7,5 % par rapport à leur niveau de 1990. Afin de rencontrer leurs obligations, les autorités belges sont susceptibles de recourir aux marchés internationaux des permis d’émission. Ce numéro de Regards a pour objectif d’expliquer de manière simple le fonctionnement de tels marchés et d’indiquer la mesure dans laquelle il est justifié d’y recourir.

Is Kyoto fatally flawed? An analysis with MacGEM

In this paper we present some numerical simulations with the MacGEM model to evaluate the consequences of the recent Marrakesh agreements and the defection of the USA for the Kyoto Protocol. MacGEM is a global marginal abatement cost model for carbon emissions from fossil fuel use based on the GEM-E3-World general equilibrium. Nonparticipation of the USA causes the equilibrium carbon price in Annex B countries to fall by approximately 50% since an important share of permit demand falls out. Carbon sinks enhancement activities enable Parties to fulfil their reduction commitment at lower compliance costs and cause the equilibrium permit price to decrease by 40%. Finally, it is shown that the former Soviet Union and central European countries have substantial monopoly power in the Kyoto carbon permit market. We conclude that the recent accords have eroded completely the Kyoto Protocol's emission targets but that they have the merit to have saved the international climate change negotiation framework

Survival of dental implants in patients with oral cancer treated by surgery and radiotherapy: a retrospective study

BACKGROUND: The aim of this retrospective study was to evaluate the survival of dental implants placed after ablative surgery, in patients affected by oral cancer treated with or without radiotherapy. METHODS: We collected data for 34 subjects (22 females, 12 males; mean age: 51 ± 19) with malignant oral tumors who had been treated with ablative surgery and received dental implant rehabilitation between 2007 and 2012. Postoperative radiation therapy (less than 50 Gy) was delivered before implant placement in 12 patients. A total of 144 titanium implants were placed, at a minimum interval of 12 months, in irradiated and non-irradiated residual bone. RESULTS: Implant loss was dependent on the position and location of the implants (P = 0.05-0.1). Moreover, implant survival was dependent on whether the patient had received radiotherapy. This result was highly statistically significant (P < 0.01). Whether the implant was loaded is another highly significant (P < 0.01) factor determinin

Miss USA Meets Feminism: A Qualitative Study Exploring Contestants\u27 Thoughts on Feminism

The purpose of this qualitative study was to explore pageant contestants’ thoughts on feminism. A total of 12 of the 51 state titleholders who had competed in the 2020 Miss USA Competition were interviewed. They were recruited through letters sent to individual State Pageant Directors of Miss USA. The objective of the study was to gain an understanding of how women who compete in beauty pageants view their participation in light of feminism. The focus of the interviews centered on their motivations for participating, pageantry support for feminist ideals, their own self-identification as a feminist, and any criticism they may have received to suggest pageants do not align with feminist ideals. Titleholders were also invited to add any additional thoughts or suggestions on pageants and feminism. In-depth semi-structured interviews were conducted. Each interview consisted of a series of open-ended questions. The interviews were transcribed and coding categories were developed. Sixteen coding categories emerged from the analysis of the interview transcripts and were organized under the topics of focus for the study. Specifically, the 16 coding categories were organized according to the four research questions for this study which included: motivation for participating, pageantry support for feminist ideals, self-identification as a feminist, and experience with anti-feminist critique. Three overarching themes emerged from a further analysis of the 16 coding categories and include Pageants are Empowering, Swimsuit is Complicated, and Pageantry Has Evolved. This study revealed that these women had many reasons for entering pageants, the least of which was related to beauty. Most women felt pageantry supported feminist ideals, and personally identified themselves as a feminist, yet had experience being told by outsiders that their participation was anti-feminist and they were not feminists. Much of the outside criticism centered on the swimsuit competition, however most of the titleholders found swimsuit to be empowering. They also felt pageants had evolved and did not see “beauty pageant” as an appropriate descriptor for their participation. Implications for the study findings are discussed, including ways in which pageants might better support feminist ideals