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Environmental Policy


The regulatory choice of noncompliance in the lab: effect on quantities, prices, and implications for the design of a cost-effective policy

Recent theoretical developments show the conditions under which it is cost effective for the regulator to induce perfect compliance in cap and trade programs. These conditions are based on the ability that a regulator with perfect information has to induce the firms to emit any desired level with different combinations of the number of permits supplied to the market and the monitoring probability, assuming that firms are expected profits maximizers. In this paper we test this hypothesis with a series of laboratory experiments.


Beyond IPCC, Research for Paris 2015 and Beyond

The Climate conference in ParisDecember 2015 is described as “last chance” or “5 to twelve” but in the climate arena there is a risk that we have over-utilized the doomsday vocabulary already in the run-up to Copenhagen, 2009 the better part of a decade ago. For those who have worked on climate issues for several decades it poses a special challenge to calibrate language.Words like “immediate” need careful explanation.


Environmental Policy, First Nature Advantage and the Emergence of Economic Clusters

We explain the spatial concentration of economic activity when the cost of environmental policy – which is increasing in the concentration of pollution – acts as a centrifugal force, while positive knowledge spillovers and a site with natural cost advantage act as centripetal forces. We study the agglomeration effects caused by trade-offs between centripetal and centrifugal forces which eventually determine the distribution of economic activity across space.