Allocating Tradable Permits on the Basis of Market Price to Achieve Cost Effectiveness

It is a well known result that distributional constraints can lead to an imperfectly competitive permit market where the emission target is no longer met at least cost. In this paper, we suggest an allocation rule for tradable permits which can handle this problem. If the permit allocation is dependent on the market price for permits, this allocation rule can achieve both cost effectiveness and meet specific requirements for cost distribution across agents.     

The merits of non-tradable quotas as a domestic policy instrument to prevent firm closure

Many countries fear that adopting a domestic tradable quota system for greenhouse gases that requires all emitters to pay for their quotas may lead to closures of emissions-intensive industrial companies. The starting point of this paper is that a government, to avoid firm closure, has opted to allocate quotas free of charge to emission-intensive industries. The aim of this paper is to explore to what extent making the free quotas tradable or non-tradable will affect investment in new abatement technology and firm closure. The conclusion is that the expectations about future product prices and the number of quotas distributed free of charge are crucial for the difference in the properties of tradable and non-tradable quotas.     

Children’s stories about team selection: a discourse analysis

The aim of our study was to identify and problematise messages and value principles visible in children’s stories about team selection in sport. To achieve this, we adopted a discourse analysis approach. Semi-structured face-to-face interviews were conducted with 24 children aged 10–11 years who participated in four team sports in 12 different Swedish sports clubs. Based on the children’s stories, the findings reveal two discourses of team selection: one participation/inclusion-oriented and one performance/exclusion-oriented discourse in which four different forms of team selection work. The participation/inclusion-oriented discourse constructs sport as a fun game that involves all participating children. The performance/exclusion-oriented discourse shows that coaches select the best children in the team to obtain the best chance of winning games. Some of the coaches have given conflicting messages that align with both discourses, which are revealed by both the girls’ and the boys’ voices in varying degrees. The findings also demonstrate that children’s reasons for playing sport are in harmony with the participation/inclusive-oriented discourse. This discourse represents a child’s perspective, promoting every child’s right to participate under the same conditions. However, the selection procedure in both discourses exhibits strong classification, since coaches are the ones who possess the power to select.     

The European Union's potential for strategic emissions trading through permit sales contracts

Strategic market behavior by permit sellers will harm the European Union (EU) as it is expected to become a large net buyer of permits in a follow-up agreement to the Kyoto Protocol. In this paper, we explore how the EU could benefit from making permit trade agreements with non-EU countries. These trade agreements involve permit sales requirement, complemented by a financial transfer from the EU to the other contract party. Such agreements would enable the EU to act strategically in the permit market on behalf of its member states, although each member state is assumed to behave as a price taker in the permit market. Using a stylized numerical simulation model, we show that an appropriately designed permit trade agreement between the EU and China could significantly cut the EU's total compliance cost. This result is robust for a wide range of parameterizations of the simulation model.     

The Productivity Commission Inquiry Report into Mental Health—A Commentary from a Health Economics Perspective

The Productivity Commission's Inquiry Report into Mental Health makes extensive recommendations to improve population mental health as a means of further enhancing productivity and economic growth. While providing an invaluable high‐level vision for reforming current mental health and social systems at a programmatic level, it lacks supporting evidence that would guide implementation of specific recommendations. We discuss important methodological considerations used to measure the output of the mental health sector and present clinical and cost‐effectiveness evidence, supporting selected recommendations. We suggest the development of a broad‐based health technology assessment process to facilitate consistent decision making across health and other government sectors.     

A Note on The Kyoto Protocol, Tradeable Quotas and Firm Survival

There is a concern in many countries thatintroducing a tradeable greenhouse-gas quotasystem may lead to closures ofemission-intensive industrial companies.Jebjerg and Lando argue in an article publishedpreviously by this Journal that shutdowns canbe prevented by a generous distribution of freequotas. However, this is only true if thequotas are distributed contingent on continuedproduction. Some of the practical problems withconditional allocation of free tradeable quotascan be avoided by letting all free quotas benon-tradeable.     

Market Power with Interdependent Demand: Sale of Emission Permits and Natural Gas from Russia

With implementation of the Kyoto Protocol, Russia will most likely be able to exert market power in the emission permit market. But, as Russia is also a big exporter of fossil fuels, the incentives to boost the permit price may be weak. However, a significant share of Russia’s fossil fuel exports is natural gas. If a high permit price boosts the demand for natural gas through substitution from more polluting fuels and thus increase gas profits, this may increase the incentives to exert monopoly power in the permit market. Moreover, a large fossil fuel exporter may use its market position to influence the effective demand for permits. Hence, the relationship between permit income and fossil fuels exports runs in both directions. In this article, we explore the interdependence between the revenues from permit and fossil fuel exports both theoretically and numerically. A computable general equilibrium model suggests the fact that Russia as a big gas exporter has small effect on the incentives to exert monopoly power in the permit market. Moreover, Russia’s monopoly power in the permit market has a small, but non-negligible impact on the optimal level of Russian gas exports.     

Strategic Investment in Climate Friendly Technologies: The Impact of Global Emissions Trading

Our point of departure is that a group of industrialized countries invest in research and development (R&D) of greenhouse gas (GHG) abatement technologies. R&D investments influence the future GHG abatement choices of both industrialized and developing countries. We distinguish between investments that reduce industrialized countries’ abatement costs and investments that reduce developing countries’ abatement costs. Unlike earlier contributions, we include global trading in emission permits. This changes the nature of the game. With global permit trading, industrialized countries should in many cases invest strategically in technologies that only reduce abatement costs at home. This comes in addition to investments abroad. Second, we show that R&D investments always decrease total emissions. Finally, we find that the developing region receiving investments always benefits.