U.S. Equity Markets and Environmental Policy. The Case of Electric Utility Investor Behavior During the Passage of the Clean Air Act Amendments of 1990

We examine electric utilityinvestor reaction surrounding twenty-twomilestones associated with the passage of theClean Air Act Amendments of 1990. Resultssuggest that investors did not react sharply tothe passage of the Amendments. To the extentthat statistically significant effects wereobserved, we interpret the results as moreindicative of investor concern over resolutionof uncertainty surrounding the politicalprocess and resulting provisions than ofconcern over the expected costs of compliancefollowing passage of the Amendments. Weobserved little, if any, difference betweenutilities subject to Phase I restrictions andthose not subject to Phase I. Finally, changesin monthly excess returns appear to haveresulted from changes in U.S. interest ratesand investor concern over power industryderegulation. We view our results as importantbecause any wealth effects due to environmentalregulations represent a real economic costassociated with their implementation. In thissense, we view the results as good news forU.S. environmental policy makers.     

Is there a case for carbon-based border tax adjustment? An applied general equilibrium analysis

Concern that unilateral Greenhouse Gas (GHG) emission reductions could foster carbon leakage and undermine the international competitiveness of domestic industry has led to growing calls for carbon-based Border-Tax Adjustments (BTAs). This article uses a global general equilibrium model to assess the economic effects of BTAs and comes to three main conclusions. First, BTAs can reduce carbon leakage if the coalition of countries taking action to reduce GHG emissions is small, because in this case leakage (while typically small) mainly occurs through international trade competitiveness losses rather than through declines in world fossil fuel prices. Second, even though the economic effects of BTAs vary somewhat depending on how they are implemented, their welfare impact is typically small, and slightly negative at the world level. Third, and perhaps more strikingly, BTAs do not necessarily curb the output losses incurred by the domestic Energy Intensive-Industries (EIIs) they are intended to protect in the first place. This is in part because EIIs in industrialized countries make important use of carbon-intensive intermediate inputs produced by EIIs in other geographical areas. Another, deeper explanation is that EIIs are ultimately more adversely affected by the existence of a carbon price itself than by any international competitiveness losses. These findings are shown to be robust to key model parameters, country coverage, targets and design features of BTAs.     

碳中和背景下中国能源中短期预测研究

2020年9月,中国政府在第75届联合国大会上提出碳达峰和碳中和目标.\"2060年实现碳中和\"愿景将对中国能源结构转型产生深刻影响.运用CHINAGEM模型,针对当前政策情景(基准情景)和碳中和情景(政策情景)进行模拟分析,预测分析了2020—2040年中国能源发展状况,包括一次能源消费总量及其构成、终端能源消费量及其构成和发电量及其构成.基于分析结果,提出了实现碳中和总目标下,中短期内各项宏观指标的阶段性目标.     

Why did US air pollution decline after 1970?

US economic growth and air pollution were decoupled after 1970. Possible explanations include regulation, oil price shocks, technology and income growth. This paper uses VAR analysis to show that the 1970 Clean Air Act (CAA) may have actually increased pollution in the short run but led to accelerated improvements in abatement technology. Gross domestic product and consumption growth had little direct effect while oil price increases caused small but significant emissions reductions. Recursive simulation shows that overall, the CAA, by accelerating improvements in abatement technology, reduced total emissions as of 1998 to 46% of what they would have been.      

价格粘性下人民币不同升值模式对中国经济的影响研究

文章以衰减函数的方式将新凯恩斯学派提出的价格粘性理论引入中国动态可计算一般均衡模型中,使模型更符合经济系统中价格调整规律,并利用模型模拟渐进式升值和快速升值两种不同的人民币升值模式对我国经济的影响。模拟结果表明,在价格粘性的作用下,人民币快速升值将在短期内对我国实体经济产生较大的负面冲击,GDP增速下降最高达1．6个百分点。失业率明显上升,而渐进式升值最高只有0．67个百分点;快速升值能有效抑制我国的通货膨胀和促使我国贸易再平衡,最多使我国CPI增速下降3．6个百分点和贸易顺差占GDP比重下降1．06个百分点,并且在长期内对实体经济的负·面效应略小于渐进式升值。因此,在不同的经济形势下应采取不     

The Finnish Corporate Income Tax Reform and the Financial Strategy of Firms: A General Equilibrium Approach

This paper simulates the effects of the recent Finnish corporate tax reform with a computable general equilibrium model. It shows that the impact of the reform on the capital stock depends on the reactions of firms. If the financial strategy is changed to prefer dividend distribution and share issues, the cost of capital falls and the capital stock increases. On the other hand, if the criterion of financial policy is to minimise the welfare loss of current shareholders, the earlier financial behaviour should be continued. In that case,the induced higher cost of capital leads to a lower capital stock. The overall welfare evaluation of the tax reform is not sensitive to the regime shift: the reform should not have been implemented. This is because the increase in interest income taxation distorts saving decisions, expands the net foreign debt of the economy and weakens the terms of trade.     

Environmentally Sustainable Transport: Definition and Long-Term Economic Impacts for Austria

The transition to an environmentally sustainable transport system involves a combination of technological and demand-side transport policies. Regulatory, educational and economic instruments can be used to enhance the development of cleaner transport technologies as well as the shift from road-based towards more environmentally benign modes of transport. This article provides estimates of overall economic impacts in the long term and describes the required change in the transport system. The article proceeds in three steps. First, this article reviews concepts of sustainability and applies them to transportation. Second, a small open economy computable general equilibrium model for Austria is developed to evaluate the long-term macroeconomic and sectoral impacts of a sustainable freight transport policy. Third, simulation results are discussed and conclusions drawn concerning the crucial features of a sustainable freight transport policy.Although the required transition within the transport system is substantial, the economic costs in terms of GDP are comparably low and employment is likely to increase slightly.     

Environmental participation in the U.S. sulfur allowance auctions

The 1990 Clean Air Act established a sulfur emissions-trading program among utilities. This was the first large scale adoption of this type of emissions-trading program and the program’s success has attracted international attention. An interesting aspect of this program is that in addition to trades among the polluting firms and brokers or investors, individuals and groups have been participants, buying allowances to retire them and reduce sulfur emissions. This provides a relatively unique way to examine the “willingness to pay” for further reductions of sulfur emissions. I examine environmental participation in the sulfur allowances market, focusing on the Environmental Protection Agency (EPA) allowance auctions which have been conducted annually since 1993. The existence of groups purchasing these allowances in order to retire them suggests that the overall cap on sulfur emissions may be higher than the optimal emissions level. The marginal benefits from the first ton of emissions reduction appear to be significantly larger than marginal abatement costs. Total spending to retire sulfur emissions allowances, while small in relation to the total market, is sizeable in terms of the alternate purchases these groups and individuals could have made.      

General equilibrium effects of environmental policy: A CGE-modeling approach

Estimation of emission control cost functions is often carried out in a partial equilibrium framework, i.e., under the assumption that emission control measures have negligible effects on input and output prices. In this paper a computable general equilibrium model is used for simulation of the impact on factor prices and resource allocation of reductions of SO _infx ^sup- , NO _infx ^su- and CO₂-emissions. Thus the model includes markets for tradable emission permits, and the equilibrium prices of permits reflect the marginal costs of emission control. The results suggest that major emission reductions are likely to have general equilibrium effects, and thus that emission control cost functions that fail to take these effects into account may give a distorted picture of the economic impact of emission control.     

ACE versus CBIT: Which is Better for Investment and Welfare?

This article analyses the switch to an Allowance for CorporateEquity (ACE) or to a Comprehensive Business Income Tax (CBIT)type of tax system starting from the present German tax system.We show that in case an ACE type of reform is financed by anincrease in the VAT and not in the profit tax, it might be preferredto a CBIT even in the context of an open economy. Moreover,the required exogenous increase in the profit tax rate cannotensure revenue neutrality on its own due to the negative generalequilibrium effects it triggers on the whole economy. For aCBIT, the exogenous reduction in the tax rates on corporateand non-corporate profits leads to better results than whenwe allow for an endogenous change in the VAT. The best resultsarise when the CBIT is accompanied by a provision for immediatewrite-off and a lower profit tax or when the ACE with no additionalcapital gains taxation on household side is financed by an increasein the VAT. (JEL-Classification: C68, D58, D92, E62, H25.)     

A computable general equilibrium analysis of the welfare effects of trade liberalization under different market structures

Using a static world computable general equilibrium model with 16 sectors and 14 regions, this paper compares welfare effects of trade liberalization of the perfectly competitive model and eight imperfectly competitive models. Our main findings are as follows. First, the size of the welfare impact systematically depends on the type of model. Second, the welfare impact of the perfectly competitive model is not necessarily smaller than those of imperfectly competitive models. Third, the integrated market model tends to have a larger welfare impact than the segmented market model. Fourth, the model with the fixed number of firms tends to have a small welfare impact. Finally, the variety effect tends to have a stronger influence on the welfare effects of liberalization than do scale and markup effects. Differences in the models can be viewed as differences in the economic structures of the regions being analyzed, and therefore the analysis in this paper makes it possible to derive policy implications with regard to the relationship between economic structure and trade liberalization.     

The effect of deregulation on environmental research by electric utilities

This paper analyzes the impact of deregulation and restructuring on public-interest environmental research conducted by electric utilities in the US from 1990 to 2001. I find that deregulation has had a substantial negative impact on such expenditures, which have declined by 40%. However, restructuring has had no significant impact. In addition, the 1990 Clear Air Act Amendments have adversely affected such expenditures, contrary to the positive impact these regulations had on pollution abatement R&D as shown in the literature. Results also suggest that state and firm characteristics and regulator preferences play a strong role in the conduct of such research.      

Economy-wide Estimates of the Implications of Climate Change: Sea Level Rise

The economy-wide implications of sea level rise in 2050 are estimated using a static computable general equilibrium model. This allows for a better estimate of the welfare effects of sea level rise than the common direct cost estimates; and for an estimate of the impact of sea level rise on greenhouse gas emissions. Overall, general equilibrium effects increase the welfare costs of sea level rise, but not necessarily in every sector or region. In the absence of coastal protection, economies that rely most on agriculture are hit hardest. Although energy is substituted for land, overall energy consumption falls with the shrinking economy, hurting energy exporters. With full coastal protection, GDP increases, particularly in regions with substantial dike building, but utility falls, least in regions that protect their coasts and export energy. Energy prices rise and energy consumption falls. The costs of full protection exceed the costs of losing land. The results also show direct costs – the usual method for estimating welfare changes due to sea level rise – are a bad approximation of the general equilibrium welfare effects; previous estimates of the economic impact of sea level rise are therefore biased.