Posts Tagged ‘climate change’
Significantly reducing greenhouse gas emissions from transportation will require actions that go beyond increasing vehicle fuel efficiency and that encompass initiatives in all of the major passenger and freight modes.
TR News is copyrighted by the National Academy of Sciences and this posting is with the permission of the Transportation Research Board. This article is published in the “TR News May-June 2010″ issue number 268, pp3-5 Rubin & Noland.
February 26, 2009. Climate Change and Energy, an E2Tech Forum held in conjuction with publication of Maine Policy ReviewWednesday, February 4th, 2009
The E2 Tech Council of Maine, the Muskie School of Public Service, and The Margaret Chase Smith Policy Center are co-sponsoring Climate Change and Energy; Options for Maine in conjunction with the February publication of Maine Policy Review’s “Special Issue on Climate Change and Energy.”
February 26, 2009
This paper integrates two themes in the intertemporal permit literature through the construction of an intertemporal banking system for a pollutant that creates both stock and flow damages. A permit banking system for the special case of a pollutant that only causes stock damages is also developed. This latter, simpler case corresponds roughly to the greenhouse gas emission reduction regime proposed by the U.S. Department of State as a means of fulfilling the U.S. commitment to the Framework Convention on Climate Change. This paper shows that environmental regulators can achieve the socially optimal level of emissions and output through time by setting the correct total sum of allowable emissions, and specifying the correct intertemporal trading ratio for banking and borrowing. For the case of greenhouse gases, we show that the optimal growth rate of permit prices, and therefore the optimal intertemporal trading rate, has the closed-form solution equal to the ratio of current marginal stock damages to the discounted future value of marginal stock damages less the decay rate of emissions in the atmosphere. Given a non-optimal negotiated emission path we then derive a permit banking system that has the potential to lower net social costs by adjusting the intertemporal trading ratio taking into account the behavior of private agents. We use a simple numerical simulation model to illustrate the potential gains from various possible banking systems.