Markus Ohndorf

Bio: Markus Ohndorf is an academic researcher from ETH Zurich. The author has contributed to research in topics: Emissions trading & Coase theorem. The author has an hindex of 11, co-authored 34 publications receiving 322 citations. Previous affiliations of Markus Ohndorf include University of Innsbruck.

Optimal Monitoring of Credit-Based Emissions Trading Under Asymmetric Information

Abstract: Project-based emissions trading schemes, like the Clean Development Mechanism, are particularly prone to problems of asymmetric information between project parties and the regulator. In this paper, we extend the general framework on incomplete enforcement of policy instruments to reflect the particularities of credit-based mechanisms. The main focus of the analysis is to determine the regulator’s optimal spot-check frequency given plausible assumptions of incomplete enforcement under asymmetric information on reduction costs and heterogeneous verifiability of projects. We find that, depending on the actual abatement cost and penalty schemes, optimal monitoring for credit-based systems is often discontinuous and significantly differs from the one to be applied for cap-and-trade schemes or environmental taxes. We conclude that, in a real-world context, project admission should ultimately be based on the criterion of verifiability.

Enforcement-proof contracts with moral hazard in precaution: ensuring 'permanence' in carbon sequestration

Abstract: Opportunistic behaviour due to imperfect contract enforcement is a risk in many economic transactions. In this paper, an enforcement-proof incentive contract is developed in which a buyer demands a guaranteed delivery of a good or service given a productive upfront payment, moral hazard in precaution, and the potential for opportunistic contract breach. Investing in a contract upfront is found to be restricted by moral hazard and opportunistic contract breach. This limits the size of investment up to a specific level even if an infinite scale-up of production were beneficial. A more severe moral hazard problem results in a smaller distortion. The framework is applied and extended to international carbon sequestration contracts. In comparison to alternative liability attributions, the current regime of buyer liability yields inefficiently low levels of investment in carbon sequestration.

A Model of Benchmarking Regulation: Revisiting the Efficiency of Environmental Standards

Abstract: The conventional economic argument favors the use of market-based instruments over ‘command-and-control’ regulation. This viewpoint, however, is often limited in the description and characteristics of the latter; namely, environmental standards are often portrayed as lacking structured abatement incentives. Yet contemporary forms of command-and-control regulation, such as standards stipulated via benchmarking, have the potential to be efficient. We provide a first formal analysis of environmental standards based on performance benchmarks. We show that under specific conditions, standards can provide efficient incentives to improve environmental performance.

The theory of externalities, public goods, and club goods: Homogeneous clubs and local public goods

Abstract: A club is a voluntary group of individuals who derive mutual benefit from sharing one or more of the following: production costs, the members' characteristics, or a good characterized by excludable benefits. When production costs are shared and the good is purely private, a private good club is being analyzed (McGuire 1972; Wiseman 1957). If membership characteristics differ and motivate sharing, then membership fees will differ among members (DeSerpa 1977; Scotchmer 1994b; Scotchmer and Wooders 1987). Such fees are nonanonymous , inasmuch as a fee structure is related to the identity and attributes of a member. The focus of our analysis is the sharing of an excludable (rivalrous) public good, which we term a club good . Unless otherwise specified, crowding is assumed to be independent of the individual and hence anonymous. A number of aspects of the club definition deserve highlighting. Privately owned and operated clubs must be voluntary; members choose to belong because they anticipate a net benefit from membership. Thus, the utility jointly derived from membership and from the consumption of other goods must exceed the utility associated with nonmembership status. Furthermore, the net gain in utility from membership must exceed or equal membership fees or toll payments. This voluntarism serves as the first characteristic by which to distinguish between pure public goods and club goods. In the case of a pure public good, voluntarism may be absent, since the good might harm some recipients (e.g., defense to a pacifist, fluoridation to someone who opposes its use).

Risk-Aversion and Willingness to Pay For Energy Saving Measures in Residential Buildings

Abstract: This paper uses a choice experiment to evaluate the consumers' willingness to pay for energy-saving measures in Switzerland's residential buildings. These measures include air renewal (ventilation) systems and insulation of windows and facades. Two groups of respondents consisting respectively of 163 apartment tenants and 142 house owners were asked to choose between their housing status quo and each one of the several hypothetical situations with different attributes and prices. The estimation method is based on a fixed-effects logit model. The results suggest that the benefits of the energy-saving attributes are significantly valued by the consumers. These benefits include both individual energy savings and environmental benefits as well as comfort benefits namely, thermal comfort, air quality and noise protection.

Strengthening and Implementing the Global Response

Abstract: The global response to warming of 1.5oC comprises transitions in land and ecosystem, energy, urban and infrastructure, and industrial systems. The feasibility of mitigation and adaptation options, and the enabling conditions for strengthening and implementing the systemic changes, are assessed in this chapter.

Annual European Union greenhouse gas inventory 1990-…2011 and inventory report 2013

Abstract: Annual European Union greenhouse gas inventory 1990-…2011 and inventory report 2013. Copenhagen : European Evironment Agency, 2013, 1159 p.(Technical report No 8/2013) http://www.eea.europa.eu/publications/european-union-greenhouse-gas-inventory-2013 This report is the annual submission of the greenhouse gas inventory of the European Union to the United Nations Framework Convention on Climate Change and the Kyoto Protocol. It presents greenhouse gas emissions between 1990 and 2011 for EU-27, ...