The Environmental Kuznets Curve semi-parametrically revisited

https://www.econstor.eu/bitstream/10419/46516/1/639007074.pdf

Justifying social discounting: the rank-discounted utilitarian approach

The works and correspondence of david ricardo

In this paper we study the short term price behavior of December 2008 future prices for EU emission allowances. We model returns and volatility dynamics of this price showing that a standard ARMA-GARCH framework is not adequate and that the gaussianity assumption is rejected due to the occurrence of a number of level and volatility outliers. To improve the fitness of the model, we combine the underlying price process with an additive stochastic jump process. The resulting distribution, a mixture of Gaussians, allows for endogenously determined jumps in the process governing the returns, while the mixing law determines the jump probability. The performance of the model is improved by introducing a time varying jump probability explained by two variables. The first one is the daily relative change in the volume of transactions and suggests that sharp increases in volume increase volatility even in the absence of changes in what recent literature considers as market fundamentals. The second one accounts for changes in the jump probability associated to the European Commission's announcements regarding the NAPs for Phase II. We find that announcements concerning the NAPs induce jumps in the process and tend to increase volatility. This result suggests authorities should advocate to increase stability in the regulatory environment which is crucial to allow traders to realize efficient trading strategies and informed investment decisions regarding pollution reduction.

Understanding volatility dynamics in the EU-ETS market: lessons from the future

We present a two-good, two-country overlapping generations model where emissions arise from production and each country has a domestic emission permit system. When one country unilaterally reduces her cap on emissions, her output available for domestic and foreign consumption diminishes more than in the other country. With unchanged consumption expenditure shares for both goods the terms of trade improve, while capital stocks decline in the reducing and less strongly in the non-reducing country. The net welfare effect of improving terms of trade and falling capital stocks is negative in both countries. However, if the country which unilaterally reduces her emission permits is a net creditor to the world economy, her own welfare loss remains below that of the non-reducing country.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1259647_code459177.pdf?abstractid=1259647&mirid=1

Effects of Unilateral Climate Policy on Terms of Trade, Capital Accumulation, and Welfare in a World Economy

This paper combines the classical approach to inequality, based on the division of society into classes with different saving propensities, and the social conflict approach, in which inequality inflicts costs to growth. We assume that each consumer’s discount factor is endogenously determined through two channels: (1) it is positively related to the consumer’s relative wealth, and (2) negatively affected by an aggregate measure of social conflict. Unlike in models with exogenous discount rates, steady state equilibria are indeterminate and the set of equilibria is a continuum parameterized by an index of income inequality. Under reasonable assumptions, the relationship between growth and inequality has an inverted-U shape.

/pdf/growth-and-distribution-in-an-ak-model-with-endogenous-3ujm7jqru1.pdf

Growth and distribution in an AK-model with endogenous impatience

Intertemporal transfers of emission quotas in climate policies

The idea of family altruism is that parents care only about their children's income and not about the use of this income made by the children. First, we establish dynamical properties which place the OLG model with family altruism halfway between the model with pure life-cyclers (Diamond (1965)) and the one with dynastic altruism (Barro (1974)). Then, we show that this concept leads to interesting fiscal policy conclusions less clear-cut and more realistic than those obtained with the two previous standard OLG models: a pay as you go social security is neutral but not a public debt.

/pdf/capital-accumulation-and-fiscal-policy-in-an-olg-model-with-2ez7er0are.pdf

Capital Accumulation and Fiscal Policy in an OLG Model with Family Altruism

Renewable resource and capital with a joy-of-giving resource bequest motive

We are interested in situations in which governments are committed to some pollution abatement constraint which does not match the society's most preferred level of pollution, like in the current climate change policies undergone on behalf of the Kyoto protocol. We develop an overlapping generations model with capital and pollution in which the individuals care about the environmental quality. We show that slightly improving the intertemporal flexibility of the emission quotas by authorizing two-period backward and forward transfers allows to decentralize the whole optimal growth path at competitive equilibrium.

Stéphane Lambrecht

Papers

Growth and distribution in an AK-model with endogenous impatience

Intertemporal transfers of emission quotas in climate policies

Capital Accumulation and Fiscal Policy in an OLG Model with Family Altruism

Renewable resource and capital with a joy-of-giving resource bequest motive

Intertemporal transfers of emission quotas in climate policies