{"id":10755,"date":"2020-07-27T14:20:36","date_gmt":"2020-07-27T12:20:36","guid":{"rendered":"https:\/\/faere.altaea.com\/?p=10755"},"modified":"2025-09-03T17:58:44","modified_gmt":"2025-09-03T15:58:44","slug":"wp2014","status":"publish","type":"post","link":"https:\/\/faere.fr\/en\/wp2014\/","title":{"rendered":"2014"},"content":{"rendered":"

WP 2014.16 <\/strong>Interval Bidding in a Distribution Elicitation Format<\/strong><\/a><\/h4>\n

Published in\u00a0Applied Economics<\/em>\u00a0(2017), 1-12.<\/p>\n

Pierre-Alexandre Mahieu \u2013 Fran\u00e7ois-Charles Wolff \u2013 Jason Shogren<\/h4>\n

Abstract<\/strong>
\nInterval bidding allows people to report a range of values for a non-market good. Herein we allow people to choose their distribution over this range endogenously. Using elephant protection as our motivating example, our results suggest the shape of the distribution greatly varies across people and the degree of uncertainty is proportional to their willingness to pay. We also find that both the expected willingness to pay and the degree of uncertainty differ when the valuation exercise is real versus hypothetical.<\/em><\/p>\n


\nWP 2014.15 <\/strong>Un mod\u00e8le de mobilit\u00e9 r\u00e9sidentielle avec taxe fonci\u00e8re<\/strong><\/a><\/h4>\n

Marc Germain \u2013 Dominique Peeters<\/h4>\n

Abstract<\/strong>
\nIndividuals with heterogeneous incomes occupy a territory divided into zones with unequal levels of amenities. Using the concept of land rent \u00e0 la Ricardo, we propose a model determining the land rent in the different zones as well as the distribution of individuals across them.
\nA land tax modifies the equilibrium of the land market without tax if its amount exceeds the rent in some zones. In this case, individuals are led to concentrate on a reduced part of the territory, which affects negatively their utility. If the tax incomes are used to finance a global public good, the direct negative impact of the tax can be reduced and possibly more than compensated.
\nAn externality that affects negatively the amenities in one zone impacts the rents in all zones via a process of \u201cvoting with the feet\u201d. In the presence of a land tax, the externality may lead to a reduction in the populated part of the territory. However, the tax incomes may finance a compensation system where the landowners victims of the externality are compensated by those who are not affected.<\/em><\/p>\n


\nWP 2014.14 <\/strong>Tradable Renewable Quota vs. Feed-In Tariff vs. Feed-In Premium under Uncertainty<\/strong><\/a><\/h4>\n

Robert Marschinski \u2013 Philippe Quirion<\/h4>\n

R\u00e9sum\u00e9<\/strong>
\nWe study the performance under uncertainty of three renewable energy policy instruments: Tradable Renewable Quota (TRQ), Feed-In-Tariff (FIT), and Feed-In-Premium (FIP). We develop a stylized model of the electricity market, where renewables are characterized by a positive learning externality, which the regulator aims to internalize. Assuming shocks on the fossil-based electricity supply, renewables supply, or on total electricity demand, we analytically derive the conditions determining the instruments\u2019 relative welfare ranking. Although we generally confirm the key role of the slopes of marginal benefits and costs associated with the policy, the specific ranking depends on which type of uncertainty is considered, and whether shocks are permanent or transitory. However, a high learning rate generally favours the FIT, while TRQ is mostly dominated by the other two instruments. These results are confirmed in a numerical application to the US electricity market, in which the FIP emerges as the most robust overall choice and TRQ as the least robust.<\/em><\/p>\n


\nWP 2014.13 <\/strong>Inducing Sorting Investment and Implementation of an Alternative e-Waste Market under Imperfect Information<\/strong><\/a><\/h4>\n

Published in\u00a0Economics Bulletin<\/em>\u00a0(2018), 38(1), 629-637.<\/p>\n

Prudence Dato<\/h4>\n

Abstract<\/strong>
\nIn a context of high disposal costs in rich countries together with an imperfect monitoring system, the non reusable part of e-wastes is often illegally mixed with the reusable part and ends up in developing countries leading to an `environmental injustice\u2019 and important negative externalities. To tackle this problem, we propose an alternative e-waste market for a joint trade in reusable and non-reusable e-wastes, other than the monitoring system and we analyze the optimal mechanism design for its implementation. In this paper, we use the theory of incentives applied to e-waste market. We want to show how to induce firms in North to undertake sorting investment that would help implementing the alternative e-waste market. Results show that, if the sorting cost is low, the optimal contract to induce sorting investment and to implement the alternative e-waste market for a joint trade in reusable and non-reusable e-wastes is the Baron-Myerson (BM) contract. Moreover, we iden tify conditions to avoid the standard market. Finally, we construct the optimal decisions of the firm in South over the set of sorting costs. One of the direct implications of the results is that if the cost is not too high to deter the sorting investment, the firm in South should give incentives to the firm in North to invest in sorting so that the alternative market can easily be implemented.<\/em><\/p>\n


\nWP 2014.12 <\/strong>Is Choice Experiment Becoming more Popular than Contingent Valuation? A Systematic Review in Agriculture, Environment and Health<\/strong><\/a><\/h4>\n

Pierre-Alexandre Mahieu \u2013 Henrik Andersson \u2013 Olivier Beaumais \u2013 Romain Crastes \u2013 Fran\u00e7ois-Charles Wolff<\/h4>\n

R\u00e9sum\u00e9<\/strong>
\nThis paper provides a systematic review based on a large sample of articles published between 2004 and 2013 in economic journals and listed in ISI Web of Science. Results from descriptive statistics and regression models show that choice experiment (CE) is becoming more popular than contingent valuation (CV) in terms of number of publications and citations. Also, journals related to health economics and agricultural economics are more CE oriented than journals related to environmental economics. Finally, divergences across economic journals are found when comparing recent CE articles in terms of questionnaire design, econometric procedure, administration of questionnaire and type of participants. In particular, it is more standard to allow for unobserved taste heterogeneity in environmental journals than in health or agricultural journals.<\/em><\/p>\n


\nWP 2014.11 <\/strong>Optimal Carbon Sequestration Policies in Leaky Reservoirs<\/strong><\/a><\/h4>\n

Alain Jean-Marie \u2013 Michel Moreaux \u2013 Mabel Tidball<\/h4>\n

Abstract<\/strong>
\nWe study in this report a model of optimal Carbon Capture and Storage in which the reservoir of sequestered carbon is leaky, and pollution eventually is released into the atmosphere. We formulate the social planner problem as an optimal control program and we describe the optimal consumption paths as a function of the initial conditions, the physical constants and the economic parameters. In particular, we show that the presence of leaks may lead to situations which do not occur otherwise, including that of non-monotonous price paths for the energy.<\/em><\/p>\n


\nWP 2014.10 <\/strong>Reaping the Carbon Rent: Abatement and Overallocation Profits in the European Cement Industry, Insights from an LMDI Decomposition Analysis<\/strong><\/a><\/h4>\n

Published in\u00a0Energy Economics<\/em>\u00a0(2015), 47, 189-205.<\/p>\n

Fr\u00e9d\u00e9ric Branger \u2013 Philippe Quirion<\/h4>\n

Abstract<\/strong>
\nWe analyse variations of carbon emissions in the European cement industry from 1990 to 2011, at the European level (EU 27), and at the national level for six major producers (Germany, France, Spain, United Kingdom, Italy and Poland). We apply a Log-Mean Divisia Index (LMDI) method, crossing data from three databases: the Getting the Numbers Right (GNR) database developed by the Cement Sustainability Initiative, the European Union Transaction Log (EUTL), and the Eurostat International Trade database.
\nOur decomposition method allows disentangling seven channels of emissions change: activity, clinker trade, clinker share, alternative fuels, thermal and electric energy efficiency, and electricity decarbonisation. We find that, apart from a slow trend of emissions reductions coming from technological improvements (first from a decrease in the clinker share, then from an increase in alternative fuels), most of the emissions changes can be attributed to the activity effect.
\nUsing counterfactual scenarios, we estimate that the introduction of theEU ETS brought small but positive technological abatement (2.0% plus or minus 1.1% between 2005 and 2011). Moreover, we find that the European cement industry have gained 3.5 billion euros of \u201coverallocation profits\u201d, mostly due to the slowdown of production.
\nBased on these findings, we advocate for output-based allocations, based on a stringent hybrid clinker and cement benchmarking.<\/em><\/p>\n


\nWP 2014.09 <\/strong>Price versus Quantities versus Indexed Quantities<\/strong><\/a><\/h4>\n

Fr\u00e9d\u00e9ric Branger \u2013 Philippe Quirion<\/h4>\n

Abstract<\/strong>
\nWe develop a stochastic model to rank different policies (tax, fixed cap and relative cap) according to their expected total social costs. Three types of uncertainties are taken into account: uncertainty about abatement costs, business-as-usual (BAU) emissions and future economic output (the two latter being correlated). Two parameters, the ratio of slopes of marginal benefits and marginal costs on the one hand, and the correlation between uncertainty in BAU emissions and future economic output on the other hand, are crucial to determine which instrument is preferred.
\nWhen marginal benefits are relatively flatter than marginal costs, prices are preferred over fixed caps (Weitzman\u2019s result). When the former correlation is higher than a parameter- dependent threshold, relative caps are preferred to fixed caps. An intermediate condition is found to compare the tax instrument and the relative cap. We establish a bridge between the literature which minimizes the variance of abatement costs and the one which also includes the variance of benefits, and find that setting environmental benefit aside introduces a bias favoring relative caps over fixed caps.
\nThe model is then empirically tested for seven different regions (China, the United States, Europe, India, Russia, Brazil and Japan) using past GDP and emissions data, and International Energy Outlook forecasting. We find that tax is preferred to caps (absolute or relative) in all cases, and that relative caps are preferred to fixed caps in the US and emerging countries (except Brazil where it is ambiguous), whereas fixed cap are preferred to relative cap in Europe and Japan.<\/em><\/p>\n


\nWP 2014.08 <\/strong>Renewable Energy, Subsidies, and the WTO: Where has the \u2018Green\u2019 Gone?<\/strong><\/a><\/h4>\n

Published in\u00a0Energy Economics<\/i>\u00a0(2015), 51, 407-416.<\/p>\n

Patrice Bougette \u2013 Christophe Charlier<\/h4>\n

Abstract<\/strong>
\nFaced with the energy transition imperative, governments have to decide about public policy to promote renewable electrical energy production and to protect domestic power generation equipment industries. For example, the Canada \u2013 Renewable energy dispute is over Feed-in tariff (FIT) programs in Ontario that have a local content requirement (LCR). The EU and Japan claimed that FIT programs constitute subsidies that go against the SCM Agreement, and that the LCR is incompatible with the non-discrimination principle of the World Trade Organization (WTO). This paper investigates this issue using an international quality differentiated duopoly model in which power generation equipment producers compete on price. FIT programs including those with a LCR are compared for their impacts on trade, profits, amount of renewable electricity produced, and welfare. When `quantities\u2019 are taken into account, the results confirm discrimination. However, introducing a difference in the quality of the power generation equipment produced on both sides of the border provides more mitigated results. Finally, the results enable discussion of the question of whether environmental protection can be put forward as a reason for subsidizing renewable energy producers in light of the SCM Agreement.<\/em><\/p>\n


\nWP 2014.07 <\/strong>Limit-Pricing and the (Un)Effectiveness of the Carbon Tax<\/strong><\/a><\/h4>\n

Published in\u00a0Journal of Public Economics<\/em>\u00a0(2016), 139, 28-39.<\/p>\n

Saraly Andrade de Sa \u2013 Julien Daubanes<\/h4>\n

Abstract<\/strong>
\nThis paper questions the ability of a carbon tax to reduce oil extraction. Demand for oil is very price inelastic. Facing such demand, an extractive cartel induces the highest price that does not destroy its demand: it tolerates \u201dnon-drastic\u201d substitutes but deters substitution possibilities that have the potential to drastically deteriorate its demand. Limit-pricing equilibria of non-renewable resource markets sharply differ from conventional Hotelling outcomes. Oil taxes become neutral. Policies only reduce current oil extraction when they support existing non-drastic substitutes. Since the carbon tax applies to oil and to its current carbon substitutes, it induces higher oil current production.<\/em><\/p>\n


\nWP 2014.06 <\/strong>Nutrient Allowances Market and Wetland Abatement<\/strong><\/a><\/h4>\n

Natacha Fauvet \u2013 Jean-Christophe Pereau<\/h4>\n

Abstract<\/strong>
\nThe buffering function of wetlands is one of the most efficient mechanisms for regulating agricultural runoffs and water pollution. The aim of this paper is to show how farmers could use wetland abatement as a way to achieve pollution targets set by a regulator in a nutrient allowance market. The introduction of allowances into farmers\u2019 maximisation programs creates an incentive to either reduce fertilizer use per hectare of crops, or to restore wetlands on agricultural land. Comparative statics results express a negative correlation between the quantity of allowances per farmer and the fertilizer use. Furthermore, the quantity of allowances per farmer is negatively correlated to the wetland surface area.<\/em><\/p>\n


\nWP 2014.05 <\/strong>Assessing and Ordering Investment in Polluting Fossil-fueled and Zero-carbon Capital<\/strong><\/a><\/h4>\n

Oskar Lecuyer \u2013 Adrien Vogt-Schilb<\/h4>\n

Abstract<\/strong>
\nWe study the transition from preexisting polluting fossil-fueled capital (coal power) to cleaner fossil-fueled capital (gas) and zero-carbon capital (renewable). We model exhaustible resources, irreversible investment, adjustment costs and a carbon budget; both fossil-fuel and renewable energy consumption are subject to capacity constraints. To smooth investment and spread costs, optimal investment in expensive renewable power may start before the cheaper fossil resources are exhausted. Gas power operates as a bridge technology between coal and renewable: it allows building less renewable at the beginning of the transition, moving some efforts from the short to the middle term. Finally, the popular criteria of the levelized cost of electricity is biased toward cheaper and lower-potential alternatives (gas instead of renewable) if computed against current prices. We provide numerical simulations of the European power sector based on the Commission\u2019s energy roadmap to 2050.<\/em><\/p>\n


\nWP 2014.04 <\/strong>An Instrument that Could Turn Crowding-out into Crowding-in<\/strong><\/a><\/h4>\n

Antoine Beretti \u2013 Charles Figui\u00e8res \u2013 Gilles Grolleau<\/h4>\n

Abstract<\/strong>
\nUsing a simple decision-theoretic approach, we formalize how agents with different kinds of intrinsic motivations react to the introduction of monetary incentives. We contend that empirical results supporting the existence of a crowding-out effect in various contexts hide a more complex reality. We also propose a new policy instrument which taps into agents\u2019 heterogeneity regarding intrinsic motivations in order to turn a situation subject to crowding-out into a crowding-in outcome. This instrument uses a self-selection mechanism to match adequate monetary incentives with individuals\u2019 types regarding intrinsic motivations.<\/em><\/p>\n


\nWP 2014.03 <\/strong>Towards a Clean Vehicle Fleet: from Households\u2019 Valuation of Fuel Efficiency to Policy Implications<\/strong><\/a><\/h4>\n

B\u00e9n\u00e9dicte Meurisse \u2013 Maxime Le Roy<\/h4>\n

Abstract<\/strong>
\nThis paper investigates household behaviour with regard to vehicle fuel efficiency. We propose to approach the Willingness to Pay (WTP) for better fuel efficiency through the Hicksian compensating variation in income. Specifically, we distinguish the Willingness to Pay or to Accept (WTA) buying a more fuel-efficient car from the theoretical WTP for a reduction in fuel consumption without changing one\u2019s car. Then by assuming that the household has to replace its car, we estimate a WTP for the cleanest car.
\nWe also analyse what effect a fuel tax and\/or a feebate scheme (e.g. a bonus-malus scheme) have on the WTP for the cleanest car and on the driven mileage. We find that the WTP for the cleanest car decreases following the implementation of a fuel tax. To the contrary, a feebate system leads to an increase in this WTP. But we also find that reducing the market price of the new vehicle (i.e. through a bonus) is not worthwhile in the light of the rebound effect. However, a fuel tax \u2013 as soon as it exceeds a certain level \u2013 is able to nullify the rebound effect.<\/em><\/p>\n


\nWP 2014.02 <\/strong>Conservation Priorities when Species Interact: the Noah\u2019s Ark Metaphor Revisited<\/strong><\/a><\/h4>\n

Published in PLoS ONE 9(9), September 2014.<\/p>\n

Pierre Courtois \u2013 Charles Figui\u00e8res \u2013 Chlo\u00e9 Mulier<\/h4>\n

Abstract<\/strong>
\nThis note incorporates ecological interactions into the Noah\u0092s Arch problem [M.L. Weitzman, The Noah\u0092s Arch problem, Econometrica 66(6) (1998) 1279-1298]. In doing so, we arrive at a general model for ranking in situ conservation projects accounting for species interrelations and provide an operational cost-effectiveness method for the selection of best preserving diversity projects under a limited budget constraint.<\/em><\/p>\n


\nWP 2014.01 <\/strong>Optimal Abatement of Carbon Emission Flows<\/strong><\/a><\/h4>\n

Revised version 06.2015. Published in Journal of Environmental and Economics Management, 74, 55-70 (2015).<\/p>\n

Michel Moreaux \u2013 Cees Withagen<\/h4>\n

Abstract<\/strong>
\nWe study optimal carbon capture and storage (CCS) from point sources, taking into account damages incurred from the accumulation of carbon in the atmosphere and exhaustibility of fossil fuel reserves. High carbon concentrations call for full CCS, meaning zero net emissions. We identify conditions under which partial or no CCS is optimal. In the absence of CCS the CO2 stock might be inverted U-shaped. With CCS more complicated behavior may arise. It can be optimal to have full capture initially, yielding a decreasing stock, then partial capture while keeping the CO2 stock constant, and a final phase without capture but with an inverted U-shaped CO2 stock. We also introduce the option of adaptation and provide a unified theory regarding the optimal use of CCS and adaptation.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

WP 2014.16 Interval Bidding in a Distribution Elicitation Format Published in\u00a0Applied Economics\u00a0(2017), 1-12. Pierre-Alexandre Mahieu \u2013 Fran\u00e7ois-Charles Wolff \u2013 Jason Shogren Abstract Interval bidding allows people to report a range of values for a non-market good. Herein we allow people to choose their distribution over this range endogenously. Using elephant protection as our motivating example,<\/p>\n","protected":false},"author":1,"featured_media":11914,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[191,248],"tags":[],"class_list":["post-10755","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-publications","category-working-papers"],"acf":[],"_links":{"self":[{"href":"https:\/\/faere.fr\/en\/wp-json\/wp\/v2\/posts\/10755","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/faere.fr\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/faere.fr\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/faere.fr\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/faere.fr\/en\/wp-json\/wp\/v2\/comments?post=10755"}],"version-history":[{"count":6,"href":"https:\/\/faere.fr\/en\/wp-json\/wp\/v2\/posts\/10755\/revisions"}],"predecessor-version":[{"id":20530,"href":"https:\/\/faere.fr\/en\/wp-json\/wp\/v2\/posts\/10755\/revisions\/20530"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/faere.fr\/en\/wp-json\/wp\/v2\/media\/11914"}],"wp:attachment":[{"href":"https:\/\/faere.fr\/en\/wp-json\/wp\/v2\/media?parent=10755"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/faere.fr\/en\/wp-json\/wp\/v2\/categories?post=10755"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/faere.fr\/en\/wp-json\/wp\/v2\/tags?post=10755"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}