PP 2019-07
Planning and sustainable development in the twenty‐first century

Emmanuel Combet

Although fallen into disrepute in the 80s, the use of planning has been put back on the agenda, with the 2008 financial crisis, but also with the growing recognition of the inability of nowadays societies to tackle their long‐term development challenges. Thirty years later, I follow the Malinvaud‐Chakravarty’s line of reasoning by questioning the form and usefulness of collective planning. A review of recent insights from different fields of economic thoughts shows that what may be lacking is good formation and coordination of expectations (expectational coordination, public economics, political economics, collective decision making and planning). I elaborate on one particular analytical approach to planning, the main objective of which is to foster collective deliberation and bargaining. Rather than determining alone what is the optimal policy, a ‘dialogue analysis’ aims at clarifying the sources of disagreements about the best design of sustainable development strategies. Two applications confront this theoretical reflexion to concrete challenges of the twenty-first century: The design of national strategies against climate change and carbon pricing policies.

PP 2019-06
French Attitudes over Climate Change and Climate Policies

Thomas Douenne – Adrien Fabre

This paper aims to assess the prospects for French climate policie safter the Yellow Vests crisis halted the planned increase in the carbon tax. From a large representative survey, we elicit knowledge, perceptions and values over climate change, we examine opinions relative to carbon taxation, and we assess support for other climate policies. Specific attention is given to the link between perceptions of climate change and attitudes towards policies. The paper also studies in detail the determinants of attitudes in terms of political and socio-demographic variables. Among many results, we find limited knowledge but high concern for climate change. We also document a large rejection of the carbon tax but majority support for stricter norms and green investments, and reveal the rationales behind these preferences. Our study entails policy recommendations, such as an information campaign on climate change. Indeed, we find that climate awareness increases support for climate policies but no evidence for the formation of opinions through partisan cues as in the US, suggesting that better access to science could foster support for climate policies.

PP 2019-05
Can We Reconcile French People with the Carbon Tax? Disentangling Beliefs from Preferences

Thomas Douenne – Adrien Fabre

Using a new survey and National households’ survey data, we investigate French perception over carbon taxation. We find that French people largely reject a tax and dividend policy where revenues of the tax would be redistributed uniformly. However, their perception about the properties of the tax are biased: people overestimate the negative impact on their purchasing power, wrongly think the scheme is regressive, and do not perceive it as environmentally effective. Our econometric analysis shows that correcting these three bias would suffice to generate majority acceptance. Yet, we find that people’s beliefs are persistent and their revisions biased towards pessimism, so that only few can be convinced.

PP 2019-04
How sensitive are optimal fully renewable power systems to technology cost uncertainty?

Behrang Shirizadeh – Quentin Perrier – Philippe Quirion

Many studies have demonstrated the feasibility of fully renewable power systems in various countries and regions. Yet the future costs of key technologies are highly uncertain and little is known about the robustness of a renewable power system to these uncertainties. We build 315 long-term cost scenarios on the basis of recent prospective studies, varying the costs of key technologies. We model the optimal renewable power system for France over 18 meteorological years, simultaneously optimizing investment and dispatch.
Our results show that the optimal energy mix is highly sensitive to cost assumptions: the installed capacity in PV, onshore wind and power-to-gas varies by a factor of 5, batteries and offshore wind even more. Nevertheless, we have a robust result showing that the cost of a 100% renewable power system will not be higher than today. Finally, we show that the cost of not installing the absolutely ‘optimal’ mix is limited. Contrary to current estimates of increasing integration costs, this indicates that renewable technologies will become by and large substitutable.

PP 2019-03
Carbon Pricing and Power Sector Decarbonisation: Evidence from the UK

Marion Leroutier

The electricity and heat generation sector represents about 25% of global greenhouse gas (GHG) emissions. Policy-makers have implemented a variety of instruments to decarbonise their power sector. This paper examines the UK Carbon Price Floor (CPF), a novel carbon pricing instrument implemented in the United Kingdom in 2013. After describing the potential mechanisms behind the recent UK power sector decarbonisation, I apply the synthetic control method on country-level data to estimate the impact of the CPF on per capita emissions. I discuss the importance of potential confounders and the amount of net electricity imports imputable to the policy. Depending on the specification, the abatement associated with the introduction of the CPF range from 106 to 185 millions tons of equivalent CO2 over the 2013-2017 period. This implies a reduction of between 41% and 49% of total power sector emissions by 2017. Several placebo tests suggest that these estimates capture a causal impact. This paper shows that a carbon levy on high-emitting inputs used for electricity generation can lead to successful decarbonisation.

PP 2019-02
The economic value of NBS restoration measures and their benefits in a river basin context: A meta-analysis regression

Nabila Arfaoui – Amandine Gnonlonfin

The study collects original monetary estimates for Nature Based Solutions (NBS) and benefits, with restoration approach in a basin context. A database of 187 monetary estimates is constructed to perform the first meta-analysis, which will assess how individuals value the NBS restoration measures and their primary and co-benefits. Demonstrating the monetary value of these benefits should improve decision-making in promoting the adoption of NBS and lead to greater protection of ecosystems. We find that individuals value, in particular, global climate regulation, local environmental regulation, recreational activities, and habitat and biodiversity benefits. We find also that NBS measures aimed at floodplains and river streams are more highly valued. The results of this study suggest that the Willingness-to-pay (WTP) is weakly influenced by the methodological variables. We found that primary studies using the contingent valuation method report higher WTP compared to those using choice experiment method. Moreover, the payment modes (local-tax, national-tax, donation and water bill) and econometric estimation methods (parametric, semiparametric and non-parametric) have only a marginal effect. Indeed most of these variables are insignificant with the exception of local-tax, water-bill and parametric variables which are significantly negative. Survey modes (internet, face to face and mix) are never significant. Finally, the coefficients of America and Europe are significantly positive, indicating that the monetary value of river restoration is higher in countries in these areas.

PP 2019-01
The Economics of Recycling Rate: new insights from a Waste Electrical and Electronic Equipment

Florian Fizaine

In this paper, we address the issue relative to the determinants of metal recycling rate. The literature on recycling flows is scarce and does not directly address the issue of achieving high recycling rate. In addition, the existing literature has not quantified the recycling rate response to metal price. This is why we explore factors of the recycling rate of different metals embodied in computer. We examine the effect of metal price, metal concentration in product, and relative concentration ratio (competition between primary and secondary supply) on recycling rate. Although we find a significant effect of metal price on recycling rate, the marginal response is very low across different type of models (OLS, GLM, FRMER, left censored Tobit). This effect is not surprising and in line with the existing literature relative to recycling flows. Conversely, it seems that recycling rate is more elastic to other technical factors like the metal concentration in products or the relative concentration ratio. We discuss public policies deriving from our results. We need more data and interdisciplinary studies to support these preliminary results.

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