Sanford School of Public Policy
Duke University
Publications of Billy Pizer :chronological alphabetical combined listing:
We've launched a new site so please go to People & Research for current information on our faculty and staff.
%% Books
@book{fds367853,
Author = {Grubb, M and Jordan, ND and Hertwich, E and Neuhoff, K and Das, K and Bandyopadhyay, KR and Van Asselt and H and Sato, M and Wang, R and Pizer,
WA and Oh, H},
Title = {Carbon Leakage, Consumption, and Trade},
Volume = {47},
Pages = {753-795},
Year = {2022},
Month = {January},
url = {http://dx.doi.org/10.1146/annurev-environ-120820-053625},
Abstract = {We review the state of knowledge concerning international
CO2 emission transfers associated particularly with trade in
energy-intensive goods and concerns about carbon leakage
arising from climate policies. The historical increase in
aggregate emission transfers from developing to developed
countries peaked around 2006 and declined since. Studies
find no evidence that climate policies lead to carbon
leakage, but this is partly due to shielding of key
industrial sectors, which is incompatible with deep
decarbonization. Alternative or complementary
consumption-based approaches areneeded. Private sector
initiatives to trace and address carbon emissions throughout
supply chains have grown substantially but cannot compensate
for inadequate policy. Three main price-based approaches to
tackling carbon leakage are potentially compatible with
international trade rules: border adjustments on imports,
carbon consumption charges, and climate excise contributions
combined with emissions trading. We also consider standards
and public procurement options to tackle embodied emissions.
Finally, we discuss proposals for carbon clubs involving
cooperation among a limited set of countries.},
Doi = {10.1146/annurev-environ-120820-053625},
Key = {fds367853}
}
@book{fds194734,
Author = {William A. Pizer and Richard Morgenstern},
Title = {Reality Check: The Nature and Performance of Voluntary
Programs in the United States, Europe, and
Japan},
Publisher = {RFF Press},
Address = {Washington, DC},
Year = {2007},
Key = {fds194734}
}
@book{fds194735,
Author = {William A. Pizer and Raymond Kopp},
Title = {Assessing U.S. Climate Policy Options: A report summarizing
work at RFF as part of the inter-industry U.S. Climate
Policy Forum},
Publisher = {RFF Press},
Address = {Washington, DC},
Year = {2007},
url = {http://www.rff.org/cpfreport},
Key = {fds194735}
}
%% Journal Articles
@article{fds370983,
Author = {Howard, PH and Sarinsky, M and Bauer, M and Cecot, C and Cropper, M and Drupp, M and Freeman, M and Gillingham, KT and Gollier, C and Groom, B and Li, Q and Livermore, M and Newell, R and Pizer, WA and Prest, B and Rudebusch, G and Sterner, T and Wagner, G},
Title = {US benefit-cost analysis requires revision.},
Journal = {Science (New York, N.Y.)},
Volume = {380},
Number = {6647},
Pages = {803},
Year = {2023},
Month = {May},
url = {http://dx.doi.org/10.1126/science.adi5943},
Doi = {10.1126/science.adi5943},
Key = {fds370983}
}
@article{fds369109,
Author = {Li, Q and Zhou, Y and Pizer, WA and Wu, L},
Title = {The unbalanced trade-off between pollution exposure and
energy consumption induced by averting behaviors.},
Journal = {iScience},
Volume = {26},
Number = {1},
Pages = {105597},
Year = {2023},
Month = {January},
url = {http://dx.doi.org/10.1016/j.isci.2022.105597},
Abstract = {Behavioral responses to environmental risks create gains and
losses. We use high-frequency datasets to elucidate such
behavior responses against air pollution and find a
"double-peaked" time pattern in reducing outdoor exposure
and in increasing electricity consumption. Despite that one
standard deviation increase in the Air Quality Index
induces 2% less outdoor population and 6% more household
electricity consumption at peak, most responses fail to
match with the intra-day pollution peaks, implying
ineffective exposure avoidance. We find an unbalanced
trade-off between health benefits and energy co-damages. The
behavior-induced change in annual residential power
consumption (+1.01% to +1.20%) is estimated to be 20 times
more than that in the population-based exposure (-0.02% to
-0.05%), and generates 0.13-0.15 million more metric tons of
citywide carbon emissions. Our results imply that by
targeting peak pollution periods, policies can shrink the
trade-off imbalance and achieve mutual improvements in
exposure reduction and energy conservation.},
Doi = {10.1016/j.isci.2022.105597},
Key = {fds369109}
}
@article{fds367278,
Author = {Wang, B and Pizer, WA and Munnings, C},
Title = {Price limits in a tradable performance standard},
Journal = {Journal of Environmental Economics and Management},
Volume = {116},
Year = {2022},
Month = {October},
url = {http://dx.doi.org/10.1016/j.jeem.2022.102742},
Abstract = {Tradable performance standards are widely used sectoral
regulatory policies. Examples include the US lead phasedown,
fuel economy standards for automobiles, renewable portfolio
standards, low carbon fuel standards, and—most
recently—China's new national carbon market. At the same
time, theory and experience with traditional cap-and-trade
programs suggest an important role for price limits in the
form of floors, ceilings, and reserves. In this paper we
develop a simple analytical model to derive the welfare
comparison between tradable performance standards and a
price-based alternative. This model works out to be a simple
variant of the traditional Weitzman prices-versus-quantities
result. We use this result to show that substantial
gains—perhaps 50% or more when prices are low—could
arise from shifting two programs, China's new national
carbon market and the California Low Carbon Fuel Standard,
to a price mechanism. This finding will generally be true
when the coefficient of variation in the price under a TPS
is larger than 50%. We end with a brief discussion of
implementation issues, including consignment
auctions.},
Doi = {10.1016/j.jeem.2022.102742},
Key = {fds367278}
}
@article{fds367395,
Author = {Rennert, K and Errickson, F and Prest, BC and Rennels, L and Newell, RG and Pizer, W and Kingdon, C and Wingenroth, J and Cooke, R and Parthum, B and Smith, D and Cromar, K and Diaz, D and Moore, FC and Müller, UK and Plevin, RJ and Raftery, AE and Ševčíková, H and Sheets, H and Stock,
JH and Tan, T and Watson, M and Wong, TE and Anthoff,
D},
Title = {Comprehensive evidence implies a higher social cost of
CO2.},
Journal = {Nature},
Volume = {610},
Number = {7933},
Pages = {687-692},
Year = {2022},
Month = {October},
url = {http://dx.doi.org/10.1038/s41586-022-05224-9},
Abstract = {The social cost of carbon dioxide (SC-CO<sub>2</sub>)
measures the monetized value of the damages to society
caused by an incremental metric tonne of CO<sub>2</sub>
emissions and is a key metric informing climate policy. Used
by governments and other decision-makers in benefit-cost
analysis for over a decade, SC-CO<sub>2</sub> estimates draw
on climate science, economics, demography and other
disciplines. However, a 2017 report by the US National
Academies of Sciences, Engineering, and Medicine<sup>1</sup>
(NASEM) highlighted that current SC-CO<sub>2</sub> estimates
no longer reflect the latest research. The report provided a
series of recommendations for improving the scientific
basis, transparency and uncertainty characterization of
SC-CO<sub>2</sub> estimates. Here we show that improved
probabilistic socioeconomic projections, climate models,
damage functions, and discounting methods that collectively
reflect theoretically consistent valuation of risk,
substantially increase estimates of the SC-CO<sub>2</sub>.
Our preferred mean SC-CO<sub>2</sub> estimate is $185 per
tonne of CO<sub>2</sub> ($44-$413 per tCO<sub>2</sub>:
5%-95% range, 2020 US dollars) at a near-term risk-free
discount rate of 2%, a value 3.6 times higher than the US
government's current value of $51 per tCO<sub>2</sub>. Our
estimates incorporate updated scientific understanding
throughout all components of SC-CO<sub>2</sub> estimation in
the new open-source Greenhouse Gas Impact Value Estimator
(GIVE) model, in a manner fully responsive to the near-term
NASEM recommendations. Our higher SC-CO<sub>2</sub> values,
compared with estimates currently used in policy evaluation,
substantially increase the estimated benefits of greenhouse
gas mitigation and thereby increase the expected net
benefits of more stringent climate policies.},
Doi = {10.1038/s41586-022-05224-9},
Key = {fds367395}
}
@article{fds365138,
Author = {Newell, RG and Pizer, WA and Prest, BC},
Title = {A discounting rule for the social cost of
carbon},
Journal = {Journal of the Association of Environmental and Resource
Economists},
Volume = {9},
Number = {5},
Pages = {1017-1046},
Year = {2022},
Month = {September},
url = {http://dx.doi.org/10.1086/718145},
Abstract = {We develop a discounting rule for estimating the social cost
of carbon (SCC) given uncertain economic growth. Diminishing
marginal utility of income implies a relationship between
the discount rate term structure and economic growth
uncertainty. In the classic Ramsey framework, this
relationship is governed by parameters reflecting pure time
preference and the elasticity of the marginal utility of
consumption, yet disagreement remains about the values of
these parameters. We calibrate these parameters to match
empirical evidence on both the future interest rate term
structure and economic growth uncertainty, while also
maintaining consistency with discount rates used for
shorter-term benefit-cost analysis. Such an integrated
approach is crucial amid growth uncertainty, where growth is
also a key determinant of climate damages. This results in
an empirically driven, stochastic discounting rule to be
used in estimating the SCC that also accounts for the
correlation between climate damage estimates and discount
rates.},
Doi = {10.1086/718145},
Key = {fds365138}
}
@article{fds364257,
Author = {Rennert, K and Prest, BC and Pizer, WA and Newell, RG and Anthoff, D and Kingdon, C and Rennels, L and Cooke, R and Raftery, AE and Ševčíková, H and Errickson, F},
Title = {The Social Cost of Carbon: Advances in Long-Term
Probabilistic Projections of Population, GDP, Emissions, and
Discount Rates},
Journal = {Brookings Papers on Economic Activity},
Volume = {2021-Fall},
Pages = {223-305},
Year = {2021},
Month = {September},
url = {http://dx.doi.org/10.1353/eca.2022.0003},
Abstract = {The social cost of carbon (SCC) is a crucial metric for
inform-ing climate policy, most notably for guiding climate
regulations issued by the US government. Characterization of
uncertainty and transparency of assump-tions are critical
for supporting such an influential metric. Challenges
inherent to SCC estimation push the boundaries of typical
analytical techniques and require augmented approaches to
assess uncertainty, raising important considerations for
discounting. This paper addresses the challenges of
projecting very long-term economic growth, population, and
greenhouse gas emissions, as well as cali-bration of
discounting parameters for consistency with those
projections. Our work improves on alternative approaches,
such as nonprobabilistic scenarios and constant discounting,
that have been used by the government but do not fully
characterize the uncertainty distribution of fully
probabilistic model input data or corresponding SCC estimate
outputs. Incorporating the full range of economic
uncertainty in the social cost of carbon underscores the
importance of adopting a stochastic discounting approach to
account for uncertainty in an integrated
manner.},
Doi = {10.1353/eca.2022.0003},
Key = {fds364257}
}
@article{fds355471,
Author = {Li, Q and Pizer, WA},
Title = {Use of the consumption discount rate for public policy over
the distant future},
Journal = {Journal of Environmental Economics and Management},
Volume = {107},
Year = {2021},
Month = {May},
url = {http://dx.doi.org/10.1016/j.jeem.2021.102428},
Abstract = {The choice of discount rate has a significant impact on net
benefit estimates when costs today have benefits over long
time horizons. Standard U.S. government practice for
cost–benefit analysis is to bound such analysis using two
alternative rates. These rates are meant to represent the
rate of return paid by capital investment and the rate
received by consumers. Previous work has shown this approach
legitimately bounds the analysis—but only when future
benefits accrue directly to consumers either in a two-period
model or as a perpetuity. We generalize to consider
arbitrary patterns of future benefits, accruing either
directly to consumers or indirectly through future
investment. We derive an expression for the appropriate
discount rate and show that it converges to the consumption
rate for benefits increasingly far into the future. More
generally, the bounding rates depend on the temporal pattern
of the undiscounted dollars. As an application, we estimate
the appropriate discount rate for climate change damages
from carbon dioxide, finding it lies in a narrow range (
±0.5 percent) around the consumer rate of
interest.},
Doi = {10.1016/j.jeem.2021.102428},
Key = {fds355471}
}
@article{fds359867,
Author = {Wiener, J and Aldy, J and Felgenhauer, T and Borsuk, M and Pizer, W and Tavoni, M and Belaia, M and Ghosh, A},
Title = {Social Science Research to Inform Solar Geoengineering},
Journal = {Science},
Volume = {374},
Number = {6569},
Pages = {815-818},
Year = {2021},
url = {http://dx.doi.org/10.1126/science.abj6517},
Abstract = {[Figure: see text].},
Doi = {10.1126/science.abj6517},
Key = {fds359867}
}
@article{fds336244,
Author = {Pizer, WA and Prest, BC},
Title = {Prices versus quantities with policy updating},
Journal = {Journal of the Association of Environmental and Resource
Economists},
Volume = {7},
Number = {3},
Pages = {483-518},
Publisher = {University of Chicago Press},
Year = {2020},
Month = {May},
url = {http://dx.doi.org/10.1086/707142},
Abstract = {Weitzman shows that the welfare advantage of price versus
quantity regulation turns on the relative slopes of marginal
costs and benefits when policy is set before uncertain
shocks are known. Policy updating over time changes this
result. Under intertemporally tradable quantity regulation,
permit prices are determined by firms’ expectations about
future policy updates, and the advantage of prices versus
quantities instead turns on firms’ expectations of policy
changes. If firms accurately predict policy changes and the
government maximizes welfare, quantity regulation can
achieve the first best. Price regulation, lacking an
intertemporal link, cannot. The preference tilts back toward
prices under more realistic assumptions where governments
set policy inefficiently or firms imperfectly anticipate
policy changes. In general, the advantage turns on
information and expectations, not relative slopes. Given the
prevalence of intertemporally tradable permits and policy
updates, our results suggest new considerations in the
choice between price and quantity regulation.},
Doi = {10.1086/707142},
Key = {fds336244}
}
@article{fds366511,
Author = {Pizer, WA},
Title = {Valuing the Greenland ice sheet and other complex
geophysical phenomena.},
Journal = {Proceedings of the National Academy of Sciences of the
United States of America},
Volume = {116},
Number = {25},
Pages = {12134-12135},
Year = {2019},
Month = {June},
url = {http://dx.doi.org/10.1073/pnas.1906927116},
Doi = {10.1073/pnas.1906927116},
Key = {fds366511}
}
@article{fds330471,
Author = {Cao, J and Ho, MS and Li, Y and Newell, RG and Pizer,
WA},
Title = {Chinese residential electricity consumption: Estimation and
forecast using micro-data},
Journal = {Resource and Energy Economics},
Volume = {56},
Pages = {6-27},
Publisher = {Elsevier BV},
Year = {2019},
Month = {May},
url = {http://dx.doi.org/10.1016/j.reseneeco.2017.10.003},
Abstract = {Based on econometric estimation using data from the Chinese
Urban Household Survey, we develop a preferred forecast
range of 85–143 percent growth in residential per capita
electricity demand over 2009–2025. Our analysis suggests
that per capita income growth drives a 43% increase, with
the remainder due to an unexplained time trend. Roughly
one-third of the income-driven demand comes from increases
in the stock of specific major appliances, particularly AC
units. The other two-thirds comes from non-specific sources
of income-driven growth and is based on an estimated income
elasticity that falls from 0.28 to 0.11 as income rises.
While the stock of refrigerators is not projected to
increase, we find that they contribute nearly 20 percent of
household electricity demand. Alternative plausible time
trend assumptions are responsible for the wide range of
85–143 percent. Meanwhile we estimate a price elasticity
of demand of −0.7. These estimates point to carbon pricing
and appliance efficiency policies that could substantially
reduce demand.},
Doi = {10.1016/j.reseneeco.2017.10.003},
Key = {fds330471}
}
@article{fds342118,
Author = {Newell, RG and Pizer, WA and Raimi, D},
Title = {U.S. federal government subsidies for clean energy: Design
choices and implications},
Journal = {Energy Economics},
Volume = {80},
Pages = {831-841},
Year = {2019},
Month = {May},
url = {http://dx.doi.org/10.1016/j.eneco.2019.02.018},
Abstract = {Subsidies for clean energy deployment have become a major
component of U.S. federal energy and climate policy. After a
surge in spending under the American Recovery and
Reinvestment Act of 2009, they are an even larger component
but now face increased scrutiny. Given their lasting
presence, how does one design these subsidies to be as
cost-effective as possible? Surprisingly, the conceptual
framework and empirical evidence available to help
policymakers identify which subsidies generate the most
“bang for the buck” are limited. To help answer this
question, we begin with an overview of the justifications
for, and the arguments against, subsidizing clean energy
technologies. Next, we briefly describe major subsidies.
Finally, we summarize key design choices, suggesting an
increased focus on upfront cash payments for physical
outcomes such as capacity. This contrasts with the
considerable focus on tax credits, loan guarantees,
production, and cost-based subsidies which have been more
prominent to date.},
Doi = {10.1016/j.eneco.2019.02.018},
Key = {fds342118}
}
@article{fds336242,
Author = {Fischer, C and Pizer, WA},
Title = {Horizontal equity effects in energy regulation},
Journal = {Journal of the Association of Environmental and Resource
Economists},
Volume = {6},
Number = {S1},
Pages = {S209-S237},
Publisher = {University of Chicago Press},
Year = {2019},
Month = {March},
url = {http://dx.doi.org/10.1086/701192},
Abstract = {Choices in energy regulation, particularly whether and how
to price externalities, can have widely different
distributional consequences both across and within income
groups. Traditional welfare theory focuses largely on
effects across income groups; such “vertical equity”
concerns can typically be addressed by a progressive
redistribution of emissions revenues. In this paper, we
review alternative economic perspectives that give rise to
equity concerns within income groups, or “horizontal
equity,” and suggest operational measures. We then apply
those measures to a stylized model of pollution regulation
in the electricity sector. In addition, we look for ways to
present the information behind those measures directly to
stakeholders. We show how horizontal equity concerns might
overshadow efficiency concerns in this context.},
Doi = {10.1086/701192},
Key = {fds336242}
}
@article{fds342570,
Author = {Deryugina, T and Fullerton, D and Pizer, WA},
Title = {An introduction to energy policy trade-offs between economic
efficiency and distributional equity},
Journal = {Journal of the Association of Environmental and Resource
Economists},
Volume = {6},
Number = {S1},
Pages = {S1-S6},
Publisher = {University of Chicago Press},
Year = {2019},
Month = {March},
url = {http://dx.doi.org/10.1086/701515},
Doi = {10.1086/701515},
Key = {fds342570}
}
@article{fds336243,
Author = {Pizer, WA and Sexton, S},
Title = {The Distributional Impacts of Energy Taxes},
Journal = {Review of Environmental Economics and Policy},
Volume = {13},
Number = {1},
Pages = {104-123},
Year = {2019},
Month = {February},
url = {http://dx.doi.org/10.1093/reep/rey021},
Abstract = {Taxes have long been advocated by economists for efficient
pollution control, particularly in the energy sector.
However, these taxes may enjoy less political support than
standards-based regulation at least partly because of the
common assumption that they place a greater burden on the
poor than the rich. This article evaluates the validity of
that assumption by reviewing the literature on the
distributional impacts of energy taxes and by analyzing
energy consumption surveys in select countries. The evidence
suggests that energy taxes need not be as regressive as is
often assumed. We find that the incidence (i.e.,
distributional impact) of such taxes depends upon the energy
commodities that are taxed; the physical, social, and
climatic characteristics of the jurisdictions in which they
are implemented; and the use of energy tax revenues. We also
show that the variation in household energy expenditure is
greater within income groups than across income groups and
that such variation is not easily reduced.},
Doi = {10.1093/reep/rey021},
Key = {fds336243}
}
@article{fds340746,
Author = {Li, Y and Pizer, WA and Wu, L},
Title = {Climate change and residential electricity consumption in
the Yangtze River Delta, China.},
Journal = {Proceedings of the National Academy of Sciences of the
United States of America},
Volume = {116},
Number = {2},
Pages = {472-477},
Year = {2019},
Month = {January},
url = {http://dx.doi.org/10.1073/pnas.1804667115},
Abstract = {Estimating the impact of climate change on energy use across
the globe is essential for analysis of both mitigation and
adaptation policies. Yet existing empirical estimates are
concentrated in Western countries, especially the United
States. We use daily data on household electricity
consumption to estimate how electricity consumption would
change in Shanghai in the context of climate change. For
colder days <7 °C, a 1 °C increase in daily temperature
reduces electricity consumption by 2.8%. On warm days >25
°C, a 1 °C increase in daily temperatures leads to a 14.5%
increase in electricity consumption. As income increases,
households' weather sensitivity remains the same for hotter
days in the summer but increases during the winter. We use
this estimated behavior in conjunction with a collection of
downscaled global climate models (GCMs) to construct a
relationship between future annual global mean surface
temperature (GMST) changes and annual residential
electricity consumption. We find that annual electricity
consumption increases by 9.2% per +1 °C in annual GMST. In
comparison, annual peak electricity use increases by as much
as 36.1% per +1 °C in annual GMST. Although most accurate
for Shanghai, our findings could be most credibly extended
to the urban areas in the Yangtze River Delta, covering
roughly one-fifth of China's urban population and one-fourth
of the gross domestic product.},
Doi = {10.1073/pnas.1804667115},
Key = {fds340746}
}
@article{fds336240,
Author = {Bielen, DA and Newell, RG and Pizer, WA},
Title = {Who did the ethanol tax credit benefit? An event analysis of
subsidy incidence},
Journal = {Journal of Public Economics},
Volume = {161},
Pages = {1-14},
Publisher = {Elsevier BV},
Year = {2018},
Month = {May},
url = {http://dx.doi.org/10.1016/j.jpubeco.2018.03.005},
Abstract = {At the end of 2011, the Volumetric Ethanol Excise Tax Credit
(VEETC), which had subsidized the blending of ethanol in
gasoline, was allowed to expire. During its tenure, the
subsidy was the subject of intense scrutiny concerning who
benefited from its existence. Using commodity price data, we
estimate the subsidy incidence accruing to corn farmers,
ethanol producers, gasoline blenders, and gasoline consumers
around the time of expiration. Our empirical approach
contributes methodologically to the event studies literature
by analyzing futures contract prices (as opposed to spot
prices) when possible. Ultimately, we find compelling
evidence that, at the date of VEETC expiration, ethanol
producers captured about 25¢ of the 45¢ subsidy per gallon
of ethanol blended. We find suggestive, albeit inconclusive,
evidence that a portion of this benefit (about 5¢ per
gallon) was passed further upstream from ethanol producers
to corn farmers. Most of the remainder seems most likely to
have been captured by the blenders themselves. On the
petroleum side, we find no evidence that oil refiners
captured any part of the subsidy. We also find no evidence
that the subsidy was passed downstream to gasoline consumers
in the form of lower gasoline prices.},
Doi = {10.1016/j.jpubeco.2018.03.005},
Key = {fds336240}
}
@article{fds332833,
Author = {Iyer, G and Calvin, K and Clarke, L and Edmonds, J and Hultman, N and Hartin, C and McJeon, H and Aldy, J and Pizer, W},
Title = {Implications of sustainable development considerations for
comparability across nationally determined
contributions},
Journal = {Nature Climate Change},
Volume = {8},
Number = {2},
Pages = {124-129},
Publisher = {Springer Nature},
Year = {2018},
Month = {February},
url = {http://dx.doi.org/10.1038/s41558-017-0039-z},
Abstract = {An important component of the Paris Agreement is the
assessment of comparability across nationally determined
contributions (NDCs). Indeed, game-theory literature on
international environmental agreements highlights the need
for comparable emission-mitigation efforts by countries to
avoid free-riding 1 . At the same time, there are
well-recognized links between mitigation and other national
priorities, including but not limited to the 17 United
Nations Sustainable Development Goals (SDGs) 2-6, which
raises the question of how such links might influence
comparability assessments. Here, using a global integrated
assessment model 7, we demonstrate that geographical
distributions of the influence of meeting the domestic
mitigation component of the NDCs on a subset of the broader
SDGs may not align with distributions of effort across NDCs
obtained from conventional emissions-based or cost-based
comparability metrics 8-11 . This implies that comparability
assessments would be altered if interactions between
mitigation and other SDGs were accounted for. Furthermore,
we demonstrate that the extent to which these distributions
differ depends on the degree to which mitigation activities
directly affect broader SDGs domestically and indirectly
affect international goals, and whether these effects are
synergistic or antagonistic. Our analysis provides a
foundation for assessing how comparability across NDCs could
be better understood in the larger context of
sustainability.},
Doi = {10.1038/s41558-017-0039-z},
Key = {fds332833}
}
@article{fds327319,
Author = {Pizer, WA},
Title = {What's the damage from climate change?},
Journal = {Science (New York, N.Y.)},
Volume = {356},
Number = {6345},
Pages = {1330-1331},
Year = {2017},
Month = {June},
url = {http://dx.doi.org/10.1126/science.aan5201},
Doi = {10.1126/science.aan5201},
Key = {fds327319}
}
@article{fds317869,
Author = {Aldy, JE and Pizer, WA},
Title = {Alternative metrics for comparing domestic climate change
mitigation efforts and the emerging international climate
policy architecture},
Journal = {Review of Environmental Economics and Policy},
Volume = {10},
Number = {1},
Pages = {3-24},
Publisher = {Oxford University Press (OUP)},
Year = {2016},
Month = {December},
url = {http://dx.doi.org/10.1093/reep/rev013},
Doi = {10.1093/reep/rev013},
Key = {fds317869}
}
@article{fds328044,
Author = {Aldy, JE and Pizer, WA and Akimoto, K},
Title = {Transparency, Policy Surveillance, and the Comparison of
Mitigation Efforts},
Year = {2016},
Month = {November},
Key = {fds328044}
}
@article{fds320241,
Author = {Aldy, J and Pizer, W and Tavoni, M and Reis, LA and Akimoto, K and Blanford, G and Carraro, C and Clarke, LE and Edmonds, J and Iyer, GC and McJeon, HC and Richels, R and Rose, S and Sano, F},
Title = {Economic tools to promote transparency and comparability in
the Paris Agreement},
Journal = {Nature Climate Change},
Volume = {6},
Number = {11},
Pages = {1000-1004},
Publisher = {Springer Nature},
Year = {2016},
Month = {November},
url = {http://dx.doi.org/10.1038/nclimate3106},
Abstract = {The Paris Agreement culminates a six-year transition towards
an international climate policy architecture based on
parties submitting national pledges every five years. An
important policy task will be to assess and compare these
contributions. We use four integrated assessment models to
produce metrics of Paris Agreement pledges, and show
differentiated effort across countries: wealthier countries
pledge to undertake greater emission reductions with higher
costs. The pledges fall in the lower end of the
distributions of the social cost of carbon and the
cost-minimizing path to limiting warming to 2 °C,
suggesting insufficient global ambition in light of leaders'
climate goals. Countries' marginal abatement costs vary by
two orders of magnitude, illustrating that large efficiency
gains are available through joint mitigation efforts and/or
carbon price coordination. Marginal costs rise almost
proportionally with income, but full policy costs reveal
more complex regional patterns due to terms of trade
effects.},
Doi = {10.1038/nclimate3106},
Key = {fds320241}
}
@article{fds317867,
Author = {Dietz, S and Groom, B and Pizer, WA},
Title = {Weighing the costs and benefits of climate change to our
children},
Journal = {Future of Children},
Volume = {26},
Number = {1},
Pages = {133-155},
Publisher = {Johns Hopkins University Press},
Year = {2016},
Month = {March},
url = {http://dx.doi.org/10.1353/foc.2016.0007},
Abstract = {Our efforts to put the brakes on climate change or adapt to
a warming climate present a fundamental tradeoff between
costs borne today and benefits that accrue to the children
and grandchildren of the current generation. In making
investments today that affect future generations’
prospects, we need to think carefully about how we value
their welfare compared to our own. A common economic formula
recommends giving up only 5 cents today for every dollar of
benefits 100 years in the future; we call this discounting
the future. Underlying this approach is the assumption that
future generations will be much better off than our own,
just as we are much wealthier than our ancestors were. Would
our descendants’ agree with this approach? Are there
reasons to put more value on future benefits? William Pizer,
Ben Groom, and Simon Dietz discuss three possible reasons
that we might put a higher value on future benefits. First,
people disagree considerably about the correct discount
rate. Other plausible interpretations of society’s
preferences or observed data could increase the weight we
place on future benefits by as much as a factor of five.
Second, we may have failed to correctly value future climate
change impacts, particularly those related to the loss of
environmental amenities that have no close monetary
substitutes. Third, we may not be properly valuing the risk
that a warming climate could cause sudden and catastrophic
changes that would drastically alter the size of the
population. Ultimately, the authors write, many of the
choices about how we value future generations’ welfare
come down to ethical questions, and many of the decisions we
must make come down to societal preferences—all of which
will be difficult to extract from data or
theory.},
Doi = {10.1353/foc.2016.0007},
Key = {fds317867}
}
@article{fds343242,
Author = {Aldy, JE and Pizer, WA},
Title = {The competitiveness impacts of climate change mitigation
policies},
Pages = {565-595},
Publisher = {University of Chicago Press},
Year = {2015},
Month = {December},
url = {http://dx.doi.org/10.1086/683305},
Abstract = {The pollution haven hypothesis suggests that unilateral
domestic climate change mitigation policy would impose
significant economic costs on carbon-intensive industries,
resulting in declining output and increasing net imports. In
order to evaluate this hypothesis, we undertake a two-step
empirical analysis. First, we estimate how production and
net imports change in response to energy prices using a
35-year panel of approximately 450 US manufacturing
industries. Second, we use these estimated relationships to
simulate the impacts of changes in energy prices resulting
from a $15 per ton carbon price. We find that
energy-intensive manufacturing industries are more likely to
experience decreases in production and increases in net
imports than less-intensive industries. Our best estimate is
that competitiveness effects—measured by the increase in
net imports—are as large as 0.8% for the most
energy-intensive industries and represent no more than about
one-sixth of the estimated decrease in production.},
Doi = {10.1086/683305},
Key = {fds343242}
}
@article{fds267328,
Author = {Murray, BC and Pizer, WA and Ross, MT},
Title = {Regulating existing power plants under the U.S. Clean Air
Act: Present and future consequences of key design
choices},
Journal = {Energy Policy},
Volume = {83},
Pages = {87-98},
Publisher = {Elsevier BV},
Year = {2015},
Month = {August},
ISSN = {0301-4215},
url = {http://dx.doi.org/10.1016/j.enpol.2015.03.028},
Abstract = {In June 2014, the U.S. EPA released its proposed rules to
regulate carbon dioxide emissions from existing fossil fuel
power plants, triggering considerable debate on the
proposal's design and its environmental and economic
consequences. One question not addressed by this debate is
this: What if the EPA regulations turn out to be inadequate
to address future mitigation goals? That is, what will the
landscape for future policies look like if these regulations
turn out to be just an interim measure? This analysis
compares potential short- and long-term consequences of
several key regulatory design choices, including mass-based
versus rate-based standards, tradable versus non-tradable
standards, and differentiated versus single standards. It
finds that long-term consequences may be significant in
terms of the legacy they leave for future policy revisions:
tradable standards lead to lower electricity prices and
become weaker over time; differentiated tradable standards
lead to relatively greater investment in coal retrofits;
non-tradable standards lead to relatively greater retirement
of coal capacity. It may be the case that key policy choices
entail one set of trade-offs if proposed EPA rules are
viewed as relatively permanent and final and another set of
tradeoffs if the rules are viewed as an interim
solution.},
Doi = {10.1016/j.enpol.2015.03.028},
Key = {fds267328}
}
@article{fds267329,
Author = {Pizer, WA and Yates, AJ},
Title = {Terminating links between emission trading
programs},
Journal = {Journal of Environmental Economics and Management},
Volume = {71},
Pages = {142-159},
Publisher = {Elsevier BV},
Year = {2015},
Month = {May},
ISSN = {0095-0696},
url = {http://hdl.handle.net/10161/10258 Duke open
access},
Abstract = {Links between emission trading programs are not immutable,
as highlighted by New Jersey's exit from the Regional
Greenhouse Gas Initiative in 2011. This raises the question
of what to do with existing permits that are banked for
future use-choices that have consequences for market
behavior in advance of, or upon speculation about,
delinking. We consider two delinking policies. One
differentiates banked permits by origin, the other treats
banked permits the same. We describe the price behavior and
relative cost-effectiveness of each policy. Treating permits
differently generally leads to higher costs, and may lead to
price divergence, even with only speculation about
delinking.},
Doi = {10.1016/j.jeem.2015.03.003},
Key = {fds267329}
}
@article{fds267332,
Author = {Pizer, W and Adler, M and Aldy, J and Anthoff, D and Cropper, M and Gillingham, K and Greenstone, M and Murray, B and Newell, R and Richels,
R and Rowell, A and Waldhoff, S and Wiener, J},
Title = {Using and improving the social cost of carbon},
Journal = {Science},
Volume = {346},
Number = {6214},
Pages = {1189-1190},
Year = {2014},
Month = {December},
url = {http://www.sciencemag.org/content/346/6214/1189.full},
Doi = {10.1126/science.1259774},
Key = {fds267332}
}
@article{fds267333,
Author = {Newell, RG and Pizer, WA and Raimi, D},
Title = {Carbon markets: Past, present, and future},
Journal = {Annual Review of Resource Economics},
Volume = {6},
Number = {1},
Pages = {191-215},
Publisher = {ANNUAL REVIEWS},
Year = {2014},
Month = {October},
ISSN = {1941-1340},
url = {http://hdl.handle.net/10161/10262 Duke open
access},
Abstract = {Carbon markets are substantial and expanding. There are many
lessons from experience over the past 9 years: fewer free
allowances, careful moderation of low and high prices, and a
recognition that trading systems require adjustments that
have consequences for market participants and market
confidence. Moreover, the emerging international
architecture features separate emissions trading systems
serving distinct jurisdictions. These programs are
complemented by a variety of other types of policies
alongside the carbon markets. This architecture sits in
sharp contrast to the integrated global trading architecture
envisioned 15 years ago by the designers of the Kyoto
Protocol and raises a suite of new questions. In this new
architecture, jurisdictions with emissions trading have to
decide how, whether, and when to link with one another, and
policy makers must confront how to measure both the
comparability of efforts among markets and the comparability
between markets and a variety of other policy
approaches.},
Doi = {10.1146/annurev-resource-100913-012655},
Key = {fds267333}
}
@article{fds267330,
Author = {Aldy, JE and Pizer, WA},
Title = {Comparability of Effort in International Climate Policy
Architecture},
Year = {2014},
Month = {February},
Abstract = {The comparability of domestic actions to mitigate global
climate change has important implications for the stability,
equity, and efficiency of international climate agreements.
We examine a variety of metrics that could be used to
evaluate countries’ climate change mitigation effort and
illustrate their potential application for large developed
and developing countries. We also explain how transparent
measures of the comparability of effort can contribute to
the design of international and domestic climate change
policy along several dimensions. For example, such measures
can facilitate participation and compliance in an agreement
if they can illustrate that all parties are doing their
“fair share.” Second, these measures can inform the
bilateral linking of domestic cap-and-trade programs in a
manner akin to how nations negotiate the lowering of trade
barriers more generally in trade policy. Third, assessments
of the comparability of effort can affect whether to
implement and, if necessary, the stringency of unilateral
border measures (e.g., a border tax). Finally, such
assessments demonstrate the need for a well-functioning
policy surveillance regime.},
Key = {fds267330}
}
@article{fds267335,
Author = {Arrow, KJ and Cropper, ML and Gollier, C and Groom, B and Heal, GM and Newell, RG and Nordhaus, WD and Pindyck, RS and Pizer, WA and Portney,
PR and Sterner, T and Tol, RSJ and Weitzman, ML},
Title = {Should governments use a declining discount rate in project
analysis?},
Journal = {Review of Environmental Economics and Policy},
Volume = {8},
Number = {2},
Pages = {145-163},
Publisher = {Oxford University Press (OUP)},
Year = {2014},
Month = {January},
ISSN = {1750-6816},
url = {http://hdl.handle.net/10161/10268 Duke open
access},
Abstract = {At a workshop held at Resources for the Future in September
2011, twelve of the authors were asked by the US
Environmental Protection Agency (EPA) to provide advice on
the principles to be used in discounting the benefits and
costs of projects that affect future generations. Maureen L.
Cropper chaired the workshop. Much of the discussion in this
article is based on the authors' recommendations and advice
presented at the workshop. © The Author
2014.},
Doi = {10.1093/reep/reu008},
Key = {fds267335}
}
@article{fds267336,
Author = {Newell, RG and Pizer, WA and Raimi, D},
Title = {Carbon markets: Effective policy? - Response},
Journal = {Science},
Volume = {344},
Number = {6191},
Pages = {1460-1461},
Year = {2014},
Month = {January},
ISSN = {0036-8075},
url = {http://hdl.handle.net/10161/10261 Duke open
access},
Doi = {10.1126/science.344.6191.1460-c},
Key = {fds267336}
}
@article{fds267337,
Author = {Cropper, ML and Freeman, MC and Groom, B and Pizer,
WA},
Title = {Declining discount rates},
Journal = {American Economic Review},
Volume = {104},
Number = {5},
Pages = {538-543},
Publisher = {American Economic Association},
Year = {2014},
Month = {January},
ISSN = {0002-8282},
url = {http://dx.doi.org/10.1257/aer.104.5.538},
Doi = {10.1257/aer.104.5.538},
Key = {fds267337}
}
@article{fds267338,
Author = {Newell, RG and Pizer, WA and Raimi, D},
Title = {Carbon market lessons and global policy outlook},
Journal = {Science},
Volume = {343},
Number = {6177},
Pages = {1316-1317},
Year = {2014},
Month = {January},
ISSN = {0036-8075},
url = {http://hdl.handle.net/10161/10260 Duke open
access},
Abstract = {Ongoing work on linking markets and mixing policies builds
on successes and failures in pricing and trading
carbon.},
Doi = {10.1126/science.1246907},
Key = {fds267338}
}
@article{fds317870,
Author = {Arrow, KJ and Cropper, M and Gollier, C and Groom, B and Heal, GM and Newell, RG and Nordhaus, WD and Pindyck, RS and Pizer, WA and Portney,
P and Sterner, T and Tol, RSJ and Weitzman, M},
Title = {How Should Benefits and Costs Be Discounted in an
Intergenerational Context? The Views of an Expert
Panel},
Year = {2013},
Month = {December},
Abstract = {In September 2011, the US Environmental Protection Agency
asked 12 economists how the benefits and costs of
regulations should be discounted for projects that affect
future generations. This paper summarizes the views of the
panel on three topics: the use of the Ramsey formula as an
organizing principle for determining discount rates over
long horizons, whether the discount rate should decline over
time, and how intra- and intergenerational discounting
practices can be made compatible. The panel members agree
that the Ramsey formula provides a useful framework for
thinking about intergenerational discounting. We also agree
that theory provides compelling arguments for a declining
certainty-equivalent discount rate. In the Ramsey formula,
uncertainty about the future rate of growth in per capita
consumption can lead to a declining consumption rate of
discount, assuming that shocks to consumption are positively
correlated. This uncertainty in future consumption growth
rates may be estimated econometrically based on historic
observations, or it can be derived from subjective
uncertainty about the mean rate of growth in mean
consumption or its volatility. Determining the remaining
parameters of the Ramsey formula is, however,
challenging.},
Key = {fds317870}
}
@article{fds267341,
Author = {Newell, RG and Pizer, WA and Raimi, D},
Title = {Carbon markets 15 years after Kyoto: Lessons learned, new
challenges},
Journal = {Journal of Economic Perspectives},
Volume = {27},
Number = {1},
Pages = {123-146},
Publisher = {American Economic Association},
Year = {2013},
Month = {December},
ISSN = {0895-3309},
url = {http://hdl.handle.net/10161/10264 Duke open
access},
Doi = {10.1257/jep.27.1.123},
Key = {fds267341}
}
@article{fds267339,
Author = {Arrow, K and Cropper, M and Gollier, C and Groom, B and Heal, G and Newell,
R and Nordhaus, W and Pindyck, R and Pizer, W and Portney, P and Sterner,
T and Tol, RSJ and Weitzman, M},
Title = {Determining benefits and costs for future
generations},
Journal = {Science},
Volume = {341},
Number = {6144},
Pages = {349-350},
Year = {2013},
Month = {January},
ISSN = {0036-8075},
url = {http://hdl.handle.net/10161/10265 Duke open
access},
Abstract = {The United States and others should consider adopting a
different approach to estimating costs and benefits in light
of uncertainty.},
Doi = {10.1126/science.1235665},
Key = {fds267339}
}
@article{fds218831,
Author = {William A. Pizer},
Title = {Carbon Market 15 Years after Kyoto: Lessons Learned, New
Challenges},
Journal = {Journal of Economic Perspectives},
Year = {2013},
Key = {fds218831}
}
@article{fds317871,
Author = {Kerr, S and Leining, C and Sefton, J and Montero, J-P and Vicuna, S and Sanhueza, JE and Grasty, M and Lubowski, RN and Sterner, T and Pizer,
WA and Dodwell, C and Hobley, A},
Title = {Roadmap for Implementing a Greenhouse Gas Emissions Trading
System in Chile: Core Design Options and Policy
Decision-Making Considerations},
Journal = {Motu Working Paper},
Number = {12},
Year = {2012},
Month = {December},
Abstract = {Motu and partners were contracted by the World Bank through
its Partnership for Market Readiness (PMR) initiative to
“Draft a proposal for the implementation in Chile of a
Greenhouse Gas Emissions Trading System (ETS)”. The
specific objective in the terms of reference is to
“Propose a detailed roadmap, including its design
elements, to inform decision-making for an advanced model of
an ETS in Chile”. This is one of a set of four related
reports commissioned to assist the Chilean government in
preparing its “market readiness proposal” (MRP) for
submission to the World Bank. This report is the first step
in a process that aims to clarify how an ETS could work in
Chile and what the environmental, economic and social
impacts would be. This process will allow the Chilean
government and key stakeholders to assess, in a more
informed way, whether an ETS would be desirable in Chile, as
well as the optimal design of an ETS to achieve policy
objectives and priorities. Given that Chile intends to move
forward with a climate policy, an ETS presents several
environmental, economic, and political advantages relative
to other instruments, but also some challenges. This report
addresses each of the core components of an ETS: sector
coverage; point of obligation for regulated sectors; the
level of ambition; linking to other markets and use of
(domestic and international) offsets; emissions trading
phases; and allocation of units. Cost containment, price
stabilisation and potential use of border carbon adjustments
are not covered in detail in this report. Design options are
analysed from a largely conceptual basis, but drawing on
lessons learned in operating schemes and taking account of
Chile’s national circumstances to the extent of available
information, as well as highlighting critical points of
divergence in scheme design depending on the underlying
policy goals. The design options are brought together in a
decision-making framework out of which we identify a smaller
number of central options that appear to make the most sense
for Chile. Each of the sections on core components
identifies issues where Chile-specific research is needed to
better inform key design decisions and technical
implementation of the scheme ultimately chosen. Research
needs for the next phase of policy development are
discussed. We conclude with a high-level discussion of
process going forward, both in terms of education and
learning to enable an informed national debate, and in terms
of developing broad (political, industry, and public)
support for more serious consideration of an ETS as an
option for Chile. Chile could have several overlapping
objectives for an ETS: cost-effectively contributing to
global emission reductions; lowering the carbon-footprint of
Chile’s exports in anticipation of potential trade
restrictions against high-emitting countries and products;
driving sustainable development including stimulation of new
technology; profiting from sales of units to international
buyers; generating co-benefits and avoiding perverse
outcomes. The balance among objectives will affect design
decisions so clarity about their relative weight and their
implications for design is useful. There was a clear signal
at the Durban climate change conference (2012) that at some
point developing countries will be asked to have
commitments. Chile will want to be prepared to respond to
this. Greenhouse gas (GHG) emissions trading systems evolved
out of domestic cap-and-trade systems that control local
pollutants. If there were a global GHG agreement with a cap,
Chile would simply be one entity within the global
cap-and-trade market. Absent a global GHG agreement with a
cap, every ETS is a compromise between a system that
contributes cost-effectively to global emissions, and a
system that protects local interests in an unstable and
uncertain world. The greatest strength of emissions trading
is that it encourages private actors to use their own
knowledge and skill to find the best mitigation actions,
including long-term investments. In a perfect world
mitigation is done by the myriad of actors who can influence
emissions, at the times and in the places where it is lowest
cost. Even in an imperfect global market, if it is possible
to link emissions markets across countries, linking
facilitates cost-effective location of mitigation effort
across countries by equalising prices across markets, and is
likely to allow Chile to create a more ambitious system
without imposing unacceptable costs on its economy as a
whole. In the current imperfect world, with an uncertain
long-term price and short-term prices that could be quite
different from the long-term price, simply linking to the
“international price” without further price
stabilisation measures would impose risk and volatility on
Chile and would not necessarily move it effectively toward a
low-carbon economy. Linking to other ETS (as a seller) may
also not be feasible in the near term, since the
international market rules post-2012 are still under
negotiation in the United Nations Framework Convention on
Climate Change (UNFCCC) and bilateral agreements outside
this framework are still evolving; linking in order to sell
units can be a complex process. However, an ETS can benefit
Chile even before international ETS linking is possible. It
could facilitate financing for a highly credible Nationally
Appropriate Mitigation Action (NAMA) or through Reducing
Emissions from Deforestation and Degradation (REDD); send a
regulatory and price signal that influences long-lived
investment decisions and stimulates new technology
development, thus placing Chile on a lower-emission
sustainable development pathway; establish Chile as a
leader; avoid any negative emissions-related trade
repercussions from other countries; generate in-country
revenue that can support government policy objectives; and
produce additional environmental, economic, and social
co-benefits. As international pressure builds for more
ambitious global mitigation, Chile will be better prepared
to contribute to international climate change agreements and
compete effectively in a carbon-constrained global economy.
In a world with an agreed global cap-and-trade system, there
would be much work involved in designing and negotiating
that system, but the domestic implementation would then
follow. In our present situation, design involves a series
of compromises – essentially domestic negotiations – in
terms of the domestic cap, international linking and price
control and stabilisation and protection against leakage.
The aims when making these compromises are to achieve
credibility of emissions reduction effort, a level of carbon
price that Chile is comfortable with, and an acceptable
overall impact on the Chilean economy. This tension from
these compromises arises in each section below. Each offers
one or more proposals for specific design decisions. Our
final prototype draws on the design considerations specific
to each section, and creates a package of coordinated
compromises across issues. These are not recommendations but
sensible options to consider as starting places for further
analysis and discussion among government, researchers, and
stakeholders.},
Key = {fds317871}
}
@article{fds317872,
Author = {Ghosh, A and Muller, B and Pizer, WA and Wagner, G},
Title = {Mobilizing the Private Sector: Quantity-Performance
Instruments for Public Climate Funds},
Year = {2012},
Month = {September},
Abstract = {In recent years, public sector funding, in general, and for
the support of activities in developing countries, in
particular, has become more and more “results” and
“performance” oriented. There are different methods by
which performance can be “indicated” (or even
“measured”). The focus of this brief is on activities
that are associated with quantitative performance
indicators, i.e., performance assessed in terms of measured
quantities — such as tonnes (of carbon), kilowatt-hours,
or hectares — as carried out by the private sector. The
aim of this brief is to review options for the use of such
Quantity-Performance (QP) instruments as a way of channeling
public funds to mitigate greenhouse gas emissions in a
cost-effective way. QP instruments reward quantified
mitigation performance, typically measured in tonnes of
carbon dioxide-equivalent of achieved emissions reductions.
As such, they imply exactly the kind of results monitoring
that the current trend in public funding demands. They could
be used by governments or multilateral funds, such as the
Green Climate Fund, to mobilize the private sector and
private sector finance for mitigation activities in
developing countries.},
Key = {fds317872}
}
@article{fds317873,
Author = {Branstetter, L and Pizer, WA},
Title = {Facing the Climate Change Challenge in a Global
Economy},
Year = {2012},
Month = {July},
Abstract = {Over the past two decades, the international community has
struggled to deal constructively with the problem of
mitigating climate change. This is considered by many to be
the preeminent public policy challenge of our time, but
actual policy responses have been relatively modest. This
essay provides an abbreviated narrative history of
international policy in this domain, with a special emphasis
on aspects of the problem, proposed solutions, and
unresolved issues that are of interest to international
economists and informed observers of the global economic
system. We also discuss the potential conflict that could
emerge between free trade principles on the one hand and
environmental policy objectives on the other.},
Key = {fds317873}
}
@article{fds267364,
Author = {Fell, H and MacKenzie, IA and Pizer, WA},
Title = {Prices versus quantities versus bankable
quantities},
Journal = {Resource and Energy Economics},
Volume = {34},
Number = {4},
Pages = {607-623},
Publisher = {Elsevier BV},
Year = {2012},
ISSN = {0928-7655},
url = {http://hdl.handle.net/10161/10276 Duke open
access},
Abstract = {Quantity-based regulation with banking allows regulated
firms to shift obligations across time in response to
periods of unexpectedly high or low marginal costs. Despite
its wide prevalence in existing and proposed emission
trading programs, banking has received limited attention in
past welfare analyses of policy choice under uncertainty. We
address this gap with a model of banking behavior that
captures two key constraints: uncertainty about the future
from the firm's perspective and a limit on negative bank
values (e.g. borrowing). We show conditions where banking
provisions reduce price volatility and lower expected costs
compared to quantity policies without banking. For plausible
parameter values related to U.S. climate change policy, we
find that bankable quantities produce behavior quite similar
to price policies for about two decades and, during this
period, improve welfare by about a $1 billion per year over
fixed quantities. © 2012 Elsevier B.V.},
Doi = {10.1016/j.reseneeco.2012.05.004},
Key = {fds267364}
}
@article{fds267367,
Author = {Pizer, WA and Morgenstern, R and Shih, JS},
Title = {The performance of industrial sector voluntary climate
programs: Climate Wise and 1605(b)},
Journal = {Energy Policy},
Volume = {39},
Number = {12},
Pages = {7907-7916},
Publisher = {Elsevier BV},
Year = {2011},
Month = {December},
ISSN = {0301-4215},
url = {http://dx.doi.org/10.1016/j.enpol.2011.09.040},
Abstract = {Corporate voluntary climate programs have had limited
evaluation. The self-selection of participants-an essential
element of such initiatives-poses challenges to researchers
because the decision to participate may not be random and
may be correlated with outcomes. This study aims to gage the
environmental effectiveness of the industrial sector
elements of two early voluntary climate change programs with
established track records, the U.S. Environmental Protection
Agency's Climate Wise and the U.S. Department of Energy's
Voluntary Reporting of Greenhouse Gases Program (1605(b)).
Particular attention is paid to the participation decision
and how various assumptions affect estimates of program
outcomes using propensity score matching methods applied to
plant-level Census data. Overall, the effects are modest:
reductions in fuel and electricity expenditures are no more
than 10 percent and probably less than 5 percent. Virtually
no evidence suggests either program has a statistically
significant effect on fuel costs. Some evidence indicates
that participation in Climate Wise led to a 3-5 percent
increase in electricity costs that vanished after two years.
Stronger evidence suggests that participation in 1605(b) led
to a 4-8 percent decrease in electricity costs that
persisted for at least three years. These results suggest
that while voluntary programs can play some role in
addressing climate change, they are unlikely to bring about
the kinds of steep reductions called for in the current
debate. © 2011 Elsevier Ltd.},
Doi = {10.1016/j.enpol.2011.09.040},
Key = {fds267367}
}
@article{fds343243,
Author = {Aldy, JE and Pizer, WA},
Title = {The Competitiveness Impacts of Climate Change Mitigation
Policies},
Year = {2011},
Month = {December},
Key = {fds343243}
}
@article{fds267384,
Author = {Aldy, JE and Krupnick, AJ and Newell, RG and Parry, IWH and Pizer,
WA},
Title = {Designing climate mitigation policy},
Journal = {Journal of Economic Literature},
Volume = {48},
Number = {4},
Pages = {903-934},
Publisher = {American Economic Association},
Year = {2010},
Month = {December},
ISSN = {0022-0515},
url = {http://hdl.handle.net/10161/7011 Duke open
access},
Abstract = {This paper provides (for the nonspecialist) a highly
streamlined discussion of the main issues, and
controversies, in the design of climate mitigation policy.
The first part of the paper discusses how much action to
reduce greenhouse gas emissions at the global level is
efficient under both the cost-effectiveness and
welfare-maximizing paradigms. We then discuss various issues
in the implementation of domestic emissions control policy,
instrument choice, and incentives for technological
innovation. Finally, we discuss alternative policy
architectures at the international level.},
Doi = {10.1257/jel.48.4.903},
Key = {fds267384}
}
@article{fds343244,
Author = {Aldy, JE and Krupnick, AJ and Newell, RG and Parry, IWH and Pizer,
WA},
Title = {Designing Climate Mitigation Policy},
Year = {2010},
Month = {December},
Abstract = {This paper provides (for the nonspecialist) a highly
streamlined discussion of the main issues, and
controversies, in the design of climate mitigation policy.
The first part of the paper discusses how much action to
reduce greenhouse gas emissions at the global level is
efficient under both the cost-effectiveness and
welfare-maximizing paradigms. We then discuss various issues
in the implementation of domestic emissions control policy,
instrument choice, and incentives for technological
innovation. Finally, we discuss alternative policy
architectures at the international level. (JEL Q54,
Q58)},
Key = {fds343244}
}
@article{fds267385,
Author = {Blackman, A and Lahiri, B and Pizer, W and Rivera Planter and M and Muñoz
Piña, C},
Title = {Voluntary environmental regulation in developing countries:
Mexico's Clean Industry Program},
Journal = {Journal of Environmental Economics and Management},
Volume = {60},
Number = {3},
Pages = {182-192},
Publisher = {Elsevier BV},
Year = {2010},
Month = {November},
ISSN = {0095-0696},
url = {http://dx.doi.org/10.1016/j.jeem.2010.05.006},
Abstract = {Because conventional command-and-control environmental
regulation often performs poorly in developing countries,
policymakers are increasingly experimenting with
alternatives, including voluntary regulatory programs.
Research in industrialized countries suggests that such
programs are sometimes ineffective, because they mainly
attract relatively clean participants free-riding on
unrelated pollution control investments. We use plant-level
data on more than 100,000 facilities to analyze the Clean
Industry Program, Mexico's flagship voluntary regulatory
initiative. We seek to identify the drivers of participation
and to determine whether the program improves participants'
environmental performance. Using data from the program's
first decade, we find that plants recently fined by
environmental regulators were more likely to participate,
but that after graduating from the program, participants
were not fined at a substantially lower rate than
nonparticipants. These results suggest that although the
Clean Industry Program attracted dirty plants under pressure
from regulators, it did not have a large, lasting impact on
their environmental performance. © 2010 Elsevier
Inc.},
Doi = {10.1016/j.jeem.2010.05.006},
Key = {fds267385}
}
@article{fds304221,
Author = {Pizer, W and Sanchirico, JN and Batz, M},
Title = {Regional patterns of U.S. household carbon
emissions},
Journal = {Climatic Change},
Volume = {99},
Number = {1},
Pages = {47-63},
Publisher = {Springer Nature},
Year = {2010},
Month = {February},
ISSN = {0165-0009},
url = {http://dx.doi.org/10.1007/s10584-009-9637-8},
Abstract = {Market-based policies to address fossil fuel-related
externalities including climate change typically operate by
raising the price of those fuels. Increases in energy prices
have important consequences for a typical U. S. household
that spent almost $4,000 per year on electricity, fuel oil,
natural gas, and gasoline in 2005. A key question for
policymakers is how these consequences vary over different
regions and subpopulations across the country-especially as
adjustment and compensation programs are designed to protect
more vulnerable regions. To answer this question, we use
non-publicly available data from the U. S. Consumer
Expenditure Survey over the period 1984-2000 to estimate
long-run geographic variation in household use of
electricity, fuel oil, natural gas, and gasoline, as well as
the associated incidence of a $10 per ton tax on carbon
dioxide (ignoring behavioral response). We find substantial
variation: incidence from the tax range from $97 dollars per
year per household in New York County, New York to $235 per
year per household in Tensas Parish, Louisiana. This
variation can be explained by differences in energy use,
carbon intensity of electricity generation, and electricity
regulation. © Springer Science + Business Media B.V.
2009.},
Doi = {10.1007/s10584-009-9637-8},
Key = {fds304221}
}
@article{fds267390,
Author = {Pizer, WA and Batz, M and Sanchirico, J},
Title = {Regional Patterns of Household Carbon Emissions},
Journal = {Climatic Change},
Volume = {99},
Number = {1-2},
Pages = {47-63},
Year = {2010},
ISSN = {0165-0009},
url = {http://dx.doi.org/10.1007/s10584-009-9637-8},
Keywords = {Carbon},
Abstract = {Market-based policies to address fossil fuel-related
externalities including climate change typically operate by
raising the price of those fuels. Increases in energy prices
have important consequences for a typical U. S. household
that spent almost $4,000 per year on electricity, fuel oil,
natural gas, and gasoline in 2005. A key question for
policymakers is how these consequences vary over different
regions and subpopulations across the country-especially as
adjustment and compensation programs are designed to protect
more vulnerable regions. To answer this question, we use
non-publicly available data from the U. S. Consumer
Expenditure Survey over the period 1984-2000 to estimate
long-run geographic variation in household use of
electricity, fuel oil, natural gas, and gasoline, as well as
the associated incidence of a $10 per ton tax on carbon
dioxide (ignoring behavioral response). We find substantial
variation: incidence from the tax range from $97 dollars per
year per household in New York County, New York to $235 per
year per household in Tensas Parish, Louisiana. This
variation can be explained by differences in energy use,
carbon intensity of electricity generation, and electricity
regulation. © Springer Science + Business Media B.V.
2009.},
Doi = {10.1007/s10584-009-9637-8},
Key = {fds267390}
}
@article{fds321873,
Author = {Bennear, LS and Olmstead, SM},
Title = {Information Disclosure and Drinking Water
Quality},
Journal = {Resources Magazine},
Pages = {88-89},
Publisher = {Routledge},
Year = {2009},
Month = {October},
url = {http://dx.doi.org/10.4324/9781936331253},
Doi = {10.4324/9781936331253},
Key = {fds321873}
}
@article{fds311238,
Author = {Aldy, JE and Krupnick, A and Newell, RG and Parry, IWH and Pizer,
WA},
Title = {Designing Climate Mitigation Policy},
Year = {2009},
Month = {June},
url = {http://www.rff.org/Aldy.cfm},
Abstract = {This paper provides an exhaustive review of critical issues
in the design of climate mitigation policy by pulling
together key findings and controversies from diverse
literatures on mitigation costs, damage valuation, policy
instrument choice, technological innovation, and
international climate policy. We begin with the broadest
issue of how high assessments suggest the near and medium
term price on greenhouse gases would need to be, both under
cost-effective stabilization of global climate and under net
benefit maximization or Pigouvian emissions pricing. The
remainder of the paper focuses on the appropriate scope of
regulation, issues in policy instrument choice,
complementary technology policy, and international policy
architectures.},
Key = {fds311238}
}
@article{fds267323,
Author = {Hall, DS and Levi, MA and Pizer, WA and Ueno, T},
Title = {Policies for developing country engagement},
Pages = {649-681},
Booktitle = {Post-Kyoto International Climate Policy: Implementing
Architectures for Agreement},
Publisher = {Cambridge University Press},
Address = {Cambridge},
Editor = {Joseph Aldy and Robert Stavins},
Year = {2009},
Month = {January},
url = {http://dx.doi.org/10.1017/CBO9780511813207.022},
Abstract = {Introduction: Much of the debate surrounding global climate
policy focuses on the appropriate role for developing
countries in mitigating global emissions—and on how
industrialized countries can best support and encourage that
role. Climate change is a global problem that requires all
major emitting countries to undertake mitigation efforts;
moreover, developing countries account for most of the
emissions growth projected over the next century. If current
developing countries are going to make significant progress
towards greater prosperity while the world simultaneously
seeks to stabilize atmospheric greenhouse gas (GHG)
concentrations at somewhere between 450 and 750 parts per
million carbon dioxide-equivalent (ppm CO2e), developing
countries are going to have to develop in a less
GHG-intensive fashion than the already-industrialized
economies did (Clarke et al. 2007). Yet developing countries
face considerable obstacles: they lack resources and place
greater priority on economic development relative to
environmental protection. At the same time, industrialized
countries like the United States are well aware that their
own efforts to reduce emissions can be thwarted if, through
trade in goods and services, their emitting activities shift
to non-participants in a climate agreement, or if their GHG
cuts are simply overwhelmed by growth elsewhere. The focus
of this chapter is on the intersection of interests between
developing and developed countries. How can developed
countries—with more resources and, for the most part, a
greater sense of urgency— engage developing countries in a
cooperative effort to mitigate climate change? Part of the
answer is an increasing awareness among developing countries
that they themselves are vulnerable to the impacts of
climate change, which will tend to make them more willing to
seek cooperative solutions.},
Doi = {10.1017/CBO9780511813207.022},
Key = {fds267323}
}
@article{fds267365,
Author = {Murray, BC and Newell, RG and Pizer, WA},
Title = {Balancing cost and emissions certainty: An allowance reserve
for cap-and-trade},
Journal = {Review of Environmental Economics and Policy},
Volume = {3},
Number = {1},
Pages = {84-103},
Publisher = {Oxford University Press (OUP)},
Year = {2009},
Month = {January},
ISSN = {1750-6816},
url = {http://hdl.handle.net/10161/6750 Duke open
access},
Abstract = {On efficiency grounds, the economics community has to date
tended to emphasize price-based policies to address climate
change -- such as taxes or a “safety-valve” price
ceiling for cap-and-trade -— while environmental advocates
have sought a more clear quantitative limit on emissions.
This paper presents a simple modification to the idea of a
safety valve -- a quantitative limit that we call the
allowance reserve. Importantly, this idea may bridge the gap
between competing interests and potentially improve
efficiency relative to tax or other price-based policies.
The last point highlights the deficiencies in several
previous studies of price and quantity controls for climate
change that do not adequately capture the dynamic
opportunities within a cap-and-trade system for allowance
banking, borrowing, and intertemporal arbitrage in response
to unfolding information.},
Doi = {10.1093/reep/ren016},
Key = {fds267365}
}
@article{fds267366,
Author = {Aldy, JE and Pizer, WA},
Title = {Issues in designing U.S. climate change policy},
Journal = {Energy Journal},
Volume = {30},
Number = {3},
Pages = {179-210},
Publisher = {International Association for Energy Economics
(IAEE)},
Year = {2009},
Month = {January},
ISSN = {0195-6574},
url = {http://dx.doi.org/10.5547/ISSN0195-6574-EJ-Vol30-No3-9},
Abstract = {Over the coming decades, the cost of U.S. climate change
policy likely will be comparable to the total cost of all
existing environmental regulation-perhaps 1-2 percent of
national income. In order to avoid higher costs, policy
efforts should create incentives for firms and individuals
to pursue the cheapest climate change mitigation options
over time, among all sectors, across national borders, and
in the face of significant uncertainty. Well-designed
national greenhouse gas mitigation policies can serve as the
foundation for global efforts and as an example for emerging
and developing countries. We present six key policy design
issues that will determine the costs, cost-effectiveness,
and distributional impacts of domestic climate policy:
program scope, cost containment, offsets, revenues and
allowance allocation, competitiveness, and R&D policy. We
synthesize the literature on these design features, review
the implications for the ongoing policy debate, and identify
outstanding research questions that can inform policy
development. Copyright © 2009 by the IAEE.},
Doi = {10.5547/ISSN0195-6574-EJ-Vol30-No3-9},
Key = {fds267366}
}
@article{fds317874,
Author = {Pizer, JEAAWA},
Title = {Issues in Designing U.S. Climate Change Policy},
Volume = {Volume 30},
Number = {Number 3},
Year = {2009},
Key = {fds317874}
}
@article{fds267389,
Author = {Newell, RG and Pizer, WA},
Title = {Carbon mitigation costs for the commercial building sector:
Discrete-continuous choice analysis of multifuel energy
demand},
Journal = {Resource and Energy Economics},
Volume = {30},
Number = {4},
Pages = {527-539},
Publisher = {Elsevier BV},
Year = {2008},
Month = {December},
ISSN = {0928-7655},
url = {http://hdl.handle.net/10161/7456 Duke open
access},
Abstract = {We estimate a carbon mitigation cost curve for the U.S.
commercial sector based on econometric estimation of the
responsiveness of fuel demand and equipment choices to
energy price changes. The model econometrically estimates
fuel demand conditional on fuel choice, which is
characterized by a multinomial logit model. Separate
estimation of end uses (e.g., heating, cooking) using the
U.S. Commercial Buildings Energy Consumption Survey allows
for exceptionally detailed estimation of price
responsiveness disaggregated by end use and fuel type. We
then construct aggregate long-run elasticities, by fuel
type, through a series of simulations; own-price
elasticities range from -0.9 for district heat services to
-2.9 for fuel oil. The simulations form the basis of a
marginal cost curve for carbon mitigation, which suggests
that a price of $20 per ton of carbon would result in an 8%
reduction in commercial carbon emissions, and a price of
$100 per ton would result in a 28% reduction. © 2008
Elsevier B.V. All rights reserved.},
Doi = {10.1016/j.reseneeco.2008.09.004},
Key = {fds267389}
}
@article{fds267386,
Author = {Pizer, WA and Popp, D},
Title = {Endogenizing technological change: Matching empirical
evidence to modeling needs},
Journal = {Energy Economics},
Volume = {30},
Number = {6},
Pages = {2754-2770},
Publisher = {Elsevier BV},
Year = {2008},
Month = {November},
ISSN = {0140-9883},
url = {http://dx.doi.org/10.1016/j.eneco.2008.02.006},
Abstract = {Given that technologies to significantly reduce fossil fuel
emissions are currently unavailable or only available at
high cost, technological change will be a key component of
any long-term strategy to reduce greenhouse gas emissions.
In light of this, the amount of research on the pace,
direction, and benefits of environmentally-friendly
technological change has grown dramatically in recent years.
This research includes empirical work estimating the
magnitude of these effects, and modeling exercises designed
to simulate the importance of endogenous technological
change in response to climate policy. Unfortunately, few
attempts have been made to connect these two streams of
research. This paper attempts to bridge that gap. We review
both the empirical and modeling literature on technological
change. Our focus includes the research and development
process, learning by doing, the role of public versus
private research, and technology diffusion. Our goal is to
provide an agenda for how both empirical and modeling
research in these areas can move forward in a complementary
fashion. In doing so, we discuss both how models used for
policy evaluation can better capture empirical phenomena,
and how empirical research can better address the needs of
models used for policy evaluation. © 2008.},
Doi = {10.1016/j.eneco.2008.02.006},
Key = {fds267386}
}
@article{fds267387,
Author = {Gillingham, K and Newell, RG and Pizer, WA},
Title = {Modeling endogenous technological change for climate policy
analysis},
Journal = {Energy Economics},
Volume = {30},
Number = {6},
Pages = {2734-2753},
Publisher = {Elsevier BV},
Year = {2008},
Month = {November},
ISSN = {0140-9883},
url = {http://hdl.handle.net/10161/6628 Duke open
access},
Abstract = {The approach used to model technological change in a climate
policy model is a critical determinant of its results in
terms of the time path of CO2 prices and costs required to
achieve various emission reduction goals. We provide an
overview of the different approaches used in the literature,
with an emphasis on recent developments regarding endogenous
technological change, research and development, and
learning. Detailed examination sheds light on the salient
features of each approach, including strengths, limitations,
and policy implications. Key issues include proper
accounting for the opportunity costs of climate-related
knowledge generation, treatment of knowledge spillovers and
appropriability, and the empirical basis for parameterizing
technological relationships. No single approach appears to
dominate on all these dimensions, and different approaches
may be preferred depending on the purpose of the analysis,
be it positive or normative. © 2008 Elsevier B.V. All
rights reserved.},
Doi = {10.1016/j.eneco.2008.03.001},
Key = {fds267387}
}
@article{fds267388,
Author = {Newell, RG and Pizer, WA},
Title = {Indexed regulation},
Journal = {Journal of Environmental Economics and Management},
Volume = {56},
Number = {3},
Pages = {221-233},
Publisher = {Elsevier BV},
Year = {2008},
Month = {November},
ISSN = {0095-0696},
url = {http://hdl.handle.net/10161/6755 Duke open
access},
Abstract = {Seminal work by Weitzman [Prices vs. quantities, Rev. Econ.
Stud. 41 (1974) 477-491] revealed prices are preferred to
quantities when marginal benefits are relatively flat
compared to marginal costs. We extend this comparison to
indexed policies, where quantities are proportional to an
index, such as output. We find that policy preferences hinge
on additional parameters describing the first and second
moments of the index and the ex post optimal quantity level.
When the ratio of these variables' coefficients of variation
divided by their correlation is less than approximately two,
indexed quantities are preferred to fixed quantities. A
slightly more complex condition determines when indexed
quantities are preferred to prices. Applied to climate
change policy, we find that the range of variation and
correlation in country-level carbon dioxide emissions and
GDP suggests the ranking of an emissions intensity cap
(indexed to GDP) compared to a fixed emission cap is not
uniform across countries; neither policy clearly dominates
the other. © 2008 Elsevier Inc. All rights
reserved.},
Doi = {10.1016/j.jeem.2008.07.001},
Key = {fds267388}
}
@article{fds267353,
Author = {Tatsutani, M and Pizer, WA},
Title = {Managing Costs in a U.S. Greenhouse Gas Trading Program: A
Workshop Summary},
Year = {2008},
Month = {July},
Abstract = {Cost containment has emerged as a major point of contention
in the current congressional debate about designing a
cap-and-trade program to limit future U.S. greenhouse gas
(GHG) emissions. This paper reviews basic concepts and
policy options for cost management, drawing on a March 2008
workshop sponsored by Resources for the Future (RFF), the
National Commission on Energy Policy, and Duke
University’s Nicholas Institute for Environmental Policy
Solutions. The different sources and temporal dimensions of
cost uncertainty are explored, along with possible
mechanisms for addressing short- and long-term cost
concerns, including banking and borrowing, emissions
offsets, a price cap (or safety valve), quantity-limited
allowance reserve, and the concept of an oversight entity
for GHG allowance markets modeled on the Federal Reserve.
Recognizing that the inherent trade-off between
environmental certainty and cost certainty has no perfect
solution, the paper nonetheless concludes that numerous
options exist for striking a reasonable and politically
viable balance between these two objectives. In the effort
to forge consensus around a particular set of options, it
will be important for policymakers to strive to fit the
remedy to the problem they are trying to solve and to
preserve the underlying integrity of the overall program in
terms of its long-term ability to sustain meaningful market
incentives for low-carbon technologies.},
Key = {fds267353}
}
@article{fds267346,
Author = {Pizer, WA},
Title = {A U.S. Perspective on Future Climate Regimes},
Year = {2007},
Month = {February},
Abstract = {Momentum may be building for federal climate change policy
in the United States. Assuming this leads to mandatory
greenhouse gas regulations, the door will be open for the
United States to constructively re-engage other countries
concerning an international climate regime. Such a regime
will need to recognize that binding international limits are
unlikely to attract U.S. participation and, therefore, will
require a different approach than the Kyoto Protocol. In
particular, a future regime will need to accommodate and
encourage, rather than force or constrain, domestic actions
to focus more narrowly on major economies and emitting
nations, to balance mitigation and technology objectives,
and to engage developing countries on as many levels as
possible. In place of a heavy emphasis on negotiating
commitments in advance, there likely will need to be greater
emphasis on evaluating actions in retrospect. Such an
approach not only matches recent trends in the United States
but arguably follows from broader experience over the decade
since the negotiation of the Kyoto Protocol.},
Key = {fds267346}
}
@article{fds267322,
Author = {Morgenstern, RD and Pizer, WA},
Title = {Concluding observations: What can we learnfrom the case
studies?},
Pages = {166-185},
Publisher = {Routledge},
Year = {2007},
Month = {January},
url = {http://dx.doi.org/10.4324/9781936331123},
Doi = {10.4324/9781936331123},
Key = {fds267322}
}
@article{fds267318,
Author = {Pizer, WA},
Title = {Practical global climate policy},
Pages = {280-340},
Publisher = {Cambridge University Press},
Year = {2007},
Month = {January},
url = {http://dx.doi.org/10.1017/CBO9780511802027.008},
Abstract = {A meaningful discussion of international climate policy
agreement needs to begin by asking the question, what is the
goal of the international agreement? What defines success?
One way to answer this question is to view the problem
through the eyes of a stylized grouping of experts and
stakeholders engaged in the issue: economists, environmental
advocates, and technologists. Economists would likely
describe the goal as maximizing welfare; that is, setting a
global policy that balances expected costs and benefits of
mitigation. Environmental advocates, and indeed the United
Nations Framework Convention on Climate Change (UNFCCC),
describe a goal of preventing dangerous interference with
the climate system. Like the Clean Air Act in the United
States, it suggests first consulting the science to
establish a safe standard, then following up with a
cost-effective (i.e., least-cost strategy) to achieve it.
Alternatively, the goal might be described by technologists
as the need to develop and deploy climate friendly
technology at a global level, without a heavy emphasis on
near-term emission reductions.},
Doi = {10.1017/CBO9780511802027.008},
Key = {fds267318}
}
@article{fds267325,
Author = {Pizer, W},
Title = {Climate policy design under uncertainty},
Volume = {9780521866033},
Pages = {305-313},
Booktitle = {Human-Induced Climate Change},
Publisher = {Cambridge University Press},
Address = {Cambridge},
Editor = {Michael Schlesinger et al.},
Year = {2007},
Month = {January},
url = {http://dx.doi.org/10.1017/CBO9780511619472.030},
Abstract = {The uncertainty surrounding the costs and benefits
associated with global climate change mitigation creates
enormous obstacles for scientists, stakeholders, and
especially policymakers seeking a practical policy solution.
Scientists find it difficult to accurately quantify and
communicate uncertainty; business stakeholders find it
difficult to plan for the future; and policymakers are
challenged to balance competing interests that frequently
talk past each other. Most emissions trading programs to
date have focused on absolute caps that either remain fixed
or decline over time. Examples include the US SO2 trading
program and NOx Budget Program, the EU Emissions Trading
Scheme (EU ETS), Southern California’s NO RECLAIM program,
and a host of other regional pollutant trading schemes in
the United States. Even the Kyoto Protocol, by most
accounts, is viewed as a first step in capping emissions
that must then lead to even lower levels in subsequent
periods. Yet the uncertainty surrounding climate change
suggests that such an approach to regulating greenhouse gas
emissions is problematic. On the one hand, we are unsure
about what atmospheric concentrations need to be in the long
run to prevent dangerous interference with the climate
system. And regardless of the stabilization target,
considerations of the global economic system and its
dependence on fossil fuels suggests that optimal global
emissions trajectories will continue to grow for some time
(Wigley et al., 1996; Manne and Richels,
1999).},
Doi = {10.1017/CBO9780511619472.030},
Key = {fds267325}
}
@article{fds267383,
Author = {Pizer, WA and Kruger, J and Oates, W},
Title = {Decentralized in the EU ETS and Lessons for Global
Policy},
Journal = {Review of Environmental Econimics and Policy},
Volume = {1},
Number = {1},
Pages = {112-133},
Year = {2007},
Key = {fds267383}
}
@article{fds317875,
Author = {Parry, IWH and Pizer, WA},
Title = {Combating Global Warming},
Journal = {Regulation},
Volume = {30},
Number = {3},
Pages = {18-22},
Year = {2007},
Month = {Fall},
Abstract = {The favored federal policy to address climate change is a
domestic cap-and-trade system. However, a vocal minority of
political leaders have begun arguing in favor of a carbon
tax. Carbon taxes seem particularly attractive both for
fiscal reasons and because they provide certainty over the
price of emissions. But permit systems can be designed to
capture the potential advantages of carbon
taxes.},
Key = {fds317875}
}
@article{fds267345,
Author = {Pizer, WA},
Title = {Economics versus Climate Change},
Pages = {201-216},
Year = {2006},
Month = {June},
ISBN = {978-0-262-07302-8},
url = {http://gateway.webofknowledge.com/gateway/Gateway.cgi?GWVersion=2&SrcApp=PARTNER_APP&SrcAuth=LinksAMR&KeyUT=WOS:000284039600010&DestLinkType=FullRecord&DestApp=ALL_WOS&UsrCustomerID=47d3190e77e5a3a53558812f597b0b92},
Abstract = {This paper argues against the common-sense conclusion that
climate change demands a global market-based solution, such
as international emissions trading. First, current
experience suggests global cooperation is not necessary for
initial mandatory actions. Second, when domestic targets
vary across nations, there are a variety of reasons why
international emissions trading, even though it creates
aggregate economic gains for all nations, may not be
desirable. These reasons include concerns over legitimizing
target variations for future negotiations, real and
perceived consequences of capital flows across nations, and
distributional impacts within nations. Finally, the
underlying need for global technology solutions suggests
domestic mitigation policies that balance clear emissions
price signals, incentives for technology development and
deployment, and mechanisms to finance deployment to
developing countries. International efforts, in turn, might
focus on encouraging these domestic actions, facilitating
the developing country investment mechanisms, and providing
credible reviews of national action.},
Key = {fds267345}
}
@article{fds267380,
Author = {Pizer, WA},
Title = {The evolution of a global climate change
agreement},
Journal = {American Economic Review},
Volume = {96},
Number = {2},
Pages = {26-30},
Publisher = {American Economic Association},
Year = {2006},
Month = {May},
ISSN = {0002-8282},
url = {http://dx.doi.org/10.1257/000282806777211793},
Doi = {10.1257/000282806777211793},
Key = {fds267380}
}
@article{fds267348,
Author = {Goulder, LH and Pizer, WA},
Title = {The Economics of Climate Change},
Year = {2006},
Month = {January},
Abstract = {Global climate change poses a threat to the well-being of
humans and other living things through impacts on ecosystem
functioning, biodiversity, capital productivity, and human
health. Climate change economics attends to this issue by
offering theoretical insights and empirical findings
relevant to the design of policies to reduce, avoid, or
adapt to climate change. This economic analysis has yielded
new estimates of mitigation benefits, improved understanding
of costs in the presence of various market distortions or
imperfections, better tools for making policy choices under
uncertainty, and alternate mechanisms for allowing
flexibility in policy responses. These contributions have
influenced the formulation and implementation of a range of
climate change policies at the domestic and international
levels.},
Key = {fds267348}
}
@article{fds267381,
Author = {Pizer, W and Burtraw, D and Harrington, W and Newell, R and Sanchirico,
J},
Title = {Modeling economy-wide vs sectoral climate policies using
combined aggregate-sectoral models},
Journal = {Energy Journal},
Volume = {27},
Number = {3},
Pages = {135-168},
Publisher = {International Association for Energy Economics
(IAEE)},
Year = {2006},
Month = {January},
ISSN = {0195-6574},
url = {http://hdl.handle.net/10161/10266 Duke open
access},
Abstract = {Economic analyses of climate change policies frequently
focus on reductions of energy-related carbon dioxide
emissions via market-based, economy-wide policies. The
current course of environment and energy policy debate in
the United States, however, suggests an alternative outcome:
sector-based and/or inefficiently designed policies. This
paper uses a collection of specialized, sector-based models
in conjunction with a computable general equilibrium model
of the economy to examine and compare these policies at an
aggregate level. We examine the relative cost of different
policies designed to achieve the same quantity of emission
reductions. We find that excluding a limited number of
sectors from an economy-wide policy does not significantly
raise costs. Focusing policy solely on the electricity and
transportation sectors doubles costs, however, and using
non-market policies can raise cost by a factor of ten. These
results are driven in part by, and are sensitive to, our
modeling of pre-existing tax distortions. Copyright © 2006
by the IAEE. All rights reserved.},
Doi = {10.5547/ISSN0195-6574-EJ-Vol27-No3-8},
Key = {fds267381}
}
@article{fds304220,
Author = {Shih, JS and Harrington, W and Pizer, WA and Gillingham,
K},
Title = {Economies of scale in community water systems},
Journal = {Journal / American Water Works Association},
Volume = {98},
Number = {9},
Pages = {100-108},
Year = {2006},
Month = {January},
ISSN = {0003-150X},
url = {http://dx.doi.org/10.1002/j.1551-8833.2006.tb07757.x},
Abstract = {Data sets from the US Environmental Protection Agency's 1995
and 2000 Community Water Systems surveys were used to
examine the production costs of water supply systems. The
authors estimate water supply economies of scale by
estimating the elasticities of both the total unit cost and
the individual component costs. For total unit cost, they
found that a 1 % production increase reduced unit costs by a
statistically significant 0.16%. For individual component
costs, higher economies of scale in capital, materials,
outside services, and other costs and lower, but still
positive, economies of scale in labor and energy costs were
found. These economies of scale may reflect production
economies or suggest that larger systems are better than
smaller systems at bargaining and receiving services and
materials at a lower unit cost. Importantly, bargaining
gains and some production economies do not necessarily
depend on water systems becoming physically interconnected.
- RSH.},
Doi = {10.1002/j.1551-8833.2006.tb07757.x},
Key = {fds304220}
}
@article{fds267315,
Author = {Pizer, WA},
Title = {Setting energy policy in the modern era: Tough challenges
lie ahead},
Journal = {The RFF Reader in Environmental and Resource Policy: Second
Edition},
Volume = {156},
Pages = {171-174},
Year = {2006},
url = {http://dx.doi.org/10.4324/9781936331642},
Doi = {10.4324/9781936331642},
Key = {fds267315}
}
@article{fds267358,
Author = {Pizer, WA and Kopp, R},
Title = {Chapter 25 Calculating the Costs of Environmental
Regulation},
Journal = {Handbook of Environmental Economics},
Volume = {3},
Pages = {1307-1351},
Publisher = {Elsevier},
Year = {2005},
Month = {December},
ISSN = {1574-0099},
url = {http://dx.doi.org/10.1016/S1574-0099(05)03025-1},
Abstract = {Decisions concerning environmental protection hinge on
estimates of economic burden. Over the past 30 years,
economists have developed and applied various tools to
measure this burden. In this chapter, we present a taxonomy
of costs along with methods for measuring those costs. At
the broadest level, we distinguish between partial and
general equilibrium costs. Partial equilibrium costs
represent the burden directly borne by the regulated entity
(firms, households, government), including both pecuniary
and nonpecuniary expenses, when prices are held constant.
General equilibrium costs reflect the net burden once all
good and factor markets have equilibrated. In addition to
partial equilibrium costs, these general equilibrium costs
include welfare losses or gains in markets with preexisting
distortions, welfare losses or gains from rebalancing the
government's budget constraint, and welfare gains from the
added flexibility of meeting pollution constraints through
reductions in the use of higher-priced, pollution-intensive
products. In addition to both partial and general
equilibrium costs, we also consider the distribution of
costs across households, countries, sectors, subnational
regions, and generations. Despite improvements in our
understanding of cost measurement, we find considerable
opportunity for further work and, especially, better
application of existing methods. © 2005 Elsevier B.V. All
rights reserved.},
Doi = {10.1016/S1574-0099(05)03025-1},
Key = {fds267358}
}
@article{fds336245,
Author = {Pizer, W and Newell, R},
Title = {Carbon Mitigation Costs for the Commercial Sector:
Discrete-Continuous Choice Analysis of Multifuel Energy
Demand},
Year = {2005},
Month = {June},
Abstract = {We estimate a carbon mitigation cost curve for the U.S.
commercial sector based on econometric estimation of the
responsiveness of fuel demand and equipment choices to
energy price changes. The model econometrically estimates
fuel demand conditional on fuel choice, which is
characterized by a multinomial logit model. Separate
estimation of end uses (e.g., heating, cooking) using the
1995 Commercial Buildings Energy Consumption Survey allows
for exceptionally detailed estimation of price
responsiveness disaggregated by end use and fuel type. We
then construct aggregate long-run elasticities, by fuel
type, through a series of simulations; own-price
elasticities range from ?0.9 for district heat services to
?2.9 for fuel oil. The simulations form the basis of a
marginal cost curve for carbon mitigation, which suggests
that a price of $20 per ton of carbon would result in an 8%
reduction in commercial carbon emissions, and a price of
$100 per ton would result in a 28% reduction.},
Key = {fds336245}
}
@article{fds304222,
Author = {Newell, R and Pizer, W and Zhang, J},
Title = {Managing permit markets to stabilize prices},
Journal = {Environmental and Resource Economics},
Volume = {31},
Number = {2},
Pages = {133-157},
Publisher = {Springer Nature},
Year = {2005},
Month = {June},
url = {http://dx.doi.org/10.1007/s10640-005-1761-y},
Abstract = {The political economy of environmental policy favors the use
of quantity-based instruments over price-based instruments
(e.g., tradable permits over green taxes), at least in the
United States. With cost uncertainty, however, there are
clear efficiency advantages to prices in cases where the
marginal damages of emissions are relatively flat, such as
with greenhouse gases. The question arises, therefore, of
whether one can design flexible quantity policies that mimic
the behavior of price policies, namely stable permit prices
and abatement costs. We explore a number of "quantity- plus"
policies that replicate the behavior of a price policy
through rules that adjust the effective permit cap for
unexpectedly low or high costs. They do so without
necessitating any monetary exchanges between the government
and the regulated firms, which can be a significant
political barrier to the use of price instruments. ©
Springer 2005.},
Doi = {10.1007/s10640-005-1761-y},
Key = {fds304222}
}
@article{fds267379,
Author = {Pizer, WA},
Title = {The case for intensity targets},
Journal = {Climate Policy},
Volume = {5},
Number = {4},
Pages = {455-462},
Publisher = {Informa UK Limited},
Year = {2005},
Month = {January},
ISSN = {1469-3062},
url = {http://dx.doi.org/10.1080/14693062.2005.9685570},
Abstract = {While most of the world has pursued absolute emission limits
for greenhouse gases, the Bush administration has proposed
an alternative policy formulation based, among other things,
on reducing emissions intensity—that is, emissions per
dollar of real gross domestic product (GDP). Critics of this
formulation have denounced the general idea of an
intensity-based emission target, along with its voluntary
nature and modest targets. This raises the question of
whether intensity-based emission limits, distinct from the
other features of the Bush initiative, offer a useful
alternative to absolute emission limits. This essay makes
the case that they do, based on how emission targets are
framed. The argument draws on four key observations:
greenhouse gas emissions will continue to rise over the near
term; absolute targets emphasize zero or declining emissions
growth while intensity targets do not; developing countries'
economic development is integrally tied to emissions growth
for the foreseeable future; and intensity targets need not
be any more complicated to administer than absolute targets.
© 2005 Taylor & Francis Group, LLC.},
Doi = {10.1080/14693062.2005.9685570},
Key = {fds267379}
}
@article{fds267357,
Author = {Kruger, JA and Pizer, WA},
Title = {Greenhouse gas trading in Europe: The new grand policy
experiment},
Journal = {Environment},
Volume = {46},
Number = {8},
Pages = {8-23},
Publisher = {Informa UK Limited},
Year = {2004},
Month = {October},
ISSN = {0013-9157},
url = {http://dx.doi.org/10.1080/00139150409604401},
Abstract = {The European Union is head and shoulders ahead of the rest
of the world as it embarks on its new emissions trading
system early next year, but there are still a number of
large uncertainties to work out.},
Doi = {10.1080/00139150409604401},
Key = {fds267357}
}
@article{fds267361,
Author = {Newell, RG and Pizer, WA},
Title = {Uncertain discount rates in climate policy
analysis},
Journal = {Energy Policy},
Volume = {32},
Number = {4},
Pages = {519-529},
Publisher = {Elsevier BV},
Year = {2004},
Month = {January},
url = {http://dx.doi.org/10.1016/S0301-4215(03)00153-8},
Abstract = {Consequences in the distant future-such as those from
climate change-have little value today when discounted using
conventional rates. This result contradicts our "gut
feeling" about such problems and often leads to ad hoc
application of lower rates for valuations over longer
horizons-a step facilitated by confusion and disagreement
over the correct rate even over short horizons. We review
the theory and intuition behind the choice of discount rates
now and, importantly, the impact of likely variation in
rates in the future. Correlated changes in future rates
imply that the distant future should be discounted at much
lower rates than suggested by the current rate, thereby
raising the value of future consequences-regardless of
opinions concerning the current rate. Using historic data to
quantity the likely changes and correlation in changes in
future rates, we find that future valuations rise by a
factor of many thousands at horizons of 300 years or more,
almost doubling the expected present value of climate
mitigation benefits relative to constant 4% discounting.
Ironically, uncertainty about future rates reduces the ratio
of valuations based on alternate choices of the current
rate. © 2003 Elsevier Ltd. All rights reserved.},
Doi = {10.1016/S0301-4215(03)00153-8},
Key = {fds267361}
}
@article{fds267378,
Author = {Pizer, WA and Newell, R and Zhang, J},
Title = {Managing Permit Markets to Stabilize Prices.},
Journal = {Environment and Resource Economics},
Volume = {32},
Number = {2},
Pages = {133-157},
Year = {2004},
url = {http://dx.doi.org/10.1007/s10640-005-1761-y},
Abstract = {The political economy of environmental policy favors the use
of quantity-based instruments over price-based instruments
(e.g., tradable permits over green taxes), at least in the
United States. With cost uncertainty, however, there are
clear efficiency advantages to prices in cases where the
marginal damages of emissions are relatively flat, such as
with greenhouse gases. The question arises, therefore, of
whether one can design flexible quantity policies that mimic
the behavior of price policies, namely stable permit prices
and abatement costs. We explore a number of "quantity- plus"
policies that replicate the behavior of a price policy
through rules that adjust the effective permit cap for
unexpectedly low or high costs. They do so without
necessitating any monetary exchanges between the government
and the regulated firms, which can be a significant
political barrier to the use of price instruments. ©
Springer 2005.},
Doi = {10.1007/s10640-005-1761-y},
Key = {fds267378}
}
@article{fds267372,
Author = {Parry, IWH and Pizer, WA and Fischer, C},
Title = {How Large are the Welfare Gains from Technological
Innovation Induced by Environmental Policies?},
Journal = {Journal of Regulatory Economics},
Volume = {23},
Number = {3},
Pages = {237-255},
Year = {2003},
Month = {May},
url = {http://dx.doi.org/10.1023/A:1023321309988},
Abstract = {This paper examines whether the welfare gains from
technological innovation that reduces future abatement costs
are larger or smaller than the "Pigouvian" welfare gains
from optimal pollution control. The relative welfare gains
from innovation depend on three key factors-the initially
optimal level of abatement, the speed at which innovation
reduces future abatement costs, and the discount rate. We
calculate the welfare gains from innovation under a variety
of different scenarios. Mostly they are less than the
Pigouvian welfare gains. To be greater, innovation must
reduce abatement costs substantially and quickly and the
initially optimal abatement level must be fairly
modest.},
Doi = {10.1023/A:1023321309988},
Key = {fds267372}
}
@article{fds267373,
Author = {Fischer, C and Parry, IWH and Pizer, WA},
Title = {Instrument choice for environmental protection when
technological innovation is endogenous},
Journal = {Journal of Environmental Economics and Management},
Volume = {45},
Number = {3},
Pages = {523-545},
Publisher = {Elsevier BV},
Year = {2003},
Month = {January},
url = {http://dx.doi.org/10.1016/S0095-0696(03)00002-0},
Abstract = {This paper compares, qualitatively and quantitatively, the
welfare effects of emissions taxes, auctioned emissions
permits, and free (grandfathered) permits, when
technological innovation is endogenous. We find that there
is no unambiguous case for preferring any of these policy
instruments. The relative welfare ranking of instruments
depends on the costs of innovation, the extent to which
innovations can be imitated, the slope and level of the
marginal environmental benefit function, and the number of
polluting firms. We illustrate the types of situations when
there can be significant welfare discrepancies between the
policies and when there are not. © 2003 Published by
Elsevier Science (USA).},
Doi = {10.1016/S0095-0696(03)00002-0},
Key = {fds267373}
}
@article{fds267374,
Author = {Newell, RG and Pizer, WA},
Title = {Regulating stock externalities under uncertainty},
Journal = {Journal of Environmental Economics and Management},
Volume = {45},
Number = {2 SUPPL.},
Pages = {416-432},
Publisher = {Elsevier BV},
Year = {2003},
Month = {January},
url = {http://dx.doi.org/10.1016/S0095-0696(02)00016-5},
Abstract = {Using a simple analytical model incorporating benefits of a
stock, costs of adjusting the stock, and uncertainty in
costs, we uncover several important principles governing the
choice of price-based policies (e.g., taxes) relative to
quantity-based policies (e.g., tradable permits) for
controlling stock externalities. As in Weitzman (Rev.
Econom. Stud. 41(4) (1974) 477), the relative slopes of the
marginal benefits and costs of controlling the externality
continue to be critical determinants of the efficiency of
prices relative to quantities, with flatter marginal
benefits and steeper marginal costs favoring prices. But
some important adjustments for dynamic effects are
necessary, including correlation of cost shocks across time,
discounting, stock decay, and the rate of benefits growth.
Applied to the problem of greenhouse gases and climate
change, we find that a price-based instrument generates
several times the expected net benefits of a quantity
instrument. © 2003 Elsevier Science (USA). All rights
reserved.},
Doi = {10.1016/S0095-0696(02)00016-5},
Key = {fds267374}
}
@article{fds267375,
Author = {Newell, RG and Pizer, WA},
Title = {Discounting the distant future: How much do uncertain rates
increase valuations?},
Journal = {Journal of Environmental Economics and Management},
Volume = {46},
Number = {1},
Pages = {52-71},
Publisher = {Elsevier BV},
Year = {2003},
Month = {January},
url = {http://hdl.handle.net/10161/9133 Duke open
access},
Abstract = {We demonstrate that when the future path of the discount
rate is uncertain and highly correlated, the distant future
should be discounted at significantly lower rates than
suggested by the current rate. We then use two centuries of
US interest rate data to quantify this effect. Using both
random walk and mean-reverting models, we compute the
"certainty-equivalent rate" that summarizes the effect of
uncertainty and measures the appropriate forward rate of
discount in the future. Under the random walk model we find
that the certainty-equivalent rate falls continuously from
4% to 2% after 100 years, 1% after 200 years, and 0.5% after
300 years. At horizons of 400 years, the discounted value
increases by a factor of over 40,000 relative to
conventional discounting. Applied to climate change
mitigation, we find that incorporating discount rate
uncertainty almost doubles the expected present value of
mitigation benefits. © 2003 Elsevier Science (USA). All
rights reserved.},
Doi = {10.1016/S0095-0696(02)00031-1},
Key = {fds267375}
}
@article{fds267377,
Author = {Pizer, WA and Marcu, A},
Title = {Special Supplement on Defining and Trading Emission
Targets},
Journal = {Climate Policy},
Volume = {3},
Number = {S2},
Pages = {S3-S6},
Publisher = {Elsevier BV},
Year = {2003},
Month = {January},
url = {http://dx.doi.org/10.1016/j.clipol.2003.10.009},
Doi = {10.1016/j.clipol.2003.10.009},
Key = {fds267377}
}
@article{fds267376,
Author = {Pizer, WA and Newell, R},
Title = {Uncertain Discount Rates and Climate Policy
Analysis.},
Journal = {Energy Policy},
Volume = {32},
Number = {()},
Pages = {519-529},
Year = {2003},
Key = {fds267376}
}
@article{fds267340,
Author = {Newell, R and Pizer, W},
Title = {Discounting the Benefits of Climate Change Policies Using
Uncertain Rates},
Journal = {Resources},
Number = {146},
Pages = {15-20},
Publisher = {Washington, D.C. Resources for the Future,
Inc.},
Year = {2002},
Month = {January},
ISSN = {0048-7376},
url = {http://hdl.handle.net/10161/7075 Duke open
access},
Abstract = {Evaluating environmental policies, such as the mitigation of
greenhouse gases, frequently requires balancing near-term
mitigation costs against long-term environmental benefits.
Conventional approaches to valuing such investments hold
interest rates constant, but the authors contend that there
is a real degree of uncertainty in future interest rates.
This leads to a higher valuation of future benefits relative
to conventional methods that ignore interest rate
uncertainty.},
Key = {fds267340}
}
@article{fds304219,
Author = {Morgenstern, RD and Pizer, WA and Shih, JS},
Title = {Jobs versus the environment: An industry-level
perspective},
Journal = {Journal of Environmental Economics and Management},
Volume = {43},
Number = {3},
Pages = {412-436},
Publisher = {Elsevier BV},
Year = {2002},
Month = {January},
ISSN = {0095-0696},
url = {http://dx.doi.org/10.1006/jeem.2001.1191},
Abstract = {The possibility that workers could be adversely affected by
increasingly stringent environmental policies has led to
claims of a "jobs versus the environment" trade-off by both
business and labor leaders. The present research examines
this claim at the industry level for four heavily polluting
industries: pulp and paper mills, plastic manufacturers,
petroleum refiners, and iron and steel mills. Combining a
unique plant-level data set with industry-level demand
information, we find that increased environmental spending
generally does not cause a significant change in employment.
Our average across all four industries is a net gain of 1.5
jobs per $1 million in additional environmental spending,
with a standard error of 2.2 jobs - an economically and
statistically insignificant effect. There are statistically
significant and positive effects in two industries, but
total number of affected jobs remains quite small. These
small positive effects can be linked to labor-using factor
shifts and relatively inelastic estimated demand. © 2001
Elsevier Science (USA).},
Doi = {10.1006/jeem.2001.1191},
Key = {fds304219}
}
@article{fds267370,
Author = {Pizer, WA and Morgenstern, R and Shih, J-S},
Title = {Jobs versus the Environment: Is There a Trade-Off?},
Journal = {Journal of Environmental Economics and Management},
Volume = {43},
Number = {3},
Pages = {412-436},
Year = {2002},
ISSN = {0095-0696},
url = {http://dx.doi.org/10.1006/jeem.2001.1191},
Abstract = {The possibility that workers could be adversely affected by
increasingly stringent environmental policies has led to
claims of a "jobs versus the environment" trade-off by both
business and labor leaders. The present research examines
this claim at the industry level for four heavily polluting
industries: pulp and paper mills, plastic manufacturers,
petroleum refiners, and iron and steel mills. Combining a
unique plant-level data set with industry-level demand
information, we find that increased environmental spending
generally does not cause a significant change in employment.
Our average across all four industries is a net gain of 1.5
jobs per $1 million in additional environmental spending,
with a standard error of 2.2 jobs - an economically and
statistically insignificant effect. There are statistically
significant and positive effects in two industries, but
total number of affected jobs remains quite small. These
small positive effects can be linked to labor-using factor
shifts and relatively inelastic estimated demand. © 2001
Elsevier Science (USA).},
Doi = {10.1006/jeem.2001.1191},
Key = {fds267370}
}
@article{fds267371,
Author = {Pizer, WA},
Title = {Combining price and quantity controls to mitigate global
climate change},
Journal = {Journal of Public Economics},
Volume = {85},
Number = {3},
Pages = {409-434},
Publisher = {Elsevier BV},
Year = {2002},
ISSN = {0047-2727},
url = {http://dx.doi.org/10.1016/S0047-2727(01)00118-9},
Abstract = {Uncertainty about compliance costs causes otherwise
equivalent price and quantity controls to behave differently
and leads to divergent welfare consequences. Although most
of the debate on global climate change policy has focused on
quantity controls due to their political appeal, this paper
argues that price controls are more efficient. Simulations
based on a stochastic computable general equilibrium model
indicate that the expected welfare gain from the optimal
price policy is five times higher than the expected gain
from the optimal quantity policy. An alternative hybrid
policy combines both the political appeal of quantity
controls with the efficiency of prices, using an initial
distribution of tradeable permits to set a quantitative
target, but allowing additional permits to be purchased at a
fixed "trigger" price. Even sub-optimal hybrid policies
offer dramatic efficiency improvements over otherwise
standard quantity controls. For example, a $50 trigger price
per ton of carbon converts the $3 trillion expected loss
associated with a simple 1990 emission target to a $150
billion gain. These results suggest that a hybrid policy is
an attractive alternative to either a pure price or quantity
system. © 2002 Elsevier Science B.V. All rights
reserved.},
Doi = {10.1016/S0047-2727(01)00118-9},
Key = {fds267371}
}
@article{fds267363,
Author = {Clark, JS and Carpenter, SR and Barber, M and Collins, S and Dobson, A and Foley, JA and Lodge, DM and Pascual, M and Pielke, R and Pizer, W and Pringle, C and Reid, WV and Rose, KA and Sala, O and Schlesinger, WH and Wall, DH and Wear, D},
Title = {Ecological forecasts: an emerging imperative.},
Journal = {Science (New York, N.Y.)},
Volume = {293},
Number = {5530},
Pages = {657-660},
Year = {2001},
Month = {July},
ISSN = {0036-8075},
url = {http://www.ncbi.nlm.nih.gov/pubmed/11474103},
Abstract = {Planning and decision-making can be improved by access to
reliable forecasts of ecosystem state, ecosystem services,
and natural capital. Availability of new data sets, together
with progress in computation and statistics, will increase
our ability to forecast ecosystem change. An agenda that
would lead toward a capacity to produce, evaluate, and
communicate forecasts of critical ecosystem services
requires a process that engages scientists and
decision-makers. Interdisciplinary linkages are necessary
because of the climate and societal controls on ecosystems,
the feedbacks involving social change, and the
decision-making relevance of forecasts.},
Doi = {10.1126/science.293.5530.657},
Key = {fds267363}
}
@article{fds317876,
Author = {Newell, RG and Pizer, WA},
Title = {Discounting the Distant Future: How Much Do Uncertain Rates
Increase Valuations?},
Year = {2001},
Month = {May},
Abstract = {Costs and benefits in the distant future, such as those
associated with global warming, long-lived infrastructure,
hazardous and radioactive waste, and biodiversity often have
little value today when measured with conventional discount
rates. We demonstrate that when the future path of this
conventional rate is uncertain and persistent (i.e., highly
correlated over time), the distant future should be
discounted at lower rates than suggested by the current
rate. We then use two centuries of data on U.S. interest
rates to quantify this effect. Using both random walk and
mean-reverting models, we compute the certainty-equivalent
rate that is, the single discount rate that summarizes the
effect of uncertainty and measures the appropriate forward
rate of discount in the future. Using the random walk model,
which we consider more compelling, we find that the
certainty-equivalent rate falls from 4%, to 2% after 100
years, 1% after 200 years, and 0.5% after 300 years. If we
use these rates to value consequences at horizons of 400
years, the discounted value increases by a factor of over
40,000 relative to conventional discounting. Applying the
random walk model to the consequences of climate change, we
find that inclusion of discount rate uncertainty almost
doubles the expected present value of mitigation
benefits.},
Key = {fds317876}
}
@article{fds267369,
Author = {Morgenstern, RD and Pizer, WA and Shih, JS},
Title = {The cost of environmental protection},
Journal = {Review of Economics and Statistics},
Volume = {83},
Number = {4},
Pages = {732-738},
Publisher = {MIT Press - Journals},
Year = {2001},
url = {http://dx.doi.org/10.1162/003465301753237812},
Abstract = {Reported expenditures for environmental protection are often
cited as an assessment of the burden of current regulatory
efforts. However, the potential for both incidental savings
and uncounted costs means that the actual burden could be
either higher or lower than these reported values. Using a
production cost model that considers the possible
interaction between environmental and non-environmental
expenditures, we directly estimate the dollar-for-dollar
incidental savings/uncounted costs arising from a one-dollar
increase in reported environmental expenditures. Although
recent literature supports the idea that reported
expenditures probably understate the actual burden, we find
no such evidence in the manufacturing sector based on a
large panel of plant-level data. In one industry, we find
statistically significant overstatement. In three others, we
find no significant deviation in either direction. We
conclude that, although cost estimates are not overstated on
average, variation and uncertainty exist at the industry
level, with some plants experiencing savings and others
possibly facing uncounted burdens.},
Doi = {10.1162/003465301753237812},
Key = {fds267369}
}
@article{fds311239,
Author = {Pizer, WA},
Title = {The optimal choice of climate change policy in the presence
of uncertainty},
Journal = {Resource and Energy Economics},
Volume = {21},
Number = {4},
Pages = {255-287},
Publisher = {Elsevier BV},
Year = {1999},
Month = {January},
ISSN = {0928-7655},
url = {http://gateway.webofknowledge.com/gateway/Gateway.cgi?GWVersion=2&SrcApp=PARTNER_APP&SrcAuth=LinksAMR&KeyUT=WOS:000081101200003&DestLinkType=FullRecord&DestApp=ALL_WOS&UsrCustomerID=47d3190e77e5a3a53558812f597b0b92},
Abstract = {Considerable uncertainty surrounds both the consequences of
climate change and their valuation over horizons of decades
or centuries. Yet, there have been few attempts to factor
such uncertainty into current policy decisions concerning
stringency and instrument choice. This paper presents a
framework for determining optimal climate change policy
under uncertainty and compares the resulting prescriptions
to those derived from a more typical analysis with
best-guess parameter values. Uncertainty raises the optimal
level of emission reductions and leads to a preference for
taxes over rate controls. This suggests that analyses which
ignore uncertainty can lead to inefficient policy
recommendations. © 1999 Elsevier Science B.V. All rights
reserved.},
Doi = {10.1016/s0928-7655(99)00005-6},
Key = {fds311239}
}
@article{fds267368,
Author = {Pizer, WA},
Title = {Optimal Choice of Policy Instrument and Stringency under
Uncertainty: The Case of Climate Change},
Journal = {Resource and Energy Economics},
Volume = {21},
Number = {(3-4)},
Pages = {255-287},
Year = {1999},
Key = {fds267368}
}
@article{fds343564,
Author = {Pizer, W and Sefton, M},
Title = {Solutions: Derivation of the OLS Estimator Without Using
Calculus},
Journal = {Econometric Theory},
Volume = {12},
Number = {2},
Pages = {395-396},
Year = {1996},
Month = {January},
url = {http://dx.doi.org/10.1017/S0266466600006708},
Doi = {10.1017/S0266466600006708},
Key = {fds343564}
}
%% Chapters in Books
@misc{fds336241,
Author = {Pizer, WA and Zhang, X},
Title = {China’s New National Carbon Market},
Journal = {AEA Papers and Proceedings},
Volume = {108},
Pages = {463-467},
Publisher = {American Economic Association},
Year = {2018},
Month = {May},
url = {http://dx.doi.org/10.1257/pandp.20181029},
Abstract = {<jats:p> On December 19, 2017, China announced the official
start of its national emissions trading system (ETS)
construction program. When fully implemented, this program
will more than double the volume of worldwide carbon dioxide
emissions covered by either tax or tradable permit policy.
Many of program's design features reflect those of China's
pilot programs but differ from those of most emissions
trading programs in the United States and Europe. This paper
explains the context and design of China's new carbon
market, discusses implications and possible modifications,
and suggests topics for further research.
</jats:p>},
Doi = {10.1257/pandp.20181029},
Key = {fds336241}
}
@misc{fds351175,
Author = {Pizer, WA},
Title = {Combining price and quantity controls to mitigate global
climate change},
Pages = {391-416},
Booktitle = {Climate Change},
Year = {2017},
Month = {November},
ISBN = {9780815388081},
Abstract = {Uncertainty about compliance costs causes otherwise
equivalent price and quantity controls to behave differently
and leads to divergent welfare consequences. Although most
of the debate on global climate change policy has focused on
quantity controls due to their political appeal, this paper
argues that price controls are more efficient. Simulations
based on a stochastic computable general equilibrium model
indicate that the expected welfare gain from the optimal
price policy is five times higher than the expected gain
from the optimal quantity policy. An alternative hybrid
policy combines both the political appeal of quantity
controls with the efficiency of prices, using an initial
distribution of tradeable permits to set a quantitative
target, but allowing additional permits to be purchased at a
fixed "trigger" price. Even sub-optimal hybrid policies
offer dramatic efficiency improvements over otherwise
standard quantity controls. For example, a $50 trigger price
per ton of carbon converts the $3 trillion expected loss
associated with a simple 1990 emission target to a $150
billion gain. These results suggest that a hybrid policy is
an attractive alternative to either a pure price or quantity
system.},
Key = {fds351175}
}
@misc{fds267326,
Author = {Aldy, JE and Pizer, WA},
Title = {Comparing countries' climate mitigation efforts in a
post-Kyoto world},
Pages = {233-252},
Booktitle = {Implementing a US Carbon Tax: Challenges and
Debates},
Year = {2015},
Month = {February},
ISBN = {9781138814158},
Key = {fds267326}
}
@misc{fds200749,
Author = {William A. Pizer and Lee Branstetter},
Title = {Facing the Climate Change Challenge in a Global
Economy},
Booktitle = {Globalization in an Age of Crisis},
Publisher = {Chicago: University of Chicago Press},
Editor = {Robert Feenstra and Alan Taylor},
Year = {2014},
Key = {fds200749}
}
@misc{fds370985,
Author = {Wiener, J and Stavins, R and Ji, Z and Others, O},
Title = {International Cooperation: Agreements and
Institutions},
Booktitle = {Climate Change 2014: Mitigation},
Year = {2014},
Key = {fds370985}
}
@misc{fds218833,
Author = {William A. Pizer and Adam M. Finkel and Christopher Carrigan and eds. , With Joseph Aldy},
Title = {The Employment and Competitiveness Impacts of Power-Sector
Regulations. In Cary Coglianese},
Booktitle = {Does Regulation Kill Jobs?},
Publisher = {University of Pennsylvania Press},
Year = {2013},
Key = {fds218833}
}
@misc{fds218834,
Author = {William A. Pizer and With Joseph Aldy and I. Parry and A. Morris and R. Williams},
Title = {Comparing Countries' Climate Mitigation Efforts in a
Post-Kyoto World},
Journal = {Carbon Taxes and Fiscal Reforms: Key Issues Facing US Policy
Makers},
Publisher = {International Monetary Fund},
Address = {Washington},
Year = {2013},
Key = {fds218834}
}
@misc{fds370986,
Author = {Aldy, JE and Pizer, WA},
Title = {The Employment and Competitiveness Impacts of Power-Sector
Regulations},
Pages = {70-88},
Booktitle = {DOES REGULATION KILL JOBS?},
Year = {2013},
ISBN = {978-0-8122-4576-9},
Key = {fds370986}
}
@misc{fds218835,
Author = {Williams A. Pizer and In Roger Guesnerie and Henry Tulkens},
Title = {Economics versus Climate Change},
Journal = {The Design of Climate Policy},
Publisher = {Cambridge: MIT Press},
Year = {2009},
Key = {fds218835}
}
@misc{fds194737,
Author = {William A. Pizer},
Title = {Economics versus Climate Change},
Booktitle = {The Design of Climate Policy},
Publisher = {MIT Press},
Address = {Cambridge, Mass.},
Editor = {Roger Guesnerie and Henry Tulkens},
Year = {2009},
Key = {fds194737}
}
@misc{fds321874,
Author = {Pizer, WA},
Title = {Setting energy policy in the modern era: Tough challenges
lie ahead},
Pages = {171-174},
Booktitle = {The RFF Reader in Environmental and Resource Policy: Second
Edition},
Publisher = {Routledge},
Year = {2006},
Month = {January},
ISBN = {9781936331642},
url = {http://dx.doi.org/10.4324/9781936331642},
Doi = {10.4324/9781936331642},
Key = {fds321874}
}
@misc{fds195246,
Author = {William A. Pizer},
Title = {A U.S. perspective on future climate regimes. 2005
Sustainability Review},
Publisher = {PARIS: Agence Francaise de. Developpement (AFD) & Institut
du developpement durable et des relations internationals
(IDDRI)},
Year = {2006},
Key = {fds195246}
}
@misc{fds195247,
Author = {William A. Pizer},
Title = {Practical Climate Policy. Joseph Aldy and Robert Stavins,
eds., Architectures for Agreement},
Journal = {Cambridge University Press.},
Publisher = {Cambridge University Press},
Year = {2006},
Key = {fds195247}
}
@misc{fds195248,
Author = {William A. Pizer and Larry Goulder},
Title = {Economics of Climate Change. Larry Blume and Steven Durlauf,
eds., The New Palgrave Dictionary of Economics},
Journal = {2nd Edition. Palgrave MacMillan},
Year = {2005},
Key = {fds195248}
}
@misc{fds195249,
Author = {William A. Pizer and Raymond Kopp and Richard Morgenstern and Richard Newell},
Title = {Domestic Climate and Technology Policy. In New Approaches on
Energy and the Environment: Policy Advice for the
President.},
Journal = {Washington: RFF Press.},
Year = {2004},
Key = {fds195249}
}
@misc{fds195250,
Author = {William A. Pizer},
Title = {A Tale of Two Policies: Clear Skies and Climate Change. In
Randall Lutter and Jason Shogren eds, Painting the White
House Green.},
Publisher = {Washington: RFF Press},
Year = {2004},
Key = {fds195250}
}
@misc{fds267314,
Author = {Wiener, J},
Title = {Making Markets for Global Forests Conservation},
Pages = {119-140},
Booktitle = {Painting the White House Green: Environmental Economics in
the White House},
Year = {2004},
Key = {fds267314}
}
@misc{fds195251,
Author = {William A. Pizer and Raymond Kopp},
Title = {Calculating the Costs of Environmental Regulation.
Forthcoming in K.G.-Maler and Jeffrey Vincent eds, Handbook
of Environmental Economics.},
Journal = {Amsterdam: Elsevier.},
Year = {2002},
Key = {fds195251}
}
@misc{fds195255,
Author = {William A. Pizer and Raymond Kopp and Frederic Ghersi and Richard
Morgenstern},
Title = {Limiting Costs and Assuring Domestic Effort under the Kyoto
Protocol. Forthcoming in Ching-Cheng Chang, Robert
Mendelsohn, and Daigee Shaw, eds.,},
Booktitle = {Global Warming in Asian-Pacific, Northhampton: Edward Elgar.
With Raymond Kopp},
Year = {2002},
Key = {fds195255}
}
@misc{fds195259,
Author = {William A. Pizer},
Title = {Designing Climate Policy to Address Uncertainty. In
Designing Climate Policy:},
Booktitle = {The Challenge of the Kyoto Protocol, edited by H. Abele, T.
C. Heller and S. P. Schleicher, Vienna: Service
Fachverlag.},
Year = {2001},
Key = {fds195259}
}
@misc{fds195261,
Author = {William A. Pizer},
Title = {Choosing Price or Quantity Controls for Greenhouse Gases,
Climate Change Economics and Policy},
Booktitle = {Resources for the Future},
Address = {Washington, DC},
Year = {2001},
Key = {fds195261}
}
%% NBER Working Papers
@article{fds218845,
Author = {William A. Pizer and Kenneth Arrow and Maureen L. Cropper and Christian Gollier and Ben Groom and Geoffrey M. Heal and Richard G.
Newell and Robert S. Pindyck and Paul R. Portney and Thomas Sterner and Richard S. J. Tol and Martin L. Weitzman},
Title = {How Should Benefits and Costs Be Discounted in an
Intergenerational Context?},
Journal = {Submitted to Review of Environmental Economics and
Policy},
Year = {2013},
Key = {fds218845}
}
@article{fds218846,
Author = {William A. Pizer and Working Paper and Andrew
Yates},
Title = {Linking and delinking pollution permit markets},
Year = {2013},
Key = {fds218846}
}
@article{fds218847,
Author = {William A. Pizer and Mark Buntaine},
Title = {Leaders or Followers? Donor Financing of Clean Energy
Projects in Developing Countries},
Year = {2012},
Key = {fds218847}
}
@article{fds218848,
Author = {William A Pizer and Joseph Addy},
Title = {How Will Climate Change Policies Affect Domestic
Manufactuing?},
Year = {2012},
Key = {fds218848}
}
%% Other Working Papers
@article{fds195290,
Author = {William A. Pizer and Joseph Aldy},
Title = {The Competitiveness Impacts of Climate Change Mitigation
Policies},
Year = {2009},
Key = {fds195290}
}
%% Other
@misc{fds370984,
Author = {Murray, B and Pizer, W and Reichert, C},
Title = {Increasing Emissions Certainty under a Carbon
Tax},
Pages = {10 pages},
Publisher = {Nicholas Institute for Environmental Policy
Solutions},
Year = {2016},
Month = {October},
Abstract = {To reduce greenhouse gas emissions, some groups have
proposed that the United States consider use of a carbon
tax. But whether the nation will achieve a specific
emissions goal is uncertain because the economy’s response
to such a tax is uncertain. Ultimately, there is an
underlying tradeoff between certainty about emissions and
certainty about prices and costs. To reduce uncertainty
about whether a tax will achieve specific emissions goals,
additional mitigation measures could be called on if
emissions exceed those goals by a given amount. However,
such additional measures introduce uncertainty about costs.
At the extreme, a commitment to achieve emissions targets at
all costs would imply that costs could be quite high.
Discussions of policy mechanisms to increase price and cost
certainty under several current cap-and-trade programs
confronted this same dilemma: how much uncertainty about
emissions outcomes is acceptable given reciprocal
uncertainty about costs? Viewed through a slightly different
lens, mechanisms that balance emissions and cost uncertainty
can be viewed as a way to structure a more careful
compromise between economic and environmental interests.
This policy brief discusses mechanisms that could increase
emissions certainty under a carbon tax. It draws from recent
discussions between the authors and other policy experts,
and its goal is to introduce ideas for further exploration.
It begins with a discussion of how to measure emissions
performance, or what it means to be achieving or not
achieving an emissions goal. This performance would
presumably provide the basis for pursuing remedial
mechanisms. Next, the brief turns to a taxonomy of such
mechanisms and the challenges and opportunities of each. It
discusses ideas for initiating these mechanisms, either
through some automated or discretionary procedure. The brief
concludes with areas for additional research. The brief
intentionally raises more questions than it
answers—questions will be important to explore in ways
that can provide guidance to policy decisions and
design.},
Key = {fds370984}
}
@misc{fds218838,
Author = {William A. Pizer},
Title = {How Governments can best use public funds for
CDM},
Journal = {Guest Commentary, Carbon Markets Europe},
Volume = {12},
Number = {2},
Pages = {8},
Year = {2013},
Key = {fds218838}
}
@misc{fds218839,
Author = {William A. Pizer and Scott Morris},
Title = {Thinking Through When the World Bank Should Fund Coal
Projects},
Year = {2013},
url = {http://www.cgdev.org/publication/thnking-through-when-world-bank-should-fund-coal-projects},
Key = {fds218839}
}
@misc{fds218842,
Author = {William A. Pizer},
Title = {Seeding the market: auctioned put options for certified
emissions reductions},
Journal = {Nicholas Institute Policy Brief 11-06},
Year = {2011},
Key = {fds218842}
}
@misc{fds195274,
Author = {William A. Pizer and Joseph Aldy},
Title = {The Competitiveness Impacts of Climate Change Mitigation
Policies.},
Journal = {Report by the Pew Center on Global Climate
Change.},
Year = {2009},
Key = {fds195274}
}
@misc{fds195276,
Author = {William A. Pizer},
Title = {Climate Change Policy in the United States},
Journal = {Bridges},
Year = {2006},
Key = {fds195276}
}
@misc{fds195277,
Author = {William A. Pizer and Madeleine Baker},
Title = {Understanding Proposed CAFE Reforms for Light
Trucks.},
Year = {2005},
url = {http://www.rff.org/rff/News/Features/Understanding-Proposed-CAFE-Reforms-for-Light-Trucks.cfm.},
Key = {fds195277}
}
@misc{fds195278,
Author = {William A. Pizer},
Title = {What Kyoto Means for Oil and Gas.},
Journal = {Horizon 2},
Pages = {52},
Year = {2005},
Key = {fds195278}
}
@misc{fds195279,
Author = {William A. Pizer},
Title = {What is the United States Doing about Climate Change?
Everyone Else is Coping with Kyoto},
Journal = {Resources},
Volume = {157},
Pages = {20},
Year = {2005},
Key = {fds195279}
}
@misc{fds195281,
Author = {William A. Pizer and Joe Kruger},
Title = {Regional Greenhouse Gas Initiative: Prelude to a National
Program.},
Journal = {Resources},
Volume = {156},
Pages = {4},
Year = {2005},
Key = {fds195281}
}
@misc{fds195282,
Author = {William A. Pizer},
Title = {Mercury Rising: Understanding Global Warming
Economics.},
Journal = {Imagine},
Volume = {12},
Number = {3},
Pages = {21},
Year = {2005},
Key = {fds195282}
}
@misc{fds195283,
Author = {William A. Pizer and Joe Kruger},
Title = {The EU Emissions Trading Directive: The New Grand Policy
Experiment.},
Journal = {Environment},
Volume = {46},
Number = {8},
Year = {2004},
Key = {fds195283}
}
@misc{fds195284,
Author = {William A. Pizer and Ray Kopp},
Title = {Summary and Analysis of McCain-Lieberman-"Climate
Stewardship Act of 2003, S. 139".},
Year = {2003},
url = {http://www.rff.org/McCain_Lieberman_Summary.pdf},
Key = {fds195284}
}
@misc{fds195285,
Author = {William A. Pizer and Dallas Burtraw},
Title = {A Comparison of Two Senate Approaches to Controlling Power
Plant Pollution.},
Year = {2002},
url = {http://www.rff.org/multipollutant/},
Key = {fds195285}
}
@misc{fds195286,
Author = {William A. Pizer and Dallas Burtraw and David
Lankton.},
Title = {Legislative Comparison of Multipollutant Proposals S. 366,
S. 485, and S. 843.},
Year = {2002},
url = {http://www.rff.org/multipollutant/},
Key = {fds195286}
}
@misc{fds370987,
Author = {Newell, R and Pizer, William},
Title = {Discounting the Benefits of Climate Change Mitigation: How
Much Do Uncertain Rates Increase Valuations?},
Year = {2001},
Month = {December},
Key = {fds370987}
}
@misc{fds195287,
Author = {William A. Pizer and Richard Newell},
Title = {Discounting the Benefits of Future Climate Change
Mitigation: How Much Do Uncertain Rates Increase
Valuations?},
Journal = {Report by the Pew Center on Global Climate
Change.},
Year = {2001},
Key = {fds195287}
}
@misc{fds195288,
Author = {William A. Pizer and Raymond Kopp and Richard Morgenstern and Michael Toman},
Title = {A Proposal for Credible Early Action in U.S. Climate
Policy.},
Journal = {Weathervane},
Year = {1999},
Key = {fds195288}
}