"Inattention to Rare Events" Free Download
ECB Working Paper No. 1841

BARTOSZ MAĆKOWIAK, European Central Bank (ECB)
MIRKO WIEDERHOLT, Northwestern University - Department of Economics

The world recently experienced several rare events with disastrous consequences: the global financial crisis, the European sovereign debt crisis, and the Fukushima nuclear accident. These events have in common that key decision-makers were unprepared for them, which aggravated these events. We develop a model in which agents make state-contingent plans — prepare to act in different contingencies — subject to the constraint that agents can process only a finite amount of information. We identify the forces that make agents prepare little for some contingencies. We study whether a social planner would want agents to prepare more for rare events.

"International Environmental Law and the Global South -- Introduction" Free Download
International Environmental Law and the Global South (Shawkat Alam, Sumudu Atapattu, Carmen G. Gonzalez and Jona Razzaque, eds). Cambridge University Press, 2015

CARMEN G. GONZALEZ, Seattle University School of Law
SUMUDU ATAPATTU, University of Wisconsin Law School

The unprecedented degradation of the planet’s vital ecosystems is among the most pressing issues confronting the international community. Despite the proliferation of legal instruments to combat environmental problems, conflicts between rich and poor nations (the North-South divide) have compromised the effectiveness of international environmental law, leading to deadlocks in environmental treaty negotiations and non-compliance with existing agreements. International Environmental Law and the Global South examines both the historical origins of the North-South divide in European colonialism as well as its contemporary manifestations in a range of issues, including food justice, energy justice, indigenous rights, trade, investment, extractive industries, human rights, land grabs, hazardous waste, and climate change. Born out of the recognition that global inequality and profligate consumerism present threats to a sustainable planet, this books makes a unique contribution to international environmental law by emphasizing the priorities and concerns of the global South.

"International Environmental Agreements with Social Externalities: A Global Emissions Game with Asymmetric Players" Free Download

LINA MALLOZZI, University of Naples Federico II - Faculty of Economics
STEFANO PATRI, University of Rome I
ARMANDO SACCO, University of Rome I

In this work we present a Global Emission Game with N asymmetric players, in which the pay-off of cooperators is affected by a Social Externality, that we assume to be a positive function. We refer to the notion of self-enforcing agreements to study the stability of the coalition and we assume that the N players are divided in two homogeneous groups, developed and developing countries. Moreover, the externality doesn't depend on emissions, but only on the number of players in coalition. So, it has no effects on the choice of optimal emissions, but only on the stability of the coalition.

"A Step by Step Look at UARG v. EPA: A New Layer of Greenhouse Gas Regulation" Free Download
4 Environmental & Earth Law Journal 3 (2014)

KEVIN O. LESKE, Barry University - Dwayne O. Andreas School of Law

Hailed by many as the most important environmental law decision, the U.S. Supreme Court in Massachusetts v. EPA held that greenhouse gases (GHGs) are “air pollutants? that the United State Environmental Protection Agency (EPA) can regulate under the federal Clean Air Act (CAA). This groundbreaking conclusion soon led EPA to promulgate a series of related GHG regulations to address climate change. The cascading effect of the Supreme Court’s holding in Massachusetts that GHGs were covered by the Clean Air Act, however, remained to be seen.

One pivotal question was whether EPA’s post-Massachusetts promulgation of GHG emission standards for new motor-vehicles, in turn, required EPA to also regulate certain stationary sources of GHG emissions, such as power plants, industrial sources, as well as even smaller non-industrial sources, like small businesses and apartment buildings. And if the CAA did not compel EPA to regulate these sources, was EPA allowed to do so as a matter of its discretion under the CAA?

The Supreme Court, however, in UARG v. EPA has now resolved many of these questions that lingered in the wake of the Massachusetts v. EPA decision. Accordingly, this Article examines the very recent case of UARG v. EPA, which was decided by the Court in June of 2014.

It first gives a very brief background on greenhouse gases and climate change, as well as sets forth the provisions of the federal Clean Air Act at issue. The Article then summarizes the Supreme Court’s foundational holding in Massachusetts v. EPA that EPA has the authority to regulate GHGs under the CAA to address climate change. Next, it addresses the key challenge to EPA’s post-Massachusetts authority to regulate GHGs by exploring the U.S. Court of Appeals for the D.C. Circuit’s decision in Coalition for Responsible Regulation v. EPA, where the court rejected various petitioners’ attempts to derail EPA’s ambitious and creative plan to cut GHGs emissions from both mobile and stationary sources.

The Article then details the Supreme Court’s June 2014 decision in UARG v. EPA. Specifically, it examines Justice Scalia’s opinion on behalf of a majority of the Court; Justice Breyer’s opinion concurring in part and dissenting in part; and Justice Alito’s opinion concurring in part and dissenting in part. Finally, the last section of the Article then analyzes the potential impact of the Court’s opinions, concluding that the decision is an important step forward in developing comprehensive greenhouse gas regulation.

"Bicycle Infrastructure and Traffic Congestion: Evidence from DC's Capital Bikeshare" Free Download
Resources for the Future Discussion Paper 15-20

TIMOTHY HAMILTON, University of Richmond
CASEY J. WICHMAN, Resources for the Future

We explore the impact of bicycle-sharing infrastructure on urban transportation. Accounting for selection bias in a matching framework, we estimate a causal effect of the Capital Bikeshare on traffic congestion in the metropolitan Washington, DC, area. We exploit a unique traffic dataset that is finely defined on a spatial and temporal scale. Our approach examines within-city commuting decisions as opposed to traffic patterns on major thruways. Empirical results suggest that the availability of a bikeshare reduces traffic congestion by 2 to 3% within a neighborhood. We also identify geographic spillovers that may counteract benefits from reductions in local pollution.

"Climate Change, Catastrophe Risk and Government Stimulation of Insurance Market — A Study of Transitional China" Free Download

QIHAO HE, University of Connecticut - School of Law

Due to climate change and an increasing concentration of the world’s population in vulnerable areas, how to manage catastrophe risk efficiently and cover disaster losses fairly is still a universal dilemma. Under the current political-economy configuration of “socialism with Chinese characteristics? which creates the so-called “Chinese miracle?, China’s mechanism for managing catastrophic disaster risk is in many ways unique. These mechanisms are collectively called the “Whole-Nation System? which emphasizes government responsibilities and works well in many aspects.

Nonetheless, the “Whole-Nation System? which has the vestige of centrally-planned economy needs reform. After assessing the challenges and problems of the “Whole-Nation System?, I start a broader discussion about government responsibilities for developing catastrophe insurance in China and may provide insights for other transitional nations. I propose a catastrophe insurance market-enhancing framework which marries the merits of both the market and government to manage catastrophe risks. There are three pillars of the framework: (i) sustaining a strong and capable government; (ii) government enhancement of the market, neither supplanting nor retarding it; (iii) legalizing the relationship between government and market to prevent government from infringing well-functioning market operations. Furthermore, three principles are introduced to facilitate government intervention in catastrophe insurance market, in order to shed light on solving this universal dilemma.


About this eJournal

This eJournal distributes working and accepted paper abstracts in the full range of subjects that comprise Environmental Economics. Topics include economic causes and consequences of environmental changes; tax and regulatory policies that affect the environment; markets for pollution rights and related issues; government policies toward the environment; valuation of environmental resources, "green accounting" and intergovernmental cooperation in environmental policy.


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Advisory Board

Environmental Economics eJournal

Professor, University of Illinois at Urbana-Champaign - Department of Finance, National Bureau of Economic Research (NBER), CESifo (Center for Economic Studies and Ifo Institute)

Shuzo Nishihara Professor of Environmental and Resource Economics, Stanford University - Department of Economics, Research Associate, National Bureau of Economic Research (NBER), University Fellow, Resources for the Future

Yale University - Department of Economics, National Bureau of Economic Research (NBER)

University of Arizona - Eller College of Management

Albert Pratt Professor of Business and Government, Harvard University - Harvard Kennedy School (HKS), University Fellow, Resources for the Future, Research Associate, National Bureau of Economic Research (NBER)

Mitchell Family Professor of Economics, Colby College - Department of Economics