Employment contracts give a principal the authority to decide flexibly which task his agent should execute. However, there is a tradeoff, first pointed out by Simon (1951), between flexibility and employer moral hazard. An employment contract allows the principal to adjust the task quickly to...

For the nations of Latin America and the Caribbean to respond effectively to the Climate Change challenge, they need to be able to understand what the impacts of Climate Change may be for each country and the extent of each country's contribution to the problem before they can define and...

We study the introduction of new technologies when their costs are subject to idiosyncratic uncertainty and can only be fully learned through individual experience. We set up a dynamic model of clean experience goods that replace old polluting consumption options and show how optimal regulation...

We study (energy) markets with dirty incumbents and costly entry by clean producers. For intermediate entry costs, the market outcome exhibits inefficient production and inefficient entry. A policy mix of three popular regulatory instruments—taxation on polluters, feed-in tariffs for clean...

This study has been carried out with the purpose of assessing the overall investment needs of Latin America and the Caribbean by 2015, based on the assumption of meeting the Millennium Development Goals with regards to improving access to drinking water services and to better sanitation. It...

The ability of companies to turn an environmental constraint into a source of strategic opportunities is a controversial topic in published research. The article, which is based on a comparative study of the CO2 emission reduction strategies implemented by the cement and chemical industries,...

A central issue in the study of sustainable development is the interplay of growth and sacrifice in a dynamic economy. This paper investigates the relationship among current consumption, sacrifice, and sustainability improvement in a general context and in two canonical, stylized economies. We...

The Inter-American Development Bank (IDB) welcomes the opportunity that the World Summit on Sustainable Development offers the development community to reflect on regional trends and the major challenges facing our member countries in environmental sustainability. The IDB prepared this document...