Using a general equilibrium model in which both capital productivity and temperature are uncertain, we show that the social discount rate (SDR) will decline from 1% in 2010 to 0.6% in 2300 under the conventional, quadratic specification of the damage function, and to -2.0% under the reactive...

This paper develops a theory of asset pricing in which discount rates for investments in all assets, including adaptation and mitigation, are endogenously determined. Exploiting the characteristics of adaptation and mitigation in terms of climatic risk, I show that adaptation requires a lower...

In this memorandum a number of frequently asked questions are answered about oil and the world economy In July 2007 the memorandum of December 2004 was updated.

This report analyses the effects of Depreciation at Will (DAW) on offshore gas production, government budget and employment in the gas industry. The DAW enables firms to accelerate deprecation of investments in platforms and other offshore equipment. The interest advantage due to the postponed...

This Document describes the background and the rationale of the European Union for pursuing liberalised energy markets, explains why this policy goal is not achieved yet, and discusses recent developments and some of the future challenges faced by political decision makers. Read also the...

To what extent have national fiscal policies contributed to the decarbonisation of newly sold passenger cars? We construct a simple model that generates predictions regarding the effect of fiscal policies on average CO₂ emissions of new cars, and then test the model empirically. Our empirical...

A simple model of “hourglass†problems is presented. For such problems, the benefit of a national policy measure is propagated to all countries through one single world-wide variable.<span style="font-family: NimbusRomNo9L-Regu; font-size: small;"><span style="font-family: NimbusRomNo9L-Regu; font-size: small;">The prime example is the effect of the reduction of CO</span></span><span style="font-family: NimbusRomNo9L-Regu; font-size: xx-small;"><span style="font-family: NimbusRomNo9L-Regu; font-size: xx-small;">2 </span></span><span style="font-family: NimbusRomNo9L-Regu; font-size: small;"><span style="font-family: NimbusRomNo9L-Regu; font-size: small;">emission on the world climate.</span></span><span style="font-family: NimbusRomNo9L-Regu; font-size: small;"><span style="font-family: NimbusRomNo9L-Regu; font-size: small;">Five </span></span><span style="font-family: NimbusRomNo9L-Regu; font-size: small;"><span style="font-family: NimbusRomNo9L-Regu; font-size: small;">optimal...</span></span>

As European energy markets move towards deregulation, energy prices shift from classic ‘cost plus' prices towards market prices. Read also the accompanying <a href="http://www.cpb.nl/en/pressrelease/3213211/competition-lowers-energy-expenditures-end-users">press release</a>. We develop a model for the retail and wholesale energy markets in Europe, based on Bertrand competition in a two part...

With the ongoing liberalization and integration of European energy markets and the increasing worries about security of supply, the need for thorough economic analysis of electricity markets is growing. Elmar is a model for the European electricity market, taking into account imperfect...

This paper analyses the welfare effects of vertical integration of networks and trade in energy markets. Vertical integration reduces the effect of double marginalisation, thus increasing welfare. On the other hand, vertical integration hinders equal competition, rendering the vertically...