This study investigates the least-cost decarbonization pathways in the Finnish electricity generation industry in order to achieve the national carbon neutrality goal by 2035. Various abatement measures, such as downscaling production, capital investment, increasing labor and intermediate inputs...

Integrated assessment models lack a microeconomic foundation in modelling environmental damages to the economy. To overcome this, damage coefficients are incorporated in standard microeconomic models. Firms and consumers take both damages and prices as given. Demand, supply, profit and...

Full accounting of costs and benefits are essential to policy analysis, but regulations may have effects beyond firms covered by the policy. Considering a policy mandating stream flows below hydroelectric dams, I estimate both direct costs of regulation to regulated firms and spillovers to other...

Linkage of cap-and-trade systems is typically advocated by economists on a general analogy with the beneficial linking of free-trade areas and on the specific grounds that linkage will ensure cost effectiveness among the linked jurisdictions. An appropriate and widely accepted specification for...

Electricity transmission redistributes environmental impacts across space. We exploit episodes of high electricity transmission system congestion to explore changes in ambient concentrations of air pollutants in the eastern United States. Reducing electricity system congestion decreases ozone...

This paper proposes an analytical framework for assessing policies that will contribute to a better integration of environmental externalities in the pursuit of economic efficiency and growth objectives. The framework consists of two parts. The first part lays out principles and criteria for the...

Electricity transmission redistributes environmental impacts across space. We exploit episodes of high electricity transmission system congestion to explore changes in ambient concentrations of air pollutants in the eastern United States. Reducing electricity system congestion decreases ozone...

This paper examines the application of quasi-experimental methods in environmental economics. We begin with two observations: i) standard quasi-experimental methods, first applied in other microeconomic fields, typically assume unit-level treatments that do not spill over across units; (ii)...

Linkage of cap-and-trade systems is typically advocated by economists on a general analogy with the beneficial linking of free-trade areas and on the specific grounds that linkage will ensure cost effectiveness among the linked jurisdictions. An appropriate and widely accepted specification for...

Assessment of climate change policies requires aggregation of costs and benefits over time and across generations, a process ordinarily done through discounting. Choosing the correct discount rate has proved controversial and highly consequential. To clarify past analysis and guide future work,...