A significant portion of the northeastern territory of Brazil has a population and water resources such that, when combined, they result in low to very low water availability per inhabitant. Over time, numerous human interventions were carried out in the region in an attempt to mitigate the...

We discuss the selection of the socially optimal discount rate for public investment projects that entail costs and benefits in the very long run. More specifically, we examine in an expected utility framework how the uncertainty on the growth rate of the GNP per head affects this rate. Under...

We analyse the regulation of nonpoint source pollution. In particular, we study the use of peer monitoring to sustain co-operative abatement by a group of polluters. Delegation to a group of polluters has sometimes been proposed under a policy of so called voluntary abatement accords. By solving...

This paper investigates the effect of credibility of environmental policies on environmental innovation and welfare. When the government precommits to an emission tax, the monopolist's abatement effort is lower than if the environmental policy is at the government's discretion. Time consistent...

International climate protection investments (Joint Implementation and Clean Development Mechanism projects) are burdened with problems of contract enforcement, which prevent the realisation of efficiency gains associated with these investments. The paper analyses this problem from the...

Starting from CO2 emissions data collected during both the production phase and during the lifetime of cars and trucks, we argue that impressive opportunities to reduce emissions can be found in the consumption phase. It is however obvious that energy taxes alone will not lead to a strong...

The Kyoto Protocol sets legally binding emission targets for industrialised countries without accounting for reductions carried out prior to 2008, the beginning of the first commitment period. There exists only one exception, the project-based Clean Development Mechanism where credits accrue...

We discuss the selection of the socially efficient discount rate for public investment projects that entail costs and benefits in the far distant future. We show that the discount rate should be a decreasing function of time horizon under some specific restrictions on the distribution of...

The paper explores abatement investment and location responses to environmental policy, which takes the form of emission taxes or tradable emission permits and subsidies against the costs of abatement investment, under uncertainty and irreversibility. Uncertainty is associated with output price,...

The Kyoto Protocol incorporates emissions trading, joint implementation and the clean development mechanism to help Annex I countries to meet their Kyoto targets at a lower overall cost. This paper aims to estimate the size of the potential market for all three flexibility mechanisms under the...