We examine long-run treaties for mitigating climate change. Countries pay an initial fee into a global fund that is invested in long-run assets. In each period, part of the fund is distributed among the participating countries in relation to the emission reductions they have achieved in this...

We analyse a principal-agent relationship in the context of international climate policy. Principals in two countries first decide whether to merge domestic emission permit markets to an international market, then delegate the domestic permit supply to an agent. We find that principals select...

The marginal cost of public funds (MCF) is substantial in generous welfare state countries according to Kleven and Kreiner (2006). Their main estimate for the Danish economy exceeds 2 mainly because taxation distorts labor force participation. Adjustments in social transfers which alleviate such...

Governments have always intervened in the economy. This intervention varies in terms of scope. Presently, one of the most important instruments of government intervention in the economy is the provision of state aid. State aid puts its beneficiaries in a privileged position, which increases the...

There is a certain connection between education and economic competitiveness. The relation between these two concepts is easy to intuit. On the medium and long term investments in education generate a strong increase in a country’s level of economic competitiveness. Through education the human...

Economic theory has invoked moral motivation as an explanation for the voluntary provision of public goods but is vague with regard to the specific moral concerns involved. Using climate change as a case study, this paper relates morally-motivated public good provision to the six moral...

With the increase of the linear reduction factor (LRF), the implementation of the market stability reserve (MSR) and the introduction of the cancellation mechanism (CM), the EU ETS changed fundamentally. We develop a discrete time model of the intertemporal allowance market that accurately...

We develop a model of Tiebout sorting based on decentralized income taxation, which allows for spillovers and imperfect rivalry in consumption of the publicly provided good. We identify three sources of welfare loss from decentralization: Imperfect redistribution, inter-jurisdictional...

Economists from centuries have been leading discussions on the role of state in economy. Some of them are in favour of state's wide interference in economy while others seek to limit the role of the government. One of the arguments for the necessity of state interventionism in the market...

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)...