There are different views with respect to the treatment of tradeable permits for greenhouse gases in cost-benefit analysis. This note aims at illustrating numerically within a simple general equilibrium model how to treat tradeable permits in economic evaluations of projects. The note looks at a...

There are conflicting views on how to handle permits for greenhouse gases in cost-benefit analysis. This paper aims at clarifying within a simple general equilibrium model how to treat different kinds of trade-able permits in economic evaluations of projects. Within a framework that reminds of...

The paper analyzes optimal climate policy under uncertainty. It endows a recent quantitative analytic integrated assessment model (IAM) with long-run risk, adapting methods from the asset pricing literature to deal with endogenous climate risk. The model solves in closed-form for general degrees...

This paper explores how a principal with time-inconsistent preferences invests optimally in technology or capital. If the current principal prefers her future self to save more, she can increase current investments complementary to future savings and decrease investments in the strategic...

Specialized theoretical and empirical research should in principle be embedded in a unified framework that identifies the relevant interactions among different phenomena, enables an appropriate matching of policy instruments to objectives, and grounds normative analysis in individuals' utilities...

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,...

Various economic literatures address the question whether first-best prescriptions for government policy require modification because redistributive income taxation distorts labor supply and cannot achieve the distributive ideal. Perhaps second-best rules for public goods provision, corrective...

Should the assessment of government policies, such as the provision of public goods and the control of externalities, deviate from first-best principles to account for distributive effects and for the distortionary cost of labor income taxation? For example, is the optimal extent of public goods...