Publications – Working Papers
The costs of China’s record economic growth—including pollution—threaten to undercut its progress if left unchecked. Standing in the way of China’s efforts to control pollution is a complex political system of overlapping levels of local and national authorities. This paper examines recent efforts to address the ill-aligned incentives lead some officials to allow high levels of pollution.
Consumer Welfare Implications of More Stringent CAFE Standards
Are Passenger Vehicles Positional Goods? examines to what degree vehicles generate consumption externalities that are not currently corrected for by the market, and whether a
uniform downward shift in the size of the passenger vehicle fleet will actually result in reduced consumer welfare.
Vehicle fuel efficiency improvements through Corporate Average Fuel Economy (CAFE) standards, may lead owners of more fuel-efficient cars may be driving more as their fuel cost per mile travelled decreases. It’s called the “rebound effect” and it has significant policy implications.
Are the benefits of raising the fuel efficiency of America’s auto fleet greater than the costs? The answer may depend on whether or not there is an energy paradox.
Real Options, Natural Resources, and Offshore Oil
Consideration of real options is necessary to maximize economic return from non-renewable natural resource extraction. But ecisions over drilling are often framed as a now-or-never choice, so the option to wait (or “real option” value) is improperly treated in administrative processes that determine whether, when, and how offshore oil resources will be tapped.