The Environmental and Natural Resource Economics Workshop is supported by the Centre interuniversitaire de recherche en analyse des organisations (CIRANO), the Centre interuniversitaire de recherche en économie quantitative (CIREQ), the Réseau de recherche en économie circulaire du Québec (RRECQ) and the Fonds de recherche du Québec (FRQ).
This workshop is intended for researchers and doctoral students in economics who are interested in resource and environmental economics. The types of topics that may be dealt with, at an advanced level, are the economic theory of sustainable growth, green accounting, production constraints in natural resource exploitation, the irreversibility of environmental investment decisions, measures of biodiversity and their implications, the optimal order of extraction of natural resources, intertemporal depletion of spatially distributed non-renewable resources, property rights and natural resource exploitation, applications of differential games to natural resources and environmental economics, international environmental agreements, circular economy, climate policy and other related topics.
The workshop will be led by a team of researchers composed of Geir B. Asheim (Oslo University), Hassan Benchekroun (McGill University), Sophie Bernard (Polytechnique Montréal), Etienne Billette de Villemeur (Université de Lille, UQAM), Robert Cairns (McGill University), Justin Leroux (HEC Montréal), and Charles Séguin (UQAM).
* Information on previous workshops can be found here.
Workshop Venue
1130, rue Sherbrooke Ouest, suite 1400
Montréal, QC H3A 2M8
Registration
As seats are limited, registration is mandatory.
Speakers
Thor Larson (PhD student, University of California at Berkeley)
Rethinking Linking: Effects of Cap-and-Trade Integration on Equilibrium Emissions and Welfare
Abstract : Conventional economic reasoning suggests that linking cap-and-trade programs creates efficiency gains by lowering costs while holding emissions constant. When cap-and-trade programs have price floors or ceilings, however, linking may increase emissions and decrease welfare. I investigate this phenomenon within California and Québec, where cap-and-trade linkage increased emissions by 18.3 million tons CO2e and reduced welfare by $348 million annually – an outcome that was ex-ante foreseeable. A reformed linked market could have remained emissions-neutral while instead increasing welfare by $2 to $33 million annually. I argue that political and institutional frictions prevented such reforms from being implemented, proposing that policy makers prioritized cutting emissions cheaply over equating marginal damages and benefits. Given these constraints, linking with trading ratios remains incentive-compatible and recovers over three-fifths of potential emissions-neutral welfare gains.
Yukihiro Nishimura (Osaka University)
Global Public Goods, Income Inequality, and Kantian Equilibrium
Abstract : This paper develops a unified framework for analyzing the provision of global public goods. Building on the logic of the multiplicative Kantian equilibrium, in which agents choose contributions assuming others follow the same maxim according to preference and income, we show how three prominent allocation schemes (tradable-permit Lindahl, ratio cost-sharing, and no-transfer-efficient equilibria) can be represented as a common structure. We then examine how income inequality affects public-good provision across these mechanisms. While the tradable-permit Lindahl equilibrium tends to generate higher aggregate provision as inequality rises, both the ratio equilibrium and the no-transfer-efficient solution exhibit distributional neutrality. Accordingly, in the Kantian expression of the latter two allocations, only differences in preferences matter, as initial endowment differences are neutralized. Finally, we show that tradable permits, regardless of the share of the permits and including the no-transfer-efficient equilibrium, do not necessarily deliver a Pareto improvement over the voluntary-contribution (disagreement) equilibrium from any initial permit assignment. By contrast, the ratio equilibrium can emerge as an outcome that is robust to coalitional deviations under membership-based Kantian behavior.
