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Fischer C.,Resources for the Future | Fox A.K.,ITC Inc
Journal of Environmental Economics and Management | Year: 2012

We explore conditions determining which anti-leakage policies might be more effective complements to domestic greenhouse gas emissions regulation. We consider four policies that could be combined with unilateral emissions pricing to counter effects on international competitiveness: a border charge on imports, a border rebate for exports, full border adjustment, and domestic output-based rebating. Each option faces different potential legal hurdles in international trade law; each also has different economic impacts. While all can support competitiveness, none is necessarily effective at reducing global emissions. Nor is it possible to rank order the options; effectiveness depends on the relative emissions rates, elasticities of substitution, and consumption volumes. We illustrate these results with simulations for the energy-intensive sectors of three different economies, the United States, Canada and Europe. Although most controversial, full border adjustment is usually most effective, but output-based rebating for key manufacturing sectors can achieve many of the gains. © 2012 Elsevier Inc.

Kousky C.,Resources for the Future
Climatic Change | Year: 2014

As sea level rises, coastal communities will face increased risks of flooding, storm surge, and inundation. In some areas, structural protective measures will be built, and for some properties, accommodation to sea level rise may be possible. For other areas, however, some form of retreat will be either preferred on economic or sociopolitical grounds or required given fiscal constraints. This paper considers how society can proactively manage shoreline retreat in those locations where it is deemed the preferable policy. A three-part strategy is proposed: (1) reduce new development in the highest-risk areas; (2) adopt policies that allow for expected and orderly removal or modification of development as inundation occurs; and (3) take advantage of disasters to implement managed retreat approaches. Specific policies are recommended and the challenges of institutional change discussed. © 2014 Springer Science+Business Media Dordrecht.

Kousky C.,Resources for the Future
Review of Environmental Economics and Policy | Year: 2011

This article surveys state-mandated programs in the United States aimed at providing natural catastrophe insurance to property owners and businesses unable to find policies in the private market. The article provides an overview of ten state programs that offer wind or earthquake coverage and outlines the motivation for establishing such programs. The implications of design and operation decisions, such as pricing strategies and contract options, are discussed, as well as how these programs interact with the private property insurance market. Finally, the article examines whether such programs can handle a truly catastrophic loss year and describes proposals for federal support of these programs. © The Author 2011. Published by Oxford University Press on behalf of the Association of Environmental and Resource Economists. All rights reserved.

Kousky C.,Resources for the Future
Energy Economics | Year: 2014

This paper reviews the empirical literature on the economic impacts of natural disasters to inform both the modeling of potential future climate damages and climate adaptation policy related to extreme events. It covers papers that estimate the short- and/or long-run economic impacts of weather-related extreme events as well as studies identifying the determinants of the magnitude of those damages (including fatalities). The paper also reviews the small number of empirical papers on the potential extent of adaptation in response to changing extreme events. © 2013 Elsevier B.V.

Fischer C.,Resources for the Future | Springborn M.,University of California at Davis
Journal of Environmental Economics and Management | Year: 2011

For reducing greenhouse gas emissions, intensity targets are attracting interest as a flexible mechanism that would better allow for economic growth than emissions caps. For the same expected emissions, however, the economic responses to unexpected productivity shocks differ. Using a real business cycle model, we find that a cap dampens the effects of productivity shocks in the economy on all variables except for the shadow value of the emissions constraint. An emissions tax leads to the same expected outcomes as a cap but with greater volatility. Certainty-equivalent intensity targets maintain higher levels of labor, capital, and output than other policies, with lower expected costs and no more volatility than with no policy. © 2011 Elsevier Inc.

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