Last 6 Classes1. Reasons behind climate change2. Cost of Change3. Policy instruments and effectiveness (+guest)4. Policy instruments and effectiveness5. The option of renewables6. Game theory
Assignment BPolicy proposal for CO2 reduction:– Imagine that USA has actually agreed with the intl community to curbits CO2 emissions by 50% (based on 1990 figures) as of 2030.– You are working for the EPA, and are asked for one policy suggestionwhich will help reach this goal (not by itself, but a part of a number ofinitiatives)– Policy success criteria:• Your suggestion may not cost the government more then $1bn per year• It should have as little a negative impact on the economy as little as possible• It should not increase unemployment, if anything create employment;preferably high-skill jobs• Maximize for CO2 reduction• Political viability. President Obama will need to deal with it.• 5% of your total grade for the class• Use max 2 pages, min 1 page, font 12 (Arial), no extra spacing• Back up your argument with papers / studies you find online and refer to them• When you’re done, share the google share with me: email@example.com• Make document title: EE_Assignment-B_Name• Deadline: End of April 29thSections• One-sentencedescription• Proposal description• Impact on emissions• Required budget (if any)• Impact on economy• Impact on employment• Political feasibility
Big Picture on Mitigation OpportunitiesMGI - 2010
Putting a price on CarbonThe Yale University hosts a debateabout which one is a bettermedium.What do you think?Why does it matter?
Cap & Trade vs TaxingCap & Trade TaxationEfficiency for not setting taxrates for each of the industries.But the companies find out forthemselves how much theywould like to cut emissionsDoesn’t reward laggersSimpler to administrateNo state intervention, notransfers back and forth fromstate – admin burden lightenedLess speculative, prices are clearGives the state a budget, alever, for otherinterventionsBarclays Capital predicts that "Carbon will be the worlds biggest commoditymarket, and it could become the worlds biggest market overall."Companies decide where toreduce emissions – liberalmarket principles
Choosing a Portfolio for InvestmentsNatural Resources - availabilityEconomics of technologyEconomic externalities – exports, labor marketTechnical feasibility - intermittenceRisks – “broad portfolio” approach
Reading for next timeRead:Prisoner’s Dilemna on Wikipedia:http://en.wikipedia.org/wiki/Prisoner%27s_dilemmaAndThe Selfish Gene – Chapter 11&12http://dl.dropbox.com/u/2049474/SelfishGene_11%2612.pdforhttp://macroevolution.narod.ru/gene/gene30.htm#11