Air pollution is one of the most severe environmental problems that Mexico is currently facing. T... more Air pollution is one of the most severe environmental problems that Mexico is currently facing. The objective of this paper is to quantify the most relevant socioeconomic driving forces behind air polluting emissions and, more specifically, 7 local pollutants in Mexico. We do so in a multilevel version of the Stochastic Impacts by Regression on Population, Affluence and Technology (STIRPAT) model that accounts for the spatial heterogeneity at the municipal level across the country. The results show that the most relevant variables to determine the emissions of atmospheric pollutants are the population, the harvested area and the number of cars, while technological development helps to mitigate such emissions. The ecological elasticities are, in all cases, smaller than one. Our purpose is to provide quantitative information about these socioeconomic driving forces of air deterioration as a basis to establish some recommendations for environmental policy decision-making.
We study the efficiency of the uniform auction as an allocation mechanism for emission permits am... more We study the efficiency of the uniform auction as an allocation mechanism for emission permits among polluting firms. In our model, firms have private information about their abatement costs, which differ across firms and across units, and bidders' demands are linear. We show that there is a continuum of interior Bayesian Nash equilibria, and only one is efficient, minimizing abatement costs. We find that the existence of many bidders is not a sufficient condition to guarantee an efficient equilibrium in the uniform auction. Additionally, bidders' types have to be uncorrelated. Keywords Emission permits • Uniform auction • Efficiency • Incomplete information simultaneous games We thank an anonymous referee, Pedro Linares and participants at the Málaga University Economic Theory Seminar for helpful comments and suggestions. Usual disclaimer applies.
In this paper we study the relationship between market power in emission permit markets and endog... more In this paper we study the relationship between market power in emission permit markets and endogenous technology adoption. We find that the initial distribution of permits, in particular, the amount of permits initially given to the dominant firm, is crucial in determining over-or under-investment in relation to the benchmark model without market power. Specifically, if the dominant firm is initially endowed with more permits than the corresponding cost effective allocation, this results in under-investment by the dominant firm and over-investment by the competitive fringe, regardless of the specific amount of permits given to the latter firms. The results are reversed if the dominant firm is initially endowed with relatively few permits. Also, the presence of market power results in a divergence of both abatement and technology adoption levels with respect to the benchmark scenario of perfect competition, as long as technology adoption becomes more effective in reducing abatement costs.
The set of efficient policies could be too large to serve as a useful guide for real action. In t... more The set of efficient policies could be too large to serve as a useful guide for real action. In this chapter we use compromise programming (CP) to reduce the number of eligible policies and get more precise policy recommendations than those derived from the efficient set ...
Abstract We study the dynamic impact of recycling through its effect on the production set of the... more Abstract We study the dynamic impact of recycling through its effect on the production set of the economy and its relationship with natural resources. The contribution of renewable and recyclable resources for sustainability is studied. Although in the short run recycling may ...
Lecture Notes in Economics and Mathematical Systems, 2010
This is the concluding chapter. We have introduced an approach to handle the design of public eco... more This is the concluding chapter. We have introduced an approach to handle the design of public economic and environmental polices based on multicriteria decision making in connection with a computable general equilibrium model. This approach endeavours to be both operational and consistent with economic theory. In doing so, we have also tried to build a bridge between operational research methods and economic analysis. We have introduced the notions of efficient policy, compromise policy and satisficing policy, which correspond to different MCDM approaches. Efficient policies guarantee that policy makers do not miss any costless opportunity of improvement. Compromise policies aim to provide policy results that are as close as possible to the optimum values. Satisficing policies fit frameworks in which policy makers are concerned not about optimality but about attaining some target levels for their objectives. We also offer some discussion and guidelines for future research. Coming works could relax some simplifying assumptions that we have introduced to keep our model manageable. Among others, it would be possible to build a dynamic rather than static model, relaxing the small country hypothesis, performing a more accurate analysis of the job market, or explicitly accounting for technical change and pollution abatement activities.
Air pollution is one of the most severe environmental problems that Mexico is currently facing. T... more Air pollution is one of the most severe environmental problems that Mexico is currently facing. The objective of this paper is to quantify the most relevant socioeconomic driving forces behind air polluting emissions and, more specifically, 7 local pollutants in Mexico. We do so in a multilevel version of the Stochastic Impacts by Regression on Population, Affluence and Technology (STIRPAT) model that accounts for the spatial heterogeneity at the municipal level across the country. The results show that the most relevant variables to determine the emissions of atmospheric pollutants are the population, the harvested area and the number of cars, while technological development helps to mitigate such emissions. The ecological elasticities are, in all cases, smaller than one. Our purpose is to provide quantitative information about these socioeconomic driving forces of air deterioration as a basis to establish some recommendations for environmental policy decision-making.
We study the efficiency of the uniform auction as an allocation mechanism for emission permits am... more We study the efficiency of the uniform auction as an allocation mechanism for emission permits among polluting firms. In our model, firms have private information about their abatement costs, which differ across firms and across units, and bidders' demands are linear. We show that there is a continuum of interior Bayesian Nash equilibria, and only one is efficient, minimizing abatement costs. We find that the existence of many bidders is not a sufficient condition to guarantee an efficient equilibrium in the uniform auction. Additionally, bidders' types have to be uncorrelated. Keywords Emission permits • Uniform auction • Efficiency • Incomplete information simultaneous games We thank an anonymous referee, Pedro Linares and participants at the Málaga University Economic Theory Seminar for helpful comments and suggestions. Usual disclaimer applies.
In this paper we study the relationship between market power in emission permit markets and endog... more In this paper we study the relationship between market power in emission permit markets and endogenous technology adoption. We find that the initial distribution of permits, in particular, the amount of permits initially given to the dominant firm, is crucial in determining over-or under-investment in relation to the benchmark model without market power. Specifically, if the dominant firm is initially endowed with more permits than the corresponding cost effective allocation, this results in under-investment by the dominant firm and over-investment by the competitive fringe, regardless of the specific amount of permits given to the latter firms. The results are reversed if the dominant firm is initially endowed with relatively few permits. Also, the presence of market power results in a divergence of both abatement and technology adoption levels with respect to the benchmark scenario of perfect competition, as long as technology adoption becomes more effective in reducing abatement costs.
The set of efficient policies could be too large to serve as a useful guide for real action. In t... more The set of efficient policies could be too large to serve as a useful guide for real action. In this chapter we use compromise programming (CP) to reduce the number of eligible policies and get more precise policy recommendations than those derived from the efficient set ...
Abstract We study the dynamic impact of recycling through its effect on the production set of the... more Abstract We study the dynamic impact of recycling through its effect on the production set of the economy and its relationship with natural resources. The contribution of renewable and recyclable resources for sustainability is studied. Although in the short run recycling may ...
Lecture Notes in Economics and Mathematical Systems, 2010
This is the concluding chapter. We have introduced an approach to handle the design of public eco... more This is the concluding chapter. We have introduced an approach to handle the design of public economic and environmental polices based on multicriteria decision making in connection with a computable general equilibrium model. This approach endeavours to be both operational and consistent with economic theory. In doing so, we have also tried to build a bridge between operational research methods and economic analysis. We have introduced the notions of efficient policy, compromise policy and satisficing policy, which correspond to different MCDM approaches. Efficient policies guarantee that policy makers do not miss any costless opportunity of improvement. Compromise policies aim to provide policy results that are as close as possible to the optimum values. Satisficing policies fit frameworks in which policy makers are concerned not about optimality but about attaining some target levels for their objectives. We also offer some discussion and guidelines for future research. Coming works could relax some simplifying assumptions that we have introduced to keep our model manageable. Among others, it would be possible to build a dynamic rather than static model, relaxing the small country hypothesis, performing a more accurate analysis of the job market, or explicitly accounting for technical change and pollution abatement activities.
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Papers by Francisco J. Andre