The optimal time path of clean energy R&D policy when patents have finite lifetime

We study the optimal time path for clean energy innovation policy. In a model with emission reduction through clean energy deployment, and with R&D increasing the overall productivity of clean energy, we describe optimal R&D policies jointly with emission pricing policies. We find that while emission prices can be set at the Pigouvian level independently of innovation policy, the optimal level of R&D subsidies and patent lifetime change with the stages of the climate problem. In the early stages of clean energy development, innovators find it more difficult to capture the social value of their innovations. Thus, for a given finite patent lifetime, optimal clean energy R&D subsidies are initially high, but then fall over time. Alternatively, if research subsidies are kept constant, the optimal patent lifetime should initially be long and fall over time.     

Functional and community-level soil microbial responses to zinc addition may depend on test system biocomplexity

The effect of zinc on soil nitrification and composition of the microbial community in soil was investigated using a full factorial experiment with five zinc concentrations and four levels of biological complexity (microbes only, microbes and earthworms (Eisenia fetida), microbes and Italian ryegrass (Lolium multiflorum var. Macho), and microbes, ryegrass and earthworms). After 6 weeks of exposure, the activity of soil nitrifying bacteria was measured and the microbial community structure was characterized by phospholipid fatty acid (PLFA) analysis. Soil nitrification and several PLFA markers were significantly influenced by either zinc addition and/or the presence of earthworms or ryegrass, and one of the most pronounced changes was the increase of fungi and decrease of bacteria with increasing concentrations of zinc. Of particular interest, however, was the potential interaction between the presence of plants and/or earthworms and the effect of zinc, which the factorial study design allowed us to explore. Such an effect was observed in two cases: Earthworms reduced the positive effect of zinc on the fungal biomass (ANOVA, p=0.03), and the effect of earthworms on the soil nitrification activity depended on zinc concentration (ANOVA, p<0.05). The effect of earthworm presence was not very large, but it does show that multispecies tests might give information about metal toxicity or bioavailability that cannot be predicted from single-species tests.     

Mitigation costs,distributional effects,and ancillary benefits of carbon policies in the Nordic countries,the U.K., and Ireland

This paper provides a survey of top-downmodelling analyses of carbon (C) abatementmitigation costs, distributional effectsand ancillary benefits in the Nordiccountries, the U.K. and Ireland. Specialemphasis is placed on the effects ofrevenue recycling and tax exemptions.According to the analyses, modestemissions reductions can be met withoutsubstantial costs for the countriesstudied, and a strong double dividend isfound in some analyses. The gross domesticproduct (GDP) or welfare effects are mostlyin the range of –0.4 and 1.2 percent whenC emissions are reduced by 20–30 per cent.Lowest costs are obtained without taxexemptions and with tax revenues used toreduce distortionary taxes. Ancillarybenefits are mostly in the range35–80/MgC^-1, i.e., about the same order ofmagnitude as the mitigation costs.Distributional effects are mostlyregressive, unless the tax revenues aredistributed in lump-sum fashion with equaltransfers to each household.     

Oil Exploration under Climate Treaties

In this paper we focus on how an international climate treaty will influence the exploration of oil in non-OPEC countries. We present a numerical intertemporal global equilibrium model for the fossil fuel markets. The international oil market is modelled with a cartel (OPEC) and a competitive fringe on the supply side, following a Nash–Cournot approach. An initial resource base for oil is given in the non-OPEC region. However, the resource base changes over time due to depletion, exploration, and discovery. When studying the effects of different climate treaties on oil exploration, two contrasting incentives apply. If an international carbon tax is introduced, the producer price of oil will drop compared to the reference case. This gives an incentive to reduce oil production and exploration. However, the oil price may increase less rapidly over time, which gives an incentive to expedite production and exploration. In fact, in the case of a rising carbon tax we find the last incentive to be the strongest, which means that an international climate treaty may increase oil exploration in non-OPEC countries for the coming decades and reduce OPEC's market share.