Thesis advisor: Hideo Konishi / This paper will review prior research to support the notion that innovation does in fact lead to a competitive advantage for business, and that this competitive advantage is translated into increased profitability and productivity. Though the body of work reviewed here will by no means unequivocally prove that this relationship always holds true in real-world markets, it will provide a convincing argument that fostering innovation will likely have positive economic affects. Building off this assumption, this paper will then focus specifically on examining the relationship between environmental regulation and innovation in more detail. This paper looks to answer the question: Under what conditions will environmental regulation cause firms to begin choosing to innovate technologically rather than simply to meet regulation with compliance? Using a simple model of price competition between two firms it will be shown that environmental regulation can effectively induce innovation through spending on R&D projects to develop more efficient technology. / Thesis (BS) — Boston College, 2010. / Submitted to: Boston College. College of Arts and Sciences. / Discipline: Economics Honors Program. / Discipline: Economics.

Esta tesis doctoral estudia distintos problemas de economía medioambiental, con un énfasis en la regulacción medioambiental (incluyendo políticas, aplicación y gobernanza) y en su cumplimiento por parte de las empresas. Consta de tres capítulos, unidos por el tema de regulación ambiental, específicamente, la visión desde los niveles internacional, nacional y de empresa. El primer capítulo estudia los acuerdos internacionales en materia de medio ambiente, siendo el aspecto innovador la toma en consideración de múltiples contaminantes con efectos correlaciondos y la secuencia de la negociación. Se muestra que una cooperación en la primera fase puede facilitar las negociaciones posteriores. Además, excepto para países simétricos, la secuencia de la negociación afecta a los resultados respecto a acuerdos, haciendo de la secuencia otro instrumento para aumentar la participación. En el segundo capítulo se analiza, en un marco en que la política medioambiental viene predeterminada, cómo debería distribuirse el poder para imponer la aplicación de las normativas en una estructura de aplicación centralizada, descentralizada o mixta. El capítulo se relaciona con la literarura sobre federalismo ambiental al incorporar una nueva perspectiva sobre los problemas relacionados con el cumplimiento de las normativas. Los sacrificios que deben hacerse al elegir entre centralización y descentralización recaen en la internalización de externalidades negativas y la consideración de la heterogeneidad entre regiones. Además, si las preocupaciones ambientales locales y centrales no coinciden, podrían surgir contradicciones donde cada nivel jurisdiccional prefiere lo opuesto como estructura de aplicación superior. En el tercer capítulo de la tesis me centro en otro aspecto del cumplimiento de las normativas medioambientales por parte de las empresas. Me centro en el estudio de cómo las características de una compañía, y en particular las de su gobierno corporativo, afectan al comportamiento de ésta con respecto al cumplimiento de la regulación medioambiental. Además del efecto disuasorio general de la regulación medioambiental, en este trabajo proporciono un nuevo aspecto que puede ayudar a entender la heterogeneidad que se observa en el comportamiento de las empresas en el terreno medioambiental. Propongo un modelo teórico que luego estudio empíricamente, y llego a la conclusión de que el impacto del gobierno de la compañía en el grado de cumplimiento con las normativa medioambiental presenta una forma funcional en U invertida, lo que explicaría que no se haya encontrado una relación significativa en la literatura empírica previa. Este hecho indica por tanto que además de las expectativas convencionales de que la mejora del gobierno corporativo debería reducir sus incumplimientos en materia medioambiental, puede darse también el efecto inverso. / This doctoral thesis is generally on environmental economics, with a slight focus on environmental regulation (including policy, enforcement and governance) and firm’s compliance. It consists of three essays, linked by the theme of environmental governance, specifically, the governance on the international, national and firm level. The first essay studies international environmental agreement, with its innovation in taking into account multiple pollutants with correlation effect and the negotiation sequence. It turns out that a cooperation in the first stage can facilitate later negotiations. And except for symmetric countries, the negotiation agendas matters for the membership outcome, which makes the sequence another instrument to possibly enlarge the participations. In the second essay, it analyzes when the environmental policy is predetermined, how the enforcement power should be distributed under centralized, decentralized or a mixed enforcement structure. The chapter brings the environmental federalism literature to a new perspective of compliance problems. The tradeoff between centralization and decentralization lies in internalizing negative externalities and accounting for heterogeneity across regions. Besides, if the environmental concern of the central and local agencies does not coincide, disagreements may arise where each jurisdictional level prefers the opposite as to the superior enforcement structure. The research then shifts to the environmental governance within the firm level in the third essay. I study whether and how a firm’s characteristics, in particular its corporate governance, affect the environmental compliance behavior. Besides the general deterrent effect of environmental regulation, this essay provides a novel angle in explaining the heterogeneity of corporate environmental performance. By both theoretical and empirical means, I find that the impact of firm’s corporate control on the degree of environmental violation exhibits an inverse-U trend. The failure to discover a significant relationship in previous empirical literature can thereby be explained. Hence, additional to conventional expectation that an improvement of a firm’s corporate governance should lessen its environmental incompliance, the reverse effect can also take place.

Various environmental standards have been established for the sake of public health and ecosystem diversity since environmental awareness was awakened in the late 1960s. However, the results were often unsatisfactory. Either environmental goals achieved were far from desired, or regional development was hampered due to some unpractical high environmental standards. The failure of these environmental standards resulted in innovations of environmental policy instruments to find practical environmental goals and methods approaching them scientifically. Another class of environmental policy instruments, so called economic incentive policies, is established based on environmental economics theory. A neo-classical economics framework is founded for setting appropriate environmental goals and assessing efficiency of environmental policies in reaching these goals. This thesis summarizes rationales and factors affecting the performance for environmental policy instruments under the neo-classical economic framework. Since the acid rain program, the first large-scale implementation of the emissions trading policy, has achieved great success in reducing SO₂ emissions from the electricity generators in the United States, the emission trading policy attracted many interests in this kind of environmental policy instrument. Many countries, such as China, plan to adopt the emissions trading policy to address various environmental problems. Hence, factors leading to the success of this program should be identified. Potential risks and problems must be addressed as well lest the emissions trading policy causes some problem during implementation. Feasibility of implementing an emissions trading policy will be discussed based on these results. Three kinds of geographic analyses, change detection, network analysis, and hot spots identification, are conducted in this thesis to study the effectiveness and efficiency of the acid rain program. It is found that the acid rain program is successful in improving the sustainability of the economic development in the United States. But the effectiveness is not as great as the high emissions cutting rate achieved in this program. In addition, the acid rain program lowers the compliance costs of achieving the environmental goal since the radius of the high quality coal service area doubles. Lastly, hot spots are found around the Ohio River valley and Los Angeles. Suggestions on integrating geographic factors into the economic framework are presented in order to eliminate the risk of causing severe environmental problems. Finally, the feasibility of migrating the emissions trading policy to China is discussed. Further work can be conducted in this direction to realize sustainable development quicker with lower costs.

Various environmental standards have been established for the sake of public health and ecosystem diversity since environmental awareness was awakened in the late 1960s. However, the results were often unsatisfactory. Either environmental goals achieved were far from desired, or regional development was hampered due to some unpractical high environmental standards. The failure of these environmental standards resulted in innovations of environmental policy instruments to find practical environmental goals and methods approaching them scientifically. Another class of environmental policy instruments, so called economic incentive policies, is established based on environmental economics theory. A neo-classical economics framework is founded for setting appropriate environmental goals and assessing efficiency of environmental policies in reaching these goals. This thesis summarizes rationales and factors affecting the performance for environmental policy instruments under the neo-classical economic framework. Since the acid rain program, the first large-scale implementation of the emissions trading policy, has achieved great success in reducing SO₂ emissions from the electricity generators in the United States, the emission trading policy attracted many interests in this kind of environmental policy instrument. Many countries, such as China, plan to adopt the emissions trading policy to address various environmental problems. Hence, factors leading to the success of this program should be identified. Potential risks and problems must be addressed as well lest the emissions trading policy causes some problem during implementation. Feasibility of implementing an emissions trading policy will be discussed based on these results. Three kinds of geographic analyses, change detection, network analysis, and hot spots identification, are conducted in this thesis to study the effectiveness and efficiency of the acid rain program. It is found that the acid rain program is successful in improving the sustainability of the economic development in the United States. But the effectiveness is not as great as the high emissions cutting rate achieved in this program. In addition, the acid rain program lowers the compliance costs of achieving the environmental goal since the radius of the high quality coal service area doubles. Lastly, hot spots are found around the Ohio River valley and Los Angeles. Suggestions on integrating geographic factors into the economic framework are presented in order to eliminate the risk of causing severe environmental problems. Finally, the feasibility of migrating the emissions trading policy to China is discussed. Further work can be conducted in this direction to realize sustainable development quicker with lower costs.

<p>The changes to the environment caused by anthropogenic climate change pose major challenges for energy production in the next century. Carbon Capture and Storage (CCS) is a group of technologies that would permit the continued use of carbon-intense fuels such as coal for energy production while avoiding further impact on the global climate system. The mechanism most often proposed for storage is injection of CO2 below the surface of the Earth in geological media, with the most promising option for CO2 reservoirs being deep saline aquifers (DSA's). Unlike oil and gas reservoirs, deep saline aquifers are poorly characterized and the variability in their properties is large enough to have a high impact on the overall physical and economic viability of CCS. Storage in saline aquifers is likely to be a very high-capacity resource, but its economic viability is almost unknown. We consider the impact of geological variability on the total viability of the CO2 storage system from several perspectives. First, we examine the theoretical range of costs of storage by coupling a physical and economic model of CO2 storage with a range of possible geological settings. With the relevant properties of rock extending over several orders of magnitude, it is not surprising that we find costs and storage potential ranging over several orders of magnitude. Second, we use georeferenced data to evaluate the spatial distribution of cost and capacity. When paired together to build a marginal abatement cost curve (MACC), this cost and capacity data indicates that low cost and high capacity are collocated; storage in these promising areas is likely to be quite viable but may not be available to all CO2 sources. However, when we continue to explore the impact of geological variability on realistic, commercial-scale site sizes by invoking capacity and pressure management constraints, we find that the distribution costs and footprints of these sites may be prohibitively high. The combination of issues with onshore storage in geological media leads us to begin to evaluate offshore storage potential. By considering the temperature and pressure regimes at the seafloor, we locate and quantify marine strata that has "self-sealing" properties, a storage option that we find is plentiful off the coasts of the United States. We conclude that further research into transport optimization that takes into account the true variation in geological media is necessary to determine the distribution of costs for carbon capture and storage to permit the full evaluation of CCS as a mitigation option.</p> / Dissertation

Thesis (Ph. D.)--Ohio State University, 2003. / Title from first page of PDF file. Document formatted into pages; contains xi, 465 p.; also includes graphics. Includes abstract and vita. Advisor: Allan Randall, Interdisciplinary Program. Includes bibliographical references (p. 161-165).

Thesis (Ph.D)--Public Policy, Georgia Institute of Technology, 2010. / Committee Chair: Noonan, Douglas S.; Committee Co-Chair: Norton, Bryan; Committee Member: Bowman, Kirk; Committee Member: Fox, Mary F. Part of the SMARTech Electronic Thesis and Dissertation Collection.

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In three essays, the relationship between environmental regulation and firm behavior is explored. First, firms are found to influence the price in a regulatory market for emissions permits by exercising market power within their own price market. As the degree of market power in three high emitting industries increased, the price of NOx permits in Southern California’s RECLAIM permit increased as well. Second, the process of firm learning is explored. Power plants facing more stringent environmental regulation are found to learn from environmental regulation and experience efficiency gains. These gains are found to spillover to other power plants facing less stringent regulation through knowledge networks. Third, the decision of electricity firms to participate in reserve markets is modeled and simulated in order to measure the effect of increased wind power in the market on this decision. As the amount of wind power in the market increased, the expected capacity available in the market decreased, inviting the possibility of electricity shortages. However, the reduced variability in market outcomes when wind penetration increases suggests that policy makers may be better able to manipulate existing market mechanisms to induce investment in new capacity.

According to a new study EPI (2012), India has the worst air pollution in the entire world. Given the severe damages caused by air pollution, it is important to explore various options to control air pollution. In chapter 1, I use a computable general equilibrium (CGE) model to show that a Pigouvian tax on the use of fossil fuels with cuts in existing distortionary taxes could have double dividend in India. In addition, the fuel tax policy is also progressive. Alternative Pigouvian tax on output of pollution intensive commodities has a positive effect on economic growth, but it achieves only a modest reduction in air pollution. This tax policy does not have a significant distributive impact. / Economics