This dissertation analyses the impact of political and macroeconomic uncertainties on environmental outcomes and design of policy instruments.  The first essay examines how the rate of agricultural land expansion in tropical countries depends on the nature and persistence of new political regimes.  We use a novel panel data method that extends previous studies.  We find that both new autocratic and democratic regimes have accelerated the expansion of agricultural land, thus yielding support to some of the findings in the earlier literature.  Interesting differences emerge between regions, with the impact being most pronounced in Latin America.  The analysis is developed more formally using a simple competitive land use model with political regime dependent confiscation risk and agricultural subsidy policy.  The second essay evaluates the effectiveness of performance bonding for tropical forest concession management in achieving first and second best outcomes concerning reduced impact logging (RIL) standards.  As a novel contribution, this essay introduces a simple model of two-stage concession design, and focus on the impact of three complications: harvester participation constraints, government repayment risk, and imperfect enforcement.  We find several new and interesting results, in particular, imperfect enforcement and bond risk may deter implementation of bonding schemes as either the bond payment has to be set higher or the penalty mapping has to become more punitive.  Policy implications, including potential for mechanisms such as REDD+ in improving the bonding outcomes, and the degree of financial support required to guarantee full implementation of RIL, are also examined.  The third essay focuses on the relative performance of fixed versus intensity allowances in the presence of both productivity and energy price uncertainties.  Both allowance instruments achieve the same steady-state emissions reduction target of 20%, which is similar to the current policy proposals, and the regulator then chooses the allowance policy that has the lowest expected abatement cost.  We use a standard real business cycle (RBC) model to solve for the expected abatement cost under both policies.  Unlike previous studies, our results show that under a reasonable model calibration, fixed allowances outperform intensity allowances with as much as 30% cost difference. / Ph. D.

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In my thesis, I address two important issues: (i) the creation of a price signal through the use of carbon markets (or cap-and-trade schemes) and (ii) the necessity to reach a global agreement on greenhouse gas emission reduction policies. It consists of three separate papers. Chapters 2 and 3 of this thesis emphasize theoretically and empirically the fact that achieving international cooperation on climate change is very difficult. Chapter 3 suggests that the global nature of the climate change problem and the design of climate agreements (i.e. the means available to reduce CO2 emissions) may explain this failure. Chapter 2 shows theoretically that asymmetric information between countries may exacerbate the free-rider problem. These two chapters also provide some possible solutions to the lack of international cooperation. To address the issue of information asymmetry, chapter 2 proposes the creation of institutions in charge of gathering and certifying countries' private information before environmental negotiations. If achieving international cooperation is still not possible, chapter 3 suggests that regional cooperation may supplement global treaties. Chapter 1 presents an example of such a regional agreement to reduce CO2 emissions. The EU emissions trading system is a cornerstone of the European Union's policy to combat climate change. However, as it is highlighted in chapter 1, the design of such regional carbon markets really matters for their success in reducing carbon emissions. This chapter shows the interactions between intertemporal permit trading and the incentives of firms to undertake long-term investments in abatement technologies. / Doctorat en Sciences économiques et de gestion / info:eu-repo/semantics/nonPublished