Optimal Unilateral Carbon Policy

Optimal Production Policy under the Carbon Emission Market

The aim of this paper is to address the effect of the carbon emission allowance market on the production policy of a polluter production firm. We investigate this effect in three cases; when the firm is not a large polluter, when it has a large contribution in emission of carbon but can not affect the risk premium of the allowance market, and when it is a large contributor in the emission of ca...

Climate policy, interconnection and carbon leakage: the effect of unilateral UK policy on electricity and GHG emissions in Ireland

This paper examines the effect on Ireland’s Single Electricity Market (SEM) of the UK’s unilateral policy to implement a carbon price floor for electricity generation based on fossil-fuel. We simulate electricity markets and find that, subject to efficient use of the interconnectors between the two markets, a carbon price floor will lead to carbon leakage, with associated emissions in the Repub...

Optimal Fiscal Policy With Oil Revenues

Nonsmooth optimal value and policy functions for mechanical systems subject to unilateral constraints

State–of–the–art approaches to optimal control of contact–rich robot dynamics use smooth approximations of value and policy functions and gradient–based algorithms for improving approximator parameters. Unfortunately, the dynamics of mechanical systems subject to unilateral constraints—i.e. robot locomotion and manipulation—are generally nonsmooth. We show that value and policy functions genera...

Credibility in carbon policy

Carbon policy faces an intractable trade-off: while credible commitment to future policy improves the dynamic efficiency of incentives it imposes costs in form of reduced flexibility to respond to changing circumstances. Investors favor long-term stability of the regulatory regime. But considerable uncertainty prevails, resulting in increased market risks and investment hold-up. Uncertainty ste...