This paper studies the optimal transition from existing coal power plants to gas and renewable power under a carbon budget. It solves a model of polluting, exhaustible resources with capacity constraints and adjustment costs (to build coal, gas, and renewable power plants). It finds that optimal...

With rapid development of wind power in China, the following three issues have become barriers for further scale-up: 1) concentration of wind farms in the Three-North region, which became significantly underutilized because of a limited capability of local power grids to off-take and consume...

International negotiations on climate change have been dogged by mutual recriminations between rich and poor countries, constricted by the zero-sum arithmetic of a shrinking global carbon budget, and overtaken by shifts in economic power between industrialized and developing countries. To...

Feed-in tariffs have become the most widely used policy instrument to promote renewable energy deployment around the world. This paper examines the relation between tariff setting and policy outcome based on wind capacity expansion in 35 European countries over the 1991-2010 period. Using a...

Recent carbon market prices are substantially lower than mean or median estimates of the social cost of carbon in the literature. Intuition would therefore suggest that'investment errors'are being made, in the sense that markets favor higher carbon-emitting projects, while global welfare would...

This paper studies interactions between a"policy bloc's"emissions quota market and an offset market where emissions offsets can be purchased from a non-policy"fringe"of countries (such as for the Clean Development Mechanism under the Kyoto Protocol). Policy-bloc firms enjoy free quota...