In this note we discuss how a cost–benefit analysis could be formulated in a second-best world where lump-sum taxation is not available. The question is how the government's budget is balanced. Different options are available. A value added tax or an income tax or a profit tax could be...

The European Union’s Emissions Trading System, EU ETS, has been reformed, shifting the system from a fixed-cap system into a system with an endogenous supply of permits. This paper discusses how to handle the scheme in project appraisal. The focus is on a few relatively straightforward...

The European Union's Emissions Trading System is the largest system in the world for trade in greenhouse gases. It used to be a cap-and-trade scheme with a fixed supply of permits. However, a recent reform of the system "punctures the waterbed" by making the supply of permits endogenous. The...

Standard elicitation approaches used to obtain quantitative information typically assumes that individuals can provide a precise value. For unfamiliar (as as well as familiar) goods, this is a strong assumption. We suggest they use of self-selected intervals, in which the shortest possible...

How can increasing intermittent power generation in the Swedish electricity system be managed in a more market-oriented and cost-efficient way? We argue that market mechanisms are the most natural means for obtaining the needed flexibility in electricity systems. We believe that a complete ex...