We model countries’ choice of greenhouse gas (GHG) emissions as a dynamic game. Emissions generate immediate benefits to the emitting country but also increase atmospheric GHG concentrations that negatively affect present and future welfare of all countries. Because there are no international...

We analyze how the threat of a potential future regime shift affects optimal management. We use a simple general growth model to analyze four cases that involve combinations of stock collapse versus changes in system dynamics, and exogenous versus endogenous probabilities of regime shift. Prior...

Transitioning the economy from one that relies on fossil fuels to one that emphasizes renewable energy sources will have important implications for the pattern of natural resource use. Such a transition depends on government policies. As elected politicians have an incentive to weigh the...

Natural gas is likely to become increasingly important in the future. Understanding the stochastic underpinnings of natural gas prices will be critical, both to policy analysts and to market participants. To this end, we investigate the potential presence of jumps in natural gas spot prices in...

Economists have analyzed potential for damages from climate change from theoretical analyses and with Integrated Assessment Models (IAMs). Analytical models typically write damages as a function of the carbon stock, while IAMs typically view damages as based on temperatures. In this paper, we...

In this paper we study the behavior of rivals when there is a known probability of imminent entry. Experimental markets are used to collect data on pre- and post-entry production when there is an announced time of possible entry; some markets experience entry and other do not. In all pre-entry...

I investigate the interaction between a country that imports a commodity whose production contributes to a stock pollution, such as electricity, from a country that produces that commodity. If the transboundary externality is priced improperly, the application of a feed-in tariff or border tax...

On April 20, 2010, the Macondo well suffered a blowout, causing the mobile offshore drilling unit "Deepwater Horizon" to explode and eventually sink. Oil flowed from the well into the Gulf of Mexico for 87 days. In the aftermath of this event, the US Government proposed significant regulatory...

New England is at the leading edge of an energy transition in which natural gas is playing an increasingly important role in the US electricity generation mix. In recent years, the region’s wholesale natural gas and electricity markets have experienced severe, simultaneous price spikes. While...

The existing economics literature neglects the important role of capacity in the production of renewable energy. To fiill this gap, we construct a model in which renewable energy production is tied to renewable energy capacity, which then becomes a form of capital. This capacity capital can be...