Green Expectations: Current Effects of Anticipated Carbon Pricing

Lemoine, Derek

doi:10.1162/rest_a_00627

Cited by 41 publications

(18 citation statements)

References 41 publications

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“…19 Other authors have used similar methods to estimate the effect of policy announcements on stock and commodity markets (Linn, 2010;Lemoine, 2013;Bushnell et al, 2013). Bielen et al (2016) (Elliot et al, 1996).…”

Section: Event Study Analysismentioning

confidence: 99%

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Policy Shocks and Market‐Based Regulations: Evidence from the Renewable Fuel Standard

Lade¹,

Lawell

Smith

2018

American J Agri Economics

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The Renewable Fuel Standard (RFS2) mandates large increases in U.S. biofuel consumption and is implemented using a market for tradable compliance credits, known as RINs. In early 2013, RIN prices soared, causing the regulator to propose reducing future mandates. We develop a dynamic model of RFS2 compliance to demonstrate how changes in expectations about future policy affect current compliance costs, and we use a market efficiency test to demonstrate that RIN markets have behaved in accordance with our model. We then estimate empirically the effect of three 'policy shocks' that reduced the expected mandates in 2013. The largest of these shocks decreased the total cost of compliance by nearly $8 billion. The burden of the mandate reductions fell primarily on advanced biofuel firms and on commodity markets of the marginal compliance biofuel. We argue that the policy shocks reduced the incentive to invest in the technologies required to meet the future objectives of the RFS2.

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Section: Event Study Analysismentioning

confidence: 99%

“…More flexible functions do not change the results. 23 Similar methods are used byLemoine (2013) to study commodity market movements after negotiations for a comprehensive climate bill in the U.S. Senate ended unexpectedly.…”

mentioning

confidence: 99%

Policy Shocks and Market‐Based Regulations: Evidence from the Renewable Fuel Standard

Lade¹,

Lawell

Smith

2018

American J Agri Economics

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“…Therefore, they argue that the green paradox does exist, but its relevance is limited due to market conditions and technical restrictions on the demand‐side. Another approach is taken by Lemoine (). He analyses the reaction of coal and gas futures when the carbon cap and trade legislation in the US unexpectedly collapsed in 2010.…”

Section: Introductionmentioning

confidence: 99%

“…As mentioned by Lemoine () coal markets are linked over time via extraction, storage and the number of coal‐burning plants. Taking into account that the climate action plans are likely to reduce the marginal benefit of delaying extraction as well as the marginal benefit of storage, it is reasonable to assume that resource owners accelerate extraction to maximise their profit under the new conditions.…”

Section: Introductionmentioning

confidence: 99%

A Synthetic Control Assessment of the Green Paradox: The Role of Climate Action Plans

Steinkraus

2019

German Economic Review

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This paper extends the green paradox literature by providing empirical insights into its existence. To check the green paradox theory, I analyse the production of coal in four major coal‐producing US states that announced a greenhouse gas action plan. To form a statement on whether there is a treatment effect caused by the green policy, I employ Synthetic Control Methods to calculate counterfactual coal production trajectories. I find that Montana experienced a high and statistically significant increase in coal production that is supported by a set of validity indicators. However, there is no evidence for a paradox in Kentucky, Pennsylvania and Virginia.

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“…This cannot always be taken for granted. Lemoine (2013) provides evidence for announcement effects on the US energy market.…”

Section: Introductionmentioning

confidence: 99%

Does the Adverse Announcement Effect of Climate Policy Matter? — A Dynamic General Equilibrium Analysis

Riekhof

Bröcker

2017

Clim. Change Econ.

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe consider a carbon emissions tax announced today, but implemented after a known time-lag. Before implementation, the announcement induces higher emissions than without intervention. In welfare terms, this adverse announcement effect could more than outweigh the gain after tax implementation. We quantify a 'critical lag' such that a shorter (longer) implementation lag is a welfare gain (loss) over nointervention. We identify resource scarcity as the main driver for a short critical lag. The model is a global Ramsey Model extended by an exhaustible carbon resource and linked to a climate model.

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Green Expectations: Current Effects of Anticipated Carbon Pricing

Cited by 41 publications

References 41 publications

Policy Shocks and Market‐Based Regulations: Evidence from the Renewable Fuel Standard

Policy Shocks and Market‐Based Regulations: Evidence from the Renewable Fuel Standard

A Synthetic Control Assessment of the Green Paradox: The Role of Climate Action Plans

Does the Adverse Announcement Effect of Climate Policy Matter? — A Dynamic General Equilibrium Analysis

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