R.J.R.K. Heijmans, R. Gerlagh
Economics Statistische Berichten,
2019
R. Gerlagh, R.J.R.K. Heijmans
Book chapter, forthcoming in Routledge,
2019
For any emission trading system (ETS) with quantity-based endogenous supply of allowances, there exists a negative demand shock, e.g. induced by abatement policy, that increases aggregate supply and thus cumulative emissions. We prove this green paradox for a general model and then apply it to the details of EU ETS. In 2018, new rules for a Market Stability Reserve (MSR) were agreed on and implemented. We show that abatement policies announced in early periods but realized in the future, are inverted by the new rules and increase cumulative emissions. We provide quantitative evidence of our result for a model disciplined on the price rise in the EU ETS that followed the introduction of the MSR.
R. Gerlagh, R.J.R.K. Heijmans, K.E. Rosendahl
Working Paper,
2019
R. Gerlagh, R.J.R.K. Heijmans
Nature Climate Change,
2019
The question in which we are interested is how a market inhabited by multiple agents, about whom we are differentially uncertain, and who trade goods the use of which imposes a negative effect on others, is to be ideally regulated. We show that a priori asymmetric uncertainty, when combined with a posteriori observed outcomes, is a rich source of information that can be used to reduce aggregate uncertainty. The observation implies that whereas asymmetric information usually entails a cost on welfare, it can help achieve greater efficiency in regulation.
R.J.R.K. Heijmans, R. Gerlagh
CentER Discussion Paper,
2019
We develop a dynamic regulation game for a stock externality under asymmetric information and future market uncertainty. Within this framework, regulation is characterized as the implementation of a welfare-maximization program conditional on informational constraints. We identify the most general executable such programs and find these yield simple and intuitive policy rules. We apply our theory to carbon dioxide emissions trading schemes and find substantial welfare gains are possible, compared to current practices.
R. Gerlagh, R.J.R.K. Heijmans
Work-in-progress,
2018
R.J.R.K. Heijmans, R. Gerlagh
EAERE Magazine,
2018
In Dutch. Report written on request of the Dutch Ministry of Agriculture, Nature and Food Quality regarding the question how – i.e. using which mechanism – the rights to build windmill parks on the North Sea are best allocated.
Eric van Damme, Reyer Gerlagh, Roweno Heijmans, Bert Willems
Government report,
2018
