The black paradox

We model competition between an oil monopolist and competitive suppliers of coal and renewable energy in a dynamic general equilibrium framework. We show that market power— which disrupts the order of extraction—may lead to higher long-run emissions by encouraging early extraction of dirty fuels such as coal which would otherwise remain in the ground permanently; simply banning coal burning may be better than Pigovian taxation….

The Economy, The Biosphere and Planetary Boundaries: Towards Biosphere Economics

Nine planetary boundaries have been proposed, capturing essential biophysical processes that sustain the Earth System and its biosphere in an accommodating state for humanity. Drawing on economics literature, we propose conditions under which remaining within these boundaries is in line with economic policy. We assert that pervasive uncertainties combined with impacts of trespassing planetary boundaries clearly legitimate using safe minimum standards or precautionary approaches. Moreover,…

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