Terminating links between emission trading programs

© 2015 Elsevier Inc.Links between emission trading programs are not immutable, as highlighted by New Jersey's exit from the Regional Greenhouse Gas Initiative in 2011. This raises the question of what to do with existing permits that are banked for future use-choices that have consequences for market behavior in advance of, or upon speculation about, delinking. We consider two delinking policies. One differentiates banked permits by origin, the other treats banked permits the same. We describe the price behavior and relative cost-effectiveness of each policy. Treating permits differently generally leads to higher costs, and may lead to price divergence, even with only speculation about delinking.

Prices versus quantities versus bankable quantities

Quantity-based regulation with banking allows regulated firms to shift obligations across time in response to periods of unexpectedly high or low marginal costs. Despite its wide prevalence in existing and proposed emission trading programs, banking has received limited attention in past welfare analyses of policy choice under uncertainty. We address this gap with a model of banking behavior that captures two key constraints: uncertainty about the future from the firm's perspective and a limit on negative bank values (e.g. borrowing). We show conditions where banking provisions reduce price volatility and lower expected costs compared to quantity policies without banking. For plausible parameter values related to U.S. climate change policy, we find that bankable quantities produce behavior quite similar to price policies for about two decades and, during this period, improve welfare by about a $1 billion per year over fixed quantities. © 2012 Elsevier B.V.

Equity trading volume and volatility: Latent information arrivals and common long-run dependencies

This article examines the behavior of equity trading volume and volatility for the individual firms composing the Standard & Poor's 100 composite index. Using multivariate spectral methods, we find that fractionally integrated processes best describe the long-run temporal dependencies in both series. Consistent with a stylized mixture-of-distributions hypothesis model in which the aggregate "news"-arrival process possesses long-memory characteristics, the long-run hyperbolic decay rates appear to be common across each volume-volatility pair.

The neural basis of naming impairments in Alzheimer's disease revealed through positron emission tomography.

The naming impairments in Alzheimer's disease (AD) have been attributed to a variety of cognitive processing deficits, including impairments in semantic memory, visual perception, and lexical access. To further understand the underlying biological basis of the naming failures in AD, the present investigation examined the relationship of various classes of naming errors to regional brain measures of cerebral glucose metabolism as measured with 18 F-Fluoro-2-deoxyglucose (FDG) and positron emission tomography (PET). Errors committed on a visual naming test were categorized according to a cognitive processing schema and then examined in relationship to metabolism within specific brain regions. The results revealed an association of semantic errors with glucose metabolism in the frontal and temporal regions. Language access errors, such as circumlocutions, and word blocking nonresponses were associated with decreased metabolism in areas within the left hemisphere. Visuoperceptive errors were related to right inferior parietal metabolic function. The findings suggest that specific brain areas mediate the perceptual, semantic, and lexical processing demands of visual naming and that visual naming problems in dementia are related to dysfunction in specific neural circuits.