Environmental Dynamics of Dissolved Black Carbon in Aquatic Ecosystems

Black carbon (BC), the incomplete combustion product from biomass and fossil fuel burning, is ubiquitously found in soils, sediments, ice, water and atmosphere. Because of its polyaromatic molecular characteristic, BC is believed to contribute significantly to the global carbon budget as a slow-cycling, refractory carbon pool. However, the mass balance between global BC generation and accumulation does not match, suggesting a removal mechanism of BC to the active carbon pool, most probable in a dissolved form. The presence of BC in waters as part of the dissolved organic matter (DOM) pool was recently confirmed via ultrahigh resolution mass spectrometry, and dissolved black carbon (DBC), a degradation product of charcoal, was found in marine and coastal environments. However, information on the loadings of DBC in freshwater environments and its global riverine flux from terrestrial systems to the oceans remained unclear. The main objectives of this study were to quantify DBC in diverse aquatic ecosystems and to determine its environmental dynamics. Surface water samples were collected from aquatic environments with a spatially significant global distribution, and DBC concentrations were determined by a chemical oxidation method coupled with HPLC detection. While it was clear that biomass burning was the main sources of BC, the translocation mechanism of BC to the dissolved phase was not well understood. Data from the regional studies and the developed global model revealed a strong positive correlation between DBC and dissolved organic carbon (DOC) dynamics, indicating a co-generation and co-translocation between soil OC and BC. In addition, a DOC-assistant DBC translocation mechanism was identified. Taking advantage of the DOC-DBC correlation model, a global riverine DBC flux to oceans on the order of 26.5 Mt C yr-1 (1 Mt = 1012 g) was determined, accounting for 10.6% of the global DOC flux. The results not only indicated that DOC was an important environmental intermediate for BC transfer and storage, but also provided an estimate of a major missing link in the global BC budget. The ever increasing DBC export caused by global warming will change the marine DOM quality and may have important consequences for carbon cycling in marine ecosystem.

Essays on emissions trading markets

This dissertation is a collection of three economics essays on different aspects of carbon emission trading markets. The first essay analyzes the dynamic optimal emission control strategies of two nations. With a potential to become the largest buyer under the Kyoto Protocol, the US is assumed to be a monopsony, whereas with a large number of tradable permits on hand Russia is assumed to be a monopoly. Optimal costs of emission control programs are estimated for both the countries under four different market scenarios: non-cooperative no trade, US monopsony, Russia monopoly, and cooperative trading. The US monopsony scenario is found to be the most Pareto cost efficient. The Pareto efficient outcome, however, would require the US to make side payments to Russia, which will even out the differences in the cost savings from cooperative behavior. The second essay analyzes the price dynamics of the Chicago Climate Exchange (CCX), a voluntary emissions trading market. By examining the volatility in market returns using AR-GARCH and Markov switching models, the study associates the market price fluctuations with two different political regimes of the US government. Further, the study also identifies a high volatility in the returns few months before the market collapse. Three possible regulatory and market-based forces are identified as probable causes of market volatility and its ultimate collapse. Organizers of other voluntary markets in the US and worldwide may closely watch for these regime switching forces in order to overcome emission market crashes. The third essay compares excess skewness and kurtosis in carbon prices between CCX and EU ETS (European Union Emission Trading Scheme) Phase I and II markets, by examining the tail behavior when market expectations exceed the threshold level. Dynamic extreme value theory is used to find out the mean price exceedence of the threshold levels and estimate the risk loss. The calculated risk measures suggest that CCX and EU ETS Phase I are extremely immature markets for a risk investor, whereas EU ETS Phase II is a more stable market that could develop as a mature carbon market in future years.

Essays on Emissions Trading Markets

This dissertation is a collection of three economics essays on different aspects of carbon emission trading markets. The first essay analyzes the dynamic optimal emission control strategies of two nations. With a potential to become the largest buyer under the Kyoto Protocol, the US is assumed to be a monopsony, whereas with a large number of tradable permits on hand Russia is assumed to be a monopoly. Optimal costs of emission control programs are estimated for both the countries under four different market scenarios: non-cooperative no trade, US monopsony, Russia monopoly, and cooperative trading. The US monopsony scenario is found to be the most Pareto cost efficient. The Pareto efficient outcome, however, would require the US to make side payments to Russia, which will even out the differences in the cost savings from cooperative behavior. The second essay analyzes the price dynamics of the Chicago Climate Exchange (CCX), a voluntary emissions trading market. By examining the volatility in market returns using AR-GARCH and Markov switching models, the study associates the market price fluctuations with two different political regimes of the US government. Further, the study also identifies a high volatility in the returns few months before the market collapse. Three possible regulatory and market-based forces are identified as probable causes of market volatility and its ultimate collapse. Organizers of other voluntary markets in the US and worldwide may closely watch for these regime switching forces in order to overcome emission market crashes. The third essay compares excess skewness and kurtosis in carbon prices between CCX and EU ETS (European Union Emission Trading Scheme) Phase I and II markets, by examining the tail behavior when market expectations exceed the threshold level. Dynamic extreme value theory is used to find out the mean price exceedence of the threshold levels and estimate the risk loss. The calculated risk measures suggest that CCX and EU ETS Phase I are extremely immature markets for a risk investor, whereas EU ETS Phase II is a more stable market that could develop as a mature carbon market in future years.