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.

Particle export during a bloom of Emiliania huxleyi in the North-West European continental margin

Coccolithophores, the dominant pelagic calcifiers in the oceans, play a key role in the marine carbon cycle through calcification, primary production and carbon export, the main drivers of the biological CO2 pump. In May 2002 a cruise was conducted on the outer shelf of the North-West European continental margin, from the north Bay of Biscay to the Celtic Sea (47.0 degrees-50.5 degrees N, 5.0 degrees-11.0 degrees W), an area where massive blooms of Emiliania huxleyi are observed annually. Biogeochemical variables including primary production, calcification, partial pressure of CO2 (pCO(2)), chlorophyll-a (Chl-a), particle load, particulate organic and inorganic carbon (POC, PIC) and Th-234, were measured in surface waters to assess particle dynamic and carbon export in relation to the development of a coccolithophore bloom. We observed a marked northward decrease in Chl-a concentration and calcification rates: the bloom exhibited lower values and may be less well developed in the Goban Spur area. The export fluxes of POC and PIC from the top 80 m, determined using the ratios of POC and PIC to Th-234 of particles, ranged from 81 to 323 mg C m(-2) d(-1) and from 30 to 84 mg C m(-2) d(-1), respectively. The highest fluxes were observed in waters presenting a well-developed coccolithophore bloom, as shown by high reflectance of surface waters. This experiment confirms that the occurrence of coccolithophores promotes efficient export of organic and inorganic carbon on the North-West European margin.

Carbon export by small particles in the Norwegian Sea

Despite its fundamental role in controlling the Earth's climate, present estimates of global organic carbon export to the deep sea are affected by relatively large uncertainties. These uncertainties are due to lack of observations as well as disagreement among methods and assumptions used to estimate carbon export. Complementary observations are thus needed to reduce these uncertainties. Here we show that optical backscattering measured by Bio-Argo floats can detect a seasonal carbon export flux in the Norwegian Sea. This export was most likely due to small particles (i.e., 0.2–20 μm), was comparable to published export values, and contributed to long-term carbon sequestration. Our findings highlight the importance of small particles and of physical mixing in the biological carbon pump and support the use of autonomous platforms as tools to improve our mechanistic understanding of the ocean carbon cycle.

Global assessment of ocean carbon export by combining satellite observations and food-web models

The export of organic carbon from the surface ocean by sinking particles is an important, yet highly uncertain, component of the global carbon cycle. Here we introduce a mechanistic assessment of the global ocean carbon export using satellite observations, including determinations of net primary production and the slope of the particle size spectrum, to drive a food-web model that estimates the production of sinking zooplankton feces and algal aggregates comprising the sinking particle flux at the base of the euphotic zone. The synthesis of observations and models reveals fundamentally different and ecologically consistent regional-scale patterns in export and export efficiency not found in previous global carbon export assessments. The model reproduces regional-scale particle export field observations and predicts a climatological mean global carbon export from the euphotic zone of ~6 Pg C yr−1. Global export estimates show small variation (typically < 10%) to factor of 2 changes in model parameter values. The model is also robust to the choices of the satellite data products used and enables interannual changes to be quantified. The present synthesis of observations and models provides a path for quantifying the ocean's biological pump.

Diatom carbon export enhanced by silicate upwelling in the North East Atlantic.

Diatom carbon export enhanced by silicate upwelling in the northeast Atlantic John T. Allen1,2, Louise Brown1,3, Richard Sanders1, C. Mark Moore1, Alexander Mustard1, Sophie Fielding1, Mike Lucas1, Michel Rixen4, Graham Savidge5, Stephanie Henson1 and Dan Mayor1 Top of pageDiatoms are unicellular or chain-forming phytoplankton that use silicon (Si) in cell wall construction. Their survival during periods of apparent nutrient exhaustion enhances carbon sequestration in frontal regions of the northern North Atlantic. These regions may therefore have a more important role in the 'biological pump' than they have previously been attributed1, but how this is achieved is unknown. Diatom growth depends on silicate availability, in addition to nitrate and phosphate2, 3, but northern Atlantic waters are richer in nitrate than silicate4. Following the spring stratification, diatoms are the first phytoplankton to bloom2, 5. Once silicate is exhausted, diatom blooms subside in a major export event6, 7. Here we show that, with nitrate still available for new production, the diatom bloom is prolonged where there is a periodic supply of new silicate: specifically, diatoms thrive by 'mining' deep-water silicate brought to the surface by an unstable ocean front. The mechanism we present here is not limited to silicate fertilization; similar mechanisms could support nitrate-, phosphate- or iron-limited frontal regions in oceans elsewhere.

Volatile and persistent real exchange rates with or without sticky prices

The flexible-price two-country monetary model is extended to include a consumption externality with habit persistence. Two methodologies are employed to explore this model's ability to generate volatile and persistent exchange rates. In the first, actual data is used for the exogenous driving processes. In the second, the model is simulated using estimated forcing processes. The theory, in both cases, is capable of explaining the high volatility and persistence of real and nominal exchange rates as well as the high correlation between real and nominal rates. © 2007 Elsevier B.V. All rights reserved.

Solving exchange rate puzzles with neither sticky prices nor trade costs

We present a simple framework in which both the exchange rate disconnect and forward bias puzzles are simultaneously resolved. The flexible-price two-country monetary model is extended to include a consumption externality with habit persistence. Habitpersistence is modeled using Campbell Cochrane preferences with ‘deep’ habits along the lines of the work of Ravn, Schmitt-Grohe and Uribe. By deep habits, we mean habits defined over goods rather than countries. The model is simulated using the artificial economy methodology. It offers a neo-classical explanation of the Meese–Rogoff puzzle and mimics the failure of fundamentals to explain nominal exchange rates in a linear setting. Finally, the model naturally generates the negative slope in the standard forward market regression.

Prices and Wages in Ireland, 1700-1850

The article presents primary research on rural wages and the prices of agricultural goods and draws conclusions concerning the trend in the living conditions of rural workers in the century before the Great Irish Famine of 1845-1850.