Carbon leakage revisited: unilateral climate policy with directed technical change

Using a stylized theoretical model, we argue that current economic analyses of climate policy tend to over-estimate the degree of carbon leakage, as they abstract from the effects of induced technological change. We analyse carbon leakage in a two-country model with directed technical change, where only one of the countries enforces an exogenous cap on emissions. Climate policy induces changes in relative prices, that cause carbon leakage through a terms-of-trade effect. However, these changes in relative prices also affect the incentives to innovate in different sectors. This leads to a counterbalancing induced-technology effect, which always reduces carbon leakage. We therefore conclude that the leakage rates reported in the literature may be too high, as these estimates neglect the effect of price changes on the incentives to innovate.

Teaching stylistics: analysing cohesion and narrative structure in a short story by Ernest Hemingway

The main aim of this article is to propose an exercise in stylistic analysis which can be employed in the teaching of English language. It details the design and results of a workshop activity on narrative carried out with undergraduates in a university department of English. The methods proposed are intended to enable students to obtain insights into aspects of cohesion and narrative structure; insights, it is suggested, which are not as readily obtainable through more traditional techniques of stylistic analysis. The text chosen for analysis is a short story by Ernest Hemingway comprising only 11 sentences. A jumbled version of this story is presented to students who are asked to assemble a cohesive and well-formed version of the story. Their (re)constructions are then compared with the original Hemingway version. Much interest, it is argued, lies in the ways in which the students justify their own versions in terms of their expectations about well-formedness in narrative. The activity is also intended to encourage students to see literary texts as a valuable means of providing insights into the subtleties of linguistic form and function.