Annoyance and welfare costs from the presence of renewable energy power plants: an application of the contingent valuation method

Sustainability is frequently defined by its three pillars: economically viable, socially equitable, and environmentally bearable. Consequently the evaluation of the sustainability of any decision, public or private, requires information on these three dimensions. This paper focuses on social sustainability. In the context of renewable energy sources, the examination of social sustainability requires the analysis of not only the efficiency but also the equity of its welfare impacts. The present paper proposes and applies a methodology to generate the information necessary to do a proper welfare analysis of the social sustainability of renewable energy production facilities. This information is key both for an equity and an efficiency analysis. The analysis focuses on the case of investments in renewable energy electricity production facilities, where the impacts on local residents’ welfare are often significantly different than the welfare effects on the general population. We apply the contingent valuation method to selected facilities across the different renewable energy power plants located in Portugal and conclude that local residents acknowledge differently the damage sustained by the type, location and operation of the plants. The results from these case studies attest to the need of acknowledging and quantifying the negative impacts on local communities when assessing the economic viability, social equity and environmental impact of renewable energy projects.

Listening to the public: enacting power : citizen access, Standing and influence in public participation discourses

Public participation in environmental governance is typically associated with citizen access to power despite many closures and limitations having been identified in participatory processes. This article proposes an analytical framework to analyse discursive practices involved in public consultation processes. Critical Discourse Analysis is used to examine and appraise citizens’ access, standing and influence. We apply that framework to a ‘notice and comment’ process on a hydroelectric power plan in Portugal and show that it was discursively managed to justify the decision of constructing 10 large dams and to reject critical or alternative views. Citizens’ access, standing and influence were constrained through diverse discursive practices which (re)produced very unequal power relationsbetween policy proponents and participating individuals. More generally, the article illustrates the potential of Critical Discourse Analysis to assess voice(s) in policy processes. Focusing on argumentative, interactional and rhetorical levels, and how they are interwoven in public consultation discourses, the proposed framework is conceivably applicable in other studies.

Barriers to innovation and public policy in Catalonia

The present paper analyses the link between firms’ decisions to innovate and the barriers that prevent them from being innovative. The aim is twofold. First, it analyses three groups of barriers to innovation: the cost of innovation projects, lack of knowledge and market conditions. Second, it presents the main steps taken by Catalan Government to promote the creation of new firms and to reduce barriers to innovation. The data set used is based on the 2004 official innovation survey of Catalonia which was taken from the Spanish CIS-4 sample. This sample includes individual information on 2,954 Catalan firms in manufacturing industries and knowledge-intensive services (KIS). The empirical analysis reveals pronounced differences regarding a firm’s propensity to innovate and its perception of barriers. Moreover, the results show that cost and knowledge barriers seem to be the most important and that there are substantial sectoral differences in the way that firms react to barriers. The results of this paper have important implications for the design of future public policy to promote entrepreneurship and innovation together.

Global Warming And Extreme Events: Rethinking The Timing And Intensity Of Environmental Policy

The possibility of low-probability extreme events has reignited the debate over the optimal intensity and timing of climate policy. In this paper we therefore contribute to the literature by assessing the implications of low-probability extreme events on environmental policy in a continuous-time real options model with “tail risk”. In a nutshell, our results indicate the importance of tail risk and call for foresighted pre-emptive climate policies.

Notes on Agents’ Behavioral Rules Under Adaptive Learning and Studies of Monetary Policy

These notes try to clarify some discussions on the formulation of individual intertemporal behavior under adaptive learning in representative agent models. First, we discuss two suggested approaches and related issues in the context of a simple consumption-saving model. Second, we show that the analysis of learning in the NewKeynesian monetary policy model based on “Euler equations” provides a consistent and valid approach.

Distinct neurophysiological mechanisms mediate mixing costs and switch costs.

Using event-related potentials (ERPs), we investigated the neural response associated with preparing to switch from one task to another. We used a cued task-switching paradigm in which the interval between the cue and the imperative stimulus was varied. The difference between response time (RT) to trials on which the task switched and trials on which the task repeated (switch cost) decreased as the interval between cue and target (CTI) was increased, demonstrating that subjects used the CTI to prepare for the forthcoming task. However, the RT on repeated-task trials in blocks during which the task could switch (mixed-task blocks) were never as short as RTs during single-task blocks (mixing cost). This replicates previous research. The ERPs in response to the cue were compared across three conditions: single-task trials, switch trials, and repeat trials. ERP topographic differences were found between single-task trials and mixed-task (switch and repeat) trials at approximately 160 and approximately 310 msec after the cue, indicative of changes in the underlying neural generator configuration as a basis for the mixing cost. In contrast, there were no topographic differences evident between switch and repeat trials during the CTI. Rather, the response of statistically indistinguishable generator configurations was stronger at approximately 310 msec on switch than on repeat trials. By separating differences in ERP topography from differences in response strength, these results suggest that a reappraisal of previous research is appropriate.

Asset Prices, Business Cycles, and Markov-Perfect Fiscal Policy when Agents are Risk-Sensitive

We study a business cycle model in which a benevolent fiscal authority must determine the optimal provision of government services, while lacking credibility, lump-sum taxes, and the ability to bond finance deficits. Households and the fiscal authority have risk sensitive preferences. We find that outcomes are affected importantly by the household's risk sensitivity, but not by the fiscal authority's. Further, while household risk-sensitivity induces a strong precautionary saving motive, which raises capital and lowers the return on assets, its effects on fluctuations and the business cycle are generally small, although more pronounced for negative shocks. Holding the stochastic steady state constant, increases in household risk-sensitivity lower the risk-free rate and raise the return on equity, increasing the equity premium. Finally, although risk-sensitivity has little effect on the provision of government services, it does cause the fiscal authority to lower the income tax rate. An additional contribution of this paper is to present a method for computing Markov-perfect equilibria in models where private agents and the government are risk-sensitive decisionmakers.

The Effects of Experience on Preference Uncertainty: Theory and Empirics for Public and Quasi-Public Environmental Goods

This paper develop and estimates a model of demand estimation for environmental public goods which allows for consumers to learn about their preferences through consumption experiences. We develop a theoretical model of Bayesian updating, perform comparative statics over the model, and show how the theoretical model can be consistently incorporated into a reduced form econometric model. We then estimate the model using data collected for two environmental goods. We find that the predictions of the theoretical exercise that additional experience makes consumers more certain over their preferences in both mean and variance are supported in each case.

Global Warming and Fat Tailed-uncertainty: Rethinking the Timing and Intensity of Climate Policy

The possibility of low-probability extreme natural events has reignited the debate over the optimal intensity and timing of climate policy. In this paper, we contribute to the literature by assessing the implications of low-probability extreme events on environmental policy in a continuous-time real options model with “tail risk”. In a nutshell, our results indicate the importance of tail risk and call for foresighted pre-emptive climate policies.

Public policy for entrepreneurship and innovation: impact in managed and entrepreneurial economies

Many of the most advanced economies of the world have undergone significant transformation in the last few decades. Globalization and technological changes, especially developments in information technologies, have helped to stimulate this transformation. These have contributed to changing institutional frameworks in many respects within the economies including adjustments to economic policies. The results of these transformations take many different forms and are manifested in different areas of an economy. At the heart of these changes however, has been the increasingly important role of entrepreneurship in the economy. The transformed ("new") economy stimulates and supports activities in innovation and entrepreneurship and is labelled the entrepreneurial economy. The "old" economy on the other hand restricts such activities and is referred to as the managed economy (Audretsch & Thurik, 2001).

The de facto independence of regulatory agencies and its consequences for policy making and regulatory outcomes

This dissertation focuses on the practice of regulatory governance, throughout the study of the functioning of formally independent regulatory agencies (IRAs), with special attention to their de facto independence. The research goals are grounded on a "neo-positivist" (or "reconstructed positivist") position (Hawkesworth 1992; Radaelli 2000b; Sabatier 2000). This perspective starts from the ontological assumption that even if subjective perceptions are constitutive elements of political phenomena, a real world exists beyond any social construction and can, however imperfectly, become the object of scientific inquiry. Epistemologically, it follows that hypothetical-deductive theories with explanatory aims can be tested by employing a proper methodology and set of analytical techniques. It is thus possible to make scientific inferences and general conclusions to a certain extent, according to a Bayesian conception of knowledge, in order to update the prior scientific beliefs in the truth of the related hypotheses (Howson 1998), while acknowledging the fact that the conditions of truth are at least partially subjective and historically determined (Foucault 1988; Kuhn 1970). At the same time, a sceptical position is adopted towards the supposed disjunction between facts and values and the possibility of discovering abstract universal laws in social science. It has been observed that the current version of capitalism corresponds to the golden age of regulation, and that since the 1980s no government activity in OECD countries has grown faster than regulatory functions (Jacobs 1999). Following an apparent paradox, the ongoing dynamics of liberalisation, privatisation, decartelisation, internationalisation, and regional integration hardly led to the crumbling of the state, but instead promoted a wave of regulatory growth in the face of new risks and new opportunities (Vogel 1996). Accordingly, a new order of regulatory capitalism is rising, implying a new division of labour between state and society and entailing the expansion and intensification of regulation (Levi-Faur 2005). The previous order, relying on public ownership and public intervention and/or on sectoral self-regulation by private actors, is being replaced by a more formalised, expert-based, open, and independently regulated model of governance. Independent regulation agencies (IRAs), that is, formally independent administrative agencies with regulatory powers that benefit from public authority delegated from political decision makers, represent the main institutional feature of regulatory governance (Gilardi 2008). IRAs constitute a relatively new technology of regulation in western Europe, at least for certain domains, but they are increasingly widespread across countries and sectors. For instance, independent regulators have been set up for regulating very diverse issues, such as general competition, banking and finance, telecommunications, civil aviation, railway services, food safety, the pharmaceutical industry, electricity, environmental protection, and personal data privacy. Two attributes of IRAs deserve a special mention. On the one hand, they are formally separated from democratic institutions and elected politicians, thus raising normative and empirical concerns about their accountability and legitimacy. On the other hand, some hard questions about their role as political actors are still unaddressed, though, together with regulatory competencies, IRAs often accumulate executive, (quasi-)legislative, and adjudicatory functions, as well as about their performance.