Andrea Baranzini

A future for carbon taxes

Abstract Carbon taxes have been frequently advocated as a cost-effective instrument for reducing emissions. However, in the practice of environmental policies, only six countries have implemented taxes based on the carbon content of the energy products. In this paper, we evaluate carbon taxes with regard to their competitiveness, distributional and environmental impacts. The evidence shows that carbon taxes may be an interesting policy option and that their main negative impacts may be compensated through the design of the tax and the use of the generated fiscal revenues.

Paying for Quietness: The Impact of Noise on Geneva Rents

Using the hedonic approach, this paper analyses housing market data to infer the impact of noise on rents in Geneva, Switzerland. Using three different databases, including a geographical information system (GIS), structural, accessibility and environmental variables were obtained for a large proportion of apartments rented in Geneva. The paper is thus in line with the new generation hedonic models, which exploit the vast potential of GIS to obtain large databases including detailed characteristics of the apartments. In addition, different and original measures of noise were used in order to assess possible differences of the noise impact on rents, while existing studies typically refer to a single noise index. This paper assesses the impacts of noise related to all sources, but also to airport noise only, while existing studies usually refer to road or aircraft noise. The results can be summarised as follows. First, it is shown that the impact of all sources of noise on rents at the level of the whole canton is about 0.7 per cent per dB(A) and about 1 per cent when considering exclusively airplane noise, in the airport area. Secondly, this impact does not change fundamentally depending on the different measures of noise used in the estimations. Thirdly, the impact of noise does not depend on the institutional structure of the market-i.e. it is relatively similar in the private rental sector and in apartments directly under government control, although in the former the dynamic of noise has a greater impact. Fourthly, the results show that noise also has a higher economic impact, when the background noise level is lower. And fifthly, air pollution has a distinct impact on rents, in addition to noise.

A sight for sore eyes: Assessing the value of view and land use in the housing market

We apply a hedonic model to the Geneva-Switzerland rental market to assess the value of view from dwellings and of land uses around buildings. Using a geographic information system, we calculate three-dimensional view variables, accessibility and land use variables. To our knowledge, this is the first paper to develop precise view measures at the dwelling level, considering surrounding land uses, in an urban context and with a large sample of 13,000 observations. The results show that view of various environmental amenities and its size has a significant impact on rents. The estimated rent premium for a dwelling located in a neighbourhood with an extended surface of water can be as high as 3%, and a view of water-covered area can raise rent up to 57%.

The impact of possible climate catastrophes on global warming policy

Abstract Recent studies on global warming have introduced the inherent uncertainties associated with the costs and benefits of climate policies and have often shown that abatement policies are likely to be less aggressive or postponed in comparison to those resulting from traditional cost–benefit analyses (CBA). Yet, those studies have failed to include the possibility of sudden climate catastrophes. The aim of this paper is to account simultaneously for possible continuous and discrete damages resulting from global warming, and to analyse their implications on the optimal path of abatement policies. Our approach is related to the new literature on investment under uncertainty, and relies on some recent developments of the real option in which we incorporated negative jumps (climate catastrophes) in the stochastic process corresponding to the net benefits associated with the abatement policies. The impacts of continuous and discrete climatic risks can therefore be considered separately. Our numerical applications lead to two main conclusions: (i) gradual, continuous uncertainty in the global warming process is likely to delay the adoption of abatement policies as found in previous studies, with respect to the standard CBA; however (ii) the possibility of climate catastrophes accelerates the implementation of these policies as their net discounted benefits increase significantly.

Elasticities of gasoline demand in Switzerland

Using cointegration techniques, we investigate the determinants of gasoline demand in Switzerland over the period 1970–2008. We obtain a very weak price elasticity of −0.09 in the short run and −0.34 in the long run. For fuel demand, i.e. gasoline plus diesel, the corresponding price elasticities are −0.08 and −0.27. Our rich dataset allows working with quarterly data and with more explicative variables than usual in this literature. In addition to the traditional price and income variables, we account for variables like vehicle stocks, fuel prices in neighbouring countries, oil shocks and fuel taxes. All of these additional variables are found to be significant determinants of demand.

Is sustainable growth optimal

This paper analyzes sustainable growth in a stochastic environment, with human extinction as a possible outcome. The basic constraint of sustainability is that consumption never decreases over an infinite horizon, which requires that the probability of extinction be maintained at zero. We show that this problem can be examined in a standard optimal-growth model. Under certain conditions, the solution of this problem is a corner solution with probability of survival equal to one, at the cost of economic growth. These conditions depend on the initial development level and on the elasticity of utility with respect to consumption. In some circumstances, which depend on the social discount rate, optimal-growth paths do not exist. In these situations, the sustainable-growth concept has a clear autonomy with respect to the usual optimality criterion.

The Demand for Football in Switzerland: An Empirical Estimation

This paper identifies the factors determining the attendance at football games in Switzerland. Our data covers three seasons of the top division of the Swiss football league, between 2001 and 2004, which includes a major revision of the championship rules in 2003-2004. We were able to gather a high amount of information, allowing us to take into consideration several factors not always accounted for simultaneously in the literature, such as ticket price, capacity constraint, TV coverage, as well as more traditional factors like uncertainty. In order to cope with problems imposed by capacity constraints as well as the panel dimension of the data, we make use of a random effects Tobit model. Among others, our results show that TV coverage does not have a significant impact on the number of spectators, and, except for FC Basel, the price-elasticity is relatively low, which indicates that football clubs could raise their gate revenues by increasing ticket prices. Furthermore, the new championship formula did clearly raise attendances.

Effectiveness, earmarking and labeling: testing the acceptability of carbon taxes with survey data

This paper analyzes the drivers of carbon taxes acceptability with survey data and a randomized labeling treatment. Based on a sample of more than 300 individuals, it assesses the effect on acceptability of specific policy designs and individuals’ perceptions of carbon taxes advantages and disadvantages. We find that the lack of perception of primary and ancillary benefits is one of the main barriers to the acceptability of carbon taxes. In addition, policy design matters for acceptability and in particular earmarking fiscal revenues for environmental purposes can lead to larger support. We also find an effect of labeling, comparing the wording “climate contribution” with “carbon tax”. We argue that proper policy design coupled with effective communication on the effects of carbon taxes may lead to a substantial improvement in acceptability.

Consumers' Choices Among Alternative Electricity Programs in Geneva - An Empirical Analysis

Services industriels de Geneve (SIG) is the monopoly which delivers natural gas, water and electricity in the Geneva Canton. A few years ago, SIG offered to Geneva households 6 different types of electricity products from which households can choose. Those new electricity products differ in particular because of the origin of their production (natural gas, hydraulic, solar, asf) and of their price. Through a survey research, we investigate what are the main factors which explain household choices among the different products. By using a series of logistic regressions, we assess what determines households knowledge of the different electricity products which are offered by SIG and the factors explaining their choices among them.

Unconventional Determinants of Greenhouse Gas Emissions: The role of trust

Social norms have been included in the theory of collective action to overcome difficulties in explaining why commons may perform better when self-regulated. The role of trust has been identified in several contexts of local social dilemmas, but only recently has been extended to global commons, based on large descriptive evidence collected by Elinor Ostrom. However, no quantitative evidence was available until now. Using a dataset of 29 European countries over the period 1990-2007, we provide empirical evidence in favor of the role of trust in global dilemmas. We find that trust has a negative impact on greenhouse gas emissions, whose extrapolation to Spain would imply a reduction in emissions of 12.5% if Spaniards would trust each other as Swedish people do.