Noah Dormady

Carbon allowances and the demand for offsets: a comprehensive assessment of imperfect substitutes

The efficient use of market-based policy instruments is an area of increasing importance as scholars and policymakers work to balance effective climate policy with economic growth. Carbon allowances and carbon offsets, despite being statutorily substitutable, behave in practice like imperfect substitutes. This paper provides a synthesis of extant work, market data and the regulatory frameworks of the world’s major carbon markets, and provides a comprehensive assessment of the drivers of demand for carbon offsets. It also provides a detailed assessment of the process through which international carbon offsets are produced, the UN’s Clean Development Mechanism. Demand for carbon offsets is heavily influenced by key programme design parameters that are specific to carbon market design and its implementation. These design parameters heavily influence the degree to which transaction costs, regulatory uncertainty and risk factor into the decisions of firms operating within the carbon trading programme. This paper also identifies key extra-statutory drivers that are outside of the policymaker’s control, which should be considered in both the policy design and the implementation process. This paper provides an instructive set of guiding criteria for policymakers and scholars for the design of future market-based environmental policy.

The Potential Impact of an Anthrax Attack on Real Estate Prices and Foreclosures in Seattle

This article provides a methodology for the economic analysis of the potential consequences of a simulated anthrax terrorism attack on real estate within the Seattle metropolitan area. We estimate spatially disaggregated impacts on median sales price of residential housing within the Seattle metro area following an attack on the central business district (CBD). Using a combination of longitudinal panel regression and GIS analysis, we find that the median sales price in the CBD could decline by as much as

Do Markets Make Good Commissioners?: A Quasi-Experimental Analysis of Retail Electric Restructuring in Ohio

280,000, and by nearly

Who Pays for Retail Electric Deregulation?: Evidence of Cross-Subsidization from Complete Bill Data

100,000 in nearby communities. These results indicate that total residential property values could decrease by over

Carbon Auctions, Energy Markets and Market Power: An Experimental Analysis

50 billion for Seattle, or a 33% overall decline. We combine these estimates with HUDs 2009 American Housing Survey (AHS) to further predict 70,000 foreclosures in Seattle spatial zones following the terrorism event.

A Survey Approach to Measuring the Cost-Effectiveness of Economic Resilience to Disasters

Empirical support for the purported benefits of retail electric deregulation is mixed at best. Prior studies that identify states as simply “retail deregulated�? overlook complex policy environments in which deregulation is implemented by regulators with a high degree of discretion. Prior studies also rely on Energy Information Administration (EIA) data that does not account for core regulatory interventions that can take place during the process of implementing deregulation. Using robust time series household final bill survey data from the Public Utilities Commission of Ohio (PUCO), this paper provides a quasi-experimental analysis of the price impacts of retail electric restructuring in Ohio. The results suggest that residential electricity prices have increased following retail restructuring in all service territories in Ohio, with significant favorable welfare effects observed only in the Cincinnati area, where key policy implementation stages were not circumvented.

The Resilience of the Firm: A Production Theory Approach

Retail electric deregulation has been identified in the literature to have favorable price impacts to businesses and households because of the introduction of competition into rate-setting. Those studies often ignore the important role of regulatory intervention. They are also generally national or multi-state aggregated studies that ignore state- and utility-specific dynamics, and most rely on Electricity Information Administration (EIA) price data that does not account for riders and surcharges on consumer bills, which can total more than 60 percent of bills. Using a unique panel of representative, complete electricity bill data from the Public Utilities Commission of Ohio (PUCO), this paper provides a multi-utility panel regression analysis of the effect of retail deregulation on total electric bills in Ohio. The results identify two main sources of cross-subsidization that have generally cancelled out the favorable effects of restructuring. Both types of cross-subsidies result in substantial burden shifts to residential consumers.

Carbon auctions, energy markets & market power: An experimental analysis☆

This paper provides an experimental analysis of a simultaneous energy-emissions market under conditions of market power. The experimental design employs real-world institutional features; including stochastic demand, permit banking, inter-temporal (multi-round) dynamics, a tightening cap, and resale. The results suggest that dominant firms can utilize energy-emissions market linkages to simultaneously inflate the price of energy and suppress the price of emissions allowances. Whereas under prior market designs, regulators were concerned with dominant firms exercising their market power over the emissions market to exclude rivals and manipulate the permit market by hoarding permits, the results of this paper suggest that this strategy is less profitable to dominant firms in contemporary auction-based markets than strategic capacity withholding in the energy market and associated demand reduction in the emissions market.

A meta-analysis of the economic impacts of climate change policy in the United States

The chapter provides a methodology for measuring the cost-effectiveness of resilience to disasters. Whereas the vast majority of extant literature in the resilience field focuses on regional and community resilience, this work extends prior work by the authors on microeconomic (i.e., firm-level) resilience and its measurement. Firm-level resilience actions, or tactics, are identified and described within an established economic resilience framework (Rose, 2017: Dormady et al., 2017). A survey-based approach is presented with an explicit application to businesses impacted by Superstorm Sandy in the NY and NJ coastal areas. A small sample demonstration of resilience cost-effectiveness results is presented in the form of statistical cost curves. The chapter concludes with a discussion of both methodological and public policy applications of the approach.

Regional macroeconomic assessment of the Pennsylvania Climate Action Plan

As a result of catastrophic events, firms and other organizations are faced with input shortages and price shocks. Firms can respond to these events using a variety of “resilience�? actions, or tactics. Here we provide a microeconomic foundation for analyzing a comprehensive range of these tactics, incorporating both inherent and adaptive concepts of resilience. We classify these tactics and derive optimality conditions for production with the use of each class of resilience in the context of a nested Constant Elasticity of Substitution (CES) function consisting of aggregated Capital (K), Labor (L), Infrastructure (I), and Materials (M). The framework has broad applicability, including measurement and scoring of resilience, cost-effectiveness assessment of resilience tactics individually and as a group, calculation of resilience indices, and supply-chain management.