Hubert Stahn

Faculty ,  Aix-Marseille Université , Faculté d'économie et de gestion (FEG)

Public economics
Stahn
Status
Professor
Research domain(s)
Environmental economics, Public economics, Game theory and social networks
Thesis
1991, Université Louis Pasteur
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Contact
hubert.stahn[at]univ-amu.fr
+33(0)4 13 94 20 30
Address

Maison de l'économie et de la gestion d'Aix
424 chemin du viaduc, CS80429
13097 Aix-en-Provence Cedex 2

Abstract This paper is essentially based on the assumption that policies supporting investment in intermittent renewable technologies cannot be contingent on meteorological events causing this intermittence. This decision was taken by most policymakers to avoid overly complex policy prescriptions. But in doing so, the first-best energy mix may be out of reach. We compare, in a unified second-best setting, the feed-in tariff, renewable premiums and tradable green certificates policy. We consider a “two-period, S-state” model. The S states reflect intermittency. Production decisions for renewable electricity are taken prior to the resolution of the uncertainty while the fossil-fuel sector adjusts its decision in each state. Retailers buy electricity on a state-dependent wholesale market which they deliver to consumers according to a fixed-tariff or a real-time-pricing contract. All these elements matter in the efficiency assessment of these policies.
Keywords Tradable green certificates, Renewable premiums, Feed-in tariff, Renewables, Intermittency
Publication HAL Google Scholar
Abstract This paper is essentially based on the assumption that policies supporting investment in intermittent renewable technologies cannot be contingent on meteorological events causing this intermittence. This decision was taken by most policymakers to avoid overly complex policy prescriptions. But in doing so, the first-best energy mix may be out of reach. We compare, in a unified second-best setting, the feed-in tariff, renewable premiums and tradable green certificates policy. We consider a “two-period, S-state” model. The S states reflect intermittency. Production decisions for renewable electricity are taken prior to the resolution of the uncertainty while the fossil-fuel sector adjusts its decision in each state. Retailers buy electricity on a state-dependent wholesale market which they deliver to consumers according to a fixed-tariff or a real-time-pricing contract. All these elements matter in the efficiency assessment of these policies.
Keywords Feed-in tariff, Renewable premiums, Tradable green certificates, Renewables, Intermittency
HAL Google Scholar
Abstract This paper is essentially based on the assumption that policies supporting investment in intermittent renewable technologies cannot be contingent on meteorological events causing this intermittence. This decision was taken by most policymakers to avoid overly complex policy prescriptions. But in doing so, the first-best energy mix may be out of reach. We compare, in a unified second-best setting, the feed-in tariff, renewable premiums and tradable green certificates policy. We consider a “two-period, S-state” model. The S states reflect intermittency. Production decisions for renewable electricity are taken prior to the resolution of the uncertainty while the fossil-fuel sector adjusts its decision in each state. Retailers buy electricity on a state-dependent wholesale market which they deliver to consumers according to a fixed-tariff or a real-time-pricing contract. All these elements matter in the efficiency assessment of these policies.
Keywords Tradable green certificates, Renewable premiums, Feed-in tariff, Renewables, Intermittency
HAL Google Scholar
Abstract This paper is essentially based on the assumption that policies supporting investment in intermittent renewable technologies cannot be contingent on meteorological events causing this intermittence. This decision was taken by most policymakers to avoid overly complex policy prescriptions. But in doing so, the first-best energy mix may be out of reach. We compare, in a unified second-best setting, the feed-in tariff, renewable premiums and tradable green certificates policy. We consider a “two-period, S-state” model. The S states reflect intermittency. Production decisions for renewable electricity are taken prior to the resolution of the uncertainty while the fossil-fuel sector adjusts its decision in each state. Retailers buy electricity on a state-dependent wholesale market which they deliver to consumers according to a fixed-tariff or a real time-pricing contract. All these elements matter in the efficiency assessment of these policies.
Keywords Tradable green certificates, Renewable premiums, Feed-in tariff, Renewables, Intermittency
HAL Google Scholar
Abstract We formulate a hydro-economic model of the North-Western Sahara Aquifer System (NWSAS) to assess the effects of intensive pumping on the groundwater stock and examine the subsequent consequences of aquifer depletion. This large system comprises multi-layer reservoirs with vertical exchanges, all exploited under open access properties. We first develop a theoretical model to account for relevant features of the NWSAS by introducing, in the standard Gisser-Sanchez model, a non-stationary demand and quadratic stock-dependent cost functions. In the second step, we calibrate parameters values using data from the NWSAS over 1955–2000. We finally simulate the time evolution of the aquifer system with exploitation under an open-access regime. We specifically examine time trajectories of the piezometric levels in the two reservoirs, the natural outlets, and the modification of water balances. We find that natural outlets of the two reservoirs might be totally dried before 2050.
Keywords Hydro-economic model, Private pumping, Multi aquifer system, Groundwater-dependant ecosystems, Semi-arid region, Simulation
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Abstract We analyze the integration of intermittent renewables-based technologies into an electricity mix comprising of conventional energy. Intermittency is modeled by a contingent electricity market and we introduce demand-side flexibility through the retailing structure. Retailers propose diversified electricity contracts at different prices, but in an insufficient number to cover intermittent production. These delivery contracts are modeled similarly to numeraire assets. We study the competitive equilibrium of the state-contingent wholesale electricity markets and the delivery contract markets. We also provide an analysis linking the delivery contracts to social welfare. Finally, we discuss the conditions under which changing the delivery contracts improve penetration of renewables and increases welfare. These provide useful insights for managing intermittency and achieving renewable capacity objectives.
Keywords Incomplete markets, Intermittency, Renewables, Electricity markets
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Abstract This study examines a specific class of common-pool resources whereby rivalry is not characterized by competition for the resource stock. Artesian aquifers are a typical example of such resources since the stock never depletes, even when part of the resource is extracted. We first propose a dynamic model to account for the relevant features of such aquifers such as the water pressure and well yield and characterize the corresponding dynamics. We then compare the social optimum with the private exploitation of an open-access aquifer. The comparison of these two equilibria highlights the existence of a new source of inefficiency. In the long run, this so-called pressure externality results in an additional number of wells for the same water consumption, thereby raising costs. Finally, we characterize a specific stock-dependent tax to neutralize the pressure externality.
Keywords Dynamic optimization, Public regulation, Optimal management, Externality, Common-pool resource
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Abstract This paper explores the main differences between the Shapley values of a set of taxa introduced by Haake et al. (J Math Biol 56:479–497, 2007. https://doi-org.lama.univ-amu.fr/10.1007/s00285-007-0126-2) and Fuchs and Jin (J Math Biol 71:1133–1147, 2015. https://doi-org.lama.univ-amu.fr/10.1007/s00285-014-0853-0), the latter having been found identical to the Fair Proportion index (Redding and Mooers in Conserv Biol 20:1670–1678, 2006. https://doi-org.lama.univ-amu.fr/10.1111/j.1523-1739.2006.00555.x). In line with Shapley (in: Kuhn, Tucker (eds) Contributions to to the theory of games, volume II, annals of mathematics studies 28, Princeton University Press, Princeton, 1953), we identify the cooperative game basis for each of these two classes of phylogenetic games and use them (i) to construct simple formulas for these two Shapley values and (ii) to compare these different approaches. Using the set of weights of a phylogenetic tree as a parameter space, we then discuss the conditions under which these two values coincide and, if they are not the same, revisit Hartmann’s (J Math Biol 67:1163–1170, 2013. https://doi-org.lama.univ-amu.fr/10.1007/s00285-012-0585-y) convergence result. An example illustrates our main argument. Finally, we compare the species ranking induced by these two values. Considering the Kendall and the Spearman rank correlation coefficient, simulations show that these rankings are strongly correlated. These results are consistent with Wicke and Fischer (J Theor Biol 430:207–214, 2017. https://doi-org.lama.univ-amu.fr/10.1016/j.jtbi.2017.07.010), who reach similar conclusions with a different simulation method.
Keywords Shapley value, Phylogenetic trees, Biodiversity, Fair Proportion index
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Abstract In this paper, we consider competitive polluting firms that outsource their abatement activity to an upstream imperfect competitive eco-industry to comply with environmental regulation. In this case, we show that an usual environmental policy based on a Pigouvian tax or a pollution permit market reaches the first-best outcome. The main intuition is based on the idea that purchasing pollution reduction services instead of pollution abatement inputs modifies for each potential tax rate (or out of the equilibrium permit price) the nature of the arbitrage between pollution and abatement. This induces a demand for abatement services which is, at least partially, strongly elastic and therefore strongly reduces upstream market power. This argument is first illustrated with an upstream monopoly selling eco-services to a representative polluting firm under a usual Pigouvian tax. We then progressively extend the result to permit markets, heterogeneous downstream polluters and heterogeneous upstream Cournot competitors. JEL Codes: Q58, D43
Keywords Abatement Outsourcing, Imperfect competition, Eco-industry, Environmental Regulation
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Abstract In this article, the authors introduce a polluting eco-industry. Depending on the level of damage, there are two optimal equilibria. If the damage is low, one generalizes the usual results of the economic literature to the polluting eco-industry: the dirty firm partially abates their emissions, only efficient eco-industry firms produce and the abatement level increases with the damage. However, very specific results are obtained if the damage is high. In this case, not all efficient eco-industry firms produce. The abatement level and the number of active eco-industry firms both decrease as the damage increases. The authors finally show that a well-designed Pigouvian tax implements these equilibria in a competitive economy.
Keywords Pigouvian tax, Welfare analysis, Heterogeneous firms, Polluting eco-industry
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Abstract We consider groundwater managed by a sole owner and where a perfect substitute, rainwater harvesting, is physically connected with the primary water source. This generates a marginal opportunity cost of using rainwater, since harvested water does not infiltrate. We first discuss the conditions that lead to a switch toward rainwater harvesting, then look at long-term rainwater harvesting systems. Due to limited storage capacity, long-term use of rainwater is only possible in conjunction with groundwater. We show that this only arises if the price of water is higher than the full marginal cost of rainwater harvesting. We also provide comparative statics related to this configuration, especially concerning the long-term water table. These results are finally illustrated by numerical examples. (C) 2017 Elsevier B.V. All rights reserved.
Keywords Conjunctive use, Optimal control, Rainwater harvesting, Groundwater management
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Abstract This paper studies groundwater management in the presence of rainwater harvesting (RWH). We propose a two-state model that takes into account the dynamics of the aquifer and the standard dynamics of the storage capacity, and we assume that the collection of rainwater reduces the natural recharge. We analyze the trade-off between these two water harvesting techniques in an optimal control model. In particular, we show that, when these techniques are perfect substitutes, the development of RWH leads in the long run to a depletion of the water table, even if pumping is reduced. This result is illustrated by a numerical application for the Pecos River Basin (New Mexico, USA). JEL: Q25, C61, D61. / KEY WORDS: Rainwater Harvesting, Conjunctive Use, Groundwater Management, Optimal Control.
Keywords Economie quantitative
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Abstract Permit markets lead polluting firms to purchase abatement goods from an eco-industry which is often concentrated. This paper studies the consequences of this sort of imperfectly competitive eco-industry on the equilibrium choices of the competitive polluting firms. It then characterizes the second-best pollution cap. By comparing this situation to one of perfect competition, we show that Cournot competition on the abatement good market contributes not only to a nonoptimal level of emission reduction but also to a higher permit price, which reduces the production level. These distortions increase with market power, measured by the margin taken by the noncompetitive firms, and suggest a second-best larger pollution cap.
Keywords Cerdi
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Abstract This paper explores the economic conditions for the viability of organic farming in a context of imperfect competition. While most research dealing with this issue has adopted an empirical approach, we propose a theoretical approach. Farmers have a choice between two technologies, the conventional one using two complementary inputs, chemicals and seeds, and the organic one only requiring organic seeds. The upstream markets are oligopolistic and the firms adopt Cournot behavior. The game is solved backward. The equilibrium distribution of the farmers between both sectors is obtained by a free-entry condition. Since multiple equilibria could exist, including the non-emergence of organic farming, we spell out viability conditions for organic farming. Then, using an “infant industry” argument, we propose several public policy instruments able to support the development of organic farming and assess their relative efficiency. Results could be useful to assess the conditions of emergence and viability of agricultural innovations in analogous contexts.
Keywords Agricultural inputs, Imperfect competition, Organic farming, Policy design, Technological choice
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Abstract This paper deals with the cost of treatment of final waste, that is waste which cannot, in the absence of recycling opportunities, be reduced by any appropriate tax scheme. The authors propose a new way to handle this waste based on Waste Management Contracts (WMC) which largely involve households in the cost reduction process. Within a set of feasible (i.e. budget budget-balancing, incentive-compatible and acceptable) contracts, the study characterizes the optimal WMC and compare this system with a more standard one based on a combination of advance and per-bag disposal fees.
Keywords Economie quantitative
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Abstract We deal with the problem of providing incentives for the implementation of competitive outcomes in a pure-exchange economy with finitely many households. We construct a feasible price-quantity mechanism, which fully implements Walras equilibria via Nash equilibria in fairly general environments. Traders' preferences need neither to be ordered nor continuous. In addition, the mechanism is such that no pure strategy is weakly dominated, hence is bounded (in the sense of Jackson 1992). In particular it makes no use of any integer game.
Keywords Mechanism design, Weakly dominated strategy, Strategic boundedness
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Abstract We characterise the welfare implications of uncoordinated policy decisions in the presence of multiple externalities, illustrated with an aquifer. We concentrate on the problem of coordination that can occur when distinct agricultural and water authorities implement their respective policies (to optimise food production and groundwater use) with environmental concerns in mind. We represent this problem as an open-loop Nash game, which compares the game-theoretical solution to a centrally planned solution. We show that the inefficiencies arise from differences in the account taken of relevant costs by different authorities. We demonstrate that the magnitude of the inefficiency generated by the absence of coordination of our authorities varies depending on the weights put on environmental benefits by each authority, and discuss the implications of analysis for future research and policy.
Keywords H23, Q18, Q28, R52
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Abstract Nous proposons dans ce travail de considérer le stock de connaissances exploitables par des laboratoires privés à des fins de dépôts de brevets comme un bien commun dont l’évolution au cours du temps dépend à la fois du nombre de brevets déposés et d’un co-produit des activités de recherche de l’Université. Nous montrons tout d’abord que la compétition entre les laboratoires supposés stratégiques génère, à court terme, une sur-appropriation du stock de connaissances dont l’effet, à long terme, est de réduire les possibilités de dépôts de brevets. Nous montrons ensuite que la taxation des dépôts de brevets constitue un outil efficace de régulation du processus de privatisation des connaissances.
Keywords Science et technologie, Brevet, Ressource en bien commun
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Abstract This paper is concerned with discrete choice contingent value estimate when the respondents are uncertain about the environmental amenities. Within a class of indirect utility functions often used in empirical studies, we put forwards the effect of the risk premium on the WTP. We then show how this risk premium also modifies the estimation procedure. A Monte Carlo experiment concludes the paper by putting forward a mis-estimation of the WTP when this uncertainty is ignored, more precisely when we focus on the effect of the risk premium.
Keywords Risk premium, Parametric models, Contingent valuation
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Abstract In this paper, we extend the Shapley-Shubik model to a two period financial economy, and essentially address the question of the existence of an equilibrium. More precisely, we show the existence of nice equilibria, i.e. situations in which prices for both assets and commodities are strictly positive. Even if the general lines of the proof are largely influenced by the paper of Dubey and Shubik (J Econ Theory 17:1-20, 1978), most of the arguments are new because of the financial nature of the economy. It forces us to deal with a generalized Nash equilibrium, and to proscribe the use of arguments which only work with a single cash-in-advance constraint.
Keywords Shapley-Shubik equilibria, Strategic market games, Financial markets, Shapley-Shubik equilibria, Jeux stratégiques de marchés, Marchés financiers, Équilibres de Shapley-Shubik
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Abstract We try to understand why firms producing goods by means of complementary components do not merge, especially in industries in which investments in component-based knowledge matters. As Audretsch, we state that these activities are developed by "individuals" who do their best to appropriate the return from their knowledge and whose effort is non-contractible. The organization of the industry into firms is identified to a partition of the set of individuals. In this context, we prove that an organization in which each individual hold his own firms is both stable with respect to unilateral deviation and optimal in the line of the property right approach. If the returns are high enough, this structure is even the only one which shares both properties.
Keywords Lateral disintegration, Dual Cournot competition, Property rights, Incomplete contracts, Composite goods
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Abstract Dans son article "Choice, Expectation and Measurability", Nicholas Goergescu-Roegen mène une attaque en règle contre la théorie de l’utilité en rejetant l’un de ses principe fondateurs : l’axiome d’Archimède. Son argumentaire s’appuie pour l’essentiel sur la notion d’ordre lexicographique. Mais une fois son attaque menée, il n’a pas cherché à refonder la théorie des préférences en autorisant ce type de structure d’ordre. L’objectif de ce travail est de reprendre l’argumentaire de Georgescu Roegen à l’encontre de la théorie de l’utilité afin non seulement de comprendre pourquoi il n’a pas su tirer parti de la littérature mathématique sur les structures ordonnées mais aussi de voir où l’aurait mené l’utilisation de cette technique.
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Abstract In this paper, we study monopolistic pricing behaviors within a two-way network. In this symbiotic production system, independent decision centers carry out an activity which concurs to the production of different system goods. The players are assumed to know the whole network. Due to this rationality, they try to capture a share of the profit of the firms who sell the system goods to the consumers. These double marginalization behaviors are studied within very general networks. Conditions with ensure existence and uniqueness are discussed. We even provided a complete characterization of an equilibrium. Potential applications are also discussed
Keywords Non-cooperative games, Two-way networks, Monopolistic behaviors
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Abstract The expansion of intermittent electricity increases supply variability and requires greater flexibility from consumers. This results in welfare losses for these agents, which can nevertheless be mitigated by energy storage. Our model analyzes these welfare consequences in the context of short-term variability in renewable energy given fixed dispatchable and storage capacities. We explore an optimal control problem that determines a welfare-maximizing electricity consumption path by adjusting dispatchable and stored energy throughout the short-term production cycle of renewables. This optimization problem identifies three regimes (no storage and active storage, with or without capacity constraints) and provides the associated consumer welfare over this cycle. Under all three regimes, a certain degree of consumer flexibility is part of the optimal solution and entails welfare losses. Active storage reduces these losses but cannot eliminate them completely due to the energy conversion losses induced by this activity. However, when storage capacity is constrained, a proactive adjustment of this capacity can offset the losses.
Keywords Optimal control, Welfare analysis, Electricity consumption, Energy storage, Intermittent renewable
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Abstract In this paper, we examine the possibility for a regulator to reduce policy costs by substituting a voluntary policy based on a legislative threat to an active harvest control. Specifically, we focus on fisheries where the regulator aims to maintain an optimal level of conservation through a voluntary agreement. To achieve this, we identify a mandatory regulation that can serve as a threat to ensure voluntary compliance and avoid regulation costs. However, threats differ from effective policies. To be enforceable, they must be validated through a legislative process, the outcome of which is uncertain and subject to objections. Consequently, we introduce of a random delay in its application and address issues of social acceptability. This threat rests upon two pillars: a moratorium with financial compensation followed by an Individual Transferable Quota (ITQ) mechanism, and a suitably chosen tax on harvesting capacity to deter deviations. We use data from the scallop fishery in the Bay of Saint-Brieuc (France) to illustrate this voluntary mechanism.
Keywords Voluntary agreements, Fisheries, Conservation policies, Dynamic games
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Abstract This paper is essentially based on the assumption that policies supporting investment in intermittent renewable technologies cannot be contingent on meteorological events causing this intermittence. This decision was taken by most policymakers to avoid overly complex policy prescriptions. But in doing so, the first-best energy mix may be out of reach. We compare, in a unified second-best setting, the feed-in tariff, renewable premiums and tradable green certificates policy. We consider a "two-period, S-state" model. The S states reflect intermittency. Production decisions for renewable electricity are taken prior to the resolution of the uncertainty while the fossil-fuel sector adjusts its decision in each state. Retailers buy electricity on a state-dependent wholesale market which they deliver to consumers according to a fixed-tariff or a real-time-pricing contract. All these elements matter in the efficiency assessment of these policies.
Keywords Intermittency, Renewables, Feed-in tariff, Premiums for renewable, Tradable green certificates
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Abstract We examine the efficiency and environmental consequences of assigning species-specific common-property rights, considering a Lotka-Volterra model in which fisheries are specialized in the harvesting of a single species. We show that the fragmentation of the ecosystem implies the tragedy of the anticommons even when fisheries compete for the resource. Indeed, contrasting the private exploitation equilibrium with the socially optimal solution, we demonstrate that the predator stock is too high while the prey stock is too low under private property rights. A puzzling result is that the "abundant" species is actually underused because of insufficient economic incentives; however, the scarce and high-priced species does not necessarily suffer from overexploitation. Biological interactions are consequently the main driver of stock depletion. Finally, we investigate how to simultaneously solve both the tragedy of the commons and that of the anticommons and analyze the economic costs of regulating only the tragedy of the commons.
Keywords Exclusive property rights Common-pool resource Anticommons Fisheries, Exclusive property rights, Optimal control, Prey-predator relationship, Fisheries, Anticommons, Common-pool resource
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Abstract We formulate a hydro-economic model of the NorthWestern Sahara Aquifer System (NWSAS) to assess the effects of intensive pumping on the groundwater stock and examine the subsequent consequences of aquifer depletion. This large system comprises multi-layer reservoirs with vertical exchanges, all exploited under open access properties. We first develop a theoretical model to account for relevant features of the NWSAS by introducing, in the standard Gisser-Sanchez model, a non-stationary demand and quadratic stock-dependent cost functions. In the second step, we calibrate parameters values using data from the NWSAS over 1955-2000. We finally simulate the time evolution of the aquifer system with exploitation under an open-access regime. We specifically examine time trajectories of the piezometric levels in the two reservoirs, the natural outlets, and the modification of water balances. We find that natural outlets of the two reservoirs might be totally dried before 2050.
Keywords Groundwater-dependant ecosystems, Semi-arid region, Simulation, Multi aquifer system, Private pumping, Hydro-economic model
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Abstract We analyze the integration of intermittent renewables-based technologies into an electricity mix comprising of conventional energy. Intermittency is modeled by a contingent electricity market and we introduce demand-side flexibility through the retailing structure. Retailers propose diversified electricity contracts at different prices allowing consumers to choose their optimal electricity consumption. These contracts are modeled by a set of state-contingent electricity delivery contracts. We show existence and uniqueness of a competitive equilibrium of the contingent wholesale and retail markets. We provide a welfare analysis and only obtain constraint efficiency due to a limited number of delivery contracts. Finally, we discuss the conditions under which changing the set of delivery contracts improves penetration of renewables and increases welfare. This provides useful policy insights for managing intermittency and achieving renewable capacity objectives.
Keywords Electricity market, Renewables, Intermittency, Demand flexibility
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Abstract This paper studies a specific class of common-pool resources whereby rivalry is not characterized by competition for the resource stock. Artesian aquifers have been identified as a typical example, since the stock is never depleted, even when part of the resource is extracted. We first propose a dynamic model to account for relevant features of such aquifers-like water pressure, or well yield-and to characterize the corresponding dynamics. We then compare the social optimum and the private exploitation of an open-access aquifer. The comparison of these two equilibria allows us to highlight the existence of a new source of inefficiency. We refer to this as pressure externality. This externality results in the long run in an additional number of wells for the same water consumption, and hence additional costs. Finally, we characterize a specific stock-depend tax to neutralize the pressure externality. JEL Classification: H21, H23, Q15, Q25, C61
Keywords Dynamic optimization, Public regulation, Optimal management, Externality, Common-pool resource
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Abstract This paper explores the main differences between the Shapley Values of a set of taxa introduced by Haake et al. [4] and Fuchs and Jin [3], the latter having been found identical to the Fair Proportion Index (Redding and Mooers [10]). In line with Shapley [13], we identify the cooperative game basis for each of these two classes of phylogenetic games and use them (i) to construct simple formulas for these two Shapley values and (ii) to compare these different approaches. Using the set of weights of a phylogenetic tree as a parameter space, we then discuss the conditions under which these two values coincide and, if they are not the same, revisit Hartman's [5] convergence result. Finally, we compare the species ranking induced by these two values. Considering the Kendal and the Spearman rank correlation coefficient, simulations show that these rankings are strongly correlated.
Keywords Biodiversity, Phylogenetic trees, Shapley value, Fair Proportion index
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Abstract We investigate the possibility for governance authorities to avoid a large part of regulatory costs, by simply backing up social norms with a threat of collective punishment. Specifically, we consider the case of fisheries in which the regulatory cap is to sustain an optimal conservation level. We identify a mandatory regulation such that, when it is used as a threat, it ensures that the cap is voluntarily implemented. The mandatory scheme is based on a incentive mechanism which secures the returns of the harvester, and a tax on potential capacity. From the status of mere threat, this mandatory regulation takes time to be enforced though. We show that such a tax scheme, even if it is applied randomly after the first occurrence of a deviation from the optimal conservation level, ensures voluntary compliance, provided a suitable choice of the capacity tax. We study the properties of this tax scheme and build an example using data on the scallop fishery in the Saint-Brieuc Bay (France) to illustrate our point.
Keywords Voluntary agreements, Fisheries, Conservation policies
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Abstract In this paper, we study an eco-industry providing an environmental service to a competitive polluting sector. We show that even if this eco-industry is highly concentrated, a standard environmental policy based on a Pigouvian tax or a pollution permit market reaches the first-best outcome, challenging the Tinbergen rule. To illustrate this point, we first consider an upstream monopoly selling eco-services to a representative polluting firm. We progressively extend our result to heterogeneous downstream polluters and heterogeneous upstream Cournot competitors. Finally, we underline some limits of this result. It does not hold under the assumption of abatement goods or downstream market power. In this last case, we obtain Barnett's result.
Keywords Environmental Regulation, Eco-industry, Imperfect competition, Abatement services
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Abstract In this article we introduce a polluting eco-industry. Depending on the level of the damage, we find one of two optimal equilibria. If the damage is low, we generalize the usual results of the economic literature to the polluting eco-industry: the dirty firm partially abates their emissions, only efficient eco-industry firms produce and the abatement level increases with the damage. However, we obtain very specific results if the damage is high. In this case, not all efficient eco-industry firms produce. The abatement level and the number of active eco-industry firms both decrease as the damage increases. We finally show that a well-designed Pigouvian tax implements these equilibria in a competitive economy.
Keywords Polluting eco-industry, Heterogeneous firms, Welfare analysis, Pigouvian tax
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Abstract Rainwater harvesting, consisting in collecting runoff from precipitation, has been widely developed to stop groundwater declines and even raise water tables. However this expected environmental effect is not self-evident. We show in a simple setting that the success of this conjunctive use depends on whether the runoff rate is above a threshold value. Moreover, the bigger the storage capacity, the higher the runoff rate must be to obtain an environmentally efficient system. We also extend the model to include other hydrological parameters and ecological damages, which respectively increase and decrease the environmental efficiency of rainwater harvesting.
Keywords Groundwater management, Rainwater harvesting, Optimal control, Conjunctive use
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Abstract This article explores the economic conditions for the viability of organic farming in a context of imperfect competition. While most research dealing with this issue has adopted an empirical approach, we propose a theoretical foundation. Farmers have a choice between two technologies, the conventional one using two complementary inputs, chemicals and seeds, and the organic one only requiring organic seeds. The upstream markets are oligopolistic and the firms adopt Cournot behavior. The game is solved backward. The equilibrium repartition of the farmers between both sectors is obtained by a free entry condition. Since multiple equilibria could exist, including the non emergence of organic farming, we spell out viability conditions for organic farming. Then, using an "infant industry" argument, we propose several public policy instruments able to support the development of organic farming, and assess their relative efficiency. Results could be useful to assess the conditions of emergence and viability of agricultural innovations in analogous contexts.
Keywords Organic farming, Imperfect competition, Technological choice, Free entry, Policy design, Agricultural inputs
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