Found 738 article(s) in category 'Regulation'

The Economic Implications of a Low-Carbon Future

The Economic Implications of a Low-Carbon Future. Joseph Aldy, January 2019, Paper, “What are the costs and benefits of reducing the carbon intensity of the U.S. economy? The economic costs of decarbonization reflect the stringency of climate policy goals—how ambitious is the objective and how quickly must the economy meet it—and the responsiveness of investment and consumption to new policies and associated price signals. The more low-cost opportunities for switching to lower- and zero-carbon energy sources and the more options for energy efficiency and conservation, the lower the cost of any decarbonization goal. The costs will also reflect a number of critical policy design choices that will affect the cost-effectiveness of reducing carbon emissions, the creation and use of economic value (such as carbon tax revenues) that could promote economic growth, and the potential for innovation policy to complement emission mitigation policy.Link

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Do financial constraints curb firms’ efforts to control pollution? Evidence from Chinese manufacturing firms

Do financial constraints curb firms’ efforts to control pollution? Evidence from Chinese manufacturing firms. Richard Freeman, January 12, 2019, Paper, “Financial constraints have long existed in China’s manufacturing sectors. The growth of the manufacturing sector has been slowing in recent years due to increasingly strict environmental regulations that force factories to cut production. In this study, we discussed whether financial constraints were essential in firms’ decision to control pollution, and matched the Annual Surveys of Industrial Firms dataset with the Ministry of Environmental Protection survey data on firms’ expenditures in industrial waste gas emission control. The relationship between calculated investment-cash flow sensitivity (ICFS) and the environmental investment ratio (ratio of firms’ expenditures on pollution control to total assets) was analyzed. We found that, overall, financial constraints had a significantly negative effect on firms’ efforts to reduce waste gas emission.Link

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International Commitments and Domestic Opinion: The Effect of the Paris Agreement on Public Support for Policies to Address Climate Change

International Commitments and Domestic Opinion: The Effect of the Paris Agreement on Public Support for Policies to Address Climate Change. Dustin Tingley, January 2019, Paper, “The Paris Agreement marked a new turn in international environmental agreements, by allowing each country to set its own non-binding goals for emissions reductions. How might purely voluntary international commitments affect domestic support for costly policies to address climate change? We investigated this question by administering survey experiments in the U.S. Our experiments supported three conclusions. First, even voluntary international commitments transformed public opinion. Public support emissions control policies was much higher in scenarios where the U.S. government had joined the Paris Agreement than in scenarios where it had not. Second, voluntary commitments were most consequential in boosting support for policies that imposed intermediate costs on the public, while having smaller effects on policies involving low or high costs. Finally, our experiments exposed the dangers of promising too much (overpledging) or too little (underpledging). These findings have important implications for the design and consequences of international agreements.Link

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Pathways to Materiality: How Sustainability Issues Become Financially Material to Corporations and Their Investors

Pathways to Materiality: How Sustainability Issues Become Financially Material to Corporations and Their Investors. George Serafeim, 2019, Paper, “As sustainability issues, also labelled environmental, social and governance (ESG) issues, become financially material, companies, investors and regulators are designing strategies and policies to improve sustainability disclosure and performance. In this paper, we outline a framework of how sustainability issues become financially material arguing that materiality is not a “state of being” but a “process of becoming.” Our framework could assist companies and investors to make resource allocation decisions based on expectations about future materiality, social entrepreneurs and NGOs to develop their theories of social change, and policy makers to design disclosure regulations. Moreover, our framework generates predictions about the conditions under which sustainability issues become financially material that could be empirically tested in the future.Link

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Stock Market Short-Termism’s Impact

Stock Market Short-Termism’s Impact. Mark Roe, December 2018, Paper, “Stock-market–driven short-termism is crippling the American economy, according to legal, judicial, and media analyses. Firms forgo the R&D they need, cut capital spending, and buy back their own stock so feverishly that they starve themselves of cash. The stock market is the primary cause: directors and executives cannot manage for the long term when their shareholders furiously trade their company’s stock, they cannot make long-term investments when stockholders demand to see profits on this quarter’s financial statements, they cannot even strategize about the long term when shareholder activists demand immediate results, and they cannot keep the cash to invest in their future when stock market pressure drains away that cash in stock buybacks. This doomsday version of the stock-market–driven short-termism argument entails economy-wide predictions that have not been well-examined for their severity and accuracy.Link

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Trusting Nudges: Toward A Bill of Rights for Nudging

Trusting Nudges: Toward A Bill of Rights for Nudging. Cass Sunstein, 2018, Book, “Many “nudges” aim to make life simpler, safer, or easier for people to navigate, but what do members of the public really think about these policies? Drawing on surveys from numerous nations around the world, Sunstein and Reisch explore whether citizens approve of nudge policies. Their most important finding is simple and striking. In diverse countries, both democratic and nondemocratic, strong majorities approve of nudges designed to promote health, safety, and environmental protection—and their approval cuts across political divisions.Link

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The Price of Biodiesel RINs and Economic Fundamentals

The Price of Biodiesel RINs and Economic Fundamentals. James Stock, December 2018, Paper, “The D4 RIN is the tradable compliance certificate for the biomass-based diesel mandate in the Renewable Fuel Standard (RFS). Understanding the price dynamics of the D4 RIN is important for understanding the RFS because its price sets a ceiling on the ethanol RIN (D6) and because some observers have suggested that RIN price fluctuations are too large to be explained by economic theory. We use option pricing theory to develop a model of the D4 RIN in terms of its economic fundamentals: the spread between the prices of biodiesel and petroleum diesel and the status of the biodiesel blenders’ tax credit. The resulting D4 fundamental price closely tracks actual D4 prices. We conclude that RIN price volatility arises because of the design of the RFS and intrinsic features of the US fuel supply system.Link

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Stock Market Distress Signal: How Low-Cost Index Funds Are Taking Over

Stock Market Distress Signal: How Low-Cost Index Funds Are Taking Over. John Coates, December 12, 2018, “Sounding the alarm on index funds. How their runaway success has reshaped power and accountability in boardrooms and on Wall Street. Guests – John Coates, professor of law and economics at Harvard Law School where he teaches corporate governance, mergers and acquisitions and finance. Member of the Investor Advisory Committee of the Securities and Exchanges Commission. (@jciv) Link

 

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Health as a Way of Doing Business

Health as a Way of Doing Business. Amy Edmondson, December 6, 2018, Paper, “For too long, the worlds of business and health have been mired in a checkered, sometimes contentious, history. Millions of deaths worldwide can be attributed to risk factors including tobacco use, alcohol and drug misuse, and suboptimal dietary intake linked to commercial products. Media (including social media) coverage about the safety and cost of many consumer goods, both medical (drugs, devices) and nonmedical, reflect profound public concerns. Longstanding societal scrutiny about the role of business in environmental pollution has only increased in the era of global warming.Link

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Evaluating the performance of regulations and regulatory institutions

Evaluating the performance of regulations and regulatory institutions. Joseph Aldy, 2018, Book Chapter, “If markets function well in allocating resources, then government regulation is unnecessary. Indeed, government intervention in well-functioning markets will likely  make society worse off by imposing costs that exceed their benefits. If markets do not…Link

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