Cameron Hepburn

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Teaching

Cameron hails from a family of teachers, and he had his first tutoring position in mathematics at age 15.

While at Melbourne University, he taught at Ormond College and Trinity College (in law and engineering), and third-year mathematics in the Engineering Department.

At Oxford, Cameron held lectureships at Pembroke College and New College, teaching economics to PPE, E&M, EEM and H&E students.  In 2002, he designed and then delivered the core economics lectures and the environmental economics option course for the following 8 years on the MSc in Environmental Change and Management programme, and in 2014 co-designed a course on Decision Theory for the MSc in Nature, Society and Environmental Policy.

Cameron supervises admitted DPhil and/or MSc students at the University of Oxford when they have closely related research interests and an exceptional academic record.  He has to date supervised >20 masters or doctoral theses.


Theses supervised

  • Aligning capital allocation with the carbon budget: What role for climate-related financial disclosures?

    Dominic Wyard

    (2016)

    Oxford University, Masters Thesis.

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  • Substitution Chains: a prolegomenon for sustainable resource policy

    Abstract

    Sustainability requires a non-declining stock of wealth assets to be maintained for future generations. To achieve this, the Hartwick rule posits that rents from non-renewable natural resources should be substituted for other forms of capital. However, most economic analyses posit that resource rents should be redistributed, not necessarily substituted, through taxation. This paper formalises the distinction between these two approaches- capital substitution versus resource redistribution. I argue resource policy is largely synchronic in orientation, emphasising intratemporal justice and redistribution. Conversely, sustainability exhibits a diachronic orientation, emphasising intertemporal justice, and wealth maintenance through substitution. The synchronic bias obscures the manifold ways that wealth is substituted. To characterise these diverse ways natural is substituted with produced capital, I advance the heuristic of transcapital substitution chains. Presenting evidence that such chains operated during Australia’s mining boom, I suggest that policy must either design hermetic rent taxes, or support economy-wide savings.

    Hamish McKenzie

    (2016)

    Oxford University, Masters Thesis.

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  • Integrating intermittent renewables: Interaction of electricity capacity markets and interconnection

    Abstract

    Scaling up intermittent renewable energies is critical to mitigating climate change. However, their economic structure and intermittency poses several challenges. While pertinent responses such as interconnection and capacity markets have been studied extensively on their own, their interaction has received little attention in the literature. Especially the influence of intermittent renewables and stakeholder opinions has not been considered. I contribute to closing this gap, using theoretical economic analysis, semi-structured interviews and empirically-grounded electricity-modelling to examine effects on energy security, welfare and carbon emissions based on a case study of France and Germany. I find that benefits from increased interconnection and capacity markets outweigh their costs, however, resulting in redistribution effects primarily within countries. Moreover, to some extent markets with significant shares of intermittent renewables might benefit from neighbouring capacity markets through interconnection. Finally, polycentric governance is suggested as appropriate form of governance due to different rationales of introducing capacity mechanisms.

    Stefan Hanuska

    (2016)

    Oxford University, Masters Thesis.

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  • Coal-lapse? The Impacts of Coal Generation Retirements on Employment, Prices, and Communities

    Abstract

    Low natural gas prices, better environmental regulations, and the growth of renewables and energy efficiency have led to retirements of coal power generation units that have supported local jobs and communities for decades. Headlines and congressional testimonies have spun power plant closures into narratives of lost jobs and unaffordable energy prices. This research explores these claims, particularly on employment, using the propensity score matching technique. Surprisingly, this thesis finds that closing coal power plants has not contributed to higher unemployment rates locally. The results of this research strengthens support for the role of citizens, organizations, and businesses at the early stages of electricity decarbonization. Through a combined effort, coalitions have helped to ease the shock of coal closures in certain areas, though more attention, strategic local governance, and coalition building will be necessary in the years to come.

    Seth Collins

    (2016)

    Oxford University, Masters Thesis.

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  • Probabilistic Event Attribution and the Best-Case Scenario for a Successful Climate Tort in the United Kingdom

    Abstract

    Litigation has emerged as a means to hold industry and government liable

    for damages rendered by climate change, but has been historically unavailable to

    victims of extreme weather events. While such events are not definitively attributable

    to human action, ‘Probabilistic Event Attribution’ science can calculate the risk of a

    weather event occurring due to anthropogenic climate change. This dissertation

    explores how this science could provoke climate torts in the UK by considering

    potential scenarios. A public nuisance action following a heatwave offers the best

    chance of success, because it can include more litigants and heatwaves often have

    stronger attribution studies. However, establishing causation remains an obstacle for

    climate torts. This dissertation also examines climate cases in other countries and

    discusses potential ramifications, including impacts on investor decision­making, lost

    assets, and shifts in intergovernmental climate policy. It concludes with steps

    forward, including raising test cases and progressing event attribution science.

    Louis Spanias

    (2015)

    Oxford University, Masters Thesis.

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  • Essays in climate policy and exhaustible resource economics

    Abstract

    Owners of exhaustible resources will respond to climate policies, and these policies have to take such responses into account. This thesis considers three separate instances in which market power and exhaustible resources interact with climate policy.

    Chapter 2 considers research and development (R&D) into green substitutes to oil as a climate policy instrument. Oil exporters will respond to such R&D efforts in ways which reduce the effectiveness of the policy. Making substitute technologies competitive against current oil prices is not sufficient. R&D efforts will only force higher oil supplies, aggravating short-term pollution. Eventually, the oil age will end as the substitutes become competitive against the marginal cost of producing oil. This motive encourages an R&D push to leave more oil underground. Strategic gaming between the importers and exporters may reduce both oil supply and R&D efforts.

    Chapter 3 considers fixed costs into opening a deposit of an exhaustible resource. Counterintuitively, a monopolist may invest too early, into too much capacity. I then apply this model to an unconventional exhaustible resource: empty space underground, in which to store captured carbon emissions. I focus on the case of storing European emissions under the North Sea. Monopolistic storage is only a concern if storage space is suciently abundant. In this case, the monopolist will not invest enough, to cut back the cumulative storage capacity. Duopolistic storage may involve tacit collusion.

    Chapter 4 considers an unconventional climate policy instrument: capital income taxes imposed on oil exporters. Such taxes can motivate conservation of polluting resources and allow oil importers to appropriate some oil wealth. These benefits come at the cost of inducing productive distortions, which diminish overall economic output.

    Niko Jaakkola

    (2014)

    Oxford University, Doctoral Thesis.

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  • Unlocking Lock-in: Transition to transition costs – A new theory on transition costs of socio-technical regimes

    Abstract

    In the face of dangerous anthropogenic climate interference, understanding how to transition carbon intensive systems, such as the electricity sector, to a lower carbon state becomes increasingly important. Many of such systems should be thought of as socio-technical regimes, which consist of networks and complex dynamics between for example policy, industry, consumer expectations, institutions, civil society and culture. These regimes can be highly resilient against radical change. This thesis aims to improve our understanding of the drivers of such resilience by presenting a new theory centered on the idea of transition costs. A heuristic framework is presented discussing how transition costs act as barriers between the path of an existing regime and visions of alternative paths. The new theory explains how transition costs are created and reinforce one-another; it thereby goes beyond previous work on lock-in and spillover effects and complements Geels’ (2012) framework on multi-level perspective (MLP). Based on the transition cost theory an analytical framework has
    been derived, categorizing the costs into policy spheres. The new framework is employed in order to analyze transition costs in the German electricity sector and the risk of policy interventions creating future transition costs. It is concluded that the German electricity sector faces high transition costs; however there is a window of opportunity currently opening. In this context a policy package aiming at several elements of the regime is discussed. The theory and framework presented herein has the potential to improve policy making on the matter of transition of socio-technical regimes and in particular to ameliorate policy timing and avoiding future transition costs.

    Benjamin Merle

    (2013)

    Oxford University, Masters Thesis.

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  • Packing a Punch – The Response of the Capital Wealth of Nations to Natural Disasters and Other External Shocks

    Abstract

    Although the effect of external shocks on physical capital is closely measured, almost no literature extends the analysis to human and natural capital. By reproducing novel measures for all three, this paper measures the response of the capital ‘wealth of nations’ to natural disasters, commodity price fluctuations, and financial aid shocks. Applying a panel vector auto-regression (PVAR) model to 35 countries across the 1985-2011-period, we find empirical evidence that these external shocks have a significant impact on a country’s wealth. However, we also show that non-external factors explain most of the variation in the wealth of nations, and thus point out several avenues for future research.

    Leon De-Graaf

    (2013)

    LSE, Masters Thesis.

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  • The role of national development banks in the transition towards low-carbon development: The case of “Nacional Financiera” and the Climate Change Fund in Mexico.

    Abstract

    According to the International Development Finance Club (IDFC), the National Development Banks (NDBs) are key actors in the climate finance architecture having contributed $89 billion to dealing with climate change in 2011. The purpose of this research is to identify the role of the NDBs in the climate finance architecture of Mexico, with the hypothesis that NDBs could play a major role in the transition towards a low carbon development if they include both the framework of Climate Policy Integration (CPI) in their institutional arrangements, and transparency and accountability mechanisms in their operations. The case of the “Nacional Financiera” (NAFIN), trustee of the Mexican Climate Change Fund, is reviewed using qualitative methods (interviews and a focus group). The findings show that the NDBs actions as investors but mainly as trustees are limited by the mandates of the federal government, particularly by the Finance Ministry. The research concludes that to improve the role of NDBs at least four actions are necessary: increasing the participation of the Finance Ministry in climate issues; improving the coordination between governmental and non-governmental actors; defining a clear mandate to guide the actions of the NDBs, and creating comprehensive transparency and accountability mechanism in order to built trust among national and international actors.

    Sandra Guzman-Luna

    (2013)

    LSE, Masters Thesis.

  • Too good to be true – How too generous PV Feed-in Tariffs are more a curse than a blessing for renewable energy investors

    Abstract

    The European Union has set itself ambitious targets to generate 20% of final energy consumption from renewable sources by 2020 and Feed-in Tariffs (FiT) are regarded as the most effective way to accelerate their deployment. Tremendous growth rates have been achieved under these systems, especially in the deployment of Photovoltaic (PV), as they provide investors with adequate returns and price certainty. However, five European countries have retroactively changed their PV FiT levels in the last three years, undermining the financial feasibility of PV projects, creating highly volatile investment cycles, and leading to a 28% decline in PV investments in the EU in 2012. This thesis provides three contributions to understanding the origins of retroactive FiT adjustments as well as their effects on renewable energy investors. First, a theoretical model is developed to understand the retroactive changes from an economic perspective, demonstrating how over-generous FiTs can lead to such adjustments. Second, several determinants of the probability of retroactive adjustment were analyzed: higher costs in relation to the total value of electricity generated was identified as the main determinant, while higher shares of ground-mounted installations and early realization of the 2020 targets add to the effect. Third, several insights from interviews with several European renewable energy investors and experts are presented. Different strategies to overcome retroactive measures were developed while over-generous FiTs that are ‘too good to be true’ signal that the market might overheat and provoke retroactive changes.

    Thomas Haelsig

    (2013)

    LSE, Masters Thesis.

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  • Cod recovery in the north-west Atlantic. Can mother earth pay the (economic) rent? Applying ecosystem-based management.

    Best Masters thesis for 2011 at Oxford’s Environmental Change Institute

    Abstract

    The method of event ecology is applied to the socio-ecological history of Newfoundland’s cod stock collapse and its subsequent failure to recover, despite a near total moratorium on fishing over the past 20 years. An examination of the collapse using event ecology and consideration of the emerging paradigm of ecosystem-based management leads to the hypothesis that ecosystem interactions, either in the form of the continuing low-level cod harvest, or of bycatch from human harvesting of the currently dominant invertebrate species of lobster, crab and shrimp, or of seal predation from the growing harp seal population, are inhibiting a recovery of cod stocks. This hypothesis is then tested through the derivation of a mathematical model incorporating both harvesting and predator-prey interactions, based on the Lotka-Volterra predation equation with logistic growth.

    A triangulation of qualitative and quantitative methods is then used to set parameters and solve the equations for the equilibrium sizes of each population at various harvest levels. Potential interventions to allow cod stocks to recover are then modelled using ecological and economic tools to estimate the financial impact of cod stocks recovery. Finally, consideration is given to the governance and incentive structures necessary for sustaining a holistic ecosystem-based management approach for Newfoundland cod, and to financing the transition to a higher-value fishery where cod stocks have become more abundant.

    Tony Chappel

    (2011)

    Oxford University, Masters Thesis.

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  • Benefit uncertainty and climate policy design: The economics of instrument choice under new scientific information

    Best Masters thesis for 2010 at Oxford’s Environmental Change Institute

    Jisung Park

    (2010)

    Oxford University, Masters Thesis.

  • Environmental Policy, Agglomeration and firm location: A theoretical study of environmental regulation with endogenous firm location

    Best M.Phil thesis for 2010 in Oxford’s Economics Department (George Webb Medley Prize)

    Abstract

    This thesis considers the related policy challenges of deindustrialisation and ‘leakage’ which can arise when environmental regulation is differentiated across regions.  A dynamic two-region ‘New Economic Geography’ (NEG) model is adopted in which agglomeration forces (which encourage firms to locate together) may make firms tolerant of regulatory disadvantage (Chapter 3).  Each region ratifies an international environmental agreement (IEA) which requires it to tax trans-boundary pollution created by local firms.  The tax rates may be differentiated.  It is assumed that the IEA is the only policy instrument available.  In contrast to previous NEG models used in this context, the model adopted is considerably more tractable, which enables comparative static analysis to be undertaken analytically rather than through computer simulation.

    The model is extended to consider the relationship between the prescribed tax rate and deindustrialisation caused by the relocation of firms (Chapter 4).  Firm relocation in response to a given tax differential depends crucially on trade costs and the initial location (configuration) of industry.  For some industry configurations, agglomeration forces are strong and a set of tax differentials exist which cause no international relocation of polluting firms.  For other initial industry configurations in which agglomeration forces are weaker, the same set of tax differentials may cause complete international relocation to the less stringently regulated region.

    The model is further extended to consider the issue of carbon leakage, which arises in the regulation of greenhouse gas (GHG) emissions (Chapter 5). Agglomeration forces are a double-edged sword. For relatively low tax differentials, agglomeration forces create rents which tend to anchor industry in the higher taxing region, avoiding carbon leakage. If the tax differential is too great, however, agglomeration forces cause all firms to relocate to the lower taxing region where they optimally emit more GHGs. Environmental outcomes may therefore be improved by reducing the tax rate in the higher taxing region in order to discourage industry relocation. I show that in the presence of agglomeration forces, trade liberalisation can make industry less (rather than more) likely to relocate in response to a regulatory disadvantage. When industry is diversified between regions, firms respond to higher (lower) relative domestic taxes by increasing (decreasing) output and polluting more (less). The model suggests that carbon leakage in response to a policy shift may be far higher in the long-run than it is in the short-run due to the importance of firm relocation.

    Feddersen, J.

    (2010)

    Oxford University, Masters Thesis.

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  • Optimal extraction of exhaustible resources with endogenous backstop technology development

    Jaakkola, N.

    (2008)

    Oxford University, Masters Thesis.

  • Risk, inequality and time: How can public attitudes be incorporated better into the economics of climate change?

    Best environmental Masters thesis in the UK for 2007 (WWF and Environment Agency Prize)

    Abstract

    Much of the debate following the publication of the Stern Review of the Economics of Climate Change has focused on one single parameter in the economic model, labelled η. Currently, this parameter represents simultaneously a measure of aversion against risk as well as against inequality both within generations and across generations. This debate is important for two reasons. Firstly, cost estimates of climate change damages are highly sensitive to how risk, inequality and time are dealt with. The choice of optimal climate policy therefore depends crucially on the value of η. Secondly, the approach taken to risk, time and inequality involves important value judgements that should not be left to economists alone.

    This dissertation makes two contributions to the debate. It tests the validity of using a single parameter to incorporate these three different concepts. This is done by surveying the attitudes of over 3000 people to risk, time, and income inequality. The results indicate that there is a clear need for a new model that is rich enough to treat the three different components as distinct. The paper then proceeds to develop such a model.

    Saelen, H.

    (2007)

    Oxford University, Masters Thesis.

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  • Climate ethics survey: Disentangling public risk preferences from inequality & time

    Abstract

    This dissertation disentangles individuals’ preferences for the elasticity of marginal utility, η, a central and ethically important parameter in the economic analysis of climate-change. Preferences for η in the dimension of risk are separated from preferences in the dimensions of inequality and intertemporal substitution (time) by creating a worldwide on-line Climate Ethics Survey of public attitudes. The experimental measures are based on respondent choices in hypothetical situations established with least departure from the standard economics framework possible. Sample heterogeneity, climate-change policy specificity, and incorporation of risk (individual and societal), inequality (national and global), and time makes this work genuinely novel regarding past studies.

    This dissertation shows individual measures of relative aversion to risk, inequality, and time display substantial heterogeneity and are essentially uncorrelated. The majority of respondents are least risk tolerant for national inequality, global inequality, and time, with η>7.5, while the modal response for both individual and societal risk indicates 3.0<η<5.0.

    Thus, the outcome of this work challenges standard economic assumptions that: 1.η=1 and 2.η is constant across: risk, inequality, and time. The findings suggest the structure of the economic analysis of climate-change is flawed because the underlying model is not rich enough. This effort effectively addresses the failures of analysing climate-change discounting using conventional economic or ethical frameworks in isolation and builds a solid case for structuring preference sets disentangling risk from inequality and time outside the expected-utility framework. If employed in sensitivity analyses of climate- change policies, these values for η would advocate different consumption-path choices than those determined by i.e. The Stern Review.

    Additionally, demographic and attitudinal indicators are compared between individual risk, social risk, national inequality, global inequality, and time using an Ordered Probit Model. It is demonstrated that a number of risky behaviours, i.e. smoking, are not significant indicators of attitudes towards higher- stake gambles on either the individual- or societal-levels. Additionally, gender and country of residence are uniformly statistically significant indicators of greater aversion to: risk, inequality, and time.

    Helgeson, J.

    (2007)

    Oxford University, Masters Thesis.

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  • Assessing and managing regulatory risk in China’s CDM market: A carbon finance perspective

    Abstract

    China has the lions’ share of world’s expected Certified Emission Reduction (CERs) produced from projects under Clean Development Mechanism (CDM). However, a huge gap between expected CERs and actualized CERs is observed in China. It is perceived China’s regulatory risk is the main contributing factor. This thesis attempts to assess the effect of China’s regulatory risk on project developers’ ability to deliver CERs, and proposes effective risk management strategies. This can be achieved by employing a combination of financial theories, qualitative interviews and Analytical Hierarchy Process (AHP), a multi-criteria decision making tool. Assuming project diversification is common, regulatory risk can be modeled as carbon credit default risk. Based on this “risk-equivalent” approach, this thesis conducts 12 structured interviews and develops AHP assessment models to measure the regulatory risk effect. It is found that regulatory risk has cast an above-medium negative impact on CER delivery. At last, Carbon-based Collateralized Debt Obligation (CCDO), an innovative financial risk management instrument, is proposed and evaluated. Despite some shortfalls, CCDO can fully transfer the regulatory risk and improve carbon market, providing an innovative solution to a critical environmental problem. The approaches and outcomes in this thesis are expected to make important contribution to the subject of Carbon Finance.

    Huang, Y.

    (2007)

    Oxford University, Masters Thesis.

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  • The Climate Challenge Game: How Might Computer Games be Used to Communicate the Issues of Climate Change?

    Abstract

    This study set out to examine the use of computer games for the communication of climate change issues, using the Climate Challenge Game as a case study. In particular, any changes in knowledge, understanding and attitudes towards climate change, as a result of playing the game, were assessed, as were the players’ attitudes towards the use of games for communication. A survey was carried out, with participants asked to fill out an online questionnaire before and after playing the game. It was found that many participants did learn about climate change, and that some attitudes were changed as a result of the game, and the concept of using games as communication tools was well supported by the participants.

    Rowlands, H.

    (2006)

    Oxford University, Masters Thesis.

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  • Green and profitable? The potential returns to good environmental management

    Abstract

    This thesis uses modern panel data techniques to analyse a new Japanese dataset in an investigation into the professed link between good environmental performance and corporate returns. It also builds some very simple models to further examine two frequently quoted drivers of firms’ environmental performance, reputation and eco- efficiency. The analysis finds both theoretical rationales and empirical evidence that more environmentally friendly firms have higher profits. These findings are not general however, but specific to particular industrial sectors and appear to depend on the degree to which production is exposed to consumer pressures, and the environmental impact of the production process itself. Seen jointly, the theoretical discussion and empirical findings seem to imply that the ability of modern panel data techniques to reduce some endogeneity issues, makes these especially appropriate in the ‘environmental performance – corporate returns’ context. Finally, the thesis empirically investigates an alleged link between environmental performance and managerial quality. It finds significant evidence that such a link exists in the sample.

    Mohn, W.

    (2006)

    Oxford University, Masters Thesis.

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  • An analysis of the UK energy market in an age of climate change: will adherence to the national emission reduction targets force an increasing reliance on nuclear power?

    Abstract

    A number of different greenhouse gases from a variety of sources contribute to the greenhouse effect that is responsible for climate change. A reduction in emissions of these gases would delay and diminish the consequences of climate change. Electricity generation from fossil fuel energy sources is a major contributor to global emissions of carbon dioxide. The threat of climate change is recognised by the UK’s recent Energy White Paper, which establishes the goal of a reduction of carbon dioxide emissions by 60% of 1990 levels by 2050.

    A limited number of realistic options exist to reduce carbon emissions from the electricity sector, including efficiency improvements, increase use of renewable energy sources, carbon sequestration plants and nuclear power.

    The analysis in this thesis suggests that reconciling the UK’s economic growth projections with the government’s plans for carbon abatement will not be easy. The carbon abatement target imposes restrictions on fossil-fuelled electricity generation; renewable energy has practicable limitations  and feasible electricity efficiency improvements are constrained below 2%/year.

    As such, it will be argued that the UK will be unable to meet electricity demand in 2050 without a large scale program of nuclear energy or carbon sequestration. There are compelling arguments favouring investment in new nuclear generating capacity, including cost efficiency, the government’s desire for energy diversity, and the fact that nuclear is an established technology, whose risks and potential problems are well known.

    Cousins, K.

    (2005)

    Oxford University, Masters Thesis.

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  • Bridging Kyoto with the European Emissions Trading Scheme: Analysis of the “Linking Directive” and its Implications

    Gorina, N.

    (2005)

    Oxford University, Masters Thesis.

  • Does green management pay? An empirical examination of the relationship between the environmental and financial performance of listed Japanese companies

    Kikuchi, T.

    (2005)

    Oxford University, Masters Thesis.

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  • How cost-effective are carbon emission reductions under the Prototype Carbon Fund?

    Abstract

    The Clean Development Mechanism (CDM) aims both to mitigate greenhouse gases cost-efficiently and to contribute to sustainable development in developing countries. In order to catalyze CDM projects, the World Bank established the Prototype Carbon Fund (PCF) in 1999. This thesis aims to assess cost-effectiveness of projects managed by the PCF, as well as to understand the relationship between cost-efficiency and sustainable development. This is achieved using data acquired from the World Bank Project Appraisal Documents and Project Design Documents covering thirteen PCF projects. In particular, Implicit Emission Reduction Costs (IERCs) are calculated for each project, and then compared with various carbon prices. Unlike the carbon credits prices determined by the negotiation in the market, IERCs represent the real costs of generating carbon emission reductions, and permit cost benefit tests over the different technologies. It is found that IERCs for the thirteen projects vary from -$9/tCO2e to $13/tCO2e, dividing the projects’ cost benefit analysis result into two groups: cost-efficient projects and cost-inefficient projects. Interestingly, however, some of the cost-efficient projects appear to be problematic projects, often condemned by the civil society as failing to contribute to sustainable development. This finding leads some support to the idea of providing a separate incentive to support the achievement of sustainable development objectives.

    Nagai, H.

    (2005)

    Oxford University, Masters Thesis.

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  • Social cost of carbon: Equity weighting

    Best Masters thesis for 2004 at Oxford’s Environmental Change Institute

    Abstract

    Equity weighting enables fair comparison of monetary damages that accrue to regions with very different income levels. This is especially appropriate in the context of climate change where damages are likely to affect people with very diverse levels of wealth. This thesis makes both theoretical and practical contributions to the literature on climate change economics.

    The theoretical foundation of equity weighting is advanced in two areas. Firstly, this thesis develops a new conceptual analysis of equity weighting that demonstrates the relationship between equity weighting and discounting. This new model also shows clearly that the way equity weighted results have been presented in the literature is open to misinterpretation and suggest a way of presenting equity weighted marginal damage figures that does not suffer from this problem. Secondly, the model for equity weighting is significantly enhanced when it is applied to aggregated damage figures for whole regions. An aggregation coefficient is derived that corrects errors that are introduced when regionally average data sets and scenarios are used.

    All theoretical ideas have then been implemented in two leading impact assessment models (FUND and RICE) in order to test the magnitude of change these theoretical advances cause to the social cost of carbon figures. A significant amount of work was spent on improving FUND, not only in the area of equity weighting, but also in making in- and outputs more user friendly and implementing many other improvements to the model.

    Results from modelling suggest that the effect equity weighting has on the social cost of carbon figures has been underestimated significantly in the literature. New, corrected, results are presented. At the same time, it is outlined why, in policy decision making, equity weighted numbers must be used differently than unweighted damage figures.

    Anthoff, D.

    (2004)

    Oxford University, Masters Thesis.

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  • Checking the price tag on catastrophe: An investigation of the sensitivity of FUND’s Social Cost of Carbon estimates to the incorporation of non-linear climate responses

    Ceronsky, M.

    (2004)

    Oxford University, Masters Thesis.

  • Discounting and the social cost of carbon

    Abstract

    This dissertation carries out a sophisticated sensitivity study on the impacts of declining discount rates on the social cost of carbon (SCC), an important number in the economic appraisal of climate change policies. Five declining discounting schemes are successfully implemented in the FUND 2.8 model. Combined with different assumptions of the pure rate of time preference, these five DDR schemes produce 10 estimates of the SCC number. Among them, the Gollier heterogeneous discounting scheme is, to the best of our knowledge, implemented for the first time in the literature. Without equity weighting, the percentages increase of SCC values ranges from 10% to 4100% and the value of SCC ranges from -£1.4/tC to £128/tC. Although this uncertainty range is large, most discounting schemes and combinations don’t push up the number to the high level suggested by UK DEFRA (2002). The novel implementation of the Gollier heterogeneous discounting even suggests the possibility of negative SCC, although it also has to do with the damage profile in FUND. One of the major policy implications is that at the higher end of the values of SCC found here (although not all of them), many climate change related policies — such as the Kyoto Protocol — have no trouble passing a cost-benefit analysis.

    Guo, J.

    (2004)

    Oxford University, Masters Thesis.

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  • Investigating the effect of risk and ambiguity aversion on the social cost of carbon

    Abstract

    The magnitude and probabilities of global warming consequences involve both risk and ambiguity. Consequences of global warming are risky because climate change may generate a variety of damage possibilities with different probabilities attached to them. Impacts of global warming are also ambiguous because the probabilities of the occurrences of events are imprecise. With risk and ambiguity surrounding a universal challenge of global warming, this thesis aims to give a realistic account of risk and ambiguity aversion in the estimation of the social cost of carbon (SCC) to reflect the level of risk and ambiguity society is willing to take based on our current knowledge.

    This thesis studied the effect of risk and ambiguity aversion under different climate sensitivity, marine methane hydrate destabilisation and emission scenarios. It is found that in taking uncertainties of climate sensitivity into account, a risk premium of 0.8-23% of the expected SCC needs to be added to the social cost of carbon. Considering uncertainties in marine methane hydrate destabilisation, the SCC should increase by a risk premium of 0.1-6.4%. The uncertainties in emission scenarios also give a similar range of risk premium of 0.5-6.4%. When climate sensitivity, marine methane hydrate destabilisation and emission scenarios are taken into consideration altogether, it is shown that risk premium ranges from 1.4% to 22% and ambiguity premium varies between 2% and 34% of the SCC given our ranges of relative risk aversion and absolute ambiguity aversion.

    Li, A.

    (2004)

    Oxford University, Masters Thesis.

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  • The price of Davy Jones’ locker: Assessing the social costs of marine carbon sequestration

    Abstract

    Directly injecting CO2 into the ocean represents one method of mitigating global climate change. However, the costs of ocean sequestration are poorly understood. The objective of this thesis is to develop a mathematical model for estimating the social costs of ocean sequestration stemming from atmospheric and oceanic damages. A model for estimating net present costs is developed as a function of depth of injection, taking the form:

    Model simulations indicate that damages from leaked carbon dioxide potentially significant (> $13/tC for a 2000m injection), while damages to current and potential future uses of the marine realm are inconsequential (< $0.02/tC). Ramifications for climate policy are discussed.

    Elliott, M.

    (2003)

    Oxford University, Masters Thesis.

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  • NAFTA, Environment and Institutions: A critical analysis of the national and multilateral environmental institutions in Mexico, in light of trade liberalization in the agricultural sector

    Abstract

    This dissertation argues that environmental damage in the agricultural sector in Mexico has been exacerbated by the weak environmental institutional framework which complemented The North American Free Trade Agreement (NAFTA). This research first characterizes the negative environmental impacts of agricultural liberalization in Northern and Southern Mexico using Scale, Technique and Composition effect economic analysis. Second, the analysis explores how weaknesses in the national and multilateral environmental institutional framework are partially responsible for these negative environmental impacts. A lack of adequate objectives, structure and funding in relevant institutions has limited their ability to deal with the increased environmental stresses brought about by NAFTA’s agricultural liberalization. Furthermore, lack of access to rural credit and a scarcity of funding for rural development plans has generated socio-economic difficulties that exacerbate environmental damage caused by the Southern peasantry. Key recommendations to improve the national and multilateral institutional framework, as well as access to adequate financing schemes are proposed.

    Vilas, S.

    (2003)

    Oxford University, Masters Thesis.

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