1 / 19

Interactive Exercise

Interactive Exercise. Scenario. Engineer or mid-level manger in a firm Six firms: 1 ... 6 Know of an action that would reduce emissions Six possible actions per firm: A ... F Think of them as efficiency improvements The action could reduce up to 10 tons of emissions

oren-ballard
Download Presentation

Interactive Exercise

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Interactive Exercise

  2. Scenario • Engineer or mid-level manger in a firm • Six firms: 1 ... 6 • Know of an action that would reduce emissions • Six possible actions per firm: A ... F • Think of them as efficiency improvements • The action could reduce up to 10 tons of emissions • The action has a specific cost per ton • Example: $8 per ton

  3. Simulation • Randomly distribute initial information • Slips will show: firm, action, cost per ton • Form into teams for each firm • Assemble and digest information • Determine how firm would react to policies • Command and control (2 cases) • Emissions fee or tax • Tradable emissions permits

  4. Initial Emissions

  5. Policy 1: Equal Reductions • Each firm must eliminate 30 tons of its emissions • Firms can choose the lowest cost method • Questions: • Which actions should your firm take? • What is your firm’s total cost of abatement?

  6. Policy 1 results

  7. Policy 2: Proportional Reductions • Each firm must eliminate 30% of its emissions • Firms can choose the lowest cost method • Questions: • Which actions should your firm take? • What is the firm’s total cost of abatement?

  8. Policy 2 results

  9. Policy 3: Emissions Fee • Each firm must pay $17 on each ton emitted • Firms can clean up, pay the fee, or do some of both • Firm’s goal is to keep costs low • Questions: • Which actions should your firm take? • How much does it reduce emissions? • What is the cost of reducing emissions? • How much does the firm pay in fees? • What is the total cost imposed by the policy?

  10. Policy 3 results

  11. Policy 4: Tradable Permits • Each firm must own a permit for each ton emitted • Firms are granted permits for 30 tons less than original emissions • The permits can be bought or sold • Questions: • How many permits would your firm want to BUY at each of the following prices: • $1, $3, $5, $7, $9, $11, $13, $15, $17,$19 • How many permits would your firm want to SELL at each of the prices above? • Fill in the answers on the worksheet

  12. Policy 4 permit market: demand

  13. Policy 4 permit market: supply

  14. Policy 4 permit market

  15. Policy 4 trading and abatement

  16. Policy 4 costs

  17. Summary

  18. Why the differences across firms? • Initial emissions differ • Especially important for proportional reduction or taxes • Abatement options differ • Abatement costs differ as a result • Here, the six firms fell into three categories • Firms 2 & 5: lowest cost at first but then rising • Firms 3 & 6: higher initial cost but rises more slowly • Firms 1 & 4: high and rapidly rising costs

More Related