10. Flashcards
What is an externality?
How do we establish social order
How does the market system relate to social order?
How do public goods and externalities relate to social order?
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Define
* Social contract
* Hobbesian tradition
What is a consumption externality
First theorem of Wlefare economics
What happens to the general equilibrium when there is an externality?
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What has changed in the general equilibrium?
General equilibrium with externality
What is the first welfare thereorem?
Why is no externalities required for first welfare therom to hold?
What is coase Theorem?
coase Theorem and property rights
What are the properties of public goods
What is the:
* perfect subsitue case
* Perfect complement case
Canonical example:
Assumptions
What is the meaning of the sign?
Application of public goods: Security/ Defence
* What is the issue?
* How can this be provided as a public good to solve the issue?
* What do G and γ mean?
Application of public goods: Climate change
* What is the issue?
* How can this be provided as a public good to solve the issue?
* What do G and γ mean?
What happens in a Nash equilibrium?
What are the incentives to contribute?
What sort of function is this?
What is the equation?
*
What is the dominant stratergy?
What are the implications of this?
What is the range of the benefit of public good?
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Assurance game
What is the utility equation?
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Assurnace game on the population level
When should we invest and when should we not (equatiojns?)
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What are the solutions to the free-rider problem?
Lin Ostrom’s work
What is voluntary cooperation?
Is self-interest a reasonable assumption?
The game when there is a reciprocals
Do penalties work in practice?
What is the role of the government?
Government reprecutions measures
Government subsidisation
Direct Government provision
Chan et al (2018)
Why is international cooperation required to tackle climate change?
- Countries can free-ride on the actions of others so we have international cooperations
- Able to address emission sources that are unevenly distributed
Chan et al (2018)
What criteria can we use to evaluate international climate policy?
- Environmental effectiveness: To what degree do they reduce climate change?
- Aggregate economic performance: Cost-effectiveness
- Distributional impacts: Benefits and costs for everyone overtime
- Institutional feasibility: Ability for the parites in the agreement to implement effort
Chan et al (2018)
What aspects are important in the design of international climate policy?
- Strong multilateralism: High degree of coordination of goals or action among participants
- Harmonized antional policies: Cooperation to make the design and ambition of national polcies similar to one another relying less of a centralised authority
- Decentralised policies: Composed topically focused building blocks
- Legal framework: Legal type, whether commitment is mandatory, the specifcity of commitments and the use of enforcement provisions.
Chan et al (2018)
Summarise the features and objectives of the 2015 Paris Agreement? Has it been effective? Is it sufficient?
- 10 year national goals for climitae mitigation
- Countries have to submit revised NCDs every 5 years
- Bottom up nature
Altundas et al (2021)
Can market forces help reinforce the objectives of international agreements through, for example, the financial sector?
- Banking sector is lending away from polluting firms, as they expect more stringent climate risk-related policies, or increased awarness by banks of climate change related risks.
Income distribution
