Conference Agenda

China's Carbon Emission Trading Scheme (ETS) has completed its first decade, marking a significant transition from regional ETS pilots to a nationwide market, albeit limited to the power sector. Several fundamental questions remain unanswered: Whether and how does carbon ETS facilitate firms’ competitiveness? How can the allowance allocation rules in the nationwide market be improved to enable carbon market participation? How can we design the nationwide market to address the incomplete information on abatement costs and local externalities of abatement? Three papers presented in this thematic session comprehensively evaluate China's carbon market through empirical evidence, lab-in-the-field experiments, and theoretical modeling and simulation. Leveraging regional pilots as a quasi-natural experiment, paper one examines the causal impacts of ETS on firms’ innovation and competitiveness. This paper unravels a critical yet unexplored channel of how early climate innovators can gain a competitive advantage. Paper two explores how alternative allowance allocation rules could facilitate carbon market participation. This paper implements a lab-in-the-field experiment for three thousand industry practitioners through the Beijing Green Exchange training courses. On top of the policy design, the last paper discusses the trade-off in policy design between market and planning under incomplete information for carbon abatement costs and the local externality of abatement.

This session focuses on how individual preferences and attitudes form or change depending on whether collective action is taken and how successful it is. Bartels & Kesternich analyse a potential crowding out of voluntary action in presence of collective action. Carlsson et al. look at support for climate leadership, and the role of conditionality. Pahle et al. analyse the change of preferred political level (national, regional, international) of action in light of (being informed about) the increasingly likeliness that the Paris climate goals will be failed. Overall results suggest a “weak unidirectional link” in the sense that actual collective action has very little effect of individual preferences, but to some degree affects preferences for desired collective action.

The session investigates how nudges and taxes interact in reducing externalities. It encompasses three papers that complement each other in terms of methods and results. The first one, presented by Olof Johansson Stenman, analyzes theoretically pro-social nudges and their interaction with the Pigouvian tax. The second one, presented by Stefan Ambec, report results from an online shopping experiment with a nudge (a traffic-light label) and two levels of a carbon tax. The third one, presented by Gregory Sun, estimates the welfare impact of nudges and taxes with data on 300 experiments on cigarettes, vaccinations, and energy conservation.

Through shifts in temperatures, sea levels, precipitation patterns, and extreme weather events, climate change is poised to inflict severe costs on societies. Tipping points, characterized by qualitative changes to elements of the Earth system following small perturbations, can drastically alter the trajectory of climate change impacts. Since understanding their potential effects is key for prudent mitigation policy and risk management, we propose a thematic session to present new research on the social costs and financial risks of climate tipping points and their integration in integrated assessment models (IAMs). The session opens with two papers assessing how structural model variations, including the consideration of tipping points, affect the social cost of carbon (SCC) in an evidentiary synthesis that combines a meta-analysis, an expert survey and a synthetic construction of SCC estimates using machine learning (paper 1) or in a modular, meta-analytic IAM combining different structural model modifications (paper 2). As such, these papers quantify the relative importance of tipping points for climate change impacts and their interactions with other crucial modeling features. Using META, the leading IAM for assessing tipping points, the following two papers investigate how an advanced representation of tipping points alters the SCC and the social costs of methane. Paper 3, among other things, implements a new Antarctic Ice Sheet module updates META’s downscaling of temperature change to CMIP6, amongst other improvements, and estimates the economic benefits of methane action, alongside new national-level and global SC-CH4 estimates, while paper 4 adds a new impact channel to assessing the costs of Atlantic Meridional Overturning Circulation (AMOC) slowdown. Finally, paper 5 quantifies the financial risks for stock investors posed by tipping points, underscoring the necessity of integrating them into risk assessments and stress tests. Together, the papers advance our understanding of the complex interplay between environmental change and economic impacts and yield important insights for climate policy.

Pesticide use in agriculture leads to environmental pollution and major health concerns. Two recent trends in farming have brought pesticides front and center: genetically modified (GM), herbicide-tolerant crops, and increased homogenization of agricultural landscapes. Here we present new insights on the impact of GM crop adoption on pesticide use and spillovers across farms and countries. The adoption of herbicide-tolerant GM crops has led to large increases in herbicide use – specifically the herbicide they are designed to tolerate. The paper by Ed Rubin and Emmett Saulnier focuses on the health effects of the increase in the use of herbicides (glyphosate). The paper by Anouch Missirian shows that the herbicide (dicamba) externalities from dicamba-tolerant GM adoption force the adoption of that new technology in neighboring fields. The paper by Jean-Sauveur Ay, Estelle Gozlan, and Emmanuel Paroissien looks at the pesticide interactions across farms through pest stocks. The final paper by Vasundhara Gaur, Frederik Noack, and Eduardo Souza-Rodrigues analyzes pesticide and spillovers across countries through general equilibrium effects.

The overarching theme of the papers presented in this session is social values in environmental and resource economics. Any analysis of environmental issues and policies requires a careful consideration of both facts and underlying social values. Over the past couple of decades, economists have largely focused on uncovering factual insights through excellent econometric, experimental, and quantitative research. However, this shift in the field often resulted in value judgments becoming implicit. The session aims to broaden the focus on social values and their applications in resource and environmental economics. The selected papers collectively contribute to this theme by exploring various dimensions, including the impact of disagreement on climate sensitivity on climate targets, the quantity-quality tradeoff in population ethics, the role of welfare weights in shaping environmental regulations, and the attitudes towards discounting and inequalities in theories of intergenerational justice.