This thesis consists of four essays on environmental and resource economics. The two first essays analyze the climate policy, the third one focuses on timber markets and the fourth combines a climate policy with timber markets.
The first essay examines business cycle fluctuations of an optimal emission price with a macroeconomic general equilibrium model. The analysis shows that emission price tends to be procyclical as its fluctuations are connected to the changes in the marginal utility of consumption. A quantitative assessment shows that the optimal fluctuation of emissions depends on the production technology in the energy sector.
The second essay examines the optimal allocation of new allowances in an emissions allowance market, when banking of allowances for later use is allowed. The allocation decision faces a time-consistency problem because the banking decision is forward looking. To tackle this issue we examine a Markov solution of the planning problem. The quantitative assessment with a climate policy shows that the regulator prevents the accumulation of the banked allowances, and tries to maintain a stable allowance price level.
The third essay constructs a competitive equilibrium timber supply from the binary final felling decisions of individual forest owners, when the forests are age-structured and timber demand varies randomly. The model gives a stand-level interpretation for a generic market-level model and an empirically testable structure for future studies. The numerical results suggest that the insights drawn from the preceding stand-level analysis may be unwarranted in a competitive equilibrium.
The fourth essay examines an optimal climate policy in the forest and energy sectors. In the essay we combine an age-structured forest, the carbon cycle, and the different ways of using timber in a single model and derive an optimal climate policy for this system. We analyze two different carbon accounting schemes and show that a climate policy can be based on either of these. The numerical results suggest that carbon sequestration into forest biomass has priority in the mitigation of atmospheric carbon concentration.
|Translated title of the contribution||Esseitä ympäristö- ja luonnonvarataloustieteestä|
- , Supervisor
- Uusivuori, Jussi, Advisor, External person
|Publication status||Published - 2019|
|MoE publication type||G5 Doctoral dissertation (article)|
- climate policy, timber markets, business cycles