Abstract: We examine the role that spot markets and physical inventories play in revealing to uninformed traders the expectations of informed traders. Although many papers investigate potential mechanisms by which futures markets may disseminate such information, the role of spot markets has not been examined in comparable detail. Because the incentive for speculative trading in futures contracts stems from the failure of spot markets to eliminate differences in beliefs regarding future market conditions, the scope for speculative trading in the futures market is therefore determined, but also limited, by the extent to which spot market transactions disseminate private information. Using a rational expectations approach, we show that equilibrium differences in beliefs are determined by specific characteristics of the underlying commodity, including storage costs, the amplitude of unexpected demand and supply shocks, the accuracy of information acquired by informed investors, the numbers of informed and uninformed investors, and the elasticity of demand and supply.

Abstract: Over the past several years, labeling schemes that focus on a wide range of environmental and social metrics have proliferated. Although little empirical evidence has been generated with respect to carbon footprint labels, much can be learned from our experience with similar product labels. We first review the theory and evidence on the influence of product labeling on consumer and firm behavior. Next, we consider the role of governments and nongovernmental organizations, concluding that global, multistakeholder organizations have a critical part to play in setting protocols and standards. We argue that it is important to consider the entire life cycle of a product being labeled and develop an international standard for measurement and reporting. Finally, we examine the potential impact of carbon product labeling, discussing methodological and trade challenges and proposing a framework for choosing products best suited for labeling.

Abstract: Researchers using stated preference (SP) techniques have increasingly come to rely on what we call “hypothetical baselines.” By the term “hypothetical baseline,” we mean that respondents are provided with a description of a current state, or baseline, but that this baseline is intentionally not the actual state of environmental quality, health, or other baseline condition. The SP researcher then poses a valuation question or choice task that is contingent, not on the existing status quo, but rather on the state of the world described in this new hypothetical baseline. In this paper, we argue that SP researchers have often used hypothetical baselines without carefully considering the cognitive challenges this poses for respondents or the difficulties this practice creates for advising policy makers. We present a simple typology of four types of SP studies, two of which rely on hypothetical baselines, and give six examples of conditions that an SP researcher may change to create a hypothetical baseline. We discuss four main reasons why SP analysts use hypothetical baselines in their research designs, plus some of the risks associated with the use of hypothetical baselines. Finally, we offer guidance for the use of hypothetical baselines in future SP surveys.

Abstract: Using advances in text analysis, we examine the content and timing of21,493 press releases issued by the U.S. Environmental Protection Agency (EPA) between 1994 and 2009. Press releases announcing enforcement actions or regulatory changes were issued more often on Fridays and before holidays, a time when news has the least impact on media coverage and financial markets. Changing the timing of press releases may increase deterrence through awareness of regulation and market reaction to environmental news. We find no evidence of regulatory capture. We compare text analysis techniques that allow data collection from sources previously too expensive to access.

Abstract: Commercial and residential buildings are responsible for 42 percent of all U.S. energy consumption and 41 percent of U.S. CO2 emissions. Engineering studies identify several investments in new enegy-efficiency equipment or building retrofits that would more than pay for themselves in terms of lower future energy costs, but homeowners and businesses generally do not have good information about how to take advantage of these opportunities. Energy auditors make up a growing industry of professionals who evaluate building energy use and provide this information to building owners. This paper reports the results of a survey of nearly 500 home energy auditors and contractors that Resources for the Future conducted in summer 2011. The survey asked about the characteristics of these businesses and the services they provide, the degree to which homeowners follow up on their recommendations, and the respondents’ opinions on barriers to home energy retrofits and the role for government. Findings from the survey suggest that the audit industry only partially is filling the information gap. Not enough homeowners know about or understand audits, and the follow-through on recommendations once they do have audits is incomplete. But the survey findings suggest that low energy prices and the high cost of retrofits may be more responsible for these outcomes than failures of information.

Abstract: Recent legislation has prompted federal regulatory agencies inside and outside the executive branch to develop numerous new major regulations. The Wall Street Reform and Consumer Protection Act alone contains more than 300 provisions expressly stating that rulemaking is required or permitted, although there is uncertainty about the number of rules because some provisions give regulatory agencies authority but not an obligation to issue a rule, some provisions may result in multiple rules, and rules may be used to implement yet other provisions that do not explicitly require or grant rulemaking (Copeland 2010). In summer 2010, the Commodities Futures Trading Commission (CFTC) released a list of 30 areas of rulemaking to implement the Wall Street Reform and Consumer Protection Act (CFTC 2010). The CFTC, like other “independent” regulatory commissions, develops and issues regulations outside the process of regulatory planning and review of the 1993 Executive Order 12866, continued in President Obama’s Executive Order 13563, “Improving Regulation and Regulatory Review” (President Obama 2011). These executive orders, like President Reagan’s 1981 Executive Order 12291, extend to regulatory agencies whose heads serve at the pleasure of the President, such as the Environmental Protection Agency and the Food and Drug Administration, but not to agencies intended to be independent of the President, whose heads can be removed only for cause. These independent agencies include the Consumer Product Safety Commission (CPSC), the Nuclear Regulatory Commission (NRC), the Federal Trade Commission (FTC), the Securities and Exchange Commission (SEC), and the Federal Reserve Board. Regulations from these independent regulatory commissions (IRCs) are typically developed without adherence to the Executive Order 12866, which requires that major regulations be subject to an analysis of benefits and costs. Here we address the practice of regulatory impact analysis at IRCs. We explore whether information available to the public about the expected consequences of regulatory decisions by IRCs is comparable to or less specific than that made available by executive branch agencies issuing comparable regulations. We focus on only those agencies identified by the federal Office of Management and Budget (OMB) as having issued major final regulations over the past 10 years. We ignore other independent regulatory commissions and agencies, including some identified as such by statute (i.e., the Federal Deposit Insurance Corporation, the Federal Housing Finance Board, the Federal Maritime Commission, the Mine Enforcement Safety and Health Review Commission, the National Labor Relations Board, the Occupational Safety and Health Review Commission, and the Postal Rate Commission) (Paperwork Reduction Act, Section 3502(5)). We do not consider regulatory actions by some agencies that are clearly important, such as the International Trade Commission, whose mission includes administering the U.S. trade remedy laws within its mandate in a fair and objective manner. We do not assess whether final regulations recently issued by these agencies might rise to the level of “major,” nor do we explore the quality of any economic analysis they may conduct in support of regulations.

Abstract: Economic analyses of nature must somehow define the “environmental commodities” to which values are attached. This paper articulates a set of principles to guide the choice and interpretation of nonmarket commodities. We describe how complex natural systems can be decomposed consistent with what can be called “ecological production theory.” Ecological production theory—like conventional production theory—distinguishes between biophysical inputs, process, and outputs. We argue that a systems approach to the decomposition and presentation of natural commodities can inform and possibly improve the validity of nonmarket environmental valuation studies. We raise concerns about the interpretation, usefulness, and accuracy of benefit estimates derived without reference to ecological production theory.

Abstract: It is increasingly understood that transport infrastructure and services are critical elements to achieving poverty reduction, gender equality, and sustainable development, but relevant methods tosystematically characterize and address differences in mobility and access are lagging. This paper presents a series of maps based on an integrated pilot application of geographical information systems (GIS) and participatory sketch mapping to elicit and evaluate differential mobility and access patterns of villagers in the highlands of rural Lesotho. Fieldwork was carried out in the Senqu and Senqunyane Valleys in southern Lesotho—among the most isolated areas in the country—to link local-level information and perspectives on transport and other services to the enhanced GIS at the Ministry of Public Works and Transport. The resulting cognitive maps and focus group interviews reveal significant gender differences in mobility and access with implications for healthcare, education, and transport planning; they also provide a basis for cross-sectoral participatory decisionmaking through the integrated GIS.

Abstract: The gender dimensions of spatial exclusion are important components of social marginalization and vulnerability. Transport infrastructure and services play a critical role in supporting mobility and access to basic services vital to achieving poverty reduction, gender equality, and sustainable development objectives. This paper explores how Geographic Information Systems (GIS) technology can support integrated evaluations of the gender dimensions of transport using an innovative combination of community participatory mapping, new gender-disaggregated household-level Demographic and Health Surveys (DHS), and transport sector GIS data. The pilot study focuses on three countries, Lesotho, Ethiopia, and Ghana, and reveals new opportunities for cross-scale evaluation.

Abstract: In developing countries, weak environmental regulatory institutions often undermine conventional command-and-control policies. As a result, these countries are increasingly experimenting with alternative approaches that aim to leverage nonregulatory “green” pressures applied by local communities, capital markets, and consumers. This article reviews three strands of the empirical literature on this trend. The first strand examines the direct impact of nonregulatory pressures on developing country firms’ environmental performance. The second and third strands analyze policy innovations reputed to leverage these pressures—public disclosure and voluntary regulation. I find that the econometric evidence that nonregulatory pressures have had a direct impact on firms’ environmental performance is thin, at least partly because disentangling such impacts is inherently difficult. Nevertheless, existing empirical research suggests that public disclosure programs have spurred emissions reductions by particularly dirty firms. The evidence on voluntary regulatory policies is far more mixed. Taken as a whole, the literature suggests that policymakers would do well to exercise caution in promoting and implementing alternative pollution control tools: they are only likely to be effective in some incarnations and situations.

Abstract: In developing countries, weak environmental regulatory institutions often undermine conventional command-and-control policies. As a result, these countries are increasingly experimenting with alternative approaches that aim to leverage nonregulatory "green" pressures applied by local communities, capital markets, and consumers. This article reviews three strands of the empirical literature on this trend. The first strand examines the direct impact of nonregulatory pressures on developing country firms' environmental performance. The second and third strands analyze policy innovations reputed to leverage these pressures—public disclosure and voluntary regulation. I find that the econometric evidence that nonregulatory pressures have had a direct impact on firms' environmental performance is thin, at least partly because disentangling such impacts is inherently difficult. Nevertheless, existing empirical research suggests that public disclosure programs have spurred emissions reductions by particularly dirty firms. The evidence on voluntary regulatory policies is far more mixed. Taken as a whole, the literature suggests that policymakers would do well to exercise caution in promoting and implementing alternative pollution control tools: they are only likely to be effective in some incarnations and situations.