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CIRANO-CIREQ Workshop on Environmental and Natural Resource Economics

Friday 27 Jan 2023
From 9:30AM To 12PM

This workshop is intended for researchers and doctoral students in economics who are interested in natural resource and environmental economics. 

The January 27 workshop will host Alicia Bassière, PhD student, HEC Montréal and Yoan Wallois, PhD student, Université de Lille.

 

  • Alicia Bassière: Moving Forward Blindly: Capacity Planning, Uncertainty, and Environmental Targets

The energy industry currently faces significant uncertainty in future demand and supply. Despite this, policies for decarbonizing the power sector are often based on predetermined scenarios. In this paper, we develop a dynamic stochastic model of generation capacity investment to evaluate the consequences of neglecting uncertainty under ambitious environmental targets. The model is calibrated using hourly data from the German electricity system for the period 2015-2020. The results show that disregarding uncertainty results in vastly underestimating the cost of decarbonization and hinders reaching environmental targets. Our study suggests a practical approach of focusing on a more pessimistic, predetermined scenario as a better solution.

 

  • Yoan Wallois: Multi-dimensional Environmental Legislation Stringency Index

With climate change and ecosystems collapse, environmental issues are becoming critical to modern societies. In response, policymakers around the world are introducing a growing number of environmental legislations that disrupt the environment-socioeconomic nexus. Identifying environmental policy instruments implemented worldwide and quantifying their stringency would allow for significant new developments in the evaluation of such policies. The existing literature offers databases covering a limited number of countries, years, and environmental aspects. This research bridges this gap by introducing the original comparative Multi- dimensional Environmental Legislation Stringency Index (MELSI). Available for 201 countries, from 1950 to 2020, the MELSI is a composite index incorporating seven dimensions of the environment: "Agriculture", "Ecosystem management", "Energy and air pollution", "Forest Management", "Freshwater management", "Land and Sea", and "Waste management". The MELSI also distinguishes adaptation/mitigation policies and Command-and-control/market based policy instruments. This dataset provides comprehensive new insights on environmental policies, strongly relevant for future environmental policy evaluations and recommendations.

 

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