Research

Job Market Paper

"Linking Cap-and-Trade Systems with Heterogeneous Co-Benefits from Abatement"

Abstract: Expanding the coverage of cap-and-trade systems is essential for improving global environmental outcomes and can lower the economic costs of achieving climate goals. However, linking cap-and-trade systems to new sectors presents various challenges for policymakers. This paper develops a theoretical model to study the linkage of existing markets to new sectors using two policy instruments: new emissions permit allocations and trading ratios. I show that first-best outcomes can be achieved by (i) setting trading ratios equal to the ratio of co-benefits from abatement between sectors and (ii) setting new permit allocations based on the efficiency of the initial cap. Importantly, regulators cannot achieve first-best solutions if there are constraints on one of these policy instruments. Leveraging my theoretical model, I simulate the European Union Emissions Trading System's decision to link its cap-and-trade system to the aviation sector. Using estimates from the EU, this paper quantifies welfare from the initial linkage and demonstrates that alternative choices of trading ratios and permit allocations could have improved welfare by over €640 million annually.

Link to paper: https://drive.google.com/file/d/1aR720kLmg_dC3AXlA_1zXloQIcNQ1t05/view?usp=sharing 

Publications

·   Webster, G. (2024). Free fare for better air? Evaluating the impacts of free fare public transit on air pollution. Transportation Research Part A: Policy and Practice, 184, 104076.

·   Webster, G., Brenkert-Smith, H., Champ, P. A., Meldrum, J. R., Wallace, K., Donovan, C., Wagner, C., & Taniguchi, C. (2025). Are wildfire risk mitigators more prepared to evacuate? Insights from communities in the Western United States. Ecological Economics, 236, 108638.

·   Wallace, K., Brenkert-Smith, H., Champ, P. A., Meldrum, J. R., Webster, G., Taniguchi, C., Wagner, C., & Wittenbrink, S. (2025). Wildfire risk information sources and the acceptability of fuels treatments near select WUI communities in the Western United States. Forest Policy and Economics, 176, 103537.

Working Papers

• “When a good thing goes bad: changes in acceptability of fuels treatments after an escaped prescribed fire” (with Patricia Champ, James Meldrum, Hannah Brenkert-Smith and Kelly Wallace)

• “Wildfire Risk Perceptions Differ Between Residents and Professionals in Wildland-Urban Interface Communities Across the Western United States” (with Kelly Wallace, Patricia Champ, Hannah Brenkert-Smith and James Meldrum)

• “Is wildfire mitigation on private property the missing link for addressing the insurability problem?” (with Kelly Wallace, Patricia Champ, Hannah Brenkert-Smith and James Meldrum)

• “Analysis of Utilizing Remote Sensing Data for Wildfire Risk Assessments” (with Hannah Brenkert-Smith)

• “Using mitigation discounts to improve wildfire insurability: a certification approach ” (with Jim Webster)

Work In Progress

“Sweating through the Night: How Nighttime Heat Affects Students Outcomes” (with Elizabeth Sorensen Montoya)

“Home Court Advantage or Referee Bias? Evaluating the Impacts of Home Fans on College Basketball”

"Evaluating the Costs of Wildfires on Water Quality" (with Elizabeth Sorensen Montoya)

"All Dried Up: Understanding the impacts of drought on healthcare and education expenditures In Sub-Saharan Africa"