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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
"Are Wildfire Risk Mitigators More Prepared to Evacuate? Insights from Communities in the Western United States" (with Hannah Brenkert-Smith, Patricia Champ, and James Meldrum) (Accepted at Ecological Economics, 2025)
Working Papers
"Wildfire information sources and the acceptability of fuels treatments near select WUI communities in the Western United States" (with Kelly Wallace; Hannah Brenkert-Smith; Patricia A Champ; James R Meldrum; Christine Taniguchi; Julia B Goolsby; Colleen Donovan; Carolyn Wagner; Christopher M Barth; Josh Kuehn; Suzanne Wittenbrink
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"
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