Suchergebnisse

Peltzman's model of price regulation predicts inefficient prices for regulated firms; based on a constraint giving the trade‐off between economic profit and the regulated price, the price will be set between a competitive industry price and a monopoly price. This article generalizes the model for application to a wider class of trade‐offs, including municipal utilities that are not legally permitted to make a profit. Extending Peltzman's idea of political support functions, this article defines political feasibility relative to economic efficiency. A Pareto superior change with compensation is sufficient but not necessary for political feasibility; the Kaldor‐Hicks criterion is neither necessary nor sufficient for political feasibility. The generalization of Peltzman's model of public choice and the concept of political feasibility together explain why Tucson in 1976 and Los Angeles in 1993 adopted efficient water rates during droughts and why, 1 yr later, Tucson rescinded the rates and Los Angeles almost rescinded them. The concept of political feasibility explains why and how, after the drought, the Los Angeles innovations to rate design achieved efficiency and political feasibility, avoiding reversion to the previous, inefficient rates, by separating economic efficiency from political feasibility in both the rate design and the rate reform process.(JELD42, D70, H00, L38, L51, L97, Q25, Q28, Q48, Q58)

Water rates are designed to meet multiple objectives, typically resulting in trade‐offs among the objectives of economic efficiency, revenue sufficiency, and related revenue stability. Standard theory of natural monopoly is extended here to explain why long‐run marginal cost (LMC) can be greater than both average cost and short‐run marginal cost (SMC) for municipal water utilities. The distinctions between "benign monopoly rates" and "marginal cost rate design" favor LMC over SMC as the basis for economically efficient rate design. Taking into account conservation investments by consumers, SMC rates are economically inefficient, except during temporary shortages. The City of Los Angeles adopted economically efficient, revenue sufficient, and revenue‐stable water rates at the end of a prolonged drought. After the drought ended, Los Angeles (LA) modified the rate design, making the design politically feasible during normal rainfall years. Unique features in the LA rate design determine the allocation of consumer surplus among ratepayers, making the rate design politically feasible by sharing efficiency gains among customer classes. Revenue sufficiency and stability features in the rate design minimize adverse job effects on water utility management, reducing the frequency of rate hearings with an increasing block design. (JEL L51, L95, Q25, Q51)

This is a summary comparison and "first rough cut" cumulation of recent estimates regarding private and external costs of energy. The estimates of external costs take into consideration damage to health and property caused by air pollution from coal, oil, and gas; damage caused by acid rain from coal, and costs of reducing acid rain; costs of delaying global warming caused by carbon dioxide from coal, oil, and gas; national security costs of importing oil, and benefits of oil security; national security costs of minimizing damage from terrorist attacks on nuclear power plants; insurance subsidies for nuclear accidents; storage of nuclear waste; loss of nuclear reactors from accidents and safety risks; and benefits from additional nuclear safety requirements. The estimates of private costs focus on nuclear plants, coal, oil, gas, conservation, wind, solar power plants, and geothermal steam.

This paper describes categories of solar technologies and identijies those that are economic. It compares the private costs of power from solar, wind, nuclear, coal, oil, and gas generators. In the southern United States, the private costs of building and generating electricity from new solar and wind power plants are less than the private cost of electricity from a new nuclear power plant. Solar power is more valuable than nuclear power since all solar power is available during peak and mid‐peak periods. Half of the power from nuclear generators is off‐peak power and therefore is less valuable. Reliability is important in determining the value of wind and nuclear power. Damage from air pollution, when factored into the cost of power from fossil fuels, alters the cost comparison in favor of solar and wind power. Some policies are more effective at encouraging alternative energy technologies that pollute less and improve national security.

This volume will include scenarios of geophysical and economic impacts from global warming beyond a doubling of greenhouse gases. Analyses will examine geophysical, ecological, and economic impacts, physical and institutional lags, alternative scenarios with and without policy intervention, institutional change, political-economic barriers to effective policy, and prescriptions for change. Perspectives will include those from physical and biological sciences, as well as economics

Over the past 50 years, the rapid transformation of agricultural technology has provided the benefits of lower prices and a smaller share of income spent on food. Developing and applying synthetic chemicals was instrumental in lowering costs of production and in increasing yields. Conventional agriculture today relies on substantial use of synthetic chemicals as key inputs. This leads to increasing concern over negative externalities, including risks to both human health and the environment. In response to these concerns, organic food has emerged as a rapidly expanding industry. This paper examines the role of organic agriculture and other low‐input farming methods more sustainable within the context of policies designed to reduce negative externalities from using synthetic chemicals.