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SUSTAINABLE ECONOMIC DEVELOPMENT SEMINAR 2013-2014

 
Please click here for the presentation of the SED seminar and contact details

 

 
 
Program May 2014
 
 
May 20, 2014
14:00 - 15:00
Location: Ground Floor Library, Department of Economics, Building 081

► Gwenaël ROUDAUT (Dept of Economics, Ecole Polytechnique)

"The Relationships between Managers, Shareholders and Stakeholders: Why do Boards Care about CSR?"


 
This paper investigates empirically the relationship between multidimensional CSR performances (extra-financial rating) and board composition for French listed Firms (SBF120) in order to determine how CSR and corporate governance interact. Consistent with the CEO's opportunistic behavior hypothesis, CSR and environmental performances are negatively correlated with the proportion of independent directors (monitoring ability). In the opposite, social and business performances are negatively related with the proportion of insiders (entrenchment ability). Consistent with the stakeholders' conflicts resolution hypothesis, social performance is positively correlated with the proportion of each stakeholder representatives (employees, business -customers and suppliers-, support –bankers- and extern stakeholders) and business performance only with the proportion of business directors. On the contrary, CSR and environmental performances are positively related with the proportion of employees’ representatives and negatively with the proportion of support directors and extern directors. Environmental commitment may then exacerbate conflicts with stakeholders except with employees.
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May 27, 2014
14:00 - 15:00
Location: Ground Floor Library, Department of Economics, Building 081

 Stéphanie MONJON (Paris Dauphine)

Title: "Would climate policy improve the European energy security?"    

Abstract: Energy security improvement is often presented as a possible co-benefit of climate policies. This paper evaluates this claim. It presents a methodology to investigate whether climate policy would improve energy security, while accounting for the difficulties entailed by the many-faceted nature of the energy security concept and the large uncertainties on the determinants of future changes in energy systems. To do so, it uses a set of indicators in a four-dimension analysis grid of the energy security concept, and a database of scenarios exploring the uncertainty space. The results, focusing on Europe, reveal there is no unequivocal effect of climate policy on all the dimensions of energy security and that some trade-offs are involved. The many-faceted nature of energy security matters: energy security has several dimensions, some of which can be heightened by climate policy. Time matters: the effect of climate policy on energy security depends on the time horizon considered. Last, these results are robust to key uncertainties on the future potential and costs of technologies, on future improvements in energy efficiency, on fossil fuel resources and markets and on drivers of economic growth. However, some of these uncertainties determine the magnitude of the effect of climate policy on energy security indicators.
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Archives

April 1, 2014
14:00 - 15:00
Location: Ground Floor Library, Department of Economics, Building 081

► Bert SCHOLTENS (University of Groningen and University of St Andrews)

Title: "Towards a Theory of Responsible Investing"

Joint work with Lammertjan Dam ( University of Groningen)
 

Abstract: Studies that link corporate social and financial performance usually find a positive association between the two. However, this literature does not establish a significant impact of socially responsible investing on stock market returns. We develop a coherent framework and try to solve this paradox. This framework is important for all research on responsible investment as it offers the theoretical underpinnings for the actual behavior of market participants. We associate corporate social performance with key financial accounting ratios like the market-to-book ratio (market value of the firm in relation to accounting value), return on assets, and stock market return. We conclude that there is a strong theoretical foundation for a positive relationship between corporate social responsibility and financial performance. We illustrate that the empirical literature about responsible investing is well in line with our model.

Please do not hesitate to contact Alena Kotelnikova for any questions or requests regarding the SED seminar.

 

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April 29, 2014
14:00 - 15:00
Location: Ground Floor Library, Department of Economics, Building 081

► Mar REGUANT (Stanford GSB)
 

"Blowin' in the Wind: Sequential Markets, Market Power and Arbitrage" 

Joint work with Koichiro Ito (Boston University)

Abstract: We study strategic behavior of wind producers in electricity markets, and examine their dynamic adjustments through sequential markets. Wind production is uncertain and volatile, and therefore participation of wind farms in these markets is potentially beneficial. However, we show evidence that these sequential markets exhibit systematic price differences, leaving room for arbitrage. In particular, there is a day-ahead premium, with forward prices being larger than real-time prices. As a result, wind farms overstate their production over 20% on average at the day-ahead market, only slowly adjusting their commitments to expected production as they get closer to the time of delivery. Consistent with the premium being driven by market power, wind farms that have market power do not exploit price differences, whereas competitive farmers exploit these gaps. These results show how pre-existing distortions in markets can have unintended consequences, making the integration of wind power more challenging.

  
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March 4, 2014
14:00 - 15:00
Location: Ground Floor Library, Department of Economics, Building 081

► Philippe QUIRION (CIRED)

Title: "Tradable Renewable Quota vs. Feed-In Tariff vs. Feed-In Premium under Uncertainty"

co-written with Robert Marschinski (MCC, PIK & TU-Berlin)

Abstract: We study the performance under uncertainty of three renewable energy policy instruments: a Tradable Renewable Quota (TRQ) requires producers of electricity from fossil-fuel sources to buy a given number of green certificates per unit of output. A Feed-In-Tariff (FIT) pays a fixed premium price to suppliers of electricity from renewable energy sources, while a Feed-In-Premium (FIP) pays them a fixed subsidy on top of the market price. We develop a stylized two-period, two-sector model of the electricity market, where renewables are characterized by a positive learning externality, which the regulator aims to internalize. Assuming shocks on the level of the two supply curves or on total electricity demand, we analytically derive the dominance conditions that determine the instruments’ relative welfare ranking. Although our results generally confirm the key role of the slopes of marginal benefits and costs associated with the policy, the specific instrument ranking depends on which type of uncertainty is considered, and whether shocks are permanent or transitory. However, we find that a high learning rate generally favours the FIT, and that TRQ is mostly dominated by the other two instruments. The latter result is also confirmed by a numerical application to the US electricity market.

Please do not hesitate to contact Alena Kotelnikova for any questions or requests regarding the SED seminar.

 

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February 11, 2014
14:00 - 15:00
Location: Ground Floor Library, Department of Economics, Building 081

► Elena ESCRIG-OLMEDO (Jaume I University)

Title: "BALANCED AND DYNAMIC CSR PERFORMANCE MEASUREMENT IN COMPANIES "

co-written with M.J. MUÑOZ-TORRES, J.M. RIVERA-LIRIO, M.A. FERNÁNDEZ-IZQUIERDO

Abstract: Sustainability ratings agencies evaluate companies in economic, social, environmental and corporate governance terms. However, the scoring modes employed by the rating agencies to evaluate the social and environmental performance are associated with some problems: the difficulty of defining the border between sustainability and non-sustainability when using an abstract concept, the possible offsetting of negative scores with good scores, and the lack of adaptation of rating criteria and rating evaluation methodologies to the preferences of investors and companies.To overcome these difficulties, two fuzzy multi-criteria decision-making methods are proposed: Fuzzy Inference System and Fuzzy TOPSIS method.The subjectiveness and imprecision of the evaluation process are modeled as fuzzy numbers by means of linguistic terms. These methods for measuring sustainability address the complexity of the concept and enable the incorporation of expert knowledge into the system of assessment.The proposed methods are applied to measure the environmental performance in European, North American, and Australasian agri-food companies. Besides the emphasis on theory and fundamental research nature, the paper has practical and social value. From business perspective, the results from this research will enable analysing the positioning of any organisation in term of its contribution to sustainability development. Such positioning, make it easier for organizations and their stakeholders, to access to information for decision making about sustainable management. The positioning, for example, would allow organisations to evaluate their own polices and processes linked to sustainability, but also to benchmarking their results with those from other organisations having similar characteristics (size, sector, etc.)From financial market perspective, this research will enable improving the investment decisions making of social responsibility investors. Moreover, this methodology to evaluate the sustainability of the companies will enable designing SRI portfolios and promoting the growth of socially responsible financial products. From a global perspective, this research will enable the reader to have a better understanding of the interaction between CSR and financial performance.
 
Please do not hesitate to contact Alena Kotelnikova for any questions or requests regarding the SED seminar.
 
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January 14, 2014
14:00 - 15:00
Location: Ground Floor Library, Department of Economics, Building 081

Scott BARRETT (Columbia University)

Title: "Global Collective Action and the Choice of Institutions"

 

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January 28, 2014
14:00 - 15:00
Location: Ground Floor Library, Department of Economics, Building 081

► Hélène OLLIVIER (Paris School of Economics, CNRS)

Title: "Product Mix, Trade, and the Environment: Theory and Evidence from Indian Manufacturing"

Co-written with Geoffrey Barrows


 
Abstract: We develop a multiproduct multi-factor model with heterogeneous firms, variable markups, and monopolistic competition in which each product has a specific environmental emission intensity. Trade affects firm-level emission intensity through the endogenous response of product mix. First, we find that when varieties that are away from the core competency of the firm are greener, then tougher competition increases firm-level emission intensity, whereas when they are dirtier, then tougher competition improves the environmental performance of the firm. Second, we find that even though trade may cause some firms to become dirtier through product mix changes, selection effects dominates at the industry level so that trade still generates both economic and environmental efficiency gains. Third, we investigate the correlation between unit cost and emission intensity in a unique panel dataset of Indian Manufacturing firms which reports both physical output and energy input by product. We find that the sign of the correlation varies by industry, but that in aggregate, core varieties tend to be dirtier. Fourth, we find that exporting increases firm-level emission intensity, as well as the output share of core products within a firm.
 
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Program December 2013
December 3rd, 2013
14:00 - 15:00
Location: Ground Floor Library, Department of Economics, Building 081

Florian BERG  (Amundi)

"A comparison of the impact of environmental, social and governmental performance on the cost of debt across Europe, North America and Asia/Pacific"
 

Abstract: I analyze the link between the environmental, social and governmental performance of a firm and its cost of debt financing. The environmental, social and governmental performance is measured by ratings on the aggregated and disaggregated level stemming from Amundi. The cost of debt financing is measured by the credit spread of a firm's outstanding bonds. Surprisingly, the link between ratings and the spread seems to vary across different regions. In Europe, environmental, social and governmental performance seems to be positively correlated with the spread. In contrast, the cost of debt tends to decreases with a good social and governmental policy in North America , albeit statistically insignificant. Debt in Asia/Pacific does not seem to be linked to the environmental, social or governmental performance at all.
 
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December 17th, 2013
14:00 - 15:00
Location: Ground Floor Library, Department of Economics, Building 081

Stephan BEHRINGER ( Ruprecht-Karls-University) 

Joint work with Thorsten Upmann

Title: "Optimal Harvesting of a Spatial Renewable Resource
 

Abstract: In this paper we investigate optimal harvesting of a renewable natural resource. While in the standard approach the resource is located at a single point in space we allow for the resource to be distributed over the plane. Consequently, an agent who exploits the resource has to travel from one location to another. For a fixed planning horizon we investigate the speed and the time path of harvesting chosen by the agent. We show that the agent adjusts the speed of movement so that he accomplishes to visit each location only once, even in the absence of travelling cost. Since he does not come back to any location for a second harvest, it is optimal for him to fully deplete the resource upon arrival. A society interested in conserving some of the resource thus has to take measures suitable to limit the exploitative behaviour of the agent.
 
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   Program November 2013
November 5th, 2013
14:00 - 15:00
Location: Ground Floor Library, Department of Economics, Building 081

Dominique BUREAU (MEDEE) 

Title: Transition écologique et investissements verts" Environment and Economic Growth - The role of green investment"
 
Résumé : Derrière la notion de croissance soutenable, il y a la prise de conscience que la croissance économique utilise actuellement des services, notamment ceux fournis par les énergies émettrices de gaz à effet de serre, dont la production dégrade les actifs naturels. Leur épuisement ou leur détérioration très rapide la menace à terme. Pour rétablir sa soutenabilité, on peut agir sur l’offre ou la demande pour ces services, ou trouver des modes de production plus économes de ces ressources. La composition optimale de ces deux derniers types d’actions et, en conséquence, le rôle de l’accumulation de capital vert dans la transtion à opérer dépendent de la comparaison des élasticités relatives à la demande d’une part, et à la substituabilité entre capital vert et ressources naturelles, d’autre part.
 
Si, comme le suggèrent beaucoup d’études sectorielles, le gisement sur la demande de services ne suffira pas, une réallocation importante du capital, vers le capital vert, est nécessaire, qui requiert une politique macroéconomique appropriée, dégageant une épargne suffisante et orientée vers ce type d’investissement. Certes, leur déploiement sera progressif et doit se faire « par ordre de mérite ». Mais il demeure une correction immédiate des structures de production à réaliser, qui doit être intégrée dans les stratégies macroéconomiques. De plus, si la productivité du capital vert est faible, son accumulation, nécessaire pour éviter l’épuisement des actifs naturels, tend à prélever progressivement l’essentiel de l’épargne. Dans le cas plus favorable, le taux d’épargne rejoint progressivement son niveau habituel.
 
L’introduction, dans un modèle de croissance de type AK, d’un actif non renouvelable permet d’esquisser un cadre pour construire des modèles de croissance intégrés. A cette fin, les différentes facettes d’une politique de transition énergétique ou écologique sont passées en revue, notamment ses impacts sur l'accumulation du capital vert, puis sur le partage optimal entre épargne et consommation.
 
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November 19th, 2013
14:00 - 15:00
Location: Ground Floor Library, Department of Economics, Building 081

Romina BOARINI (OCDE) http://www.oecd.org/forum/speakers/romina-boarini.htm
 

Title:" Beyond GDP: Is There a Law of One Shadow Price?" co-authored with Fabrice Murtin (OCDE) , Juan Cordoba (Iowa State University), Marla Ripoll (University of Pittsburgh)
 
Abstract: This paper builds a welfare measure encompassing household disposable income, unemployment and longevity, while using two different sets of “shadow prices” for non-income variables. The valuations of vital and unemployment risks estimated from life satisfaction data (“subjective shadow prices”) and those derived from model-based approaches and calibrated utility functions (“objective shadow prices”) are shown to be broadly consistent once a number of conditions are fulfilled. Subjective shadow prices appear to be inflated by the downward bias in the coefficient of the income variable in life satisfaction regressions conducted at the individual level, bias which is largely removed when running regressions at the country level. On the other hand, objective shadow prices are typically underestimated as: i) the valuation of the unemployment risk is assumed to take place under the ‘veil of ignorance’ (i.e. for a representative agent that has no information on her current or future conditions); ii) the standard model relies on a Constant Relative Risk Aversion (CRRA) utility function, which has no specific relative risk aversion parameter for unemployment and vital risks; iii) the Value of Statistical Life that is used in standard approaches pertains to the adult lifespan while life expectancy at birth covers the entire lifetime.
Please do not hesitate to contact Esther Delbourg for any questions or requests regarding the SED seminar.
 
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Program October 2013 

October 8th, 2013
14:00 - 15:00
Location: Ground Floor Library, Department of Economics, Building 081

Juan  Pablo MONTERO (PUC-Chile)  www.economia.puc.cl/jmontero

Title:  “On the diffusion of a cleaner technology: The effect of driving restrictions on fleet turnover” Authors: F. Gallego, J.-P. Montero, and H. Barahona"
 

Abstract: Because of the acute deterioration in air quality, in the early 1990s the city of Santiago introduced a once-a-week restriction on older vehicles while leaving new vehicles (those with catalytic converters) exempt from the restriction. Past research has been highly critical about these restriction policies because of their unintended long-run effects of more cars and pollution. We study the effect of the Santiago restriction on fleet turnover using a panel data of fleet evolution at the municipality level and using those not affected by the restriction as control group. Our preliminary results show, unlike previous literature, a positive effect in terms of both a faster turnover towards cleaner cars and a more rapid elimination of older cars. We elaborate on the mechanisms at play that may explain these results and test for alternative hypothesis. At the end, we argue that the effect on local pollution has been necessarily positive by displacing older vehicles to cities that do not suffer from local air pollution (we cannot say the same, at least yet, for global air pollution).
 

Please do not hesitate to contact Esther Delbourg for any questions or requests regarding the SED seminar
 

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October 15th, 2012
14:00 - 15:00
Location: Ground Floor Library, Department of Economics, Building 081

Arnaud GOUSSEBAILE (Dept of Economics Ecole Polytechnique) 

Title: "Natural disasters and urban development: insurance policies and zoning restrictions"
 

Abstract: Many cities in the world are located in areas prone to natural disasters creating a trade-off between transport costs and expected losses in urban development. I investigate this question using an urban model in which households are subject to transport costs and disaster risks.While competitive insurance markets should implement Pareto optimal settlements, economies with insurance subsidization or assistance could be Pareto improved with the establishment of zoning restrictions. Considering the extreme case of a mandatory uniform insurance policy, I derive the optimal zoning restrictions for the city. In this case as in the case of competitive insurance, the upper risk threshold delimiting the inhabited areas usually decreases as the transport cost to the city center increases.

Please do not hesitate to contact Esther Delbourg for any questions or requests regarding the SED seminar

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