00:00 Hello,
00:00 everyone,
00:00 and,
00:01 and welcome to the first seminar of the WDR 2025 seminar series.
00:05 I'm Xavi Jinne.
00:06 I'm the director of this year's WDR which,
00:09 uh,
00:09 as you may know,
00:10 it's entitled Leveraging Standards for Development.
00:13 So,
00:13 as preparation for the report,
00:15 we've commissioned a series of background
00:17 papers on various topics around standardization.
00:20 And so we want the seminar series to allow the authors of the,
00:23 of the papers to present their,
00:25 their work.
00:25 So,
00:26 we're very delighted to have
00:28 Stefan Ambek,
00:29 who's a professor at uh Toulouse School of Economics
00:31 and director of the TSC Energy and Climate Center.
00:35 So,
00:35 Professor Ambeg will talk about
00:37 when and how standards can be used as a
00:39 tool for public policy in addressing environmental concerns.
00:43 So,
00:44 Professor,
00:44 you have around 40 minutes,
00:46 but,
00:47 but we,
00:47 as,
00:48 as,
00:48 as mentioned,
00:48 we welcome questions along the way.
00:50 So for the audience,
00:52 uh,
00:52 you know,
00:52 if you want to ask a question,
00:54 simply raise your hand and I'll,
00:56 I'll call your name in the order you,
00:57 you raise a hand.
00:58 And so,
00:59 so let's hope to have a lively,
01:01 lively debate.
01:02 Uh,
01:03 so,
01:03 uh,
01:04 Stefan,
01:04 professor,
01:04 the,
01:05 the,
01:05 the floor is yours.
01:06 Thank you.
01:07 Thank you,
01:08 Javier.
01:09 Thank you everybody for
01:10 this opportunity to share my research and
01:14 topics and
01:16 Uh,
01:16 well,
01:17 topics I'm working on for quite a long time.
01:22 So,
01:23 um,
01:24 the,
01:25 my background,
01:26 uh,
01:27 report is really about environmental standards.
01:30 So the focus is on
01:32 standards as a way to
01:34 Improve
01:36 the environment,
01:37 to reduce pollution and to manage the exploitation of natural resources.
01:44 So then the,
01:44 the,
01:45 this is the,
01:46 the,
01:47 well,
01:47 the,
01:48 the outline of,
01:49 of,
01:49 of the,
01:49 of the report.
01:51 Uh,
01:52 so first,
01:53 the first question is,
01:54 um,
01:55 Uh,
01:55 how you place the environmental standard in the mix of policy instruments.
02:01 So then the question is,
02:02 what are the policy instruments to tackle environmental issues?
02:06 Uh,
02:07 so then I will talk about the typology of
02:09 3 types of instruments and define those instruments,
02:12 provide examples
02:13 and see how standard
02:15 fit on,
02:16 on these,
02:17 uh,
02:18 background.
02:20 Then the next question is,
02:22 uh,
02:22 well,
02:23 given we have several instruments to reduce pollution,
02:28 when do we should use standard?
02:29 When standard should be part of the solution for uh
02:33 improving the environment?
02:36 Uh,
02:36 that's the first point.
02:37 The second point is,
02:38 uh,
02:39 if we use standard,
02:41 then,
02:41 uh,
02:42 should we use other instruments to complement the policy?
02:47 Um,
02:47 so the question is,
02:48 what are the mechanisms?
02:49 Are there complement substitute?
02:53 Then I will talk about two ways to see standards,
02:57 uh,
02:57 voluntary standards and mandatory standards.
03:02 So,
03:02 um,
03:03 uh,
03:04 what,
03:04 what are they?
03:05 How do they work?
03:07 Should we make standard voluntary or mandatory?
03:10 Um,
03:11 are there complement or substitute?
03:15 And then at the last,
03:16 the last part of the report,
03:18 I'll talk about the interplay between
03:21 environmental standards and international trade.
03:28 OK.
03:29 So what about the policy instruments to reduce
03:32 pollution and improve the management of natural resources?
03:36 So usually in economics,
03:38 we distinguish between
03:40 2 or 3
03:42 types of instruments.
03:44 The command and control instruments that are,
03:47 you know,
03:47 everything which is related to the technology.
03:49 So these are really engineering type of instruments.
03:52 So
03:53 basically you impose some constraint on the technology,
03:57 uh,
03:58 directly or
04:00 through some
04:02 constraint on input on,
04:04 on pollution levels.
04:08 The second type of instrument are what is called the market-based,
04:13 so you relied on market mechanisms to induce a reduction
04:17 of pollution to incentivize firms and consumers to reduce their
04:22 polluting emissions.
04:24 So this is kind of instrument that talks to economists.
04:30 Uh,
04:30 because you,
04:31 we actually,
04:31 we,
04:32 you,
04:32 you,
04:32 you rely on economic mechanism.
04:36 And then the third type of instrument,
04:38 which is something that has been
04:41 analyzed in the last 20 years in economics,
04:44 which was well known in psychology.
04:47 are what are called the information-based instruments.
04:50 Everything which is related to
04:53 information,
04:53 the,
04:54 the framing of product,
04:56 uh
04:57 sometimes,
04:57 they are called nudges.
04:59 So the idea here is that you,
05:01 you don't.
05:03 Put any
05:04 technical constraint,
05:05 you don't put
05:07 any price,
05:08 so you don't rely on
05:10 prices,
05:11 but you rely on information.
05:13 You,
05:13 you,
05:13 you give information.
05:15 Uh,
05:16 and you're given them information in the way that you would change,
05:18 you would like to change the behavior of
05:21 stakeholders,
05:22 firms,
05:23 or consumers in the right way,
05:25 in the way of reducing their pollution.
05:28 Oh,
05:28 you say they are the pollution or they are
05:30 harmful impact on the environment.
05:35 So let's be,
05:36 let's me talk,
05:38 start with the command and control instruments.
05:42 So as I said,
05:43 there are,
05:43 these are mostly technical standards.
05:47 So you impose some technology,
05:50 you ban some pesticides,
05:52 some inputs,
05:53 you ban other technology,
05:55 you put some restriction on the technology used.
05:58 So for instance,
05:59 you oblige a coal power plant to
06:03 install some kind of scrubber
06:06 to filter their CO2 and NOx emissions.
06:11 Are you um
06:13 And oblige them to use less.
06:17 polluting inputs like coal with a low sulfur content
06:22 or like fuel with less
06:25 no lead or
06:27 less sulfur.
06:30 So these are,
06:31 you know,
06:32 very specific measures on the technology.
06:36 Uh,
06:36 you have some light
06:39 way to restrict standards which are emission
06:43 standards.
06:44 So instead of
06:45 specifying the technology to use,
06:48 you
06:49 set limits on
06:53 polluting emissions.
06:55 So you can uh
06:57 limit particulate matters emission,
06:59 docks,
07:00 SO2,
07:01 uh,
07:01 you can set uh
07:03 energy efficiency standard expressed in terms of uh kilowatt per square or
07:08 in terms of CO2 emissions.
07:11 Uh,
07:11 so these are
07:13 usually mandatory,
07:14 so you impose this.
07:17 Um,
07:17 and when I would talk about the voluntary standard is
07:20 more than you have a different level of emission standards,
07:25 for instance,
07:26 and you distinguish product according to those levels
07:30 and you let firms decide about which level they
07:33 would like to,
07:34 to implement.
07:37 She fit
07:39 The citizens watching,
07:42 I am the leader the G20 by 4.
07:47 I'm sorry,
07:48 uh,
07:49 could you,
07:50 could you please mute yourself?
07:51 Let world leaders strip away the rights of their citizens.
07:58 OK.
07:59 So what about market-based instruments?
08:02 So there are two
08:04 types of market-based instruments.
08:07 So either you decide on prices,
08:09 uh,
08:10 positive or negative prices like subsidies.
08:14 So a classical example is the carbon tax
08:18 or subsidy for investing in
08:22 Um,
08:23 low carbon technologies like in the inflation Reduction Act in the US,
08:27 for instance.
08:28 So,
08:29 so you reward,
08:30 um,
08:31 decarbonization,
08:32 for instance,
08:33 of like
08:34 less polluting technologies,
08:36 for instance,
08:38 or you penalize,
08:40 um,
08:42 um,
08:42 emissions.
08:43 So you charge pollution in the
08:47 Piguvian way,
08:48 I mean,
08:48 like,
08:49 in the logic of,
08:50 of Arthur Pigo.
08:53 Another way to do that is you work with quantities.
08:57 So uh you set limits on pollution,
09:00 but the difference with emission standard is
09:04 now you allow
09:06 firms to trade emissions.
09:09 Uh,
09:10 quota or emission allowances.
09:13 So you actually design a market,
09:16 you should assign property rights on emission permits,
09:20 and you design a market in which
09:24 firms can trade.
09:26 So,
09:26 um,
09:27 in both cases,
09:29 what you do,
09:29 you leave a lot of flexibility
09:32 about how to deal with pollution,
09:36 so you don't impose any technology.
09:39 But you incentivize firms
09:41 to reduce their emitting pollution.
09:45 Um,
09:46 so,
09:46 um,
09:48 One specific example of this kind of market-based instrument which
09:52 has a little bit of the flavor of a standard.
09:57 Is um.
09:59 The tradable emission standard or
10:02 what is called performance standard.
10:05 So one example is this uh corporate average fuel
10:08 economy
10:10 standard
10:11 in the US.
10:12 So,
10:13 in the US,
10:14 uh,
10:15 car manufacturer
10:17 have an obligation to uh reach uh an emission intensity,
10:23 an average emission intensity for their
10:25 car fleet.
10:27 Um,
10:28 that they can,
10:29 um.
10:31 They,
10:31 they can,
10:32 they can achieve by
10:35 buying a certificate from other car manufacturers,
10:38 for example,
10:39 electric car manufacturers.
10:41 In the same way,
10:42 uh,
10:43 some states in the US have implemented the
10:47 um
10:48 um renewable portfolio standards
10:51 that are obligation of utilities,
10:54 electricity retailers
10:56 to um.
10:58 rely on.
11:01 to have a share of their electricity.
11:04 Relying on renewables,
11:06 let's say 30% of what they sell to final consumer should come from
11:11 renewable energy source,
11:13 uh,
11:13 renewable energy sources like
11:15 wind and solar power.
11:17 So in order to achieve this target,
11:19 what they do,
11:20 they um
11:22 by certificate
11:23 to uh
11:24 solar and wind power producers
11:27 uh if they don't issue the certificate certificate themselves.
11:31 So it's not an obligation to invest and to have 30% of their production capacity
11:37 with renewables
11:39 because they can just buy certificates from renewable producers
11:43 and if they have more than that,
11:44 they can sell the certificate to other retailers.
11:47 So it's a startup with some flexibility
11:51 about how to achieve it.
11:53 And,
11:53 and then at the end,
11:54 the incentives are more
11:56 with the price incentive because at the end,
11:59 your decision whether to invest or not
12:02 should depend on the price of those certificates.
12:06 In Europe for car manufacturing,
12:09 we have what's called feebates,
12:12 so it's it used to be
12:15 a tax subsidies based on the
12:18 energy efficiency of cars or CO2 emissions per 100 kilometers of cars.
12:24 So it's
12:26 It is defined
12:28 from one average
12:30 CO2 emission
12:32 standard per 100 kilometers and then
12:36 um
12:36 cars that are emitting more are taxed proportional to their
12:41 emission standard emission.
12:44 Well,
12:45 emission ratio
12:46 per 100 kilometer.
12:48 And those who are eating less get a subsidy from that and and.
12:54 The Fibet was designed originally
12:57 to be budget balanced.
12:59 So again,
13:00 you set a standard like emission per
13:03 100 kilometers,
13:04 emission per kilowatt hour.
13:07 And then you have like prices to adjust around the standard.
13:12 So it's a
13:14 mix of
13:15 market-based and instrumental standards.
13:19 And the third type of instrument are information-based instruments.
13:24 So you provide information to stakeholders.
13:29 Usually like consumers,
13:30 but also firms and also investors,
13:33 for instance.
13:35 Uh,
13:35 so these are a couple of examples.
13:37 Of course,
13:37 eco labels are the more straightforward.
13:40 Another
13:42 information is um
13:44 the certified environmental management procedures
13:48 like ISO certification 90,000.
13:51 So
13:52 firms can uh decided to adopt this um
13:57 man Amaton management procedure and be certified
14:01 in order to get some comparative advantage,
14:03 for instance,
14:04 um.
14:05 Uh,
14:06 to,
14:06 to,
14:07 to be able to sell their product to,
14:09 to,
14:09 to certified company if you are self-certified
14:14 ISO 40,000,
14:16 then you commit to buy from a
14:18 supplier that are certified.
14:21 Or to have access to uh
14:23 uh
14:24 public procurements because often it's part of the regulation.
14:29 Uh,
14:30 so,
14:30 so then
14:31 it's also one way to report emissions and um.
14:36 You have also,
14:37 you know,
14:38 some a lot of information that are
14:42 mandatory to provide to regulation regulators that are becoming public
14:48 and that will have an impact on
14:51 the image of company or products.
14:54 And some also programs
14:56 are managed by regulation agencies.
15:00 So one example is the 3050 program
15:04 that has been managed by the US Environmental Protection Agency.
15:09 In which uh
15:11 manufacturing plants volunteer to report their emissions
15:16 and in exchange what they have,
15:18 they have some sharing of best,
15:19 best practices,
15:21 uh,
15:22 some also
15:25 target on emission reduction,
15:28 uh,
15:28 and,
15:29 and,
15:29 and,
15:29 and,
15:30 um,
15:31 privilege,
15:32 privilege.
15:33 Well,
15:34 a,
15:34 a,
15:34 a good relationship with,
15:35 with,
15:36 I would say with,
15:36 with the,
15:37 with the regulator.
15:40 So again,
15:41 you know,
15:41 these market-based,
15:43 the information-based instruments,
15:45 uh,
15:46 they,
15:46 they don't
15:48 have any monetary impact really
15:51 direct monetary impact.
15:52 So there are no prices,
15:55 uh,
15:55 no obligation,
15:56 but,
15:57 but everything is about information.
16:00 So these are example of the just,
16:02 yes.
16:03 So,
16:03 sorry,
16:04 sorry to,
16:04 uh,
16:05 yeah,
16:05 sorry,
16:05 just,
16:06 uh,
16:06 uh,
16:06 a minor point to take issue on,
16:08 on ISO 14,000.
16:10 So,
16:10 I mean,
16:12 So,
16:12 you,
16:13 you,
16:13 you,
16:14 you call it a,
16:15 an,
16:15 just an information instrument information-based instrument,
16:18 but,
16:19 but in order to comply with ISO 14,000,
16:21 I may have to change the way I produce,
16:23 right?
16:24 I mean,
16:24 you know,
16:25 uh,
16:25 so I may not,
16:26 you know,
16:26 I may not,
16:27 you know,
16:27 uh,
16:27 from the get-go,
16:28 I may not comply with everything that ISO 14,000 requires me to do.
16:33 Um,
16:33 uh,
16:34 and so,
16:34 you know,
16:35 may have to hire a consultant and the guy will
16:38 walk around the plant and will say,
16:40 OK,
16:40 you know,
16:40 you're,
16:41 you know,
16:41 you're,
16:42 you're,
16:42 you're not treating the water properly,
16:44 or,
16:45 or,
16:45 or whatever,
16:46 you know,
16:46 or,
16:47 you know,
16:47 you're needing too much or,
16:48 or something.
16:49 And so,
16:50 and so,
16:50 basically,
16:51 I will have to take action in order to be certified.
16:54 I will have to take some action,
16:56 right,
16:56 and,
16:56 and,
16:56 and so,
16:57 and to curb,
16:58 curb some,
16:59 curb some pollution.
17:00 So it's,
17:01 so you know it's,
17:02 it's different from,
17:03 you know,
17:03 posting my emissions and actually
17:06 being certified with ISO
17:08 140,000,
17:08 right,
17:09 because I may feel the same,
17:13 yeah,
17:13 so um,
17:14 yeah,
17:16 so I'm,
17:16 I'm not saying that it is costless.
17:19 I'm not saying it is,
17:20 it does not cost.
17:21 What I'm saying is that this is voluntary.
17:25 So that's,
17:26 um,
17:27 so,
17:27 so you,
17:28 you don't have any obligation to come to,
17:31 to,
17:32 uh to,
17:33 to be ISO certified.
17:35 You may decide not to,
17:37 to go to launch this process.
17:39 The same way if you want to have the organic label as a farmer,
17:44 you need also to comply with many,
17:47 many rules,
17:48 and this is costly.
17:50 But you're not obliged to to to turn your production organic.
17:55 Um,
17:56 and so what,
17:57 and then what you get,
17:57 what do you get out of it,
17:59 after that,
18:00 you don't get,
18:00 uh,
18:01 well,
18:03 you don't get a subsidy,
18:04 for instance,
18:04 you don't get,
18:05 uh,
18:06 you don't avoid taxes,
18:08 but what you get is some,
18:09 some,
18:10 some label that,
18:11 that you can use to get some,
18:13 some that's.
18:17 So,
18:17 so I mean that,
18:18 that's the general idea,
18:19 of course,
18:20 I mean,
18:20 sometimes you have subsidy to turn organic or to certified.
18:24 Also,
18:25 in some countries,
18:26 you have an obligation to report their emissions
18:29 and be ISO certified is one way,
18:31 a cheap way to comply with this reporting.
18:35 But,
18:35 but the certification itself,
18:38 uh,
18:39 it's,
18:40 it's,
18:40 it's,
18:40 it's,
18:41 it's not associated to,
18:42 to some,
18:43 to some tax or subsidy or to some certificate
18:46 or some,
18:46 to some,
18:47 uh,
18:48 some monetary outcome
18:50 and,
18:51 uh,
18:51 and it is no
18:53 technical obligation related to,
18:56 I mean,
18:56 you,
18:56 you're not,
18:57 you're free not to,
18:58 to be certified,
18:58 so you're free not to
19:00 uh implement those technology,
19:02 for instance.
19:04 Did I answer well to your point,
19:06 or
19:07 Yeah,
19:07 yeah,
19:07 thank you.
19:08 Thank you so much.
19:11 So just like this is a slide that I use for teaching
19:15 example of,
19:15 of these information-based technologies like Dutches.
19:19 Um,
19:19 so,
19:20 another example is,
19:21 you know,
19:22 you compare your consumption,
19:25 as energy consumption in,
19:25 in the,
19:26 in the
19:27 electricity bill compared to your neighbor and you,
19:30 you may have some
19:31 target,
19:32 and you may have some objective in reducing
19:35 consumption.
19:37 These are kind of labels
19:39 that you see that
19:41 on
19:43 electric appliances related to
19:47 energy efficiency.
19:48 Or carbon emissions.
19:51 So again,
19:51 that it is a formation.
19:54 Uh
19:55 You,
19:56 you are free to be A,
19:57 B,
19:57 C,
19:58 D,
19:58 E,
19:58 F,
19:58 G,
20:00 uh,
20:00 that's or to have the Energy Star label or not.
20:03 Um.
20:04 But if you do have,
20:06 then there's a cost of doing that,
20:07 then the reward is you can have a price premium
20:10 by attacking.
20:12 The demand of some consumers.
20:17 So these are
20:19 well-known labels.
20:22 My product
20:24 OK,
20:25 so
20:26 now,
20:28 When standard should be used
20:30 as a command and control instrument.
20:33 So,
20:34 generally,
20:35 economists think that
20:37 market-based instruments are more efficient.
20:41 In reducing pollution at a lower cost.
20:45 For two reasons.
20:46 One is.
20:48 You don't constrain the type of technology you use.
20:53 So,
20:54 then,
20:54 then each firm can decide to use the,
20:57 the,
20:58 the,
20:58 the best technology
21:00 and that you can have heterogeneity in terms of best response to uh
21:06 This reduction of pollution,
21:08 uh,
21:09 you can innovate,
21:10 uh,
21:11 you can
21:12 do different things.
21:13 So there's no
21:14 obligation to implement one type of technology.
21:18 So this flexibility,
21:20 uh,
21:21 implies that you will go for the less costly and the more efficient technology.
21:27 And the second reason is that,
21:29 you know,
21:29 the,
21:30 the issue with the,
21:31 the emission standard,
21:33 you know,
21:33 this cap on emission
21:36 is that once you achieve the standard,
21:39 you don't have an incentive to go beyond to reduce further your emissions
21:44 to be more energy efficient,
21:46 for instance.
21:47 Whereas with the,
21:48 with the tax or subsidy
21:50 for every
21:52 CO2 ton of CO2 you avoid,
21:54 you are rewarded because you avoid paying a tax,
21:57 for instance,
21:58 or you get a subsidy
22:00 for
22:01 investing more in renewable,
22:03 for instance.
22:05 So that one,
22:06 the reason why
22:08 Uh,
22:09 economists tend to think that market-based
22:11 treatments are more efficient.
22:14 Uh,
22:15 but,
22:15 um,
22:16 noted that,
22:17 um,
22:18 this is in the standard
22:21 economic model in which
22:23 consumers don't care about uh.
22:26 The harmful impact of their
22:29 decision when they
22:30 buy goods.
22:32 I have a joint paper with one of my colleagues in which we make the point that
22:38 If we do have,
22:39 we have green consumers,
22:41 consumers that are willing to pay
22:44 a higher price for greener products like organic food,
22:47 for instance.
22:50 Then
22:51 the dominance of the market-based
22:53 treatment
22:54 on standard.
22:56 It's not any more true.
22:59 The reason is because
23:00 in this case,
23:01 you don't have,
23:02 we don't have cost effectiveness,
23:04 that is,
23:05 we don't have the minimized cost of achieving one reduction of pollution.
23:11 Because
23:12 um what the
23:14 market-based instrument tend to do with green consumer
23:18 is to increase the gap
23:20 between the cost of reducing pollution,
23:23 the marginal abatement cost.
23:26 Among consumers.
23:28 Which is inefficient.
23:29 So the higher the gap between the marginal apartment cost,
23:33 the cost of avoiding 1 ton of CO2,
23:36 the,
23:37 the,
23:37 the more costly this
23:39 to
23:40 CO2 emissions are.
23:42 Are,
23:43 are low,
23:44 the total emissions are lower or higher cost
23:47 when you have a higher gap between marginal abutment cost.
23:51 So what Markets Bet and are doing
23:53 in the standard model,
23:54 uh,
23:54 with,
23:54 with the same type of consumers
23:57 is that you,
23:58 you have,
23:59 you avoid one ton of CO2 as the same cost and minimize cost.
24:03 But you have different consumers,
24:05 and you have
24:07 the
24:07 green consumers that are buying high
24:09 quality products with more energy efficient product
24:13 and the the other consumers are buying.
24:17 The,
24:17 the less energy efficient product and what the
24:21 carbon tax is doing,
24:22 it increases the gap between these two types of products and that reduces the,
24:26 that increases the cost of
24:27 achieving the same reduction of CO2 emissions.
24:32 So that's one reason why you should prefer
24:34 standard when you have these green consumers.
24:37 Another reason you should prefer standards,
24:41 especially limits on emissions
24:43 in when you have um
24:47 Pollutants for which
24:49 local concentration of pollution matters.
24:53 Um,
24:55 So the problem with market-based instruments is that
24:58 you don't control the localization of polluting activities.
25:04 So if you have,
25:05 for instance,
25:06 an emissions trading schemes in which firms are buying and selling
25:11 emission permits,
25:13 you may end up having all the
25:16 more polluting production plants at the same place.
25:21 In the same location,
25:22 so have a very high concentration of pollution in this place.
25:26 So it's not a big issue when it
25:29 When this
25:31 pollution is related to greenhouse gasses like when CO2 emissions.
25:36 But it is for air quality,
25:39 for particulate matters,
25:40 knocks or socks.
25:44 Uh,
25:45 so,
25:45 so then if you have standard,
25:47 then you limit,
25:48 uh,
25:49 you can control the more easily the local
25:52 concentration of,
25:53 of pollution.
25:58 There's
25:59 another
26:00 argument which is a little bit related to this idea of uh.
26:05 Uh,
26:06 high damage for
26:08 local concentration.
26:10 There is a
26:11 seminal paper by Martin Weitzmann,
26:14 which is comparing market-based versus quantity-based instruments.
26:20 And making the point that quantity-based instruments are
26:24 better
26:25 when you have
26:27 a
26:27 steeply sloped marginal damage
26:30 compared to the slope of marginal abatement cost
26:34 and basically the idea that if you have like a
26:38 The damage
26:39 from pollution is becoming
26:43 quickly very high
26:46 above some level.
26:48 So like if you have tipping points,
26:50 then you want to be sure not to exceed this level.
26:54 Uh,
26:55 and this is,
26:55 um,
26:57 what you can do with stand up,
26:59 but,
26:59 but not with market-based instruments.
27:02 Um,
27:05 OK.
27:05 So,
27:05 so just by,
27:06 by the way,
27:07 In,
27:08 in the.
27:10 So in the comment you sent me by email,
27:13 there was something about
27:18 Uh,
27:18 is it consistent with the other,
27:21 other
27:22 work by Martin Weitzmann?
27:25 That
27:25 he published afterward about climate change.
27:30 So I think in this other paper,
27:32 the following paper that he published about
27:35 uncertainty of,
27:36 of,
27:37 of climate change and tipping point.
27:39 He was making a very different.
27:42 argument
27:44 which was more about
27:47 intergenerational equity,
27:49 what should be the
27:50 The cost we have to pay now and the benefit later
27:54 and pushing for having a
27:57 very high.
27:59 And very stringent
28:02 policy now to avoid the catastrophic events.
28:06 But that's,
28:07 that argument
28:08 um
28:09 holds for market-based,
28:11 I mean,
28:12 instrument also and so,
28:14 so the type of instrument,
28:16 uh whether it's a
28:18 standard or market-based doesn't matter for this uh
28:22 this point.
28:23 So here really it's about um
28:26 more about um
28:28 uh
28:28 pollution now and more about uh
28:31 uh local pollution.
28:33 So this is about local pollution for which at some point you want to avoid the
28:39 pollution concentration above some level.
28:44 Stefan,
28:44 uh,
28:44 just to follow up on that.
28:47 Uh,
28:48 I,
28:48 I guess
28:49 one question is what happens if the regulator does not have
28:53 the information that about
28:55 or complete information about marginal damage and cost,
28:58 you know,
28:58 if there's uncertainty on
29:01 how bad it can be if,
29:02 uh,
29:04 the temperature,
29:04 uh,
29:05 reaches some level and so on.
29:07 So is it fair to say that this type of uncertainty is pushing
29:12 Towards standard because we really don't want to go in
29:15 a region in which we cannot assess the risk.
29:18 Yes.
29:20 I think it is fair to say that because
29:22 um
29:23 111 way
29:26 like uh
29:28 To model this is to say that
29:31 there's some probability that the marginal damage is
29:34 infinitively sloped.
29:38 It's a vertical line at some point.
29:41 Uh,
29:42 and so,
29:43 so,
29:44 so you have a
29:46 very steeply,
29:46 there's a,
29:47 there's a probability that you have very steeply slow marginal damages.
29:52 But,
29:52 but then another issue,
29:54 well,
29:55 so,
29:55 so,
29:55 yes,
29:56 but
29:56 when it comes to climate change,
29:59 And greenhouse gas emissions,
30:01 then you still have the problem of like global pollutants and the issue of
30:06 what is the marginal impact of
30:10 One country,
30:11 one firm
30:13 on.
30:15 On the marginal damage.
30:18 So,
30:19 so,
30:19 um,
30:20 it's difficult to
30:23 To imagine that uh.
30:26 A country,
30:27 the,
30:27 the impact of one country,
30:29 a small country or,
30:30 or,
30:30 or,
30:31 or a manufacturing plant.
30:34 Will
30:36 Will,
30:36 will make you
30:37 uh
30:39 Reach this uh
30:41 this tipping point,
30:42 for instance,
30:43 or this vertical line.
30:45 And that's why you want to have a standard to be
30:48 sure at this manufacturing plant level or the country level,
30:52 to be sure not to,
30:53 to reach this
30:55 vertical line.
30:58 So I think that this argument is fair in general.
31:01 The uncertainty at the risk of having
31:05 very irreversible or very high damage call for
31:09 a standard,
31:10 but,
31:10 but it applies only for local pollution and not so much for
31:15 global pollution because the marginal impact of,
31:17 of,
31:18 of the polluter
31:19 that you want to regulate
31:21 is,
31:22 is very small.
31:27 OK,
31:28 uh,
31:28 so another very well.
31:32 A different problem that
31:34 standard I tried to
31:35 fixing.
31:37 are somehow fixing the problem of
31:41 environmental accident or potential harm.
31:45 So it's,
31:46 so you don't,
31:46 you don't,
31:48 you don't pollute,
31:49 but there's a risk that you have,
31:51 you are polluting,
31:52 like for,
31:52 for instance,
31:53 you,
31:54 there's a risk of an explosion or
31:57 a nuclear accident.
32:00 And in which case the,
32:02 the damage is huge for instance.
32:04 And you want to avoid it.
32:07 In this case,
32:08 it makes sense to impose safety standards
32:12 to oblige the
32:14 potential polluter,
32:15 the firms.
32:17 To
32:19 implement some technologies,
32:20 some safety procedures.
32:23 Um,
32:26 It's costly,
32:28 but,
32:28 but
32:29 the,
32:29 and also,
32:30 and the one reason is that.
32:32 In case of accident.
32:35 Uh,
32:36 the making label
32:38 the firm.
32:41 may not be sufficient to incentivize this firm to invest in safety
32:46 because it's in case of accident,
32:48 the damage is so big.
32:51 So that you cannot
32:52 make the firm pay for this damage.
32:56 So you cannot discipline the firm from investing in safety.
33:00 Uh,
33:02 because the firm gets bankrupt basically,
33:04 or
33:06 because it takes time or because
33:08 the
33:10 institutional background is such that
33:12 you,
33:12 it's difficult to make the firm liable in case of accident.
33:16 So what is called export regulation,
33:18 making firms liable in case of accident
33:21 is not sufficient to,
33:23 to,
33:23 to invest optimally in safety.
33:25 So you,
33:25 you need to implement standard.
33:28 Today's a paper by Steven Chavell making nicely this point.
33:34 Another reason to implement standards because it's more
33:39 easy to implement.
33:41 So it's
33:42 good if you,
33:44 it's,
33:44 it's difficult to track emissions.
33:47 So for instance,
33:48 uh,
33:49 in environmental economy,
33:50 we,
33:50 we call non-point source pollutions,
33:52 pollution that
33:55 is difficult to track
33:57 like water pollution from agriculture or air pollution for
34:02 transportation
34:04 from cars,
34:05 trucks,
34:06 so it's difficult to set the
34:09 Uh,
34:09 to,
34:09 to monitor what's,
34:11 what's is emitted.
34:12 So that's why you,
34:14 you cannot tax uh easily,
34:16 uh,
34:17 the,
34:17 the drivers on their
34:19 pollution by driving.
34:21 So there's an experiment doing that,
34:22 but
34:23 it's more easy to,
34:24 to have an,
34:26 uh,
34:26 an emission standard.
34:28 For dogs
34:30 or particulate for cars.
34:33 Uh,
34:33 Stefan,
34:34 just a point on the,
34:36 on safety.
34:37 I,
34:37 I,
34:38 I understand this,
34:39 uh,
34:39 limits of exposed,
34:40 uh,
34:40 regulation,
34:41 but
34:42 another way to go would be to mandate some insurance,
34:46 uh,
34:47 on firms,
34:49 and,
34:49 uh,
34:50 I,
34:50 I'm raising this because,
34:51 uh,
34:51 in,
34:51 in another paper that we have commissioned it,
34:54 it,
34:54 it was about the development of,
34:56 uh,
34:57 during the first industrial revolution,
34:59 uh,
34:59 the of steam engine.
35:01 And you know we had standard in the in the in France
35:05 on the
35:07 that that
35:08 would uh require
35:10 some
35:11 you know thickness of the of the boiler and so on some some safety standard
35:14 and in the UK we had the
35:17 uh
35:18 insurance uh you know insurance company which will go and and and uh
35:22 uh
35:23 basically
35:24 uh you know
35:25 provide compensation in case of accidents.
35:29 So we'll try to discuss the,
35:30 the,
35:32 you know,
35:32 the,
35:32 the,
35:33 the compare the two systems,
35:35 and I would say the second one is more market-based,
35:37 uh,
35:37 uh than,
35:38 than,
35:39 than the French one,
35:42 So I just wanted to point this out in case,
35:44 uh,
35:44 and you know we can discuss this later in case you had the
35:47 further reference on this,
35:48 uh,
35:49 you know,
35:49 safety issue and,
35:50 and,
35:50 and standard,
35:51 uh.
35:54 Yeah.
35:56 So what was uh Chavel is,
35:58 is,
35:58 well,
36:00 is concluding that you should have two,
36:01 the two expo uh
36:04 safety standard,
36:04 ex ante safety standard and expose liability rules.
36:09 What you are saying that you can use an insurance.
36:13 Uh
36:15 To pay for
36:17 To
36:19 of course
36:20 but but then the question.
36:23 The question is whether the insurance company
36:26 will incentivize firms to invest in safety.
36:32 Well,
36:32 it should,
36:33 right,
36:33 because,
36:34 uh,
36:34 yeah,
36:34 exactly.
36:35 So you use the insurance company as a way to discipline
36:39 the firms and make it investing in safety.
36:43 That's right.
36:44 Because in this kind of model,
36:46 at the end,
36:46 you want uh
36:48 And there's an optimal investment in safety,
36:50 and you want to induce this investment.
36:53 So the question is what is the so again standard is
36:55 not the only way to get to get to this investment
36:59 and
36:59 you could have no.
37:03 And also the,
37:03 the,
37:04 sorry,
37:04 in the paper.
37:07 Standard has the same limit that you
37:09 impose the same investment to all
37:11 firms.
37:12 So the same technology to all
37:15 firms,
37:15 but,
37:15 but there are a lot of exaggerated among firms
37:18 and maybe it's not the best,
37:20 the best technology adapted to each firm.
37:22 So that's.
37:23 You have this limitation of harmonization.
37:25 When you harmonize,
37:26 then you don't adapt to the specificity of the film,
37:29 which is one
37:30 limitation of standards.
37:33 Perfect.
37:35 Sorry,
37:35 uh,
37:35 I think Rosie,
37:36 Rosie has a question as well.
37:37 So Rosie,
37:38 you wanna,
37:38 you wanna jump in?
37:40 Yes,
37:41 uh,
37:41 thank you,
37:41 Shelby,
37:42 and thank you,
37:42 Stefan,
37:43 for the presentation.
37:44 So can you just go back to the previous slide?
37:47 So,
37:47 I have one question for the investment argument.
37:50 So,
37:50 I'm not sure whether
37:52 based on investment argument you're reaching,
37:54 you know,
37:54 standards are better when
37:56 the slope of marginal damage is steeper
37:59 because even think about cap and trade,
38:01 uh,
38:01 policy,
38:02 you have a reg you have a cap on emissions.
38:04 So it's also
38:08 Yeah,
38:08 that's a good point,
38:09 so.
38:11 So Whiteman was talking about price versus quantities
38:15 instrument.
38:16 So you,
38:17 you think that cap and trade is a quantity instrument because you said
38:21 quantities,
38:23 uh,
38:24 but,
38:24 but for the firm itself,
38:27 I think the firm of my,
38:29 my view is that the firm see the
38:31 instrument
38:32 cap and trade instrument as a price instrument because at the end.
38:36 In the decision of the firm whether to abate,
38:38 to reduce emissions,
38:40 or whether to buy permits,
38:43 the,
38:43 the,
38:44 the what matters is the price,
38:45 right?
38:47 So I would say that um.
38:51 Um,
38:52 at the aggregate level,
38:53 it's a quantity instrument,
38:54 but,
38:55 uh,
38:55 uh,
38:56 at the individual level,
38:57 it's a price instrument.
38:59 OK,
39:00 yeah,
39:00 thank you.
39:00 And so,
39:01 another question is about overall,
39:03 uh,
39:04 like to think about when to adopt standards.
39:07 So can you comment a little bit on the political economy of adopting standards?
39:11 So for example,
39:12 maybe it's very hard or or like adopting any policies,
39:15 for example.
39:15 It,
39:16 it can be hard to adopt
39:17 gasoline taxes because you will face a lot of pushback from,
39:21 from the public,
39:22 but probably it's easier to adopt standards in practice.
39:25 So do you have any like comments on,
39:27 on the,
39:28 on the adoption of standards in terms of political economy?
39:31 Yeah,
39:31 thank you.
39:34 Yeah,
39:34 so,
39:35 um,
39:36 on the political and economic dimension,
39:39 I agree with you that,
39:40 well,
39:42 Well,
39:44 the,
39:44 the good thing with,
39:45 with standard is that it talks to engineer and so people understand what it is about.
39:52 was a carbon tax,
39:53 they don't,
39:54 a lot of people don't understand that with the carbon tax,
39:56 you,
39:57 you reduce emissions.
39:59 So that's one thing.
40:00 So,
40:01 it's easy to understand
40:02 and,
40:03 and uh
40:04 also the
40:07 People,
40:07 it,
40:08 you may have a more acceptance also
40:10 because you don't see the,
40:13 the distributional impact and the cost of the standards,
40:17 which is,
40:17 I think a limitation of standard that
40:20 so there's paper that,
40:21 uh,
40:22 for instance,
40:22 there are some paper that have,
40:24 I know a paper that
40:25 evaluated the
40:27 standards on um.
40:30 Uh,
40:31 energy efficiency or
40:34 Emissions for cars in the US.
40:39 And then showing that
40:43 the cost was important and those who suffered,
40:47 those who incurred the higher costs were the poorest people.
40:52 So with the tax,
40:53 for instance,
40:53 you can
40:54 easily compute
40:56 how much each driver will have to pay
40:59 if you increase the tax on gas
41:02 and who will pay more than others.
41:05 But if you impose that some cars have a higher
41:09 energy efficiency
41:11 and you ban those with lower in efficiency or if you impose some
41:15 um
41:16 um
41:18 emission standard for NOx particulates.
41:21 Uh,
41:22 you don't know what will be the cost
41:24 for producing the cars that are complying with this standard and the added value
41:29 of the car and how much people have to pay and so on.
41:32 So it's more difficult to,
41:35 to,
41:36 to get the cost of standards.
41:39 Uh,
41:39 so here in France,
41:40 for instance,
41:40 what's happening is that they are.
41:43 Now they're trying to,
41:44 uh,
41:44 so now for all the apartment and the housing,
41:48 we have a labeling
41:50 on energy efficiency,
41:52 and now they are starting to forbid the renting
41:56 of apartment with the lowest rating,
41:59 the FG rating.
42:02 And then people try to figure out that,
42:04 well,
42:05 it would cost them some money.
42:09 So,
42:09 so,
42:10 so,
42:10 but,
42:10 but
42:11 they tried to realize this,
42:12 but at the beginning they didn't know that.
42:14 Whereas if you have a carbon
42:16 tax,
42:17 then you have an increase of the price of energy and
42:19 then people can figure out how much you have to pay.
42:22 So that the other,
42:23 other reason maybe standard are more
42:27 uh
42:27 easier to implement and to be,
42:30 to be accepted,
42:31 but
42:32 up to the point that they figure out how much,
42:34 how costly it is for them to adopt the standard.
42:41 Or maybe I'll skip.
42:42 So I have a couple of examples.
42:44 I don't have time to.
42:48 Sorry,
42:49 Steph,
42:50 I'm interrupting you with questions.
42:52 Yeah.
42:54 Go ahead.
42:55 Um,
42:55 it's OK if I
42:57 Um,
42:58 I think one question,
42:59 um,
43:00 it's like now we're like comparing standards to different,
43:02 uh,
43:02 policy instruments.
43:04 Um,
43:04 but of course,
43:04 there's also like a big discussion about
43:07 what kind of standards to use,
43:08 whether it's more,
43:10 um,
43:11 performance-based standards versus uh technology standards.
43:15 Is there like any um guidance that you have on,
43:19 you know,
43:19 to achieve environmental objectives,
43:21 when to use
43:23 performance-based standards versus technology standards.
43:26 Um,
43:26 I can only think of like one example,
43:28 maybe like for more from safety,
43:30 uh,
43:31 where
43:31 I believe that in the EU,
43:33 uh,
43:34 New cars have to have an airbag,
43:37 right?
43:38 And you kind of like determine,
43:39 you specify the technology that the car needs to have as a safety feature,
43:43 even though you could also,
43:44 you know,
43:45 think of like a performance standard that defines you know what safe car
43:49 means and then,
43:50 you know,
43:50 let the,
43:51 let the,
43:52 let the engineers figure out a techno techno technology solution.
43:55 Like what is the
43:57 What is the um
43:58 an academic consensus on when to use
44:02 a like a technology-specific standard versus like a performance standards in,
44:06 in biometric context?
44:10 Well,
44:10 conceptually,
44:11 I mean,
44:11 if you look at the
44:13 economic view of the problem,
44:16 uh,
44:17 it's
44:19 The
44:20 performance standards are better because what you say that you live.
44:25 Our freedom to the firms
44:28 on how to comply with this performance standard,
44:31 which kind of technology to implement.
44:33 Um,
44:34 and you,
44:35 you,
44:35 you,
44:36 you expect that the,
44:38 the firm will be,
44:39 uh,
44:40 or
44:40 the manufacturing,
44:42 well,
44:42 the,
44:42 the,
44:42 well,
44:43 firms are in better position to,
44:46 to pick the best solution.
44:48 Um,
44:52 But
44:53 it's OK for safety,
44:54 maybe it's more difficult because then the regulator,
44:57 you have to think about uh
44:59 what,
44:59 what your,
44:59 your goal in terms of safety.
45:02 So,
45:03 so it's,
45:03 it would,
45:03 I think it's more difficult to,
45:05 to set a standard.
45:06 So for instance,
45:07 you can set standard on NOx emissions
45:09 or particulate emissions,
45:12 but for safety about uh how to avoid the accident.
45:17 Then maybe as a regulator you need to be more specific.
45:21 And,
45:21 but,
45:21 but even for emission standard,
45:24 usually it's,
45:25 well in practice,
45:25 it's really negotiated with the,
45:28 with the firms,
45:28 right?
45:29 So you think about um
45:31 uh
45:32 car ammunition standard and so what the regulator have done
45:37 everywhere is
45:39 To
45:40 Increase the stringencies of those standards over time.
45:45 And negotiate with car manufacturers about how to achieve those standards.
45:50 And then the car manufacturers
45:53 went
45:54 with different solutions.
45:56 Uh,
45:57 the catalytic converters,
45:58 for instance,
45:59 was the first one,
46:00 and then the catalytic reduction
46:02 with the,
46:03 this fluid,
46:04 uh,
46:04 that was another
46:06 solution.
46:07 And then you have electric cars also,
46:09 that is one way to comply.
46:12 So at the end,
46:12 it's also a negotiation between the regulator and the firms,
46:16 I would say.
46:18 But,
46:19 but for the economists,
46:20 then the
46:21 emission standard define the constraint
46:24 and let firms decide about how to optimize given these constraints.
46:29 Instead of imposing some technology,
46:32 um.
46:35 I guess maybe just take 11 explanatory note.
46:38 Um,
46:39 I,
46:39 I guess like what I've heard sometimes in,
46:42 in our client countries is the argument that firms don't have
46:46 like a lot of capacity to like figure out a solution.
46:49 So it's
46:50 kind of like more effective to kind of like tell them what to use.
46:54 Um,
46:55 and I'm wondering like if there's like any research on that,
46:57 whether,
46:57 you know,
46:58 this argument deserves merit in,
47:00 in some cases and,
47:02 you know,
47:02 might be better if the technology solution is very clear.
47:05 And we can just like,
47:06 you know,
47:06 assume that there's like mature technology that's not gonna be locked in,
47:09 we're not gonna kill innovation,
47:12 um,
47:12 that this is actually like a,
47:14 a better solution in that in certain circumstances,
47:17 but
47:18 it's a difficult question as well
47:19 to generalize,
47:20 I guess.
47:22 Well,
47:22 the,
47:22 the question is whether you,
47:24 the,
47:24 the,
47:24 the regulator would like to push some technologies.
47:28 Is this the idea you have in mind or?
47:33 Yes,
47:33 right,
47:34 yeah,
47:35 so,
47:36 OK.
47:38 I mean,
47:39 there may,
47:40 maybe some rationale for that,
47:41 some reasons,
47:43 um.
47:45 But,
47:46 but again,
47:46 the,
47:47 the,
47:47 the big question is
47:48 whether the regulator is in a better position
47:51 to identify what are the best technologies to push
47:54 compared to firms.
47:57 Um,
48:01 Yeah,
48:01 sometime in the while,
48:02 they do,
48:03 uh,
48:04 but I don't know.
48:06 I,
48:06 I have no clear idea about that.
48:11 I,
48:11 I think in,
48:12 in practice,
48:12 it's really about uh,
48:14 uh,
48:15 a gameplay between the regulator and firms and,
48:17 and consumer.
48:19 And,
48:20 and
48:21 It's,
48:22 you know.
48:24 You,
48:25 you also need to.
48:27 The to
48:28 to.
48:30 To put all your eggs in the same basket,
48:32 so you need to invest in different technologies,
48:34 so.
48:36 So in practice also.
48:40 The part of the public policy is to um
48:43 foster
48:44 innovation in with diff different tracks.
48:50 Um,
48:50 you have also a literature about,
48:52 um,
48:53 what's called a directed technical change,
48:56 the fact that
48:57 once you do research in one track,
49:00 like,
49:01 um,
49:02 you rely on fossil energy,
49:05 then it's,
49:05 it's,
49:06 it's,
49:07 um,
49:07 you have economic economical scale in
49:10 investing in this kind of technology and then it's difficult to
49:14 change of,
49:14 uh,
49:14 to think out of the box and
49:17 outside the box.
49:18 And to change with another
49:20 kind of technology.
49:22 But that will call for more subsidies
49:25 and more rather than imposing technologies about that one.
49:31 Uh,
49:32 I don't,
49:32 I.
49:34 I think you,
49:34 you,
49:34 you have an argument in,
49:36 in favor of having the regulator.
49:39 Um,
49:41 Um,
49:42 say something about the technology.
49:46 But it should be well uh.
49:48 Well,
49:50 well,
49:51 well,
49:52 uh,
49:52 well,
49:53 well,
49:54 well,
49:55 well discussed,
49:56 I would say,
49:56 well,
49:57 well,
49:57 uh,
49:58 justified.
50:03 OK.
50:05 How much time do,
50:06 do I have left?
50:11 Yes,
50:11 uh,
50:12 till 2.
50:12 So,
50:13 um,
50:15 Uh,
50:15 36 minutes.
50:18 OK.
50:20 So,
50:21 um,
50:21 I have
50:22 a couple of case studies from um
50:26 Developing countries,
50:27 uh,
50:27 one which is,
50:28 so,
50:29 so you know,
50:29 you will see in the,
50:30 in the report that I'm relying a lot on
50:34 research papers
50:35 because this is what I'm reading.
50:38 So,
50:38 uh,
50:38 there's a,
50:40 a series of 3 papers by a very well-known
50:44 economists including a Nobel Prize and
50:47 a top
50:49 environmental economist.
50:51 Uh,
50:52 who was,
50:53 they have launched a series of random control trials.
50:58 Uh,
51:00 In India,
51:01 On air quality regulation,
51:04 uh.
51:06 From,
51:07 uh,
51:09 dealing with the pollution from a textile manufacturing plant.
51:14 So the starting point of the study is to show that um well,
51:18 they,
51:18 they start by uh providing evidence that uh there is some
51:23 corruption and um
51:25 fake self-reporting of emissions.
51:27 So the
51:29 Those
51:31 manufacturing plants are regulated with standards,
51:35 emission standards.
51:37 And the way it is implemented is by self-reporting,
51:42 so they have to
51:43 hire.
51:45 Uh,
51:47 an auditing company to take samples and to measure
51:51 their emission and to report their emission to the
51:53 regulation authority.
51:56 And what they show is that,
51:58 well,
51:59 well the first evidence of
52:01 misreporting and corruption is that the fact that um
52:05 The price charged by this auditing company was
52:09 lower than the cost of measuring emissions themselves.
52:14 Uh,
52:15 and
52:16 also there was
52:17 something called a bunching of reports
52:20 just below the standard.
52:21 So,
52:21 so the auditing company
52:23 tend to report that emissions are just below the standard.
52:28 So these are suggests that they don't do any measurement and report
52:33 what leads to the regulator.
52:37 So they,
52:38 they did the first theory of RCT in which they
52:45 They randomly assigned the manufacturing plants into several groups,
52:49 one in which
52:51 the auditors were selected by the experimenters.
52:57 Um,
52:58 and then they compare the reading of the auditor selected
53:02 by the experimenter and also selected by the thumbs.
53:07 And then also they
53:10 They also have an uh um treatment in which they selected
53:14 the plan randomly rather than the discretion of the regulator,
53:19 because that was also an issue.
53:21 Uh
53:23 Maybe because of corruption,
53:25 the selection was an issue.
53:28 Um,
53:29 and then they also did a back check of
53:32 measurement,
53:33 reading of the emissions after the experiment to compare with the,
53:38 uh,
53:39 emissions reported by the auditors.
53:43 So what they do,
53:44 they find that um.
53:46 Ah,
53:47 in the.
53:49 A Group of
53:50 batter factoring implants
53:54 treated the one,
53:56 the one there where auditor was selected by the experimenters.
53:59 There was no more bunching,
54:01 so the more spread of different
54:04 emission
54:06 reports
54:07 below or above the the standard.
54:11 And those reports were more consistent with the,
54:14 what is called the back check reading.
54:16 So uh
54:17 after that,
54:18 they,
54:19 they check uh
54:21 the emissions and the,
54:23 the report emissions were more consistent.
54:27 And
54:28 they also showed that
54:30 by
54:31 selecting auditor,
54:33 they
54:34 experienced a reduction of emissions.
54:38 So that one paper and the other paper and they look more about these.
54:43 This process of selecting randomly the plants that are to be audited.
54:49 Compared to leaving
54:51 the selection of the audited plan to the discretion of the
54:55 of the regulator or the public authority.
54:59 And then they showed that even
55:02 If,
55:03 if you have like
55:05 better reading of uh.
55:09 The,
55:09 the random selection was not so good because
55:13 the public authority were targeting the more polluting plants.
55:16 So,
55:17 uh,
55:18 at the end.
55:20 You have the same level of
55:23 out of compliance in the two groups with a selected plan randomly or
55:29 plan selected by the auditor,
55:31 sorry,
55:31 by the regulator.
55:34 But
55:36 the regulator tended to select those who are more out of compliance,
55:41 so at the end,
55:43 you have more penalty
55:45 and more enforcement.
55:48 With the
55:48 with the plan selected by the by by the regulator.
55:54 So,
55:55 so letting the regulators selected the plant is better because
55:58 they want tend to selected the more polluting plant.
56:06 And then they have like a more recent paper in which they
56:11 instead of having emission standard.
56:14 They implemented um
56:16 an emission trading scheme.
56:18 And apparently this,
56:19 this um emission trading scheme was successful in reducing emissions.
56:24 And they provide evidence that this emissions trading scheme reduced the,
56:28 the cost of achieving this uh
56:31 minimize or reduce the cost of achieving this reduction of pollution.
56:39 OK,
56:39 now,
56:40 um,
56:41 which instrument to complement standards?
56:45 So usually,
56:45 you know,
56:46 standards are complemented by other instruments.
56:50 So,
56:50 for instance,
56:51 uh,
56:52 one way to,
56:54 uh,
56:55 Increase,
56:56 uh,
56:56 increase,
56:57 um,
56:58 adherence to standard to
57:00 uh.
57:02 To have a subsidy.
57:04 Uh
57:06 Associated to a standard for adoption of new technologies,
57:10 so you were obliged to install a
57:14 wastewater treatment plant at the manufacturing plant level,
57:18 but you subsidize this waste treatment plant.
57:22 So it's,
57:22 it's a subsidy is a price instrument.
57:26 Um,
57:27 it buys you,
57:28 it's,
57:29 it buys you,
57:30 uh,
57:31 acceptability,
57:31 adherence,
57:32 uh,
57:33 and reduces the cost of,
57:34 uh,
57:35 of the standard.
57:37 Another way
57:38 to see the
57:40 complementarity of price instrument to standard is that well,
57:44 usually,
57:45 if you violate the standard,
57:46 there's a penalty,
57:47 and the penalty is a price instrument.
57:51 And usually the penalty is proportional to the deviation of the standard.
57:56 The more you exceed pollution compared to the standard,
57:58 the higher the penalty.
58:01 So,
58:01 so in one sense,
58:02 it's uh somehow similar than the,
58:04 an emission tax for
58:07 exceeding the standard.
58:11 Um,
58:13 There's a clear case in which you should have both types of instrument.
58:19 It's a case of
58:21 local pollution that uh.
58:24 Local pollutants that are crossing the border of
58:30 Jurisdictions.
58:33 So then you need to have
58:35 two instruments,
58:36 one to deal with uh local pollution concentration,
58:40 the,
58:40 the,
58:40 the pollution that is at the jurisdiction level,
58:44 and that's,
58:44 as I said,
58:46 standard,
58:46 the right instrument to deal with that.
58:49 But part of this pollution is moving
58:52 to other jurisdictions,
58:53 crossing borders.
58:56 Uh,
58:57 so like county border,
58:58 for instance,
58:59 or
59:00 state border or for federal states,
59:03 for instance.
59:04 And then for this um
59:07 um
59:08 moving pollution,
59:09 transboundary pollution flows.
59:12 Having a a price instrument,
59:14 a carbon,
59:15 sorry,
59:15 a tax or an emissions trading scheme,
59:17 for instance.
59:19 Can be one way to deal with this flow.
59:23 So there's a literature about what's called environmental federalism that try to,
59:27 to see what is the best combination of,
59:28 of two.
59:31 Uh,
59:31 so one example of this is,
59:33 um,
59:35 a stand knock.
59:36 So I have worked with uh co Jessica Kya about,
59:39 uh,
59:41 An
59:41 x emission for manufacturing plant in Sweden.
59:45 So in Sweden,
59:46 the way
59:48 those
59:49 plants are regulated is with uh emission standard at the,
59:54 at the plant level.
59:55 So,
59:56 so these are,
59:56 for instance,
59:57 um thermal power plant for
1:00:00 And
1:00:01 and the way they are regulated that county decide about uh
1:00:06 emission
1:00:08 standard in terms of
1:00:11 K NOx emission per kilowatt hour or per
1:00:17 energy unit
1:00:18 at the at the
1:00:20 boiler level.
1:00:23 Uh,
1:00:23 so that's not to deal with local NOO concentration.
1:00:28 And in addition,
1:00:30 there's a national tax on knocks.
1:00:34 And this national tax is to
1:00:37 Deal with this uh
1:00:40 pollution that is crossing a
1:00:42 border.
1:00:43 So the,
1:00:43 because the problem that the country by deciding about the emission standard
1:00:48 does not take into account the impact of the
1:00:52 standard on
1:00:53 emission outside the country.
1:00:55 So you need to have a
1:00:57 Uh,
1:00:58 an authority at the highest level to,
1:01:01 to analyze these and transbounding externalities.
1:01:06 So we work on this and we provide another.
1:01:11 The reason why the
1:01:14 bucket-based and standard instrument can be complemented.
1:01:18 Is the fact that
1:01:20 with a tax on emissions.
1:01:24 You learn
1:01:25 about the cost of reducing pollution
1:01:29 by farms to have a better idea of how much it costs to farm and production plant.
1:01:35 To
1:01:36 reduce their
1:01:37 NOx emissions.
1:01:39 And
1:01:40 this information is important to decide about
1:01:43 how stringent should be the
1:01:46 emission cap.
1:01:47 So basically,
1:01:48 when you set a tax on emission,
1:01:51 you charge emission and by seeing how much,
1:01:54 by observing how much the firm
1:01:57 is emitting,
1:01:57 you have a better idea about the cost of
1:02:00 reducing emissions.
1:02:03 And this costs will tell you whether you should make the
1:02:07 emission cap and the emission standard more stringent or not.
1:02:11 So we have,
1:02:12 we have a paper that's making this point.
1:02:15 So that's,
1:02:16 uh,
1:02:16 so you use
1:02:17 the carbon price,
1:02:19 oh sorry,
1:02:20 the emission tax
1:02:21 as one way to tailor your emission standard.
1:02:25 And the same applies for emissions trading schemes.
1:02:29 And it's happened also
1:02:31 for co-pollutants.
1:02:33 You have sometime,
1:02:34 you know,
1:02:35 often
1:02:37 in a lot of manufacturing industry,
1:02:39 you pollute,
1:02:40 you have
1:02:41 multiple pollutants
1:02:43 and what,
1:02:43 what's happening for one pollutant
1:02:46 and the way one pollutant is regulated
1:02:49 can tell you something about how you should
1:02:50 regulate the other pollutants because they are,
1:02:53 uh,
1:02:54 they interact in the pollution process and also in,
1:02:57 in the,
1:02:57 in the damage function.
1:03:03 OK,
1:03:04 now what about,
1:03:05 uh,
1:03:07 making the stand up.
1:03:08 Yes,
1:03:09 sorry,
1:03:09 sorry,
1:03:09 just a quick point.
1:03:10 So we,
1:03:10 we wanna make sure that we leave,
1:03:12 uh,
1:03:12 1015 minutes,
1:03:13 uh,
1:03:14 at the end,
1:03:15 uh,
1:03:15 and so,
1:03:17 uh,
1:03:17 for,
1:03:17 for que for questions,
1:03:19 uh,
1:03:19 questions and answers.
1:03:20 So,
1:03:20 uh,
1:03:21 yeah,
1:03:22 so do you,
1:03:22 do you think you can,
1:03:23 you can finish up in 5,
1:03:25 10 minutes?
1:03:27 Yeah,
1:03:28 I'll do.
1:03:28 OK.
1:03:29 Fantastic.
1:03:29 Thank you.
1:03:31 OK,
1:03:32 so
1:03:34 So should standard will mandate,
1:03:36 should be mandatory or voluntary?
1:03:38 So it's,
1:03:39 it's related to the question to,
1:03:42 to the question why do firms adopt
1:03:45 vol standard if standards are not mandatory,
1:03:49 why firms go beyond what is mandatory by
1:03:53 reducing air pollution
1:03:55 beyond.
1:03:57 Uh,
1:03:57 so then there's a couple of good reasons to do that.
1:04:01 Attracing consumer,
1:04:03 attract investment from socially responded investment,
1:04:06 investors,
1:04:08 demand for
1:04:09 ISO,
1:04:10 40,000 35 firms.
1:04:13 Improve relationship with stakeholders.
1:04:15 So I have like a,
1:04:17 a survey paper on that uh
1:04:20 with my quarter uh.
1:04:23 Paul Danois
1:04:25 The,
1:04:26 now there's another literature of trying to measure
1:04:29 what is the impact of those voluntary standards.
1:04:31 So these are,
1:04:32 these are voluntary.
1:04:33 Are they
1:04:34 effective in reducing pollution?
1:04:37 And uh you know,
1:04:39 in the literature,
1:04:40 um,
1:04:41 a lot of those papers are based on survey of self reporting reduction of pollution.
1:04:47 Uh,
1:04:49 And,
1:04:50 and with the limitation of this is what
1:04:53 the firm self-reported,
1:04:54 so it's not clear that you should trust them.
1:04:58 And,
1:04:59 and
1:04:59 a couple of papers are.
1:05:02 Uh,
1:05:02 I've tried to answer the question based on the
1:05:05 actual measurement of pollution.
1:05:07 There's,
1:05:07 for instance,
1:05:08 one paper on the paper mill industry.
1:05:11 In Canada,
1:05:12 um,
1:05:14 and showing that ISO 40,000 certification has a
1:05:17 very low or no impact on wastewater emission
1:05:22 from pepper mill industry in Quebec.
1:05:24 So,
1:05:25 so usually the impact is very low this standard.
1:05:28 So that raises the question is whether you
1:05:30 should have voluntary standard or monetary standard.
1:05:32 If you have voluntary standard,
1:05:34 you may achieve something,
1:05:35 but usually
1:05:36 there's a lot of greenwashing,
1:05:37 though they pretend to reduce pollution,
1:05:39 those farms to get the standard,
1:05:41 but it's not very effective.
1:05:46 So
1:05:47 often they are complements in the sense that you can have voluntary standards,
1:05:50 you are
1:05:51 firms are free to go beyond what is imposed and you have a minimal
1:05:56 requirement in terms of emission standard.
1:05:59 But there can be a substitute,
1:06:01 and there are two reasons why.
1:06:03 Sometimes,
1:06:04 you know,
1:06:04 adopting.
1:06:06 Voluntary standard is one way for firms to
1:06:09 preempt the adoption of most recent standards by regulators.
1:06:14 So there are anecdotical evidence that uh
1:06:18 of that and,
1:06:19 and,
1:06:19 and,
1:06:19 and you,
1:06:20 you can,
1:06:21 I mean,
1:06:21 there are,
1:06:22 there's a
1:06:23 conceptual literature and economic making this point.
1:06:26 Uh,
1:06:27 we,
1:06:28 uh,
1:06:28 with the quota,
1:06:29 we're also making the point that
1:06:31 On the consumer perspective,
1:06:33 uh,
1:06:34 it's
1:06:35 Uh,
1:06:36 given that the,
1:06:37 the,
1:06:37 at the end of the day,
1:06:38 the citizens are decided about the regulation.
1:06:42 What you have also is that um,
1:06:46 Citizens or consumer may free ride on the fact that green consumers are
1:06:51 adopt buying greener products.
1:06:54 So at the end there's because of the greener product,
1:06:57 you have a reduction of pollution that is maybe sufficient for the other consumer.
1:07:02 So
1:07:04 having this free riding of
1:07:07 pollution reduction
1:07:09 from
1:07:10 paid by cleaner product may um.
1:07:14 Uh,
1:07:15 make,
1:07:16 may reduce,
1:07:17 reduce the probability of adopting more stent regulations.
1:07:20 So
1:07:21 you can have this also the effect that
1:07:24 Because
1:07:25 some firms are more.
1:07:28 Um,
1:07:29 uh,
1:07:29 um,
1:07:30 those,
1:07:30 those firms are,
1:07:32 uh,
1:07:32 reducing their pollution.
1:07:34 The other firm can live without any,
1:07:36 uh,
1:07:37 stringent regulation.
1:07:38 So this is showing the,
1:07:40 this,
1:07:40 this point is made in the political economy model showing that.
1:07:44 You may have less stringent standards when you have green consumers.
1:07:50 OK.
1:07:50 So I will get you this one.
1:07:53 Let's,
1:07:53 let's skip that.
1:07:56 And the last part of the report,
1:07:58 it's about the interplay between standards and trade.
1:08:03 So this is something which is general
1:08:05 for all standards,
1:08:07 bar standardization of goods and processes.
1:08:12 Uh,
1:08:12 uh,
1:08:13 then you make trade more easy.
1:08:16 And you,
1:08:16 you,
1:08:17 you may comply uh more easily to uh
1:08:21 foreign regulation.
1:08:23 For instance,
1:08:24 by reporting your CO2 emissions,
1:08:26 you can,
1:08:27 uh,
1:08:27 for instance,
1:08:29 um,
1:08:30 Uh,
1:08:31 comply with the
1:08:33 Well,
1:08:34 you can make easily
1:08:36 the importer
1:08:38 of your goods,
1:08:38 uh,
1:08:39 so
1:08:40 in,
1:08:40 in the EU.
1:08:42 Complying with the
1:08:44 carbon border adjustment mechanism that is
1:08:48 Is going to be implemented
1:08:51 next year.
1:08:53 Uh,
1:08:53 that's an example.
1:08:54 So if you have this reporting of CO2,
1:08:56 then it's easier for the importer to report the CO2 of steel that is coming from your
1:09:02 manufacturing plant.
1:09:05 It's used also to have tech technical transfer because uh
1:09:10 So,
1:09:10 so there's also some,
1:09:12 some empirical evidence that uh
1:09:14 standard facilitate technical technological transfers.
1:09:18 So in,
1:09:18 in,
1:09:18 in,
1:09:18 in the report,
1:09:20 I'm making the point that
1:09:23 adopting more stringent standards to have market assets
1:09:27 can somehow solve solve the trade-off between
1:09:31 sovereignty and increased market asset.
1:09:34 So basically it's a story that,
1:09:36 you know,
1:09:37 in some countries,
1:09:38 some countries may
1:09:40 have more stringent regulation.
1:09:43 Because
1:09:43 they care about some issues like think about the
1:09:47 genetic modified organisms.
1:09:49 It's a big issue in Europe but not in the US or Latin America
1:09:54 or,
1:09:55 you know,
1:09:56 the,
1:09:56 I,
1:09:56 I provide the example of the
1:09:59 The growth hormones
1:10:02 for cattle
1:10:04 that are forbidden or some pesticides that are forbidden in the EU
1:10:09 but are allowed in other countries.
1:10:12 So if the
1:10:13 other countries are also implementing these standards to have a market asset,
1:10:19 it goes against their preferences because they,
1:10:21 they don't think that it's a big issue,
1:10:23 but they,
1:10:24 what they do that to increase their export.
1:10:27 Um,
1:10:28 they may decide to have two different
1:10:32 supply chains,
1:10:33 one for export and one for local market with different regulations.
1:10:38 But that's it,
1:10:39 but then there's a problem of traceability.
1:10:42 You want to make sure that um
1:10:45 the,
1:10:45 the,
1:10:45 the,
1:10:46 the two supply chains are really separated.
1:10:49 And um
1:10:51 and it's not always the case.
1:10:52 So,
1:10:53 I provided an example with the
1:10:56 So at some point I was
1:10:58 involved uh.
1:11:00 In,
1:11:00 uh,
1:11:00 I was leading actually leading
1:11:03 a committee in charge of uh evaluating the free
1:11:06 trade agreement between the European Union and the Mercosur
1:11:10 area,
1:11:11 to Brazil,
1:11:11 Argentina,
1:11:12 Paraguay,
1:11:13 Uruguay.
1:11:15 For the French government,
1:11:17 um,
1:11:19 And then uh so it's it's what the KBT.
1:11:22 Launched in 2019.
1:11:25 And then we figure out that
1:11:28 about 1/3 of the pesticides used in the Berco cedar area are banned in the EU.
1:11:35 And for instance,
1:11:35 there's no regulation on animal welfare in Mercosur,
1:11:38 but there's a regulation on
1:11:40 the side of transportation.
1:11:43 I mean,
1:11:44 there's a regulation about transportation of animals
1:11:47 in,
1:11:47 in,
1:11:47 in,
1:11:48 in France.
1:11:48 So,
1:11:49 so you have really different standards
1:11:52 on,
1:11:52 on those issues.
1:11:54 Um,
1:11:54 we also banned the,
1:11:56 the.
1:11:57 The use of hormones for promoting
1:12:00 growth
1:12:02 in the EU,
1:12:03 but it's used in Brazil.
1:12:06 Um,
1:12:07 and,
1:12:07 and it,
1:12:08 and there was
1:12:10 an audit of the European Commission making the point that
1:12:14 There's no way to be sure that
1:12:17 the beef that is imported from Brazil in Europe
1:12:21 is not coming from farms that are using these hormones.
1:12:26 There was a similar issue in the free trade agreement between Canada and the EU.
1:12:33 So in the EU we forbid the.
1:12:37 Animals that are fed with
1:12:41 Uh
1:12:42 Constituent of animal origin,
1:12:44 so meat or bones.
1:12:47 And it's,
1:12:48 it's allowed in Canada and it's not clear that we are sure that
1:12:53 the meat that is coming are not coming from farms that are using.
1:12:58 Meat and bone to feed their cattle.
1:13:01 Um,
1:13:03 So that's uh
1:13:04 one reason you,
1:13:05 you
1:13:07 country may
1:13:08 go beyond their preferences to adopt
1:13:11 more region standards to,
1:13:13 to be sure to comply with the EU
1:13:16 regulation,
1:13:16 for instance.
1:13:20 So
1:13:22 That's uh
1:13:25 About all I wanted to say,
1:13:26 so just to summarize,
1:13:27 some are essential to address environmental challenges.
1:13:32 Standards are suitable to deal with local pollution.
1:13:35 So,
1:13:35 uh,
1:13:36 standards are very good
1:13:37 adapted to local pollution.
1:13:39 They are good because they are easier to enforce than market-based instrument.
1:13:44 They are also
1:13:46 good when they are complemented with market-based instruments
1:13:50 and nudges.
1:13:51 So they are part of the
1:13:53 uh
1:13:54 uh of,
1:13:55 of the policy mix.
1:13:58 They can be voluntary,
1:13:59 but when they are voluntary,
1:14:01 they are less effective,
1:14:03 and sometimes they can be counterproductive.
1:14:05 So
1:14:06 it's good also to have mandatory standards,
1:14:09 not only voluntary standards,
1:14:11 and standards are key component
1:14:13 of international trade.
1:14:16 Thank you.
1:14:21 Thank you,
1:14:22 thank you so much,
1:14:23 uh,
1:14:23 Stefan.
1:14:24 Uh,
1:14:24 yeah,
1:14:24 Milo,
1:14:25 go ahead,
1:14:25 yeah.
1:14:28 Uh,
1:14:29 hi,
1:14:29 Stefan,
1:14:29 uh,
1:14:30 thanks a lot for the
1:14:32 For the presentation and.
1:14:34 I just wanted to,
1:14:36 to
1:14:39 To discuss a little bit as you as you know,
1:14:41 the perspective of the of the report
1:14:43 will be uh standard from developing countries perspective
1:14:47 and I wanted to
1:14:50 discuss a little bit the trade off that you that you explained,
1:14:53 uh,
1:14:55 from that perspective.
1:14:56 So
1:14:57 when we think for example at
1:14:59 market based versus uh
1:15:01 command and control measure,
1:15:04 is there something that
1:15:05 research can say
1:15:07 on.
1:15:08 Which one are uh
1:15:11 maybe preferable in context in which there is
1:15:13 limited state capacity or you know the regulator
1:15:16 uh the limited enforcement capacity
1:15:19 uh
1:15:20 you you mentioned in the report that that standards are easier
1:15:23 to enforce than than uh taxes or other instruments and uh
1:15:28 I was wondering
1:15:30 if if there is
1:15:31 some evidence on that.
1:15:33 Uh,
1:15:35 or,
1:15:35 or,
1:15:35 you know,
1:15:36 more generally I would,
1:15:36 I would be thinking about all this trade
1:15:38 off more from a developing country's perspective.
1:15:42 Well,
1:15:45 So,
1:15:45 so I'm making the point that,
1:15:47 uh,
1:15:48 yeah,
1:15:48 as you say,
1:15:49 the
1:15:50 When you have a limited uh state capacity,
1:15:54 institutional capacity,
1:15:55 then this is one reason to go for standards.
1:15:58 Uh,
1:15:59 and,
1:16:00 and
1:16:00 the argument is just,
1:16:02 um,
1:16:03 Straightforward because
1:16:05 it's,
1:16:06 well,
1:16:06 first,
1:16:07 you,
1:16:07 you only need
1:16:08 to check the technology.
1:16:11 So for technical standard,
1:16:12 it's,
1:16:13 you just uh
1:16:14 check what which technology is used and you ban some,
1:16:17 some input and some technology.
1:16:20 For emission standard it's more difficult because you have to measure.
1:16:24 You have to measure and penalize if you exceed the standard.
1:16:29 But it's easier than charging taxes or
1:16:35 providing subsidies,
1:16:36 I would say,
1:16:37 particularly especially
1:16:39 because in,
1:16:39 in,
1:16:40 well,
1:16:41 in developing countries there's the tax base is low and a lot of
1:16:45 there's a big informal sector,
1:16:47 for instance.
1:16:49 Um,
1:16:50 and,
1:16:50 and when you want,
1:16:51 if you want to go to up to cap and trade emissions trading scheme,
1:16:55 that it's even more complex because you need to set up.
1:17:00 Emission rights,
1:17:01 you need to set up a platform for trading.
1:17:05 Um,
1:17:06 so that requires a lot of,
1:17:08 uh,
1:17:08 institutional background.
1:17:10 So I don't,
1:17:12 I don't think there's a big literature on that,
1:17:14 but
1:17:15 it's just only on practical instrument.
1:17:18 In practice,
1:17:19 how will I,
1:17:19 how,
1:17:20 how you will do
1:17:21 to,
1:17:21 to,
1:17:22 to implement those
1:17:23 different types of instruments.
1:17:25 And it,
1:17:26 it's just
1:17:27 more easy to implement standard compared to
1:17:31 tax and
1:17:32 and subsidy and tax and subsidies compared to emission trading schemes.
1:17:39 OK,
1:17:39 thank you,
1:17:40 and maybe you can,
1:17:41 you want to stop sharing because we see.
1:17:44 Ah,
1:17:44 OK.
1:17:48 No.
1:17:51 Mm
1:17:55 OK.
1:17:58 So,
1:17:58 uh,
1:17:58 I,
1:17:59 I mean,
1:17:59 sorry,
1:18:00 uh,
1:18:00 oh,
1:18:00 chubby,
1:18:00 chubby,
1:18:01 chubby,
1:18:01 go ahead,
1:18:02 chubby sit it up.
1:18:05 Can you hear me?
1:18:07 Yes.
1:18:08 All right,
1:18:09 um,
1:18:09 just a quick question on,
1:18:11 on the part on the,
1:18:13 on the trade-off
1:18:14 on sovereignty that I guess it,
1:18:17 it,
1:18:17 it refers to consumer preferences,
1:18:19 right,
1:18:19 in Europe,
1:18:20 in the context of the,
1:18:21 the example of the Mercosur,
1:18:22 right?
1:18:22 And
1:18:23 And increased market taxes,
1:18:26 I think.
1:18:27 Well,
1:18:27 it's a proof that they haven't agreed,
1:18:30 right?
1:18:30 So
1:18:31 there is no market access so far,
1:18:33 right?
1:18:33 And I was wondering
1:18:35 if you could just develop a little bit more into the distinction
1:18:40 between the mandatory standard and the
1:18:42 voluntary in terms of technical regulations,
1:18:44 right?
1:18:44 Because
1:18:45 You could think that if there is no risk for health,
1:18:49 um,
1:18:50 instead,
1:18:50 making a technical regulation a mandatory standard.
1:18:53 You allow a voluntary standard.
1:18:55 So for those consumers in Europe that are not sure,
1:18:59 they can,
1:19:00 the signaling can occur through a voluntary standard
1:19:03 rather than uh a mandatory standard that can act as a
1:19:08 As a barrier to trade,
1:19:09 right?
1:19:10 So if you could develop a little bit this different in the use between
1:19:14 uh the voluntary versus mandatory standard and when is more or less justified.
1:19:22 Yeah,
1:19:23 so
1:19:25 what the point I was making is that
1:19:27 for instance,
1:19:28 Brazil may
1:19:30 decide to ban these
1:19:32 these growth hormones just to have access to the
1:19:35 European market because it's otherwise it's not possible,
1:19:39 even though the citizen in general or
1:19:42 farmers and consumer,
1:19:44 they may not care.
1:19:47 It's important also for
1:19:50 the acceptability of the trade agreement for
1:19:53 the European farmers
1:19:56 because
1:19:57 most of the process
1:19:59 we experienced,
1:20:00 especially in fall in France,
1:20:02 was because they had the feeling that
1:20:06 The competition is unfair because they have less stringent standards,
1:20:10 so then that they have lower costs because of their strident standards.
1:20:15 Now,
1:20:15 um,
1:20:17 Something which is um.
1:20:19 was maybe disappointing in this trade agreement
1:20:24 is that there was not much on voluntary standards
1:20:28 and in particular there was no.
1:20:32 No,
1:20:32 nothing that would differentiate products on voluntary standards.
1:20:38 So,
1:20:38 um,
1:20:39 I think one way to foster um.
1:20:43 Uh
1:20:44 Well,
1:20:45 environmental protection in this case also the
1:20:48 The fight against deforestation is to reward voluntary standards
1:20:54 and to get lower tariffs or
1:20:58 promote
1:20:59 products with voluntary standards.
1:21:02 So for instance,
1:21:02 in Brazil you have these
1:21:05 Uh,
1:21:05 soya mon
1:21:07 it's called Soya.
1:21:09 Uh,
1:21:10 memorandum,
1:21:12 which was a standard
1:21:14 for beef,
1:21:15 not coming from,
1:21:17 not from soya,
1:21:18 for instance,
1:21:19 not coming from the Amazon area.
1:21:21 That was a party very successful.
1:21:24 Um,
1:21:26 The issue is it should be recognized as a different product.
1:21:31 When you set tariffs,
1:21:33 uh,
1:21:34 and you should have a preferential tariff for this kind of,
1:21:37 uh,
1:21:38 uh,
1:21:39 label products,
1:21:40 and,
1:21:41 and this is not,
1:21:42 uh,
1:21:42 what is,
1:21:43 what is in the agreement.
1:21:53 All right.
1:21:53 There's,
1:21:54 there's time maybe for one more question.
1:21:56 Uh,
1:21:57 Anyone,
1:21:58 he's not,
1:21:59 uh,
1:22:00 If not I,
1:22:01 I,
1:22:01 I do have a question.
1:22:02 Sorry,
1:22:02 Stefan.
1:22:03 So,
1:22:04 um,
1:22:05 So,
1:22:06 so,
1:22:06 I mean,
1:22:07 is there cross-country data that,
1:22:09 that basically showcases,
1:22:11 you know,
1:22:11 what you've been saying that,
1:22:13 that basically,
1:22:13 you know,
1:22:14 low-income countries
1:22:16 would,
1:22:16 would rather
1:22:18 set up standards rather than,
1:22:20 say,
1:22:20 uh,
1:22:21 market-based mechanisms and,
1:22:23 and,
1:22:23 and again,
1:22:24 you know,
1:22:25 and,
1:22:25 and,
1:22:25 and,
1:22:25 you know,
1:22:26 some,
1:22:26 some literature trying to understand,
1:22:28 again,
1:22:28 why,
1:22:29 why that might be the case.
1:22:30 I mean,
1:22:30 you,
1:22:30 you,
1:22:31 you know,
1:22:31 you spoke about
1:22:32 You know,
1:22:33 the,
1:22:33 the difficulty of implementing maybe market-based policies because,
1:22:36 you know,
1:22:36 maybe there's a,
1:22:37 a fixed cost of doing that.
1:22:39 I mean,
1:22:39 this reminds me,
1:22:40 you know,
1:22:41 when in the context of taxation,
1:22:43 right?
1:22:43 So,
1:22:44 VAT versus income-based taxation,
1:22:48 right?
1:22:48 And so,
1:22:49 you know,
1:22:50 in VAT of course,
1:22:51 you can,
1:22:51 you know,
1:22:52 you,
1:22:52 you,
1:22:52 you know,
1:22:53 the base,
1:22:53 the tax base is a lot
1:22:54 wider than,
1:22:55 than income base because only,
1:22:57 only
1:22:58 former workers are,
1:22:59 are.
1:22:59 Can,
1:23:00 you know,
1:23:00 can,
1:23:00 are gonna pay income-based taxes,
1:23:02 right?
1:23:03 So,
1:23:03 but,
1:23:04 but,
1:23:04 but so in the context of,
1:23:05 of whether standards or,
1:23:07 so I,
1:23:08 I want you to,
1:23:08 to,
1:23:09 you know,
1:23:09 uh,
1:23:09 to elaborate a bit more on the,
1:23:11 on the,
1:23:12 on the,
1:23:12 uh,
1:23:13 the role of informality here.
1:23:14 Uh,
1:23:15 uh,
1:23:15 you know,
1:23:15 is it easier to impose a standard on an informal firm?
1:23:19 Rather than taxes,
1:23:20 uh,
1:23:21 uh,
1:23:22 and,
1:23:22 and,
1:23:22 and again,
1:23:23 what,
1:23:23 and what are the,
1:23:24 so,
1:23:25 so one of the,
1:23:26 you know,
1:23:26 on the structure of the,
1:23:27 of the industry,
1:23:28 but also,
1:23:29 you know,
1:23:29 going back to Milo's point about
1:23:32 What are the informational requirements
1:23:34 and,
1:23:35 and expertise requirements to,
1:23:37 to set either
1:23:39 a market-based policy versus a,
1:23:42 a standard,
1:23:42 right?
1:23:43 I mean,
1:23:43 so are there differences there
1:23:45 that,
1:23:45 that make uh standards more,
1:23:48 more,
1:23:48 uh,
1:23:50 you know,
1:23:50 uh,
1:23:51 you know,
1:23:51 more,
1:23:51 more useful
1:23:53 or,
1:23:53 uh,
1:23:54 for,
1:23:54 you know,
1:23:54 for,
1:23:54 for low-income countries
1:23:56 that might have these,
1:23:57 uh,
1:23:58 the,
1:23:58 the,
1:23:58 you know,
1:23:58 that might face these more these higher constraints.
1:24:03 OK,
1:24:03 so,
1:24:05 So to answer this question,
1:24:07 if you have some more empirical evidence on that,
1:24:10 uh,
1:24:10 there are two ways to go,
1:24:12 I will say.
1:24:13 One is to go into case studies
1:24:16 because for each particular case,
1:24:18 each particular
1:24:19 source of pollution industry,
1:24:22 then you can list what are the potential standard you can implement,
1:24:26 technical standard,
1:24:27 emission standard,
1:24:29 how you can tax the pollution,
1:24:31 how you can subsidize
1:24:33 better practices and which kind of
1:24:36 And then you go into the details about uh
1:24:39 what what the cost,
1:24:40 how to implement this,
1:24:41 and uh you know,
1:24:42 waste,
1:24:43 waste
1:24:44 treatment is not the same that air quality for cars,
1:24:47 which is not the same for coal power plant,
1:24:49 and
1:24:49 you know,
1:24:50 so it's really practical,
1:24:51 you know,
1:24:52 how,
1:24:53 what does it mean in practice
1:24:55 and what are the
1:24:56 different costs and really accounting
1:24:59 what is required in terms of information,
1:25:01 you need to have a monitor tracker at the.
1:25:04 At the chimney or the muffler or.
1:25:08 Or to track the car,
1:25:09 you know,
1:25:10 that's,
1:25:10 that's very practical.
1:25:12 The other way to go is um
1:25:15 to see,
1:25:15 you know,
1:25:16 how,
1:25:17 uh
1:25:19 Firms and
1:25:20 consumers respond to different
1:25:23 types of instruments in developing countries.
1:25:27 So for instance,
1:25:28 uh,
1:25:28 if you want to have an idea about the impact of the
1:25:32 carbon
1:25:32 tax,
1:25:33 for instance.
1:25:34 You can look at uh how uh
1:25:39 Consumers and firms respond to the variation of the price of fuel,
1:25:43 for instance.
1:25:45 Which gives you a sense about if you increase the price of fuel due to the carbon tax,
1:25:50 uh,
1:25:50 how effective will be this increase in terms of
1:25:53 reducing emissions.
1:25:56 Uh,
1:25:57 uh,
1:25:57 things like that,
1:25:58 or how they adopt technologies and how they are good in adopting technologies,
1:26:03 uh,
1:26:03 the division of technology,
1:26:04 I don't know.
1:26:06 How,
1:26:06 what are the,
1:26:07 the
1:26:08 plan.
1:26:09 The leakage of if you have a subsidy program or
1:26:13 the level of corruption,
1:26:14 uh,
1:26:15 so if you spend €1 in adopting tech subsidizing some technology.
1:26:20 How much of this euro will be,
1:26:22 uh,
1:26:23 will be waste in terms of administrative,
1:26:25 well,
1:26:26 will go into administrative cost or maybe,
1:26:28 uh,
1:26:29 waste in,
1:26:29 uh,
1:26:30 other issues.
1:26:33 So you,
1:26:33 so maybe you can extrapolate with this kind of data
1:26:36 to tell something
1:26:38 more general.
1:26:39 Mm
1:26:41 Another way is to go into the details of the of of the pollution topics.
1:26:48 All right.
1:26:49 Sorry.
1:26:49 So,
1:26:49 uh,
1:26:50 I think we're,
1:26:50 we're out of time.
1:26:51 Thank you so much,
1:26:52 uh,
1:26:53 uh,
1:26:53 Stefan,
1:26:53 for,
1:26:54 for this,
1:26:54 uh,
1:26:54 very nice,
1:26:55 uh,
1:26:55 talk and lively,
1:26:56 lively discussion.
1:26:58 And,
1:26:58 uh,
1:26:59 yeah,
1:26:59 I'll,
1:26:59 I'll see you all in the,
1:27:01 in the next,
1:27:01 uh,
1:27:01 in the next seminar.
1:27:03 Thank you again and,
1:27:04 uh,
1:27:04 have a great,
1:27:05 have a great evening.
1:27:06 Thank you.
1:27:07 Thank you.
1:27:09 All right.
1:27:09 Thank you.
1:27:09 Bye.
1:27:10 Dr.
1:27:11 Stefan.
1:27:17 So,
1:27:17 so,
1:27:18 Milo,
1:27:18 OK,
1:27:18 do you have 5 minutes?
1:27:20 Sure.
1:27:21 So for the,
1:27:22 for the next step,
1:27:24 so you send me a lot of comments.
1:27:27 Let,
1:27:28 let me call back
1:27:29 Chavi online.
1:27:31 Give me a stuff,
1:27:31 or it's actually,
1:27:33 can you connect?
1:27:35 Stefan wants to have a question.
1:27:38 Oh,
1:27:38 just a sec.
1:27:40 Sorry,
1:27:40 can you reconnect or,
1:27:41 or you wanna go ahead.
1:27:47 Yeah,
1:27:47 I know,
1:27:48 so I think
1:27:49 If you
1:27:52 I mean some of them we discussed today but
1:27:55 uh so the idea would be to to have a
1:27:58 a draft which we consider finished that we can.
1:28:01 Uh,
1:28:02 if you agree post
1:28:03 on,
1:28:03 on our website.
1:28:06 OK.
1:28:06 Um
1:28:09 So in order to do that,
1:28:11 if you know,
1:28:12 if,
1:28:12 if you could incorporate some of the comments that we that that that uh.
1:28:17 That we send.
1:28:21 You know,
1:28:22 if
1:28:25 We can go in more details if you want of which one
1:28:29 or you think are priority or not but but uh.
1:28:33 Um,
1:28:39 Yeah,
1:28:39 so,
1:28:40 so there's one I,
1:28:41 so I started to,
1:28:44 so you wanted to have one example in different topics.
1:28:48 So I've,
1:28:48 uh,
1:28:49 I wrote a table,
1:28:50 so I just,
1:28:51 uh,
1:28:52 a table in which you have different like,
1:28:54 uh,
1:28:55 air quality,
1:28:55 CO2 emissions,
1:28:57 uh,
1:28:57 waste,
1:28:58 uh,
1:28:58 pollution.
1:29:00 Wastewater
1:29:01 and so on in which I have different examples
1:29:03 of different of the three types of policy instruments.
1:29:08 So I've done that
1:29:10 Um,
1:29:12 So
1:29:13 There was this point about a consistency between the fact that
1:29:20 I write in the one party that
1:29:22 usually market business are considered more efficient.
1:29:26 Than standard,
1:29:27 but then I think that
1:29:29 standard are easier to implement,
1:29:31 monitoring for that market-based instrument.
1:29:33 I don't think it is inconsistent.
1:29:35 It's,
1:29:35 there are two different properties where they are cost effective
1:29:38 and what they are easy to implement.
1:29:42 Oh.
1:29:46 Then there's a suggestion to,
1:29:47 to write a table
1:29:48 with local versus global pollutants,
1:29:51 um.
1:29:54 We should have a
1:29:56 market base versus standards?
1:29:59 Ah
1:30:01 So I,
1:30:01 I
1:30:03 I'm,
1:30:04 I'm not,
1:30:04 I'm,
1:30:05 I'm not very comfortable with this idea because
1:30:07 when we talk about local pollutants like,
1:30:10 uh,
1:30:10 as I said,
1:30:11 particulate NOx and SO2,
1:30:14 they also
1:30:16 diffuse like a little bit global because they,
1:30:18 as I said,
1:30:19 they cross the county borders.
1:30:22 So usually you need
1:30:23 both instruments.
1:30:26 But,
1:30:26 um,
1:30:28 but in the table of the different.
1:30:31 Type of instrument.
1:30:32 What I can say is that,
1:30:33 you know,
1:30:33 if you move from a
1:30:35 particulate to CO2,
1:30:38 carbon
1:30:39 dioxide,
1:30:40 then you move from local to global.
1:30:42 So that's one way to do that.
1:30:47 Uh,
1:30:47 what else?
1:30:48 Uh,
1:30:50 011 thing
1:30:53 Uh,
1:30:53 we are really
1:30:54 I mean it was really related to the last question I have on.
1:31:00 Enforcement capacity and so on.
1:31:02 This is something that I think we want to take a position in the report.
1:31:08 on
1:31:09 You know how to adapt the policy instrument based on the fact that uh.
1:31:14 That
1:31:14 we
1:31:16 You know,
1:31:16 regulators in,
1:31:17 in many developing countries do not have the
1:31:20 ability to
1:31:22 uh
1:31:23 to enforce.
1:31:25 So either you know either you,
1:31:26 you want to go for a weaker standard or you want to go for other type of policy or what.
1:31:33 So you know,
1:31:33 I,
1:31:33 I,
1:31:34 I understood your,
1:31:35 your,
1:31:35 uh,
1:31:36 your reply and uh I,
1:31:38 I also read what you wrote and the.
1:31:40 Yeah,
1:31:41 so I need.
1:31:43 If you have other
1:31:44 papers that come to your mind on this point,
1:31:45 I think that's gonna be super,
1:31:47 super,
1:31:47 super useful.
1:31:48 So you,
1:31:48 you,
1:31:49 you had this point about,
1:31:50 uh,
1:31:51 in the future with.
1:31:53 Artificial intelligence and automation,
1:31:57 it will be more easy to measure.
1:31:59 Hm.
1:32:00 So,
1:32:00 so this is something that,
1:32:02 that is
1:32:03 part of this Duflo and Griston paper.
1:32:07 So what they did in the last RCT,
1:32:09 they installed automatic
1:32:11 measurement devices
1:32:13 at the,
1:32:13 at the manufacturing plant.
1:32:16 So they didn't have to,
1:32:18 to hire auditors to measure emissions.
1:32:21 So that's something that is going to be the case.
1:32:26 Now what I can do on that
1:32:28 is I
1:32:30 So they,
1:32:31 they,
1:32:31 you do you remember Alipio Ferreira,
1:32:35 was a PhD student.
1:32:36 Yeah,
1:32:37 yeah,
1:32:37 yeah,
1:32:37 yeah.
1:32:37 He,
1:32:37 he has this paper on the impact of the
1:32:40 technical project in
1:32:42 satellite image
1:32:43 on the fight against deforestation in Brazil.
1:32:47 Mm.
1:32:48 Showing that uh
1:32:51 so basically the argument would be that
1:32:54 AI
1:32:56 or technical progress will be a way to substitute the.
1:33:01 The fact that in many developing countries we lack uh
1:33:05 technical resources or financial resources to enforce.
1:33:09 Yeah,
1:33:09 exactly.
1:33:12 So,
1:33:12 so
1:33:13 satellite image,
1:33:14 for instance,
1:33:15 is one way to improve enforcement.
1:33:18 Mhm.
1:33:18 So you can track the high level of pollution with satellite image
1:33:23 or
1:33:24 deforestation.
1:33:26 And then you can just uh
1:33:28 detect uh
1:33:29 out of compliance.
1:33:32 And then you can send some,
1:33:33 someone to,
1:33:34 to check and to,
1:33:36 to,
1:33:36 to set a fine or.
1:33:38 OK.
1:33:43 So this is further
1:33:45 pushing the idea that standard would be the appropriate tool there because it.
1:33:50 It becomes easier to enforce.
1:33:53 Thanks to,
1:33:53 well,
1:33:54 but,
1:33:54 but,
1:33:54 but that's the place of photo
1:33:56 market based instrument,
1:33:57 right,
1:33:57 or
1:33:59 Because
1:34:00 also if you,
1:34:01 if,
1:34:01 if you are measuring pollution more easily,
1:34:04 then you can charge more easily
1:34:06 emissions,
1:34:07 yeah,
1:34:07 yeah,
1:34:07 but the market based then there's all this part about collecting,
1:34:10 collecting the tax and,
1:34:11 and.
1:34:13 But OK,
1:34:14 you can think about,
1:34:15 uh,
1:34:16 no,
1:34:17 it's just making the point that enforcing regulation,
1:34:19 it's,
1:34:19 it's easier.
1:34:21 Yeah,
1:34:22 there's a paper for Iceland in which they uh by uh
1:34:25 Perin Terman in which they
1:34:27 implement the Piguvian
1:34:30 carbon tax on car driving
1:34:33 by tracking how much people drive.
1:34:36 OK.
1:34:38 Yeah.
1:34:40 So instead of having an emission,
1:34:41 well,
1:34:42 yeah,
1:34:42 then you can tax the CO2 emission
1:34:45 or NOx emission,
1:34:46 everything.
1:34:49 Bye.
1:34:51 No,
1:34:52 that sounds good.
1:34:52 I mean,
1:34:54 Uh,
1:34:55 Chavi,
1:34:56 we were,
1:34:56 Stefan was asking the next step,
1:34:58 and I told him that
1:34:59 we are
1:35:00 planning to,
1:35:00 to,
1:35:01 to publish the paper
1:35:03 on the website,
1:35:04 so.
1:35:06 Uh,
1:35:06 if you can send us
1:35:08 a revised version
1:35:10 including,
1:35:11 you know,
1:35:11 taking into account some of the comments,
1:35:13 uh,
1:35:14 you received in the.
1:35:16 I
1:35:19 I don't know,
1:35:20 maybe a couple of weeks or something.
1:35:24 Yeah,
1:35:24 yeah,
1:35:25 no,
1:35:25 I mean,
1:35:25 I,
1:35:25 I don't think we're in a rush,
1:35:26 but,
1:35:27 but yeah,
1:35:27 no,
1:35:27 that would be,
1:35:28 and,
1:35:29 and,
1:35:29 and just,
1:35:29 just on my,
1:35:30 on my,
1:35:31 on my last point,
1:35:32 uh,
1:35:33 Stefan,
1:35:33 so if you take
1:35:35 One
1:35:36 type of pollution,
1:35:38 um,
1:35:39 you know,
1:35:40 and,
1:35:40 and you look at how that is being regulated
1:35:44 across the
1:35:46 income,
1:35:46 you know,
1:35:46 the GDP per capita or sort of the,
1:35:49 you know,
1:35:49 the income distribution of the country,
1:35:52 whether there's any patterns that,
1:35:53 that,
1:35:54 that,
1:35:54 that can be,
1:35:55 you know,
1:35:55 that can,
1:35:56 you know,
1:35:56 can trace out,
1:35:57 you know.
1:35:58 And you know,
1:35:59 I hear you,
1:35:59 right?
1:36:00 I mean,
1:36:00 you know,
1:36:00 of course,
1:36:01 technology is gonna,
1:36:02 you know,
1:36:02 help in,
1:36:03 in,
1:36:04 in measurement and,
1:36:05 and that,
1:36:06 that has implications for whether you wanna set up
1:36:09 uh one system or another,
1:36:10 but,
1:36:10 but.
1:36:11 But yeah,
1:36:11 I wonder whether there's,
1:36:13 uh,
1:36:13 of course,
1:36:14 you know,
1:36:14 the type of industry also matters,
1:36:16 right?
1:36:16 I mean,
1:36:17 you know,
1:36:17 cause,
1:36:17 cause some countries don't,
1:36:18 uh,
1:36:19 you know,
1:36:19 you don't have,
1:36:20 you know,
1:36:20 if there's no steel production,
1:36:22 you know,
1:36:22 in some countries,
1:36:23 or,
1:36:24 you know,
1:36:24 then,
1:36:25 then,
1:36:25 you know,
1:36:26 uh,
1:36:27 then,
1:36:27 then,
1:36:27 you know,
1:36:28 but,
1:36:28 um.
1:36:30 Yeah,
1:36:30 so,
1:36:30 so,
1:36:31 you know,
1:36:31 I guess,
1:36:31 also having a sense of
1:36:33 who are the big emitters,
1:36:34 you know,
1:36:35 the big,
1:36:35 big polluters or not,
1:36:36 but,
1:36:37 but,
1:36:38 but I don't know,
1:36:38 like garments,
1:36:39 you know,
1:36:39 garment,
1:36:40 for example,
1:36:40 which is,
1:36:41 you know,
1:36:41 manufacturing and,
1:36:42 and this would be,
1:36:43 you know,
1:36:43 I think you,
1:36:44 you would have it in quite a,
1:36:45 you know,
1:36:46 garment.
1:36:46 You know,
1:36:47 it's there's a lot of pollution in terms of,
1:36:49 uh,
1:36:50 dyes and stuff in the,
1:36:51 you know,
1:36:52 that goes out in the river,
1:36:53 and so,
1:36:54 so,
1:36:54 you know,
1:36:54 and I believe you,
1:36:55 you might have some informal,
1:36:57 you know,
1:36:57 informal firms there.
1:36:58 So,
1:36:59 you know,
1:36:59 how countries are are solving this,
1:37:02 this issue of
1:37:03 Uh,
1:37:04 is,
1:37:04 you know,
1:37:04 might be interesting along the,
1:37:06 but,
1:37:06 but,
1:37:07 but for all we know,
1:37:07 I mean,
1:37:08 there might be no data,
1:37:08 so I guess,
1:37:09 I guess I was asking as to whether there's,
1:37:11 you know,
1:37:12 you know,
1:37:12 any,
1:37:13 you know,
1:37:13 cross-country data set
1:37:15 that,
1:37:15 that can,
1:37:15 or,
1:37:16 you know,
1:37:16 that,
1:37:16 that,
1:37:16 that can,
1:37:18 you know,
1:37:18 can,
1:37:18 can help us,
1:37:19 uh,
1:37:19 uh,
1:37:20 understand
1:37:21 how governments are tackling these,
1:37:23 these,
1:37:23 this problem,
1:37:25 you know,
1:37:25 across time and across,
1:37:26 across,
1:37:27 uh,
1:37:27 the income distribution.
1:37:29 But,
1:37:29 but,
1:37:29 you know,
1:37:30 but,
1:37:30 but the answer could just be,
1:37:31 look,
1:37:31 uh,
1:37:31 you know,
1:37:32 that doesn't exist,
1:37:33 right?
1:37:33 And so,
1:37:34 And
1:37:34 I mean,
1:37:36 there are data,
1:37:38 uh,
1:37:38 survey data on,
1:37:41 um,
1:37:43 so there's a professor the ECD have the policy
1:37:47 stringency index,
1:37:49 environmental regulations stringency and act
1:37:52 on different type of pollutants.
1:37:55 The you have the also the World
1:37:57 Values survey about the perception of environmental issues
1:38:01 in different countries,
1:38:02 how
1:38:03 people perceive nuclear power or
1:38:07 GMO or
1:38:08 but even,
1:38:09 even if you take the stringency though,
1:38:10 it's all based on standards,
1:38:13 right?
1:38:13 So
1:38:13 whether countries used a market-based approach or a standard or more uh
1:38:19 As,
1:38:19 you know,
1:38:20 standards,
1:38:21 um,
1:38:21 you know,
1:38:22 is there really,
1:38:23 uh,
1:38:24 you know,
1:38:25 is there a level in which,
1:38:27 you know,
1:38:27 you want to switch.
1:38:29 You know,
1:38:30 again,
1:38:30 you said,
1:38:30 you know,
1:38:31 standards are easy to implement,
1:38:33 but maybe
1:38:34 market-based are more efficient.
1:38:36 So,
1:38:36 is there a way when there's,
1:38:38 you know,
1:38:38 there's a critical mass of,
1:38:40 of
1:38:41 that,
1:38:41 that,
1:38:41 you know,
1:38:42 that,
1:38:42 that country somehow switch from one
1:38:45 to,
1:38:45 to another or,
1:38:46 or not?
1:38:47 I mean,
1:38:47 you know,
1:38:48 any
1:38:49 You know,
1:38:49 any,
1:38:50 any sense of whether that is happening
1:38:52 because again I think the stringency,
1:38:54 the OECD stringency stuff,
1:38:55 it's,
1:38:55 it's all about standards,
1:38:57 right?
1:38:57 But,
1:38:57 but,
1:38:58 but not,
1:38:58 it doesn't tell me,
1:38:59 I think it's,
1:38:59 it's also about tax.
1:39:01 It's also market based also
1:39:03 they collect those information about the level of a carbon tax of taxes,
1:39:06 emission taxes,
1:39:07 and so on and collection,
1:39:08 or,
1:39:09 OK,
1:39:09 OK,
1:39:09 OK,
1:39:10 OK,
1:39:11 OK,
1:39:11 also stand out we can explore that a bit.
1:39:13 OK,
1:39:14 OK.
1:39:15 All right,
1:39:15 no,
1:39:16 that's,
1:39:16 that's good.
1:39:18 Yeah
1:39:23 You can have concrete comparison about
1:39:24 the perception of environmental issues and the
1:39:27 stringency of environmental regulations and type of instruments that are used.
1:39:33 That's also interesting,
1:39:34 right?
1:39:34 I mean,
1:39:35 in terms of,
1:39:35 uh,
1:39:36 You know,
1:39:37 preference,
1:39:37 consumer preferences because,
1:39:39 I mean,
1:39:39 I guess if you're,
1:39:40 you know,
1:39:40 I mean,
1:39:41 if you're,
1:39:42 you know,
1:39:42 low income,
1:39:43 you can,
1:39:44 you,
1:39:44 you know,
1:39:44 you tolerate pollution just because,
1:39:46 you know,
1:39:46 you're hand to mouth,
1:39:47 right?
1:39:47 I mean,
1:39:47 you need to,
1:39:48 but then when you reach certain income,
1:39:50 and I think that's what happened in,
1:39:51 in China,
1:39:52 right?
1:39:52 I mean,
1:39:52 in China at some point,
1:39:53 you know,
1:39:54 they were,
1:39:55 they said,
1:39:55 you know,
1:39:55 enough is enough and,
1:39:56 and,
1:39:57 and,
1:39:57 you know,
1:39:57 that's when the government
1:39:58 cracked down on,
1:39:59 on pollution,
1:40:00 right?
1:40:00 And so,
1:40:02 and so.
1:40:03 Yeah,
1:40:04 so do you know any papers that kind of look at these,
1:40:07 kind of,
1:40:07 you know,
1:40:07 consumer preferences by,
1:40:09 by income?
1:40:10 I mean,
1:40:10 you know,
1:40:10 these are
1:40:11 probably not gonna be super well identified because,
1:40:14 you know,
1:40:14 we're comparing across countries,
1:40:16 but,
1:40:16 but maybe,
1:40:17 maybe there's some studies
1:40:18 looking at a country over time and,
1:40:21 you know,
1:40:21 any,
1:40:22 any literature that you've looked,
1:40:24 that you've come across on,
1:40:25 on,
1:40:25 on,
1:40:26 on looking at that.
1:40:28 Well,
1:40:28 I can send you a couple of references,
1:40:30 uh,
1:40:30 if you want,
1:40:31 yeah,
1:40:31 OK,
1:40:32 uh,
1:40:32 excellent.
1:40:33 OK,
1:40:33 OK.
1:40:34 Very good,
1:40:35 yeah,
1:40:36 I know,
1:40:36 that's kind of fun.
1:40:37 Thanks,
1:40:37 uh,
1:40:38 for all this,
1:40:39 uh,
1:40:40 and,
1:40:40 and,
1:40:41 uh,
1:40:41 it's super helpful.
1:40:44 OK,
1:40:45 so good luck for the,
1:40:46 so that's a big project is uh
1:40:48 annual report.
1:40:50 I can imagine.
1:40:52 Keeps you busy full time,
1:40:53 I guess.
1:40:55 OK.
1:40:57 Thank you for the opportunity.
1:40:59 Bye-bye.
1:41:00 Thank you.
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