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Abstract: This paper analyzes financial, informational and organizational barriers to energy efficiency investments for small-and medium-sized enterprises (SMEs) in China. Its findings are based on a survey of 480 SMEs in Zhejiang province, and complemented by semi-structured interviews with enterprises contained in the survey sample. Responses reveal that only a minority of SMEs in China actively perform energy saving activities at a significant level. The survey data suggest, further, that informational barriers are the core bottleneck inhibiting energy efficiency improvements in China's SME sector. Financial and organizational barriers also influence a company's energy saving activities, with interview-based evidence stronger than statistical evidence. The interviews point out three additional barriers to energy saving activities: the role of family ownership structures, lax enforcement of government regulations and the absence of government support as well as a lack of skilled labor. More than 40% of enterprises in the sample declared themselves unaware of energy saving equipment or practices in their respective business area, indicating that there are high transaction costs for SMEs to gather, assess, and apply information about energy saving potentials and relevant technologies. One policy implication of the study is that the Chinese government could play a more active role in fostering the dissemination of energy-efficiency related information in the SME sector. [Copyright &y& Elsevier]

We investigate optimal abatement strategies for cumulative and interacting pollutants. We show that different decay rates can cause non-monotonic behavior in the optimal paths of emissions, the aggregate level of pollution, and even the relative optimal price for emissions. This contrasts strikingly with the case of a single pollutant. The results are illustrated by numerical simulations, first for instructive fictitious and second for more realistic parameters mimicking the greenhouse problem. The results add to the skepticism existing about whether the concept of global warming potential is a useful indicator for the optimal relative abatement of different GHGs over time. In fact, we show that a constant index suitable for comparing dynamically different pollutants with respect to their economic harmfulness does not exist. [Copyright &y& Elsevier]

Unlike climate change mitigation, adaptation to climate change does not as much suffer from the fundamental global public good problem – at least at the country-level – since it is in the self-interest of each individual country to adapt. However, the observed level of adaptation is insufficient from an economic perspective. We address this puzzle by adding a psychological perspective to explain actors' behaviour. Based on existing meta-analytic evidence we discuss micro- (i.e. individual-), meso- (i.e. group-) and macro- (i.e. society-) level factors that may contribute to more engagement in adaptation and provide recommendations on how to address them. The results show that the strongest predictors of individual adaptation behaviour are people's beliefs whether adaptive actions will be effective in protecting them from climate-related hazards (outcome expectancy), the degree to which people believe that they are able to engage in adaptive actions (self-efficacy) and their emotional reaction to climate change. Equally strong on a meso-level are behavioural norms and cultural aspects on a macro-level. We recommend that decision-makers create more transparency about the cause–effect chain between adaptation activity and desired adaptation effects to strengthen individuals' sense of efficacy. Furthermore, inducing reflection on social norms through communicative interventions may contribute to motivate adaptive actions by individuals and organisations. Key policy insights Psychological factors play an important but underestimated role in explaining adaptation behaviour. If people believe that they can address the risks of climate-related hazards they will show stronger adaptation behaviour. This insight can be used to incentivise more investments in adaptation. Social norms and cultural values are linked to adaptation behaviour. Public communication campaigns and other policy interventions can help to change social norms, and they should be tailored to the cultural values of societies. The influence of social norms and cultural values can be stronger than individual-level variables such as beliefs and preferences. People underestimate the extent to which others are willing to contribute to society, in particular in societies scoring high on individualism and masculinity. This can prevent people from investing in adaptation. [ABSTRACT FROM AUTHOR]

This paper quantifies the macroeconomic impacts of the Kyoto Protocol's Clean Development Mechanism (CDM) employing a computable general equilibrium model of international trade and energy use. We incorporate project-based CDM supply data in order to assess the relative importance of transaction costs and investment risks, as well as CDM regulations through supplementarity and additionality criteria. The numerical results show that the macroeconomic impacts of transaction costs and investment risks are negligible. Given the large supply of cheap project-based emissions abatement in developing countries, compliance with the Kyoto Protocol can be achieved at a very low cost. However, regulatory restrictions such as a supplementarity criterion can substantially curtail the potential efficiency gains from 'where-flexibility' in climate policy. [ABSTRACT FROM AUTHOR]

The article discusses various reports published within the issue, including one by Robert Oleschak and Urs Springer on project risk associated with Clean Development Mechanism (CDM) and Joint Implementation (JI) projects and another by Rob Youngman, Jake Schmidt, Jin Lee and Heleen de Coninck on past CDM and JI project portfolios.

Reimplementation of an EU-wide emissions trading system by means of National Allocation Plans is at the core of the European environmental policy agenda. EU Member States must allocate their national emission budgets under the EU Burden Sharing Agreement between energy-intensive sectors that are eligible for European emissions trading and the remaining segments of their economies that will be subject to complementary domestic emission regulation. We show that such hybrid emission regulation may lead to substantial excess costs compared to a comprehensive emissions trading system covering all segments of the economy. Furthermore, the hybrid system associated with the current design of National Allocation Plans is likely to discriminate against sectors that are not part of the emissions trading scheme. The interested reader can make use of a web-based interactive simulation model in order to specify and evaluate alternative settings of the EU emissions trading system. [ABSTRACT FROM AUTHOR]