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Optical coherence tomography angiography (OCTA) is a non-invasive imaging modality that can acquire high-resolution volumes of the retinal vasculature and aid the diagnosis of ocular, neurological and cardiac diseases. Segmenting the visible blood vessels is a common first step when extracting quantitative biomarkers from these images. Classical segmentation algorithms based on thresholding are strongly affected by image artifacts and limited signal-to-noise ratio. The use of modern, deep learning-based segmentation methods has been inhibited by a lack of large datasets with detailed annotations of the blood vessels. To address this issue, recent work has employed transfer learning, where a segmentation network is trained on synthetic OCTA images and is then applied to real data. However, the previously proposed simulations fail to faithfully model the retinal vasculature and do not provide effective domain adaptation. Because of this, current methods are unable to fully segment the retinal vasculature, in particular the smallest capillaries. In this work, we present a lightweight simulation of the retinal vascular network based on space colonization for faster and more realistic OCTA synthesis. We then introduce three contrast adaptation pipelines to decrease the domain gap between real and artificial images. We demonstrate the superior segmentation performance of our approach in extensive quantitative and qualitative experiments on three public datasets that compare our method to traditional computer vision algorithms and supervised training using human annotations. Finally, we make our entire pipeline publicly available, including the source code, pretrained models, and a large dataset of synthetic OCTA images., Comment: Currently under review

This paper examines how enhanced flexibility across space, time, and a regulatory dimension affects the economic costs and CO $$_2$$ 2 emissions of integrating large shares of intermittent renewable energy from wind and solar. We develop a numerical model which resolves hourly dispatch and investment choices among heterogeneous energy technologies and natural resources in interconnected wholesale electricity markets, cross-country trade (spatial flexibility), energy storage (temporal flexibility), and tradable green quotas (regulatory flexibility). Taking the model to the data for the case of Europe’s system of interconnected electricity markets, we find that the appropriate combination of flexibility can bring about substantial gains in economic efficiency, reduce costs (up to 13.8%) and lower CO $$_2$$ 2 emissions (up to 51.2%). Regulatory flexibility is necessary to realize most of the maximum possible benefits. We also find that gains from increased flexibility are unevenly distributed and that some countries incur welfare losses.

This paper examines how enhanced flexibility across space, time, and a regulatory dimension affects the economic costs and CO $$_2$$ 2 emissions of integrating large shares of intermittent renewable energy from wind and solar. We develop a numerical model which resolves hourly dispatch and investment choices among heterogeneous energy technologies and natural resources in interconnected wholesale electricity markets, cross-country trade (spatial flexibility), energy storage (temporal flexibility), and tradable green quotas (regulatory flexibility). Taking the model to the data for the case of Europe’s system of interconnected electricity markets, we find that the appropriate combination of flexibility can bring about substantial gains in economic efficiency, reduce costs (up to 13.8%) and lower CO $$_2$$ 2 emissions (up to 51.2%). Regulatory flexibility is necessary to realize most of the maximum possible benefits. We also find that gains from increased flexibility are unevenly distributed and that some countries incur welfare losses.

This paper uses theoretical and numerical economic equilibrium models to examine optimal renewable energy (RE) support policies for wind and solar resources in the presence of a carbon externality associated with the use of fossil fuels. We emphasize three main issues for policy design: the heterogeneity of intermittent natural resources, budget-neutral financing rules, and incentives for carbon mitigation. We find that differentiated subsidies for wind and solar, while being optimal, only yield negligible efficiency gains. Policies with smart financing of RE subsidies which either relax budget neutrality or use polluter-pays financing in the context of budget-neutral schemes can, however, approximate socially optimal outcomes. Our analysis suggests that optimally designed RE support policies do not necessarily have to be viewed as a costly second-best option when carbon pricing is navailable.

Mitigating climate change will require integrating large amounts of highly intermittent renewable energy (RE) sources in future electricity markets. Considerable uncertainties exist about the cost and availability of future large-scale storage to alleviate the potential mismatch between demand and supply. This paper examines the suitability of regulatory (public policy) mechanisms for coping with the volatility induced by intermittent RE sources, using a numerical equilibrium model of a future wholesale electricity market. We find that the optimal RE subsidies are technology-specific reflecting the heterogeneous value for system integration. Differentiated RE subsidies reduce the curtailment of excess production, thereby preventing costly investments in energy storage. Using a simple cost-benefit framework, we show that a smart design of RE support policies significantly reduces the level of optimal storage. We further find that the marginal benefits of storage rapidly decrease for short-term (intra-day) storage and are small for long-term (seasonal) storage independent of the storage level. This suggests that storage is not likely to be the limiting factor for decarbonizing the electricity sector.

This paper uses theoretical and numerical economic equilibrium models to examine optimal renewable energy (RE) support policies for wind and solar resources in the presence of a carbon externality associated with the use of fossil fuels. We emphasize three main issues for policy design: the heterogeneity of intermittent natural resources, budget-neutral financing rules, and incentives for carbon mitigation. We find that differentiated subsidies for wind and solar, while being optimal, only yield negligible efficiency gains. Policies with smart financing of RE subsidies which either relax budget neutrality or use polluter-pays financing in the context of budget-neutral schemes can, however, approximate socially optimal outcomes. Our analysis suggests that optimally designed RE support policies do not necessarily have to be viewed as a costly second-best option when carbon pricing is navailable.

Mitigating climate change will require integrating large amounts of highly intermittent renewable energy (RE) sources in future electricity markets. Considerable uncertainties exist about the cost and availability of future large-scale storage to alleviate the potential mismatch between demand and supply. This paper examines the suitability of regulatory (public policy) mechanisms for coping with the volatility induced by intermittent RE sources, using a numerical equilibrium model of a future wholesale electricity market. We find that the optimal RE subsidies are technology-specific reflecting the heterogeneous value for system integration. Differentiated RE subsidies reduce the curtailment of excess production, thereby preventing costly investments in energy storage. Using a simple cost-benefit framework, we show that a smart design of RE support policies significantly reduces the level of optimal storage. We further find that the marginal benefits of storage rapidly decrease for short-term (intra-day) storage and are small for long-term (seasonal) storage independent of the storage level. This suggests that storage is not likely to be the limiting factor for decarbonizing the electricity sector.

Employing a numerical general equilibrium model with multiple fuels, end-use sectors, heterogeneous households, and transport externalities, this paper examines three motives for differentiated carbon pricing in the context of Swiss climate policy: fiscal interactions with the existing tax code, non-CO2 related transport externalities, and social equity concerns. Interaction effects with mineral oil taxes reduce carbon taxes on motor fuels and transport externalities increase them. We show that the cost-effective overall carbon tax on motor fuels should be lower than the one on thermal fuels. This is found in spite of the fact that pre-existing taxes on motor fuels are well below our estimate of the transport externality per unit of transport fuel consumption. Differentiating taxes in favor of motor fuels yields only slightly more equitable incidence effects among households, suggesting that equity considerations play a minor role when designing differentiated carbon pricing policies.

Employing a numerical general equilibrium model with multiple fuels, end-use sectors, heterogeneous households, and transport externalities, this paper examines three motives for differentiated carbon pricing in the context of Swiss climate policy: fiscal interactions with the existing tax code, non-CO2 related transport externalities, and social equity concerns. Interaction effects with mineral oil taxes reduce carbon taxes on motor fuels and transport externalities increase them. We show that the cost-effective overall carbon tax on motor fuels should be lower than the one on thermal fuels. This is found in spite of the fact that pre-existing taxes on motor fuels are well below our estimate of the transport externality per unit of transport fuel consumption. Differentiating taxes in favor of motor fuels yields only slightly more equitable incidence effects among households, suggesting that equity considerations play a minor role when designing differentiated carbon pricing policies.

This paper develops a multi-country multi-sector general equilibrium model, integrating high-frequency electricity dispatch and trade decisions, to study the effects of electricity transmission infrastructure (TI) expansion and renewable energy (RE) penetration in Europe for gains from trade and carbon dioxide emissions in the power sector. TI can benefit or degrade environmental outcomes, depending on RE penetration: it complements emissions abatement by mitigating dispatch problems associated with volatile and spatially dispersed RE but also promotes higher average generation from low-cost coal if RE production is too low. Against the backdrop of European decarbonization and planned TI expansion, we find that emissions increase for current and targeted year-2020 levels of RE production and decrease for year-2030 targets. Enhanced TI yields sizeable gains from trade that depend positively on RE penetration, without creating large adverse impacts on regional equity.

This paper exploits the exogeneity of weather conditions to evaluate renewable energy (RE) subsidies in Germany and Spain in terms of their short-run direct program costs for reducing carbon dioxide emissions. We find that both aggregate costs and their distribution between energy producers and consumers vary significantly depending on which type of RE technology is promoted – reflecting substantial heterogeneity in production costs, temporal availability of natural resources, and market conditions, i.e., time-varying demand, carbon intensity of installed production capacities, and opportunities for cross-border trade. We estimate that the costs for reducing 1 ton of CO2 through subsidies for solar are 411 to 1944 €. Subsidizing wind entails significantly lower costs, ranging from 82 to 276 €. In the short run, the economic rents for energy producers always decrease, while consumers incur four to seven times larger costs when solar is promoted but gain under RE policies promoting wind.

In this paper, we examine the introduction of a price floor in an emissions trading system (ETS) when some emissions are regulated outside the ETS. We theoretically characterize the conditions under which a price floor enhances welfare. Using a numerical simulation model of the European Union (EU), we find that moderate minimum prices in the EU ETS can reduce the costs of EU climate policy by up to 30 percent. We also find that, because of tax-interaction effects, the optimal minimum price in the EU ETS should be about four times higher than the average marginal abatement cost in non-ETS sectors.

This paper examines pollution tax differentiation across industries in light of social equity concerns using theoretical and numerical general equilibrium analyses in an optimal tax framework. We characterize the drivers for non-uniform optimal taxes stemming from the interaction of household heterogeneity with social preferences. Quantitatively assessing the case of price-based CO2 emissions control in the U.S. economy, we find that uniform emissions pricing is approximately optimal when social concerns are defined over inequity induced by the environmental tax. The deviation from uniform emissions pricing, however, becomes non-negligible when pollution tax rebates deviate much from optimal transfer schemes or when social concerns are defined over both policy-induced impacts and inequity unrelated to environmental policy. Our results are robust to a number of model extensions including the stringency of the environmental target, downstream vs. upstream taxation, pre-existing distortionary taxes, and parametric uncertainty in firms’ and households’ equilibrium tax responses.

This paper analyzes hybrid emissions trading systems (ETSs) under partitioned environmental regulation when firms' abatement costs and future emissions are uncertain. We show that hybrid policies that introduce bounds on the price or the quantity of abatement provide a way to hedge against differences in marginal abatement costs across partitions. Price bounds are more efficient than abatement bounds as they also use information on firms' abatement technologies while abatement bounds can only address emission uncertainty. Using a numerical stochastic optimization model with equilibrium constraints for the European carbon market, we find that introducing hybrid policies in EU ETS reduces expected excess abatement costs of achieving targeted emission reductions under EU climate policy by up to 89%. We also find that under partitioned regulation there is a high likelihood for hybrid policies to yield sizeable ex-post cost reductions.

In this paper, we examine the introduction of a price floor in an emissions trading system (ETS) when some emissions are regulated outside the ETS. We theoretically characterize the conditions under which a price floor enhances welfare. Using a numerical simulation model of the European Union (EU), we find that moderate minimum prices in the EU ETS can reduce the costs of EU climate policy by up to 30 percent. We also find that, because of tax-interaction effects, the optimal minimum price in the EU ETS should be about four times higher than the average marginal abatement cost in non-ETS sectors.

This paper examines pollution tax differentiation across industries in light of social equity concerns using theoretical and numerical general equilibrium analyses in an optimal tax framework. We characterize the drivers for non-uniform optimal taxes stemming from the interaction of household heterogeneity with social preferences. Quantitatively assessing the case of price-based CO2 emissions control in the U.S. economy, we find that uniform emissions pricing is approximately optimal when social concerns are defined over inequity induced by the environmental tax. The deviation from uniform emissions pricing, however, becomes non-negligible when pollution tax rebates deviate much from optimal transfer schemes or when social concerns are defined over both policy-induced impacts and inequity unrelated to environmental policy. Our results are robust to a number of model extensions including the stringency of the environmental target, downstream vs. upstream taxation, pre-existing distortionary taxes, and parametric uncertainty in firms’ and households’ equilibrium tax responses.

This paper exploits the exogeneity of weather conditions to evaluate renewable energy (RE) subsidies in Germany and Spain in terms of their short-run direct program costs for reducing carbon dioxide emissions. We find that both aggregate costs and their distribution between energy producers and consumers vary significantly depending on which type of RE technology is promoted – reflecting substantial heterogeneity in production costs, temporal availability of natural resources, and market conditions, i.e., time-varying demand, carbon intensity of installed production capacities, and opportunities for cross-border trade. We estimate that the costs for reducing 1 ton of CO2 through subsidies for solar are 411 to 1944 €. Subsidizing wind entails significantly lower costs, ranging from 82 to 276 €. In the short run, the economic rents for energy producers always decrease, while consumers incur four to seven times larger costs when solar is promoted but gain under RE policies promoting wind.

This paper analyzes hybrid emissions trading systems (ETSs) under partitioned environmental regulation when firms' abatement costs and future emissions are uncertain. We show that hybrid policies that introduce bounds on the price or the quantity of abatement provide a way to hedge against differences in marginal abatement costs across partitions. Price bounds are more efficient than abatement bounds as they also use information on firms' abatement technologies while abatement bounds can only address emission uncertainty. Using a numerical stochastic optimization model with equilibrium constraints for the European carbon market, we find that introducing hybrid policies in EU ETS reduces expected excess abatement costs of achieving targeted emission reductions under EU climate policy by up to 89%. We also find that under partitioned regulation there is a high likelihood for hybrid policies to yield sizeable ex-post cost reductions.

Employing a numerical general equilibrium model with multiple fuels, end-use sectors, heterogeneous households, and transport externalities, this paper examines three motives for differentiated carbon pricing in the context of Swiss climate policy: fiscal interactions with the existing tax code, non-CO2 related transport externalities, and social equity concerns. Interaction effects with mineral oil taxes reduce carbon taxes on motor fuels and transport externalities increase them. We show that the cost-effective overall carbon tax on motor fuels should be lower than the one on thermal fuels. This is found in spite of the fact that pre-existing taxes on motor fuels are well below our estimate of the transport externality per unit of transport fuel consumption. Differentiating taxes in favor of motor fuels yields only slightly more equitable incidence effects among households, suggesting that equity considerations play a minor role when designing differentiated carbon pricing policies.

This paper develops a multi-country multi-sector general equilibrium model, integrating high-frequency electricity dispatch and trade decisions, to study the effects of electricity transmission infrastructure (TI) expansion and renewable energy (RE) penetration in Europe for gains from trade and carbon dioxide emissions in the power sector. TI can benefit or degrade environmental outcomes, depending on RE penetration: it complements emissions abatement by mitigating dispatch problems associated with volatile and spatially dispersed RE but also promotes higher average generation from low-cost coal if RE production is too low. Against the backdrop of European decarbonization and planned TI expansion, we find that emissions increase for current and targeted year-2020 levels of RE production and decrease for year-2030 targets. Enhanced TI yields sizeable gains from trade that depend positively on RE penetration, without creating large adverse impacts on regional equity.

mploying a numerical general equilibrium model with multiple fuels, end-use sectors, heterogeneous households, and transport externalities, this paper examines three motives for differentiated carbon pricing in the context of Swiss climate policy: fiscal interactions with the existing tax code, non-CO₂ related transport externalities, and social equity concerns. Interaction effects with mineral oil taxes reduce carbon taxes on motor fuels and transport externalities increase them. We show that the cost-effective overall carbon tax on motor fuels should be lower than the one on thermal fuels. This is found in spite of the fact that pre-existing taxes on motor fuels are well below our estimate of the transport externality per unit of transport fuel consumption. Differentiating taxes in favor of motor fuels yields only slightly more equitable incidence effects among households, suggesting that equity considerations play a minor role when designing differentiated carbon pricing policies.

Air quality co-benefits can potentially reduce the costs of greenhouse gas mitigation. However, whereas many studies of the cost of greenhouse gas mitigation model the macroeconomic welfare impacts of mitigation, most studies of air quality co-benefits do not. We employ a U.S. computable general equilibrium economic model previously linked to an air quality modeling system and enhance it to represent the economy-wide welfare impacts of fine particulate matter. We present a first application of this method to explore the efficiency and distributional implications of a Clean Energy Standard (CES) and a Cap and Trade (CAT) program that both reduce CO[subscript 2] emissions by 10% in 2030 relative to 2006. We find that co-benefits from fine particulate matter reduction (median $6; $2 to $10/tCO[subscript 2]) completely offset policy costs by 110% (40% to 190%), transforming the net welfare impact of the CAT into a gain of $1 (−$5 to $7) billion 2005$. For the CES, the corresponding co-benefit (median $8; $3 to $14/tCO[subscript 2]) is a smaller fraction (median 5%; 2% to 9%) of its higher policy cost. The eastern United States garners 78% and 71% of co-benefits for the CES and CAT, respectively. By representing the effects of pollution-related morbidities and mortalities as an impact to labor and the demand for health services, we find that the welfare impact per unit of reduced pollution varies by region. These interregional differences can enhance the preference of some regions, such as Texas, for a CAT over a CES, or switch the calculation of which policy yields higher co-benefits, compared with an approach that uses one valuation for all regions. This framework could be applied to quantify consistent air quality impacts of other pricing instruments, subnational trading programs, or green tax swaps., United States. Environmental Protection Agency (Science to Achieve Results (STAR) program (no. R834279)), Massachusetts Institute of Technology (Leading Technology Policy Initiative (LTP)), United States. Dept. of Energy. Office of Basic Energy Sciences (grant DE-FG02-94ER61937), Massachusetts Institute of Technology (Martin Family Society Fellowship), Massachusetts Institute of Technology. Joint Program on the Science & Policy of Global Change

Regulatory measures have proven the favored approach to climate change mitigation in the U.S., while market-based policies have gained little traction. Using a model that resolves the U.S. economy by region, income category, and sector-specific technology deployment opportunities, this paper studies the magnitude and distribution of economic impacts under regulatory versus market-based approaches. We quantify heterogeneity in the national response to regulatory policies, including a fuel economy standard and a clean or renewable electricity standard, and compare these to a cap-and-trade system targeting carbon dioxide or all greenhouse gases. We find that the regulatory policies substantially exceed the cost of a cap-and-trade system at the national level. We further show that the regulatory policies yield large cost disparities across regions and income groups, which are exaggerated by the difficulty of implementing revenue recycling provisions under regulatory policy designs., Massachusetts Institute of Technology. Joint Program on the Science & Policy of Global Change, MIT Energy Initiative, United States. Dept. of Energy (Integrated Assessment Grant DE-FG02-94ER61937)

http://globalchange.mit.edu/research/publications/reports/all, We examine the efficiency and distributional impacts of greenhouse gas policies directed toward the electricity sector in a model that links a “top-down” general equilibrium representation of the U.S. economy with a “bottom-up” electricity-sector dispatch and capacity expansion model. Our modeling framework features a high spatial and temporal resolution of electricity supply and demand, including renewable energy resources and generating technologies, while representing CO2 abatement options in non-electric sectors as well as economy-wide interactions. We find that clean and renewable energy standards entail substantial efficiency costs compared to an economy-wide carbon pricing policy such as a cap-and-trade program or a carbon tax, and that these policies are regressive across the income distribution. The geographical distribution of cost is characterized by high burdens for regions that depend on non-qualifying generation fuels, primarily coal. Regions with abundant hydro power and wind resources, and a relatively clean generation mix in the absence of policy, are among the least impacted. An important shortcoming of energy standards vis-`a-vis a first-best carbon pricing policy is that no revenue is generated that can be used to alter unintended distributional consequences., The authors acknowledge the support of the Joint Institute for Strategic Energy Analysis, which is operated by the Alliance for Sustainable Energy, LLC, on behalf of the U.S. Department of Energy’s National Renewable Energy Laboratory, the University of Colorado-Boulder, the Colorado School of Mines, the Colorado State University, the Massachusetts Institute of Technology, and Stanford University under grant NREL 6A502020 “Integration of a Computable General Equilibrium Model with an Electricity Sector Optimization Model to Assess the Economic Impacts of U.S. Climate Policy”. We further acknowledge support of the MIT Joint Program on the Science and Policy of Global Change through a combination of government, industry, and foundation funding, the MIT Energy Initiative, and additional support for this work from a coalition of industrial sponsors (for a complete list see: http://globalchange.mit.edu/sponsors/all).

http://globalchange.mit.edu/research/publications/reports/all, We examine the impacts of alternative cap-and-trade allowance allocation designs in a model of the U.S. economy where price-regulated electric utilities generate 30% of total CO2 emissions. Our empirical model embeds a generator-level description of electricity production—comprising all 16,891 electricity generators in the contiguous U.S.—in a multi-region multi-sector general equilibrium framework that features regulated monopolies and imperfectly competitive wholesale electricity markets. The model recognizes the considerable heterogeneity among households incorporating all 15,588 households from the Consumer and Expenditure Survey as individual agents in the model. Depending on the stringency of the policy, we find that distributing emission permits freely to regulated utilities increases welfare cost by 40- 80% relative to an auction if electricity rates do not reflect the opportunity costs of permits. Despite an implicit subsidy to electricity prices, efficiency costs are disproportionately borne by households in the lowest income deciles., The Joint Program on the Science and Policy of Global Change is funded by the U.S. Department of Energy, Office of Science under grants DE-FG02-94ER61937, DE-FG02-93ER61677, DE-FG02-08ER64597, and DE-SC0003906; the U.S. Department of Energy, National Renewable Energy Laboratory under grant XEU-0-9920-01; the U.S. Environmental Protection Agency under grants XA-83344601-0, XA-83240101, PI-83412601-0, and RD- 83427901-0; the U.S. National Science Foundation under grants SES-0825915, EFRI-0835414, BCS-0410344, ATM-0329759, DMS-0426845, and AGS-0944121; the U.S. National Aeronautics and Space Administration under grants NNX07AI49G, NNX08AY59A, NNX06AC30A, NNX09AK26G, NNX08AL73G, NNX09AI26G, NNG04GJ80G, NNG04GP30G, and NNA06CN09A; the U.S. National Oceanic and Atmospheric Administration under grant NA070AR4310050; the U.S. Federal Aviation Administration under grants 06-C-NE-MIT and 09-C-NE-MIT; the U.S. Department of Transportation under grant DTRT57-10-C-10015; the U.S. Department of Agriculture under grant 58-0111-9-001; the Electric Power Research Institute under grant EP-P32616/C15124; and a consortium of 40 industrial and foundation sponsors (for a complete list see: http://globalchange.mit.edu/sponsors/all).

http://globalchange.mit.edu/research/publications/2286, With federal policies to curb greenhouse gas emissions in the U.S. stagnating, California has taken action on its own. We estimate the impact of California’s cap-and-trade program on the leakage of emissions to other regions using a calibrated general equilibrium model. Sub-national policies can lead to high leakage rates as state economies are generally closely connected to other economies, including integration of electricity markets. Measures that will prevent leakage from California’s cap-and-trade program include requiring permits to be surrendered for emissions embodied in imported electricity and legislation banning “resource shuffling”. Under a cap-and-trade policy without measures to reduce leakage, the price of emission permits is $12 per ton of CO2 and emissions in other regions increase by 46% of the reduction in emissions in California. When imported electricity is included in the program and resource shuffling is banned, the carbon price is $65, there is negative leakage to regions exporting electricity to California, positive leakage to other regions and the overall leakage rate is 2%. We conclude that although there is potential for large increases in emissions elsewhere due to California’s cap-and-trade policy, enforcement of requirements for imported electricity will be effective at curtailing leakage., The Joint Program on the Science and Policy of Global Change is funded by the U.S. Department of Energy, Office of Science under grants DE-FG02-94ER61937, DE-FG02- 93ER61677, DE-FG02-08ER64597, and DE-SC0003906; the U.S. Department of Energy, National Renewable Energy Laboratory under grant XEU-0-9920-01; the U.S. Environmental Protection Agency under grants XA-83344601-0, XA-83240101, PI-83412601-0, and RD- 83427901-0; the U.S. National Science Foundation under grants SES-0825915, EFRI-0835414, BCS-0410344, ATM-0329759, DMS-0426845, and AGS-0944121; the U.S. National Aeronautics and Space Administration under grants NNX07AI49G, NNX08AY59A, NNX06AC30A, NNX09AK26G, NNX08AL73G, NNX09AI26G, NNG04GJ80G, NNG04GP30G, and NNA06CN09A; the U.S. National Oceanic and Atmospheric Administration under grant NA070AR4310050; the U.S. Federal Aviation Administration under grants 06-C-NE-MIT and 09-C-NE-MIT; the U.S. Department of Transportation under grant DTRT57-10-C-10015; the U.S. Department of Agriculture under grant 58-0111-9-001; the Electric Power Research Institute under grant EP-P32616/C15124; and a consortium of 40 industrial and foundation sponsors (for the complete list see http://globalchange.mit.edu/sponsors/all).

Bush-era tax cuts are scheduled to expire at the end of 2012, leading to interest in raising revenue through a carbon tax. This revenue could be used to either cut other taxes or to avoid cuts in Federal programs. There is a body of economic research suggesting that such an arrangement could be a win-win-win situation. The first win—Congress could reduce personal or corporate income tax rates, extend the payroll tax cut, maintain spending on social programs, or some combination of these options. The second win—these cuts in income taxes would spur the economy, encouraging more private spending and hence more employment and investment. The third win—carbon dioxide (CO2) pollution and oil imports would be reduced. This analysis uses the MIT U.S. Regional Energy Policy (USREP) model to evaluate the effect of a carbon tax as part of a Federal budget deal. A baseline scenario where temporary payroll cuts and the Bush tax cuts are allowed to expire is compared to several scenarios that include a carbon tax starting at $20 per ton in 2013 and rising at 4%. We find that, whether revenue is used to cut taxes or to maintain spending for social programs, the economy is better off with the carbon tax than if taxes remain high to maintain Federal revenue. We also find that, in addition to economic benefits, a carbon tax reduces carbon dioxide emissions to 14% below 2006 levels by 2020, and 20% below by 2050. Oil imports remain at about today’s level, and compared to the case with no carbon tax, are 10 million barrels per day less in 2050. The carbon tax would shift the market toward renewables and other low carbon options, and make the purchase of more fuel-efficient vehicles more economically desirable., Acknowledgements USREP was developed as a special U.S. model project within the Joint Program. We are especially grateful to funding from sponsors of this special project. We also gratefully acknowledge the support of the Joint Program on the Science and Policy of Global Change, funded grants from DOE, EPA and other federal agencies and a consortium of 40 industrial and foundation sponsors. (For the complete list see http://globalchange.mit.edu/sponsors/all).

To address rising energy use and CO2 emissions, China’s leadership has enacted energy and CO2 intensity targets under the Twelfth Five-Year Plan (2011–2015), which are defined at both the national and provincial levels. We develop a computable general equilibrium (CGE) model with global coverage that disaggregates China’s 30 provinces and includes energy system detail, and apply it to assess the impact of provincial CO2 emissions intensity targets. We compare the impact of the provincial targets approach to a single national target for China that achieves the same reduction in CO2 emissions intensity at the national level. We find that at the national level, the national target results in 25% lower welfare loss relative to the provincial targets approach. Given that the regional distribution of impacts has been an important consideration in the target-setting process, we focus on the changes in provincial level CO2 emissions intensity, CO2 emissions, energy consumption, and economic welfare. We observe significant heterogeneity across provinces in terms of the energy system response as well as the magnitude and sometimes sign of welfare impacts. We further model the current policy of fixed end-use electricity prices in China and find that national welfare losses increase. Assumptions about capital mobility have a substantial impact on national welfare loss, while assumptions about natural gas resource potential does not have a large effect., We acknowledge the support of the Ministry of Science and Technology of China through the Institute for Energy, Environment, and Economy at Tsinghua University, and the support from Graduate School of Tsinghua University, which is supporting Zhang Da’s doctoral research as a 22 visiting scholar at the Massachusetts Institute of Technology. We are also grateful for the support provided by Rio Tinto China and Social Science Key Research Program from National Social Science Foundation, China of Grant no. 09&ZD029. We further acknowledge the support of Eni S.p.A., ICF International, and Shell, founding sponsors of the China Energy and Climate Project, for supporting this model development work. We would further like to thank Dr. John Reilly, Dr. Sergey Paltsev, Dr. Kyung-min Nam, Dr. Henry Chen, Paul Kishimoto and Tianyu Qi at Joint Program on the Science and Policy of Global Change, and participants in the annual meeting of China Energy and Climate Project and EcoMod 2012 Conference for helpful comments and discussion. 23

and PDF report are also available on the MIT Joint Program on the Science and Policy of Global Change website (http://globalchange.mit.edu/)., Many policies to limit greenhouse gas emissions have at their core efforts to put a price on carbon emissions. Carbon pricing impacts households both by raising the cost of carbon intensive products and by changing factor prices. A complete analysis requires taking both effects into account. The impact of carbon pricing is determined by heterogeneity in household spending patterns across income groups as well as heterogeneity in factor income patterns across income groups. It is also affected by precise formulation of the policy (how is the revenue from carbon pricing distributed) as well as the treatment of other government policies (e.g. the treatment of transfer payments). What is often neglected in analyses of policy is the heterogeneity of impacts across households even within income or regional groups. In this paper, we incorporate 15,588 households from the U.S. Consumer and Expenditure Survey data as individual agents in a comparative-static general equilibrium framework. These households are represented within the MIT USREP model, a detailed general equilibrium model of the U.S. economy. In particular, we categorize households by full household income (factor income as well as transfer income) and apply various measures of lifetime income to distinguish households that are temporarily low-income (e.g., retired households drawing down their financial assets) from permanently low-income households. We also provide detailed within-group distributional measures of burden impacts from various policy scenarios., This study received support from the MIT Joint Program on the Science and Policy of Global Change, which is funded by a consortium of government, industry and foundation sponsors.

and PDF report are also available on the MIT Joint Program on the Science and Policy of Global Change website (http://globalchange.mit.edu/), Electricity generation is a major contributor to carbon dioxide emissions, and a key determinant of abatement costs. Ex-ante assessments of carbon policies mainly rely on either of two modeling paradigms: (i) partial equilibrium models of the electricity sector that use bottom-up engineering data on generation technology costs, and (ii) multi-sector general equilibrium models that represent economic activities with smooth top-down aggregate production functions. In this paper, we examine the structural assumptions of these numerical techniques using a suite of models sharing common technological features and calibrated to the same benchmark data. First, our analysis provides evidence that general equilibrium effects of an economy-wide carbon policy are of first-order importance to assess abatement potentials and price changes in the electricity sector, suggesting that the parametrization of Marshallian demand in a partial equilibrium setting is problematic. Second, we find that top-down technology representations produce fuel substitution patterns that are inconsistent with bottom-up cost data, mainly because of difficulties in capturing the temporal and discrete nature of electricity generation by means of aggregate substitution elasticities. Our analysis highlights the difficulty to parameterize numerical models used for policy projections, and suggests that the integration of a bottom-up electricity sector model into a general equilibrium framework provides an attractive structural alternative for ex-ante policy modeling., This study received support from the MIT Joint Program on the Science and Policy of Global Change, which is funded by a consortium of government, industry and foundation sponsors.

This paper develops a decomposition algorithm by which a market economy with many households may be solved through the computation of equilibria for a sequence of representative agent economies. The paper examines local and global convergence properties of the sequential recalibration (SR) algorithm. The SR algorithm is then demonstrated to efficiently solve Auerbach–Kotlikoff OLG models with a large number of heterogeneous households. We approximate equilibria in OLG models by solving a sequence of related Ramsey optimal growth problems. This approach can provide improvements in both efficiency and robustness as compared with integrated complementarity-based solution methods., Alfried Krupp von Bohlen und Halbach Foundation

We analyze the distributional and efficiency impacts of different allowance allocation schemes motivated by recently proposed U.S. climate legislation for a national cap and trade system using a new dynamic computable general equilibrium model of the U.S. economy. The USREP model tracks nine different income groups and twelve different geographic regions within the U.S. We find that the allocation schemes in all proposals are progressive over the lower half of the income distribution and proportional in the upper half of the income distribution. Scenarios based on the Cantwell-Collins allocation proposal are less progressive in early years and have lower welfare costs due to smaller redistribution to low income households and, consequently, lower income-induced increases in energy demand and less savings and investment. Scenarios based on the three other allocation schemes tend to overcompensate some adversely affected income groups and regions in early years, but this dissipates over time as the allowance allocation effect becomes weaker. Finally, we find that carbon pricing by itself (ignoring the return of carbon revenues through allowance allocations) is proportional to modestly progressive. This striking result follows from the dominance of the sources over uses side impacts of the policy and stands in sharp contrast to previous work that has focused only on the uses side. The main reason is that lower income households derive a large fraction of income from government transfers, and we hold the transfers constant in real terms, reflecting the fact that transfers are generally indexed to inflation. As a result, this source of income is unaffected by carbon pricing while wage and capital income is affected.

Parasitische Nematoden beeinflussen gezielt die Abwehrreaktionen ihres Wirtes. Dies wird besonders während der chronischen Infektionsphase durch eine herabregulierte T-Zell-Antwort auf Parasitenantigene und andere Stimuli ersichtlich. In dieser Arbeit wurde die T-Zell-Antwort gegen einen intestinalen Nematoden untersucht. Mäuse wurden mit dem Trichostrongyliden Heligmosomoides polygyrus infiziert und in der Folge Effektor- sowie regulatorische T-Zellen (Tregs) untersucht. Subpopulationen von CD4+ T-Zellen wurden aus chronisch infizierten Mäusen isoliert und in naive Empfänger transferiert, welche nachfolgend infiziert wurden. Dabei zeigte sich, dass der Transfer von CD4+ Effektor-T-Zellen zu einer verminderten Wurmlast in den Empfängertieren führte, diese Zellen also einen partiellen Schutz gegen die Primärinfektion vermitteln. Der gleichzeitige Transfer von Tregs beeinflusste diesen Effekt nicht. Tregs allein zeigten keinerlei Einfluss auf die Wurmlast der Empfänger. Die Protektion durch Transfer von Effektor-T-Zellen kann vermutlich auf eine kleine Antigen-spezifische Population von CD4+ Zellen zurückgeführt werden. Diese Zellen wurden durch die Expression von CD40-L (CD154) nach Restimulation mit Parasitenantigen in vitro charakterisiert und enthielten einen Großteil der Zytokinproduzenten unter den CD4+ Zellen. Während diese Effektorzellen ein deutliches Th2-Zytokinprofil durch Produktion von Interleukin-4 (IL-4) und IL-13 zeigten, reagierte eine Treg-Subpopulation mit der Sekretion hoher Mengen von IL-10 auf Antigenstimulation. Diese Tregs waren durch Expression des Integrins AlphaE (CD103)Beta7 sowie CD25 und Foxp3 charakterisiert und vermittelten in vitro die stärkste Suppression anderer T-Zellen, wenn sie aus chronisch infizierten Mäusen isoliert wurden. Durch Untersuchung der zellulären Zusammensetzung von mesenterialen Lymphknoten und Milz konnte gezeigt werden, dass die Frequenz solcher regulatorischer Zellen im Verlauf der Infektion dauerhaft und überpro, Parasitic nematodes specifically modulate the immune response of their hosts. A cellular hyperreactivity, especially during the chronic phase of infection, is a distinct finding of such infections. The T cell response against an intestinal nematode was analyzed in this work. Mice were infected with the trichostrongylid Heligmosomoides polygyrus and surveyed for changes concerning effector and regulatory T cells (Tregs). Subpopulations of CD4+ T cells were isolated from chronically infected mice and adoptively transferred to naive recipients, which were subsequently infected. The Transfer of CD4+ effector cells conferred partial protection, seen as decreased worm burdens in recipients. This effect was unimpaired by simultaneous transfer of Tregs. The transfer of purified Tregs alone showed no effect on worm burdens. The protection by transfer of effector T cells was probably due to a small parasite-specific population, which was characterized by the expression of CD40-L (CD154) after antigen-restimulation. The CD154+ population contained high frequencies of cells reacting with production of the Th2 key cytokines interleukin-4 (IL-4) and IL-13. On the other hand, a subpopulation of Tregs secreted high amounts of IL-10 in response to the antigen. These Tregs were characterized by the expression of the integrin AlphaE (CD103)Beta7, as well as CD25 and Foxp3. They showed a peculiar strong suppressive efficacy on the proliferation of other T cells, especially when derived from chronically infected donors. Analyzing the cellular composition of mesenteric lymph nodes and spleens in response revealed a lasting and over-proportional increase in frequencies of these Tregs. In clear contrast, only a transient increase of Foxp3-expressing Tregs was detected at the site of infection during the acute phase. These results point out the changes Treg activity during an intestinal nematode infection and show the potential of CD4+ effector cells in mediating protection against infectio

Parasitische Nematoden beeinflussen gezielt die Abwehrreaktionen ihres Wirtes. Dies wird besonders während der chronischen Infektionsphase durch eine herabregulierte T-Zell-Antwort auf Parasitenantigene und andere Stimuli ersichtlich. In dieser Arbeit wurde die T-Zell-Antwort gegen einen intestinalen Nematoden untersucht. Mäuse wurden mit dem Trichostrongyliden Heligmosomoides polygyrus infiziert und in der Folge Effektor- sowie regulatorische T-Zellen (Tregs) untersucht. Subpopulationen von CD4+ T-Zellen wurden aus chronisch infizierten Mäusen isoliert und in naive Empfänger transferiert, welche nachfolgend infiziert wurden. Dabei zeigte sich, dass der Transfer von CD4+ Effektor-T-Zellen zu einer verminderten Wurmlast in den Empfängertieren führte, diese Zellen also einen partiellen Schutz gegen die Primärinfektion vermitteln. Der gleichzeitige Transfer von Tregs beeinflusste diesen Effekt nicht. Tregs allein zeigten keinerlei Einfluss auf die Wurmlast der Empfänger. Die Protektion durch Transfer von Effektor-T-Zellen kann vermutlich auf eine kleine Antigen-spezifische Population von CD4+ Zellen zurückgeführt werden. Diese Zellen wurden durch die Expression von CD40-L (CD154) nach Restimulation mit Parasitenantigen in vitro charakterisiert und enthielten einen Großteil der Zytokinproduzenten unter den CD4+ Zellen. Während diese Effektorzellen ein deutliches Th2-Zytokinprofil durch Produktion von Interleukin-4 (IL-4) und IL-13 zeigten, reagierte eine Treg-Subpopulation mit der Sekretion hoher Mengen von IL-10 auf Antigenstimulation. Diese Tregs waren durch Expression des Integrins AlphaE (CD103)Beta7 sowie CD25 und Foxp3 charakterisiert und vermittelten in vitro die stärkste Suppression anderer T-Zellen, wenn sie aus chronisch infizierten Mäusen isoliert wurden. Durch Untersuchung der zellulären Zusammensetzung von mesenterialen Lymphknoten und Milz konnte gezeigt werden, dass die Frequenz solcher regulatorischer Zellen im Verlauf der Infektion dauerhaft und überpro, Parasitic nematodes specifically modulate the immune response of their hosts. A cellular hyperreactivity, especially during the chronic phase of infection, is a distinct finding of such infections. The T cell response against an intestinal nematode was analyzed in this work. Mice were infected with the trichostrongylid Heligmosomoides polygyrus and surveyed for changes concerning effector and regulatory T cells (Tregs). Subpopulations of CD4+ T cells were isolated from chronically infected mice and adoptively transferred to naive recipients, which were subsequently infected. The Transfer of CD4+ effector cells conferred partial protection, seen as decreased worm burdens in recipients. This effect was unimpaired by simultaneous transfer of Tregs. The transfer of purified Tregs alone showed no effect on worm burdens. The protection by transfer of effector T cells was probably due to a small parasite-specific population, which was characterized by the expression of CD40-L (CD154) after antigen-restimulation. The CD154+ population contained high frequencies of cells reacting with production of the Th2 key cytokines interleukin-4 (IL-4) and IL-13. On the other hand, a subpopulation of Tregs secreted high amounts of IL-10 in response to the antigen. These Tregs were characterized by the expression of the integrin AlphaE (CD103)Beta7, as well as CD25 and Foxp3. They showed a peculiar strong suppressive efficacy on the proliferation of other T cells, especially when derived from chronically infected donors. Analyzing the cellular composition of mesenteric lymph nodes and spleens in response revealed a lasting and over-proportional increase in frequencies of these Tregs. In clear contrast, only a transient increase of Foxp3-expressing Tregs was detected at the site of infection during the acute phase. These results point out the changes Treg activity during an intestinal nematode infection and show the potential of CD4+ effector cells in mediating protection against infectio

and PDF report are also available on the MIT Joint Program on the Science and Policy of Global Change website (http://globalchange.mit.edu/), Two computable general equilibrium models, one global and the other providing U.S. regional detail, are applied to analysis of the future of U.S. natural gas as an input to an MIT study of the topic. The focus is on uncertainties including the scale and cost of gas resources, the costs of competing technologies, the pattern of greenhouse gas mitigation, and the evolution of global natural gas markets. Results show that the outlook for gas over the next several decades is very favorable. In electric generation, given the unproven and relatively high cost of other low-carbon generation alternatives, gas likely is the preferred alternative to coal. A broad GHG pricing policy would increase gas use in generation but reduce use in other sectors, on a balance increasing its role from present levels. The shale gas resource is a major contributor to this optimistic view of the future of gas, but it is far from a panacea over the longer term. Gas can be an effective bridge to a lower emissions future, but investment in the development of still lower CO2 technologies remains an important priority. Also, international gas resources may well prove to be less costly than those in the U.S., except for the lowest-cost domestic shale resources, and the emergence of an integrated global gas market could result in significant U.S. gas imports., American Clean Skies Foundation, with additional support from the Hess Corporation, the Agencia Nacional de Hidrocarburos (Columbia), the Energy Futures Coalition, and the MIT Energy Initiative.

and PDF report are also available on the MIT Joint Program on the Science and Policy of Global Change website (http://globalchange.mit.edu/), We analyze the distributional and efficiency impacts of different allowance allocation schemes for a national cap and trade system using the USREP model, a new recursive dynamic computable general equilibrium model of the U.S. economy. The USREP model tracks nine different income groups and twelve different geographic regions within the United States. Recently proposed legislation include the Waxman-Markey House bill, the similar Kerry-Boxer bill in the Senate that has been replaced by a Kerry-Lieberman draft bill, and the Cantwell-Collins Senate bill that takes a different approach to revenue allocation. We consider allocation schemes motivated by these recent proposals applied to a comprehensive national cap and trade system that limits cumulative greenhouse gas emissions over the control period to 203 billion metric tons. The policy target approximates national goals identified in pending legislation. We find that the allocation schemes in all proposals are progressive over the lower half of the income distribution and proportional in the upper half of the income distribution. Scenarios based on the Cantwell-Collins allocation proposal are less progressive in early years and have lower welfare costs due to smaller redistribution to low income households and consequently lower income-induced increases in energy demand and less savings and investment. Scenarios based on the three other allocation schemes tend to overcompensate some adversely affected income groups and regions in early years but this dissipates over time as the allowance allocation effect becomes weaker. Finally we find that carbon pricing by itself (ignoring the return of carbon revenues through allowance allocations) is proportional to modestly progressive. This striking result follows from the dominance of the sources over uses side impacts of the policy and stands in sharp contrast to previous work that has focused only on the uses side. The main reason is that lower income households derive a l, This study received support from the MIT Joint Program on the Science and Policy of Global Change, which is funded by a consortium of government, industry and foundation sponsors.

and PDF report are also available on the MIT Joint Program on the Science and Policy of Global Change website (http://globalchange.mit.edu/)., We examine the effect of biofuels mandates and climate policy on the European vehicle fleet, considering the prospects for diesel and gasoline vehicles. We use the MIT Emissions Prediction and Policy Analysis (EPPA) model, which is a general equilibrium model of the world economy. We expand this model by explicitly introducing current generation biofuels, by accounting for stock turnover of the vehicle fleets and by disaggregating gasoline and diesel cars. We find that biofuels mandates alone do not substantially change the share of diesel cars in the total fleet given the current structure of fuel taxes and tariffs in Europe that favors diesel vehicles. Jointly implemented changes in fiscal policy, however, can reverse the trend toward more diesel vehicles. We find that harmonizing fuel taxes reduces the welfare cost associated with renewable fuel policy and lowers the share of diesel vehicles in the total fleet to 21% by 2030 compared to 25% in 2010. We also find that eliminating tariffs on biofuel imports, which under the existing regime favor biodiesel and impede sugar ethanol imports, is welfare-enhancing and brings about further substantial reductions in CO2 emissions., This study received support from the MIT Joint Program on the Science and Policy of Global Change, which is funded by a consortium of government, industry and foundation sponsors.

and PDF report are also available on the MIT Joint Program on the Science and Policy of Global Change website (http://globalchange.mit.edu/)., We develop a new model of the U.S., the U.S. Regional Energy Policy (USREP) model that is resolved for large states and regions of the U.S. and by income class and apply the model to investigate a $15 per ton CO2 equivalent price on greenhouse gas emissions. Previous estimates of distributional impacts of carbon pricing have been done outside of the model simulation and have been based on energy expenditure patterns of households in different regions and of different income levels. By estimating distributional effects within the economic model, we include the effects of changes in capital returns and wages on distribution and find that the effects are significant and work against the expenditure effects. We find the following: First, while results based only on energy expenditure have shown carbon pricing to be regressive we find the full distributional effect to be neutral or slightly progressive. This demonstrates the importance of tracing through all economic impacts and not just focusing on spending side impacts. Second, the ultimate impact of such a policy on households depends on how allowances, or the revenue raised from auctioning them, is used. Free distribution to firms would be highly regressive, benefiting higher income households and forcing lower income households to bear the full cost of the policy and what amounts to a transfer of wealth to higher income households. Lump sum distribution through equal-sized household rebates would make lower income households absolutely better off while shifting the costs to higher income households. Schemes that would cut taxes are generally slightly regressive but improve somewhat the overall efficiency of the program. Third, proposed legislation would distribute allowances to local distribution companies (electricity and natural gas distributors) and public utility commissions would then determine how the value of those allowances was used. A significant risk in such a plan is that distribution to households might, MIT Joint Program on the Science and Policy of Global Change through a combination of government, industry, and foundation funding, the MIT Energy Initiative, and additional support for this work from a coalition of industrial sponsors.