PhD Candidate: Jingwen Qu

Dissertation Title: Internalizing externalities: the roles of networks, clubs and policy commitments

Abstract:

From innovation spillover to global warming, positive and negative externalities generated by one player’s actions on others are ubiquitous. Internalization of the externalities usually depends on the underlying incentives or mechanisms. This dissertation studies the roles of networks, clubs and policy commitments in internalizing externalities. The first essay examines network-based social incentives such as warm glow in the provision of public goods such as innovation in endogenous networks. One main finding is that such incentives would bring more voluntary provision only when the network flows of public goods are two-way. The second essay explores if a mechanism involving multiple climate clubs would lead to more stable international agreements on climate change than just one club, as well as the role of free-trade agreements therein. A major takeaway is that the formation of multiple clubs would indeed increase the stability of the agreements, and allowing free trade among club members would improve efficiency. The third essay considers a futuristic world in which solar radiation management (SRM) can be utilized to relieve global warming, and carbon and sulfur dioxide emissions can be reduced through tradable permits. The goal is to study the effects of policy commitments with respect to the provision of this new technology relative to policy commitments for carbon mitigation. A main finding is that if nations simultaneously commit to carbon permit policies, national SRM levels rise with carbon quotas; if they simultaneously commit to SRM policies, the global temperature falls with each unit increase in the global SRM level.

Committee: Prof. Tibor Besedes (chair), Prof. Matthew Oliver, Prof. Justin Burkett, Prof. Emilson Silva (University of Alberta), Prof. Sudipta Sarangi (Virginia Tech)

Time: March 23, 10:00-12:00

Location: Old CE Building 204