Ongoing research


Using output-based allocations to manage volatility and leakage in pollution markets
With Guy Meunier and Juan-Pablo Montero, December 2016

Output-based allocations (OBAs) are typically used in emission trading schemes to mitigate leakage in sectors at risk. Recent work has shown they may also help to stabilize prices in markets subject to supply and demand shocks. We extend previous work to simultaneously include both leakage and volatility. Motivated by discussions on how to reform carbon markets around the world, and in Europe in particular, we use our model to revisit several critical issues in the design of these markets. In particular, we look at how di erent OBA schemes manage permit price fluctuations and what are the implications of deducting OBA permits (the majority going to trade-exposed and carbon intensive sectors) from the overall permit allocation, so as to keep the global cap on emissions xed (as it is the case in California and in the EU).

Pour un financement conditionnel des projets risqués bas carbone
With Guy Meunier, September 2016

Résumé :
Une critique récurrente des subventions aux technologies propres (énergies renouvelables, solaire, mécanismes de développement propre, voiture électrique, …) est l’existence d’effets d’aubaine : des investissements bénéficient de subventions dont ils n’ont pas besoin pour être rentables. Cette note formalise ce type de situation comme la sélection d’un portefeuille de projets par l’Etat dans un contexte d’asymétrie d’information. Il montre qu’une forme de garantie du financement, avec remboursement en cas de succès, permet de limiter les effets d’aubaines et les dépenses publiques tout en maximisant le bénéfice social en termes de réduction des émissions. La pertinence du mécanisme proposé est illustrée dans le cadre de subventions pour le déploiement des infrastructures pour les véhicules à hydrogène.

Output-based allocations in pollution markets with uncertainty and self-selection
With Guy Meunier and Juan-Pablo Montero, May 2016

We study pollution permit markets in which a fraction of permits are allocated to firms based on their output. Output-based allocations, which are receiving increasing attention in the design of carbon markets around the world (e.g., Europe, California, New Zealand), are shown to be optimal under demand and supply volatility despite the output distortions they may create. In a market that covers multiple sectors, the optimal design combines auctioned permits with output-based allocations that are specific to each sector and increasing in its volatility. When firms are better informed about the latter or must self select, the regulator resort to some free (i.e., lump-sum) allocations to sort firms out. Numerical exercises illustrate the policy relevance of our results: the gains from considering output-based allocations can be substantial.

Competing green technologies and the dynamic of transition
With Guy Meunier and Michel Moreaux, May 2016

Some insights on strategic environmental policies in an open economy
With Silvia Concettini and Anna Creti, March 2016


Managing Base of the Pyramid as a Business Opportunity: A Longitudinal Field Study
With Thomas André, May 2015

In the last decade a growing articulation of the business strategy of the firms with some specific global societal challenge in line with its core activities has been observed. This change provides both a need and an opportunity for Base of the Pyramid (BoP) activities to migrate from their preserved status within the Corporate Social responsibility (CSR) department to business operations. We explore the successive steps associated with this change at Schneider Electric through a longitudinal case study. The newly adopted business strategy of the firm clearly facilitates the change in the mindsets all through the company. Still the need for adapting the management systems remains pending. A key finding that emerges from our analysis is to instill interactive processes through an organizational change and a strong commitment on the commercial purpose of the BoP activities. We also highlight that BoP activities cannot be directly transferred to operational entities without simultaneously identifying which of the functional department will be in charge of providing the corresponding management systems and support such longer-term investments.