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• We develop a model on how military and trade alliances can impact defense spending. • Importance of trade and its balance with the leader influences defense spending. • The larger the leader's trade and surplus, the lower the minor partners' spending. Military spending was the main government expenditure until the 20th century, and it still represents a significant fraction of most governments' budgets. We develop a theoretical model to understand how both military and trade alliances with military leaders can impact defense spending. By increasing the costs of military aggression by a non-ally, an alliance reduces the probability of war and allows minor partners reducing their military spending in exchange for a stronger trade relationship with an alliance leader and a higher trading surplus for the latter. We test our hypotheses with data on 138 countries for 1996–2020. Our results show that the importance of the trade relationship and the trade balance with the military alliance leader is a significant driver of military spending. The greater the weight of trade with the military leader and the higher its trade surplus, the lower is the defense spending of the minor partner. [ABSTRACT FROM AUTHOR]

Inter-municipal cooperation, where two or more local governments jointly provide one or more public services across their jurisdictions, is an increasingly prevalent mode of public administration. In part, this reflects the limited success of prior rounds of privatization and amalgamation reform – and the continuing desire to economize and improve regional coordination. In part, it speaks of the wider policy fashion for seeking collaborative solutions to public problems. This article introduces a special issue on "the drivers and effects of inter-municipal cooperation." It reviews the current evidence base and the contributions of six papers, and suggests productive avenues for future research. [ABSTRACT FROM AUTHOR]

We study the connection between the demographic transition to an aging population and global climate policy ambition in the outcomes from recent international agreements on climate change: We test whether the share of the elderly in a population is a significant determinant of the quantity and ambition of a country’s policy actions against climate change. We use different indicators of climate policy ambition as measured by the Nationally Determined Contributions (NDC) of the Paris Agreement as updated in the Glasgow Climate Pact. We also use the number of climate change laws passed in a country to further test robustness of main results. We resort to instrumental variables as part of our identification strategy to account for potential endogeneity. Our econometric results indicate a negative association between the share of the elderly and both policy ambition in climate agreements and the intensity of regulatory initiatives to fight climate change. This suggests that the increasing political influence of the older population as a consequence of aging hinders climate policy ambition. Policy implications are discussed. [ABSTRACT FROM AUTHOR]

We analyze the role of nature and geography in determining economic and social outcomes. We propose a theoretical model relating geography and nature to economic growth, and examine that model using data from NUTS 2 European regions. By doing this, we identify the predictive power of first‐nature variables to explain regional population distribution. Then we analyze the effects of misadjustment between the actual and predicted distribution of populations on economic performance. Our results indicate that deviating from first‐nature outcomes has a significant negative effect on economic growth. The main policy implication emerging from our analysis is that strategies that harmonize with nature and geography yield better social welfare than those policies that conflict with them. [ABSTRACT FROM AUTHOR]

Empirical evidence on remunicipalization remains scarce, and even more so as regards potential differences in the roles played by politicians and bureaucrats in service delivery reform. We use information obtained from a survey of Spanish municipalities to investigate differences in the service delivery preferences of politicians and technical staff, as well as differences in their respective propensities to reform. The results we obtain suggest that bureaucrats have both a stronger preference for private participation in service delivery and for reforming services than do politicians. [ABSTRACT FROM AUTHOR]

• Solid waste collection in Barcelona is regulated with competition by comparison. • Relative performance assessment is easier where competitors are near each other. • Firms anticipate easier monitoring and choose their quality performance strategically. • Quality is higher in areas where competitors are near each other. • Quality is lower in areas where competitor area far from each other. Public procurement is frequently used to contract solid waste collection services. Incomplete contracts and transaction costs increase the need for monitoring and supervision. In such cases, competition by comparison can be a useful tool. In Barcelona, solid waste collection is regulated by competition, with four delivery zones being contracted out separately. Therefore, it is possible to make relative performance assessments, especially in the areas where the contracted firms operate close to each other. Private firms anticipate stronger competitive pressures near to competitors' zones, even after the contract has been awarded, and they compete on quality. This research studies the influence of the proximity between competitors on the quality of service delivery. Monthly data on the number of complaints regarding waste collection in the city's 73 neighborhoods between 2014 and 2019 is used to evaluate quality. Using count model approaches, our results show that higher quality is provided in neighborhoods closer to other neighborhoods served by a competing firm. Moreover, lower quality is delivered in peripheral neighborhoods, where comparison with competitors' neighborhoods is much harder, if at all possible. The results are consistent with the hypothesis that firms strategically manage quality performance and tend to deliver higher quality where they anticipate that monitoring by the regulator is easier. The findings add to the existing knowledge of competition as a regulatory tool used to obtain more information and providing useful insights to policymakers and regulators to better understand firms' behavior in quality delivery. [ABSTRACT FROM AUTHOR]

Inter-municipal cooperation in public service delivery has attracted the interest of local authorities seeking to reform public service provision. Cost saving, together with better quality and coordination, has been among the most important drivers of such cooperation. However, the empirical results on inter-municipal cooperation and its associated costs offer divergent outcomes. By conducting a meta-regression analysis, we seek to explain this discrepancy. We formulate several hypotheses regarding scale economies, transaction costs, and governance of cooperation. While we find no clear indications of the role played by transaction costs in the relationship between cooperation and service delivery costs, we find strong evidence that population size and governance are significant in explaining the relationship. Specifically, small populations and delegation to a higher tier of government seem to offer cost advantages to cooperating municipalities. As an extension of our model, we seek to disentangle service-related transaction costs based on asset specificity and ease of measurability of the service. [ABSTRACT FROM AUTHOR]

• Barcelona has been undergoing a continuous reform of waste collection service. • The division of the city in service delivery areas promotes competition. • Scale economies allow proposing an additional area to enhance competition. • Re-municipalization of one area would improve the regulatory capacity of the city. Over the last two decades, Barcelona has implemented a far-reaching reform of the city's solid waste collection. In 2000, the city was divided in four zones, with four separate solid waste collection contracts being awarded to private firms, with none being allowed to obtain more than two zones, a rule that was revised in 2009 to just one contract per firm. This division of the market via exclusive territories sought to enhance competition in the expectation of the convergence of relative costs, efficiency and service quality throughout the city. This study analyzes and evaluates the creation of lots as a tool of competition with monthly observations of costs and outputs between 2015 and 2019. Main findings are that firms producing in larger zones report higher costs, that increased competition was not sufficient to lead to converging costs, and that none of the firms operate under increasing returns to scale. Based on our results, we recommend creating an additional zone. We further suggest that if a public firm managed one of the zones, the regulator would obtain more reliable information on the service costs and technical characteristics, thus increasing her capabilities as supervisor of the private firms delivering the service in other zones. [ABSTRACT FROM AUTHOR]

Several countries have experienced lengthy periods of government formation deadlock in recent years, as they have sought to form a new government. This study examines whether government formation deadlocks damage a country's economy. To do so, we analyze the case of Belgium, which took a record 541 days to create a post‐election government, following the June 2010 federal elections. Employing the synthetic control method, our results show that the Belgium economy did not suffer an economic toll; on the contrary, gross domestic product per capita growth was higher than would have otherwise been expected. As such, our evidence contradicts frequent claims that long periods of government formation deadlock negatively affect an economy. [ABSTRACT FROM AUTHOR]

Mexico City's bus rapid transit (BRT) network, Metrobus, was introduced in an attempt to reduce congestion, increase city transport efficiency and cut air polluting emissions. In June 2005, the first BRT line in the metropolitan area began service. We use the differences-in-differences technique to make the first quantitative assessment of the policy impact of a BRT system on air polluting emissions. The air pollutants considered are carbon monoxide (CO), nitrogen oxides (NO X ), particulate matter of less than 10 μm (PM 10 ), and sulfur dioxide (SO 2 ). The ex-post analysis uses real field data from air quality monitoring stations for periods before and after BRT implementation. Results show that BRT constitutes an effective environmental policy, reducing emissions of CO, NO X , and PM 10 . [ABSTRACT FROM AUTHOR]

The European Union launched a set of policies as part of its 2020 climate and energy package aimed at meeting its 20/20/20 headline targets for smart, sustainable and inclusive growth. This paper evaluates how successful new-to-the-market climate change mitigation technologies (CCMT) are in helping EU member states (MS) reach these goals and, furthermore, whether there are differences between sectors subject to EU-wide polices. To do so, we relate CCMT patent counts to two specific headline targets: (1) achieving 20% of gross final energy consumption from renewables, and (2) achieving a 20% increase in energy efficiency. Our results provide the first ex-post evaluation of the effectiveness of these technologies for combating climate change. Moreover, our sectoral impact assessment points to significant differences in the way in which these technologies contribute to policy goals across the sectors. [ABSTRACT FROM AUTHOR]

Drawing on evidence from three case studies, we show how the State's Financial Liability has worked in assigning risk in large PPP contracts in Spain. Project failure and the concessionaires' bankruptcy have resulted in the government having to assume heavy financial obligations, which have ultimately been absorbed by taxpayers and users. In contrast, Spain's leading construction companies, which were also major investors in the concessionaires, have been able to minimize their risk. Myopic PPPs have been entered into based on the transference of liabilities to taxpayers and users, and the, consequent, minimization of risks for the main private investors. [ABSTRACT FROM AUTHOR]

Inter-municipal cooperation is an important public service delivery reform, whose drivers move beyond simple concerns with costs and economic efficiency, to policy issues related to governance structure and spatial context. We conduct a meta-regression analysis based on the existing multivariate empirical literature to explore what factors explain divergence in results in the existing empirical studies. We find strong evidence that fiscal constraints, spatial, and organizational factors are significant drivers of cooperation. Our meta-regressions do not yield results to explain divergence in results on community wealth, economies of scale, or racial homogeneity. More studies on these factors are needed to understand how these factors might affect cooperation. Future theoretical and empirical research should give more attention to spatial and organizational factors to develop a better understanding of factors driving cooperation, and how they differ across local government structures and regions. [ABSTRACT FROM PUBLISHER]

This paper analyzes the relationship between market concentration in the private segment of the water industry and water prices with a sample of municipalities located in the Southern Spanish region of Andalusia. In doing so, several Heckman sample selection models are estimated with the main finding being that market concentration increases the price of water for residential use charged by private companies. The main policy recommendation is that urban water service privatization must be accompanied by the appropriate regulatory and institutional frameworks to promote competition among businesses and monitor water pricing. [ABSTRACT FROM AUTHOR]

Spain's transport infrastructure policy has become a paradigmatic case of oversupply and of mismatch with demand. The massive expansion of the country's transport infrastructure over the last decade has not been a response to demand bottlenecks or previously identified needs. For this reason, the intensity of use today on all interurban modes of transport in Spain falls well below that of other EU countries. This paper analyzes the institutional and regulatory factors that have permitted this policy, allowing us to draw lessons from the Spanish case that should help other countries avoid the pitfalls and shortcomings of Spanish policy. Based on our analysis, we also discuss policy remedies and suggest reforms in different regulatory areas, which could help improve the performance of Spain's infrastructure policy. [ABSTRACT FROM AUTHOR]

Two speed management policies were implemented in the metropolitan area of Barcelona aimed at reducing air pollution concentration levels. In 2008, the maximum speed limit was reduced to 80 km/h and, in 2009, a variable speed system was introduced on some metropolitan motorways. This paper evaluates whether such policies have been successful in promoting cleaner air, not only in terms of average pollutant levels but also during high and low pollution episodes. To do so, we use a quantile regression approach for fixed effect panel data, which allows us analyzing different scenarios (beyond the average levels). We find that the variable speed system improves air quality with regard to the two pollutants considered here, being most effective when nitrogen oxide levels are not too low and when particulate matter concentrations are below extremely high levels. However, reducing the maximum speed limit from 120/100 km/h to 80 km/h has no effect – or even a slightly increasing effect – on the two pollutants, depending on the pollution scenario. [ABSTRACT FROM AUTHOR]

New high-speed rail (HSR) lines may have an enormous influence on the provision of air services. The attention has been devoted to competition between both transportation modes but in some cases HSR services may also have an intermodal complementary role with air transportation. By taking a supply oriented empirical analysis, we study the impact of HSR on air service frequencies and seats offered by airlines in large European countries. We emphasize the distinction between routes with and without a hub airport as an endpoint and we also examine the influence of the location of the HSR station. We generally find direct competition between HSR and airlines, but we also provide some evidence that HSR can provide feeding services to long haul air services in hub airports, particularly in hub airports with HRS stations. [ABSTRACT FROM AUTHOR]

This paper studies the dynamics of concentration in the Spanish market for the provision of urban water service by private contract operators in the 2000–2020 period. The market is highly concentrated. Concentration increased until 2007, at which point it started to decline when Law 30/2007 on Public Sector Contracts and Organic Law 8/2007 on Political Party Financing were passed; before rising again from 2016 onwards. This latter trend results from strategic behaviour by the two leading operators, acquiring smaller companies with a notable presence in some regional markets. Further legislative reforms aimed at safeguarding space for competition are thus proposed. • The Spanish market for the private provision of urban water service is highly concentrated. • Concentration declined when Law 30/2007 on Public Sector Contracts and Organic Law 8/2007 on Political Party Financing were passed in 2007. • Concentration rose again from 2016 onwards following the acquisition of smaller operators by the two large market players. • Accordingly, some recommendations for further policies aimed at boosting competition for this market are proposed. [ABSTRACT FROM AUTHOR]

As in other economic activities, privatization of water delivery has not resulted in the retreat of the public sector, but rather a change in the way in which the government intervenes in the water industry. This paper illustrates this situation by comparing urban water services in two Spanish regions, Andalusia and Catalonia. Water service delivery is structured very differently in these two regions with respect to private involvement, the degree of market concentration and, as a result, problems in competition. The characteristics of the two regions' respective regulatory agencies reflect the different paths taken to privatization: in Catalonia private firms have much more tradition and operate throughout the region; in Andalusia their introduction has been much more recent and limited in scope. [ABSTRACT FROM AUTHOR]

Highlights: [•] Compares maximum speed limit of 80km/h to variable speed system on Barcelona metropolitan motorways. [•] Differences-in-differences method is used to assess policy impact on emissions of NO x and PM10. [•] Reducing the speed limit to 80km/h increases NO x by 1.7–3.2% and PM10 by 5.3–5.9%. [•] Variable speed policy reduces NO x and PM10 pollution by 7.7–17.1% and 14.5–17.3%. [ABSTRACT FROM AUTHOR]

This paper conducts an empirical analysis of the relationship between privatization, competition, and regulation drawing on data from a wide sample of European airports. Privatization policies may involve a shift in the way governments are able to intervene in markets, while airports – unlike network infrastructures – are subject to mixed degrees of competition and monopoly characteristics. In this regard, our main hypothesis is that the impact of privatization on regulatory reform will be dependent on the competition scenario that prevails in each airport. We provide empirical evidence that the stringency of regulatory reform is related to the level of existing competition. Large airports, with substantial market power, tend to be subject to highly prescriptive regulation and airports that have nearby competing airports tend to be subject to less prescriptive regulation. [ABSTRACT FROM AUTHOR]

Considerable attention has been given to the efficiency-equity dilemma in explaining the territorial allocation of investment. However, centralization policies that seek to introduce or reinforce territorial hierarchies have yet to be subject to empirical analysis. Drawing on data from Spain, we show that investment in network modes is influenced by strategies of directing funding to the regions immediately surrounding the political capital. These policies of centralization, which complement factors of efficiency-equity trade-off and the satisfaction of political partisan interests, have been facilitated in the case of roads and railways by budgetary funding models in which mobility demands have not been the main driver of investment allocation. Resumen Se ha venido prestando una atención considerable al dilema entre eficiencia-equidad para explicar la asignación territorial de inversiones. Sin embargo, aun falta por someter a un análisis empírico a aquellas políticas de centralización que buscan introducir o fortalecer las jerarquías territoriales. Haciendo uso de datos pertenecientes a España, mostramos como la inversión en modos de red se ve influenciada por estrategias que canalizan la financiación hacia aquellas regiones alrededor de la capital política. Estas políticas de centralización, que combinan factores como la búsqueda de un compromiso entre eficiencia-equidad con el satisfacer intereses políticos partidistas, han sido facilitadas en el caso de carreteras y ferrocarriles por modelos de financiación presupuestaria en los que la demanda de movilidad no ha sido el motor principal en la asignación de inversiones. [ABSTRACT FROM AUTHOR]

Abstract: Speed limits had been centralized at the federal level since 1974, until decisions were devolved to the states in 1995. However, the centralization debate has reemerged in recent years. This paper conducts the first econometric analysis of the determinants of speed limit laws and State reactions after the repeal. By using mobility, geographic and political variables, our results suggest that geography – which reflects private mobility needs and social preferences –, is one of the main factors influencing speed limit laws, together with political ideology. Furthermore, we identify the presence of regional and time diffusion effects. By presenting first evidence on policy determinants, we provide a better understanding of the formulation of the heterogeneity of speed limits in US and offer implications for the debate on centralization and decentralization of transport policy. [Copyright &y& Elsevier]

Abstract: This paper analyzes factors explaining supply and demand of local public transportation. Together with variables related to traditional economic factors and mobility, we consider variables reflecting institutional characteristics and geographical patterns. Being a political capital increases supply and demand of local public transportation, inequality is associated with higher supply, and contracting out reduces supply. Furthermore, our regional analysis allows us capturing the effect of geographical characteristics and different traditions of government intervention. In all, we provide first evidence on the role played by institutional and regional characteristics useful to achieve a better understanding of local public transportation supply and demand. [Copyright &y& Elsevier]

In this paper we investigate how local governments finance public services, and their choice between budget funding and flat service fees. On the basis of a simple model of electoral competition we predict that the tax policy will be extreme (either progressive or conservative) only if both the voting majority's economic interests and the valence point to the same ideological side. If ideological and economic interests diverge, then the equilibrium policy will be a moderate one. From our empirical analysis we find that progressive mayors in progressive constituencies use budget funding to a greater degree, whereas conservative mayors in conservative constituencies prefer flat service fees. When the political affiliation of the mayor and the ideological bias of the constituency diverge, more moderate policies are chosen. We find also that service-specific deficits are lower in cities with private production of solid waste service. Thus policy makers may have used privatization as a means to reduce the political cost of increasing service-specific taxes. [ABSTRACT FROM AUTHOR]

Abstract: The aim of this paper is to analyze the effects of intermunicipal cooperation and privatization on the delivery costs of urban solid waste services in rural environments. The results of our empirical analysis, which we conducted among a sample of very small municipalities, indicate that small towns that cooperate incur lower costs for their waste collection service. Cooperation also raises collection frequency and improves the quality of the service in small towns. By contrast, the form of production, whether it is public or private, does not result in systematic differences in costs. Interestingly, the degree of population dispersion, that is, the number of population units within the municipal jurisdiction, has a significant positive relation with service costs. No evidence of scale economies is found because small municipalities have likely exploited them by means of intermunicipal cooperation. [Copyright &y& Elsevier]

Recent concessions in France and in the USA have resulted in a dramatic difference in the valuation placed on the toll roads; the price paid by the investors in France was 12 times current cash flow whereas investors paid 60 times current cash flow for US toll roads. In this paper, we explore two questions: what accounts for the difference in these multiples? and what are the implications with respect to the public interest? Our analysis illustrates how structural and procedural decisions made by the public owner affect the concession price. Further, the terms of the concession have direct consequences that are enjoyed or borne by the various stakeholders of the toll road. [ABSTRACT FROM AUTHOR]

Abstract: Recent theoretical developments on concession contracts for long term infrastructure projects under uncertain demand show the benefits of allowing for flexible term contracts rather than fixing a rigid term. This study presents a simulation to compare both alternatives by using real data from the oldest Spanish toll motorways. For this purpose, we analyze how well the flexible term would have performed instead of the fixed length actually established. Our results show a huge reduction of the term of concession that would have dramatically decreased the firm’s benefits and the user’s overpayment due to the internalization of an unexpected traffic increase. [Copyright &y& Elsevier]

Several empirical studies have analyzed the factors that influence local privatization. We examine the influence of transaction costs and political factors on local governments' choices through new variables. We consider two relevant services accounting for different amounts of transaction costs: water and solid waste delivery. Our results show that privatization is less common for water, which has higher transaction costs. Furthermore, we find that municipalities with a conservative ruling party privatize more often regardless of the ideological orientation of the constituency. Finally, we find that intermunicipal cooperation may be a suitable organizational form for some municipalities. [ABSTRACT FROM AUTHOR]

The author reflects on issues related to local privatization. The authors present evidence on the lack of cost savings with privatization. They also illustrate the importance of managing markets, policy, and political interests to guarantee benefits from privatization. They comment on the challenges of a dynamic market-management approach.

Recent evidence on the savings from private production of local public services has become increasingly ambiguous. Here we specify and estimate a model to explain municipal costs for solid waste collection. As we find no effect of the mode of production on costs, we put forward two hypotheses. First, progressive concentration and decreases in bidding competition may come to outweigh gains from privatization. Second, the threat of privatization may have stimulated public unit managers to search for alternative reforms. The results suggest that both inter-municipal cooperation and recent privatization are associated with lower costs, while old privatization is not. [ABSTRACT FROM AUTHOR]

We empirically assess how both between-country inequality and within-country inequality relate to climate policy ambition as defined by NDC pledges of the Paris Agreement (COP21). We exploit the difference between high and low ambition targets submitted by parties to construct a climate policy ambition index. We find that both inequalities shape countries' pledges: First, low income countries tend to be more ambitious in setting their pledges when external support is received. Second, within-country inequality is associated with (i) lower mitigation ambition in low and middle-low-income countries, and with (ii) higher mitigation ambition, although non statistically significant, for upperhigh and high-income countries. Our results are discussed in terms of (i) climate policy being a superior good in rich countries, and (ii) elites benefiting from emitting economic activities in poorer countries. [ABSTRACT FROM AUTHOR]

Evidence regarding the drivers and the effects of remunicipalization remains in short supply. In this paper we exploit existing analyses of earlier historical phases of the remunicipalization of water delivery services to disentangle the role played by a range of different factors – most notably overpricing and corruption under private ownership – in the decision to remunicipalize these services. Additionally, we discuss what the effects of remunicipalization might be in the light of the, as yet, somewhat sketchy evidence. In the specific case of water tariffs, our analysis casts some doubt on whether the initial price reductions introduced following remunicipalization are sustainable over time. • Overpricing and corruption with private management have been drivers of remunicipalization. • Prices as well as investment seem to have decreased under public management. • Lower prices after remunicipalization might be unsustainable overtime. [ABSTRACT FROM AUTHOR]

Abstract: In this paper, we build an analytical framework to estimate potential passenger traffic for new long-haul routes originating in secondary airports within national airport systems where a main hub concentrates most of the transcontinental traffic. The results are particularly important in the context of air space liberalization, which is generating opportunities for new city-pair traffic. If airport and airline managers can correctly value route alternatives, they can make better decisions concerning alliances, expansion plans, or the development of their hub-and-spoke networks. [Copyright &y& Elsevier]

Re-municipalization is part of a broader set of reverse privatization reforms. We argue the term re-municipalization lacks conceptual clarity, confusing municipal level reversals from national ones, new service delivery from reversals, and mixed market positions from full public control. This conceptual confusion makes measurement of re-municipalization difficult. While more case studies are being discovered, quantitative time series studies do not show remunicipalization is increasing. Much case study based research argues remunicipalization is politically transformative, but quantitative research generally finds re-municipalization to be part of a pragmatic market management process, a position confirmed by the papers in this special issue. [ABSTRACT FROM AUTHOR]

Mismatches between forecasted and actual costs and traffic figures are common in transport investments, especially in large scale ones, and so are delusions of the future demand. High-speed rail projects are often among the worst practices for cost overruns and demand overestimation, even where traffic figures may tell a history of apparent success. In the paper, we analyse two significant cases of delusions of success , namely the Italian and Spanish HSR programmes. The Italian one shows excellent demand performances, but is among the continent's worst cases for construction costs. The Spanish one, recognised worldwide as one of the most successful outcomes of HS policy, is the one where potential demand estimations were systematically neglected, and the planned network appears largely out-of-scale compared to actual traffic. In both cases, the forecasts were not simply biased, as well-known literature on megaproject failures has clearly shown: Italian lines were deliberately designed to increase the cost, and the Spanish network was deliberately planned out-of-scale. By means of the two cases, the paper will show that the core of the problem does not lie in the wrong estimations, but in deliberate choices of overinvestment, overdesign and overquality. [ABSTRACT FROM AUTHOR]

Renewable portfolio standards (RPSs׳) require a certain fraction of the electricity generated for a given region be produced from renewable resources. California׳s RPS mandates that by 2020, 33% of the electricity sold in the state must be generated from renewables. Such mandates have important implications for the electricity sector as well as for the whole society. In this paper, we estimate the costs and benefits of varying 2020 California RPS targets on electricity prices, greenhouse gas (GHG) emissions, criteria pollutant emissions, the electricity generation mix, the labor market, renewable investment decisions, and social welfare. We have extended the RPS Calculator model, developed by Energy and Environmental Economics (E3) Inc., to account for distributions of fuel and generation costs, to incorporate demand functions, and to estimate the effects of RPS targets on GHG emissions, criteria pollutant emissions, and employment. The results of our modeling provide the following policy insights: (1) the average 2020 electricity price increases as the RPS target rises, with values ranging between $0.152 and $0.175/kW h (2008 dollars) for the 20% RPS to 50% RPS, respectively; (2) the 33% and 50% RPS targets decrease the GHG emissions by about 17.6 and 35.8 million metric tons of carbon dioxide equivalent (MMTCO 2 e) relative to the 20% RPS; (3) the GHG emission reduction costs of the RPS options are high ($71–$94 per ton) relative to results from policy options other than RPS or prices that are common in the carbon markets; and (4) a lower target (e.g., a 27% RPS) provides higher social welfare than the 33% RPS (mandate) under low and moderate CO 2 social costs (lower than $35/ton); while a higher RPS target (e.g., 50%) is more beneficial when using high CO 2 social costs or rapid renewable technology diffusion. However, under all studied scenarios, the mandated 33% RPS for California would not provide the best cost/benefit values among the possible targets and would not maximize the net social benefit objective. [ABSTRACT FROM AUTHOR]

This paper has two objectives: (i) to introduce a new approach in order to gain widespread support for road pricing; and (ii) to develop a detailed social welfare analysis for road pricing schemes. We first describe our novel approach that stimulates public support for road pricing, which we refer to as an investment public–private partnership, or IP3. This approach returns a significant portion of the economic value created by road pricing back to the citizens who own the newly priced facility. We then present a social welfare framework that estimates the benefits and costs of using the IP3 approach on an urban transportation network. A P3 project’s impact on overall social welfare provides a more comprehensive evaluation criterion than the often-used Value for Money (VfM) analysis. Apart from several theoretical studies, a detailed social welfare analysis that includes all major P3 project stakeholders is absent from the literature. We use Fresno, California as our case study in order to conduct a welfare analysis on IP3s. Our results show that system-optimal tolling favors average users, but that government—and consequently taxpayers—should pay for costly tolling systems (negative profits). In contrast, unlimited profit-maximizing tolls raise substantial profits for government, for the infrastructure’s citizen-owners, and for the private sector, but the average user is worse off. From a social-welfare perspective, one should search for a Pareto improvement under which all major stakeholders are better off. Our estimates indicate that a mixed public and private tolling scheme offers such an improvement. [ABSTRACT FROM AUTHOR]