Climate change economics and policy

My research examines the design of trading schemes and economic instruments to provide appropriate incentives for environmental protection, from the level of international actors to the individual. Managing scarce environmental resources requires credible, long-term policy frameworks that provide clear signals to firms to switch from dirty to cleaner modes of production. Climate policy must overcome an international collective action problem and significant economic uncertainty.

My research on discounting examines the framework for public investment under uncertainty. Normative economic anaysis of this nature is impossible without some excursion into moral philosophy and ethics, which is also reflected in my work. The UK government (among other governments) has adopted a declining discount rate for project appraisal in its Green Book.

Oxford University Press Book: The Economics and Politics of Climate Change

—	Helm, D. and Hepburn, C. (2009), The Economics and Politics of Climate Change, Oxford University Press.

Peer-reviewed papers


25.	'Optimal harvesting of fish stocks under a time-varying discount rate', with Duncan and Papachristodoulou, Journal of Theoretical Biology, 269:1, 166-173, 2011.

24.	'Combining multiple climate policy instruments: how not to do it', with Fankhauser and Park, Climate Change Economics, forthcoming, 2010.

23.	'Behavioural Economics, Hyperbolic Discounting and Environmental Policy', with Duncan and Papachristodoulou, Environmental and Resource Economics, 46:2, 189–206, 2010.

22.	'Environmental policy, government and the market', Oxford Review of Economic Policy, 26:2, 117-136, 2010.

21.	'Designing carbon markets, Part I: Carbon markets in time', with Fankhauser, Energy Policy, 38:8, 4363-4370, 2010.

20.	'Designing carbon markets, Part II: Carbon markets in space', with Fankhauser, Energy Policy, 38:8, 4381-4387, 2010.

19.	'International Air Travel and Greenhouse Gas Emissions: A Proposal for an Adaptation Levy', with Mueller, The World Economy, 33:6, 830-849, 2010.

18.	'An issue of trust: state corruption, responsibility and greenhouse gas emissions', with Frame, Environmental Research Letters, 5, 014004, 2010.

17.	'Siblings, Not Triplets: Social Preferences for Risk, Inequality and Time in Discounting Climate Change', with Atkinson, Dietz, Helgeson and Saelen, Economics e-journal, 2009-26, June, 2009.

16.	'Equity weighting and the marginal damage costs of climate change', with Anthoff and Tol, Ecological Economics, 68:3, 836-849, 2009.

15.	'Social discounting under uncertainty: a cross country comparison', with Koundouri, Panopoulou, and Pantelidis, Journal of Environmental Economics and Management, 57:2, 140-150, 2009.

14.	'A new global deal on climate change', with Stern, Oxford Review of Economic Policy, 24:2, 259-279, 2008.

13.	'Carbon trading: a review of the Kyoto mechanisms', Annual Review of Environment and Resources, 32, 375-393, 2007.

12.	'Ethics of the discount rate in the Stern Review on the Economics of Climate Change', with Beckerman, World Economics, 8:1, 187-210, 2007.

11.	'Gamma discounting and expected net future value', with Groom, Journal of Environmental Economics and Management, 53:1, 99-109, 2007.

10.	'Regret theory and the tyranny of choice', with Irons, Economic Record, 83:261, 191-203, 2007.

9.	'Recent advances in discounting: implications for forest economics', with Koundouri, Journal of Forest Economics, 13:2, 169-189, 2007.

8.	'Regulating by prices, quantities or both: an update and an overview', Oxford Review of Economic Policy, 22:2, 226-247, 2006.

7.	'Auctioning of EU ETS Phase II allowances: why and how?', with Neuhoff, Grubb, Matthes and Tse, Climate Policy, 6:1, 137-160, 2006. • We suggested setting a reserve price on allowance auctions, adopted in the draft U.S. cap and trade bill (Waxman-Markey s 791(d)) shown here.

6.	'Emissions, firm profits and market prices: the consequences from emissions trading', with Smale, Hartley, Grubb, and Ward, Climate Policy, 6:1, 29-46, 2006.

5.	'Discounting and the social cost of carbon: A closer look at uncertainty', with Guo, Tol and Anthoff, Environmental Science and Policy, 9:3, 205-216, 2006.

4.	'Discounting the future: the long and the short of it', with Groom, Koundouri and Pearce, Environmental and Resource Economics, 31:1, 445-493, 2005.

3.	'Clashing strategic cultures and climate policy', with Ceronsky, Obersteiner and Yamagata, Climate Policy, 4:4, 347-357, 2005.

2.	'Valuing the future: recent advances in social discounting', with Pearce, Groom and Koundouri, World Economics, 4:2, 121-141, 2003.

1.	'Credible carbon policy', with Helm and Mash, Oxford Review of Economic Policy, 19:3, 438-50, 2003. • The idea of delegating policy to an independent expert group made it to the UK Climate Change Bill: BBC News website. • Our work on the credibility problem was referenced in the Financial Times newspaper.

Chapters in books

9.	Hepburn, C. (2009) 'International Carbon Finance and the Clean Development Mechanism', in Dieter Helm and Cameron Hepburn (eds.) The Economics and Politics of Climate Change, Oxford: Oxford University Press, 409-429.
8.	Hepburn, C. (2009) 'Carbon taxes, emissions trading and hybrid schemes', in Dieter Helm and Cameron Hepburn (eds.) The Economics and Politics of Climate Change, Oxford: Oxford University Press, 365-384.
7.	Hepburn, C. and Stern, N. (2009) 'The Global Deal on Climate Change', in Dieter Helm and Cameron Hepburn (eds.) The Economics and Politics of Climate Change, Oxford: Oxford University Press, 36-57.
6.	Helm, D. and Hepburn, C. (2009) 'Introduction', in Dieter Helm and Cameron Hepburn (eds.) The Economics and Politics of Climate Change, Oxford: Oxford University Press, 1-5.
5.	Dietz, S., Hepburn, C. and Stern, N. (2008) 'Economics, ethics and climate change', in Kaushik Basu and Ravi Kanbur (ed.) Arguments for a Better World: Essays in Honour of Amartya Sen (Volume 2: Society, Institutions and Development), Oxford: Oxford University Press, in press.
4.	Helm, D. and Hepburn, C (2007) 'Carbon contracts and energy policy', in Helm, D. (ed) The New Energy Paradigm, chapter 3 (p 63-75). [Outline proposal PDF].
3.	Hepburn, C. (2007) 'Valuing the far-off future: discounting and its alternatives', in Atkinson, G., Dietz, S. and Neumayer, E. (eds) Handbook of Sustainable Development, chapter 7. [PDF].
2.	Groom, B., Hepburn, C. and Koundouri, P (2005) 'Implications of declining discount rates for UK climate change policy', in Peace, D. (ed) Valuing the Environment in Developed Countries, Cheltenham, UK: Edward Elgar, chapter 5.
1.	Helm, D., Hepburn, C. and Mash R. (2005) 'Credible carbon policy', in Helm, D. (ed) Climate-change policy, Oxford, UK: Oxford University Press, chapter 14.

Edited Oxford Review of Economic Policy edition in 2010 on Environmental policy, government and the market

Co-edited Oxford Review of Economic Policy edition in 2008 on Climate Change

Other papers

8.	Hepburn, C. (2009) 'Super solution to climate change', Australian Broadcasting Corporation, December 2010.
7.	Hepburn, C. (2009) 'Green light for a Keynesian stimulus', CEO Today, January 2009.
6.	Hepburn, C. (2008) 'Saving the planet: it's down to business', Sydney Morning Herald, 1 September 2008.
5.	Hepburn, C. (2007) 'Response to Defra consultation on voluntary carbon offsets', mimeo.
4.	Hepburn, C. (2006) 'Discounting climate change damages: Working note for the Stern review', mimeo, October.
3.	Müller, B. and Hepburn, C. (2006) 'IATAL — an outline proposal for an International Air Travel Adaptation Levy', Oxford Institute for Energy Studies, October. • A comment on this paper appeared in the Guardian.
2.	Hepburn, C. (2007) 'Use of Discount Rates in the Estimation of the Costs of Inaction with Respect to Selected Environmental Concerns', OECD Environment Directorate, ENV/EPOC/WPNEP(2006)13/FINAL.
1.	Helm D., Hepburn, C. and Mash, R. (2004) 'Time-inconsistent environmental policy and optimal delegation, Royal Economic Society, Conference Paper.

Theses Supervised

15.	Helgeson, J., (2007) 'Climate ethics survey: Disentangling public risk preferences from inequality & time', Oxford University, Masters Thesis.
14.	Huang, Y., (2007) 'Assessing and managing regulatory risk in China's CDM market: A carbon finance perspective', Oxford University, Masters Thesis.
13.	Saelen, H., (2007) 'Risk, inequality and time: How can public attitudes be incorporated better into the economics of climate change?', Oxford University, Masters Thesis. Håkon Saelen won the WWF and Environment Agency Masters Thesis Prize for 2007.
12.	Rowlands, H., (2006) 'The Climate Challenge Game: How Might Computer Games be Used to Communicate the Issues of Climate Change?', Oxford University, Masters Thesis.
11.	Mohn, W., (2006) 'Green and profitable? The potential returns to good environmental management', Oxford University, Masters Thesis.
10.	Cousins, K., (2005) 'An analysis of the UK energy market in an age of climate change: will adherence to the national emission reduction targets force an increasing reliance on nuclear power?', Oxford University, Masters Thesis.
9.	Gorina, N., (2005) 'Bridging Kyoto with the European Emissions Trading Scheme: Analysis of the “Linking Directive” and its Implications', Oxford University, Masters Thesis.
8.	Kikuchi, T., (2005) 'Does green management pay? An empirical examination of the relationship between the environmental and financial performance of listed Japanese companies', Oxford University, Masters Thesis.
7.	Nagai, H., (2005) 'How cost-effective are carbon emission reductions under the Prototype Carbon Fund?', Oxford University, Masters Thesis.
6.	Anthoff, D., (2004) 'Social cost of carbon: Equity weighting', Oxford University, Masters Thesis.
5.	Ceronsky, M., (2004) 'Checking the price tag on catastrophe: An investigation of the sensitivity of FUND's Social Cost of Carbon estimates to the incorporation of non-linear climate responses', Oxford University, Masters Thesis.
4.	Guo, J., (2004) 'Discounting and the social cost of carbon', Oxford University, Masters Thesis.
3.	Li, A., (2004) 'Investigating the effect of risk and ambiguity aversion on the social cost of carbon', Oxford University, Masters Thesis.
2.	Elliott, M., (2003) 'The price of Davy Jones' locker: Assessing the social costs of marine carbon sequestration', Oxford University, Masters Thesis.
1.	Vilas, S., (2003) 'NAFTA, Environment and Institutions: A critical analysis of the national and multilateral environmental institutions in Mexico, in light of trade liberalization in the agricultural sector', Oxford University, Masters Thesis.