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This article analyzes the willingness to pay of Costa Rican consumers for three environmental certifications in the coffee market, namely, Carbon Neutral, Fairtrade, and ISO 14001. A face-to-face survey was applied to 1191 Costa Rican inhabitants. The results show that Costa Rican consumers are willing to pay price premiums around 30% for all the considered environmental certifications. In addition, a Cragg’s hurdle model shows that household income, the level of education, and environmental or community activism increase the likelihood of consumers paying price premiums for environmental certifications, while men are less likely to pay than women. It was also found that the size of the price premiums that respondents are willing to pay are positively related to income, gender (female), and education, and negatively related to age. Once the effect of socioeconomic variables has been controlled for, we conclude that consumers are more willing to pay for the CN certification than for the other two. The results can be useful for participants in the coffee value chain; coffee producers can use environmental certifications both to enhance their participation in green markets, particularly in developing countries, and to improve their environmental performance.
Jorge A. Valenciano-Salazar; Francisco J. André; Mario Soliño. Paying for Sustainable Coffee in a Developing Country: Consumers’ Profile in Costa Rica. Sustainability 2021, 13, 9360 .
AMA StyleJorge A. Valenciano-Salazar, Francisco J. André, Mario Soliño. Paying for Sustainable Coffee in a Developing Country: Consumers’ Profile in Costa Rica. Sustainability. 2021; 13 (16):9360.
Chicago/Turabian StyleJorge A. Valenciano-Salazar; Francisco J. André; Mario Soliño. 2021. "Paying for Sustainable Coffee in a Developing Country: Consumers’ Profile in Costa Rica." Sustainability 13, no. 16: 9360.
The effectiveness of voluntary environmental programs and certifications to render social and private benefits depends on how aware consumers are, so that they can consider such initiatives when making their decisions. Consumers’ awareness has been mostly addressed in developed countries, although the benefits of companies’ environmental actions also take place in developing countries. This study is conducted in a developing country, such as Costa Rica. Using a large sample (n = 1191), consumers’ awareness of environmental certifications is studied at a general level (being able to name some environmental certification or program) and at a specific level (ability to name certified firms). The results show that consumers who are younger, with higher household income, with a university or technical degree and those participating in environmental or community groups are more likely to be aware of environmental certifications on both levels. Moreover, aware consumers tend to be more willing to pay for a certified coffee or a coffee produced by a certified company.
Jorge A. Valenciano-Salazar; Francisco J. André; Mario Soliño. Societal awareness of environmental certifications in Costa Rica. Journal of Cleaner Production 2020, 286, 124966 .
AMA StyleJorge A. Valenciano-Salazar, Francisco J. André, Mario Soliño. Societal awareness of environmental certifications in Costa Rica. Journal of Cleaner Production. 2020; 286 ():124966.
Chicago/Turabian StyleJorge A. Valenciano-Salazar; Francisco J. André; Mario Soliño. 2020. "Societal awareness of environmental certifications in Costa Rica." Journal of Cleaner Production 286, no. : 124966.
This article focuses on the strategic behavior of firms in the output and the emissions markets in the presence of market power. We consider the existence of a dominant firm in the permit market and different structures in the output market, including Cournot and two versions of the Stackelberg model, depending on whether the permit dominant firm is a leader or a follower in the output market. In all three models, the firm that dominates the permit market is more sensitive to its initial allocation than its competitor in terms of abatement and less sensitive in terms of output. In all three models, output is decreasing and the permit price is increasing in the permit dominant firm’s initial allocation. In the Cournot model, permit dominance is fruitless in terms of output and profit if the initial allocation is symmetric. Output leadership is more relevant than permit dominance since an output leader always tends to, ceteris paribus, produce more and make more profit whether it also dominates the permit market or not. This leadership can only be overcompensated for by distributing a larger share of permits to the output follower, and only if the total number of permits is large enough. In terms of welfare, Stackelberg is always superior to Cournot. If the initial permit allocation is symmetric, welfare is higher when the same firm dominates the output and the permit market at the same time.
Francisco J. André; Luis Miguel De Castro. Market Power in Output and Emissions Trading. Games 2020, 11, 43 .
AMA StyleFrancisco J. André, Luis Miguel De Castro. Market Power in Output and Emissions Trading. Games. 2020; 11 (4):43.
Chicago/Turabian StyleFrancisco J. André; Luis Miguel De Castro. 2020. "Market Power in Output and Emissions Trading." Games 11, no. 4: 43.
We propose addressing an organization’s adoption of an environmental certification as a multicriteria problem considering environmental sustainability as well as economic and strategic aspects. Our methodological approach uses the Analytical Hierarchy Process (AHP), which we use in an empirical application to analyze the adoption decision of several Costa Rican firms and institutions. Firstly, we select a set of economic, strategic, and environmental criteria that seem relevant for the organization’s direction. We select these criteria according to our literature review and a series of face-to-face interviews with scholars and companies’ managers. As an environmental certification, we focus on Carbon Neutral (CN), which is a domestic certification aimed at reducing or offsetting carbon emissions. For the sake of comparison, we also consider ISO 14001, which is a well-known international standard aimed at compliance with environmental norms. We conduct the AHP analysis using the answers given by 24 companies and institutions, which in aggregate terms, give CN a higher score than ISO 14001. This result is mainly due to the fact that CN ranks above ISO 14001 when attending to environmental sustainability, although ISO 14001 tends to be preferred in economic and strategic terms.
Francisco André; Jorge Valenciano-Salazar. Becoming Carbon Neutral in Costa Rica to Be More Sustainable: An AHP Approach. Sustainability 2020, 12, 737 .
AMA StyleFrancisco André, Jorge Valenciano-Salazar. Becoming Carbon Neutral in Costa Rica to Be More Sustainable: An AHP Approach. Sustainability. 2020; 12 (2):737.
Chicago/Turabian StyleFrancisco André; Jorge Valenciano-Salazar. 2020. "Becoming Carbon Neutral in Costa Rica to Be More Sustainable: An AHP Approach." Sustainability 12, no. 2: 737.
Cap-and-trade (CAT) programs are nowadays a common tool used by authorities to regulate polluting emissions and tackle environmental problems such as Climate Change. In this chapter, we analyze the implications of firm’s strategic behavior in product and emission permit markets for the success of these policies. We survey the related literature focusing on the relevance of market structure and firms’ competition. We develop a simple but unifying setting to revisit some of the main academic results on the subject.
Francisco J. André; Luis M. de Castro. Strategic Interaction Among Firms in Output and Emission Markets: A Unified Framework. Data Science for Nano Image Analysis 2019, 205 -229.
AMA StyleFrancisco J. André, Luis M. de Castro. Strategic Interaction Among Firms in Output and Emission Markets: A Unified Framework. Data Science for Nano Image Analysis. 2019; ():205-229.
Chicago/Turabian StyleFrancisco J. André; Luis M. de Castro. 2019. "Strategic Interaction Among Firms in Output and Emission Markets: A Unified Framework." Data Science for Nano Image Analysis , no. : 205-229.
We study the efficiency of the uniform auction as an allocation mechanism for emission permits among polluting firms. In our model, firms have private information about their abatement costs, which differ across firms and across units, and bidders’ demands are linear. We show that there is a continuum of interior Bayesian Nash equilibria, and only one is efficient, minimizing abatement costs. We find that the existence of many bidders is not a sufficient condition to guarantee an efficient equilibrium in the uniform auction. Additionally, bidders’ types have to be uncorrelated.
Francisco Alvarez; Cristina Mazón; Francisco J. André. Assigning pollution permits: are uniform auctions efficient? Economic Theory 2017, 67, 211 -248.
AMA StyleFrancisco Alvarez, Cristina Mazón, Francisco J. André. Assigning pollution permits: are uniform auctions efficient? Economic Theory. 2017; 67 (1):211-248.
Chicago/Turabian StyleFrancisco Alvarez; Cristina Mazón; Francisco J. André. 2017. "Assigning pollution permits: are uniform auctions efficient?" Economic Theory 67, no. 1: 211-248.
Francisco J. André; Luis Miguel de Castro. Scarcity climate rents under a carbon price with oligopoly competition. Oxford Economic Papers 2017, 1 .
AMA StyleFrancisco J. André, Luis Miguel de Castro. Scarcity climate rents under a carbon price with oligopoly competition. Oxford Economic Papers. 2017; ():1.
Chicago/Turabian StyleFrancisco J. André; Luis Miguel de Castro. 2017. "Scarcity climate rents under a carbon price with oligopoly competition." Oxford Economic Papers , no. : 1.
We analyze emission permit auctions in a framework in which a dominant firm enjoys market power both in the auction and in the secondary market while its competitor behaves in a competitive way. We obtain linear equilibrium bidding strategies for both firms and a unique equilibrium of the auction, which is optimal ex-post for the dominant firm. Under specific distributional assumptions we conclude that the auction always awards less permits to the dominant firm than the cost-effective amount. Our results serve as a warning about the properties of auctioning under market power. Under interior solution the auction allocation is dominated by grandfathering in terms of aggregated cost with probability one. As a policy implication, the specific design of the auction turns out to be crucial for cost-effectiveness. The chances of the auction to outperform grandfathering require that the former is capable of diluting the market power that is present in the secondary market.
Francisco Alvarez; Francisco J. André. Auctioning Emission Permits with Market Power. The B.E. Journal of Economic Analysis & Policy 2016, 16, 1 .
AMA StyleFrancisco Alvarez, Francisco J. André. Auctioning Emission Permits with Market Power. The B.E. Journal of Economic Analysis & Policy. 2016; 16 (4):1.
Chicago/Turabian StyleFrancisco Alvarez; Francisco J. André. 2016. "Auctioning Emission Permits with Market Power." The B.E. Journal of Economic Analysis & Policy 16, no. 4: 1.
We study the efficiency of the uniform auction as an allocation mechanism for emission permits among polluting firms. In our model, firms have private information about their abatement costs, which differ across firms and across units, and bidders' demands are linear. We show that there is a continuum of interior Bayesian-Nash equilibria, and only one is effcient, minimizing abatement costs. We find that the existence of many bidders is not a sufficient condition to guarantee an efficient equilibrium in the uniform auction. Additionally, bidders' types have to be uncorrelated.
Francisco Alvarez; Francisco J. André; Cristina Mazón. Assigning pollution permits: are uniform auctions efficient? 2016, 1 .
AMA StyleFrancisco Alvarez, Francisco J. André, Cristina Mazón. Assigning pollution permits: are uniform auctions efficient? . 2016; ():1.
Chicago/Turabian StyleFrancisco Alvarez; Francisco J. André; Cristina Mazón. 2016. "Assigning pollution permits: are uniform auctions efficient?" , no. : 1.
In a principal-agent model we analyze the firm's decision to adopt an informal or a standardized environmental management system (EMS). Our results are consistent with empirical evidence in several respects. A standardized EMS increases the internal control at the cost of introducing some degree of rigidity that entails an endogenous setup cost. Standardized systems are more prone to be adopted by big and well established firms and under tougher environmental policies. Firms with standardized EMS tend to devote more effort to abatement although this effort results in lower pollution only if public incentives are strong enough, suggesting a complementarity relationship between standardized EMS and public policies. Emission charges have both a marginal effect on abatement and a qualitative effect on the adoption decision that may induce a conflict between private and public interests. As a result of the combination of these two effects it can be optimal for the government to distort the tax in a specific way in order to push the firm to choose the socially optimal EMS. The introduction of standardized systems can result in win-win situations where firms, society and the environment get better off.
Eduard Alonso-Paulí; Francisco J. André. Standardized environmental management systems as an internal management tool. Resource and Energy Economics 2015, 40, 85 -106.
AMA StyleEduard Alonso-Paulí, Francisco J. André. Standardized environmental management systems as an internal management tool. Resource and Energy Economics. 2015; 40 ():85-106.
Chicago/Turabian StyleEduard Alonso-Paulí; Francisco J. André. 2015. "Standardized environmental management systems as an internal management tool." Resource and Energy Economics 40, no. : 85-106.
It has been shown in prior research that cost effectiveness in the competitive emissions permit market could be affected by tacit collusion or price manipulation when the corresponding polluting product market is oligopolistic. We analyze these cross market links using a Stackelberg model to show that under reasonable assumptions, there are no incentives to collude for lobbying prices up. However, incentives for manipulating the price of permits up appear if there is an initial free allocation of permits, which is a policy argument against grandfathering and in favor of auctioning. This effect is increasing with the amount of permits allocated to the leader. Moreover, the changes for price manipulation increase with those changes that tend to undermine the leader's advantage in output production or to reduce the leader’s abatement cost.
Francisco J. André; Luis M. De Castro. Incentives for Price Manipulation in Emission Permit Markets with Stackelberg Competition. 2015, 1 .
AMA StyleFrancisco J. André, Luis M. De Castro. Incentives for Price Manipulation in Emission Permit Markets with Stackelberg Competition. . 2015; ():1.
Chicago/Turabian StyleFrancisco J. André; Luis M. De Castro. 2015. "Incentives for Price Manipulation in Emission Permit Markets with Stackelberg Competition." , no. : 1.
Francisco J. Andrr; Luis M. De Castro; Francisco J. André. Incentives for Price Manipulation in Emission Permit Markets with Stackelberg Competition. SSRN Electronic Journal 2015, 1 .
AMA StyleFrancisco J. Andrr, Luis M. De Castro, Francisco J. André. Incentives for Price Manipulation in Emission Permit Markets with Stackelberg Competition. SSRN Electronic Journal. 2015; ():1.
Chicago/Turabian StyleFrancisco J. Andrr; Luis M. De Castro; Francisco J. André. 2015. "Incentives for Price Manipulation in Emission Permit Markets with Stackelberg Competition." SSRN Electronic Journal , no. : 1.
We analise emission permit auctions under leader-follower competition when the leader bids strategically and the follower acts as price-taker both at the auction and the secondary market. We obtain linear equilibrium bidding strategies for both firms and a unique equilibrium of the auction, which is optimal ex-post for the leader. Under specific distributional assumptions we conclude that the auction always awards less permits to the leader than the cost-effective amount. Our central result is a cautionary note on the properties of auctioning under market power. Under interior solution the auction allocation is dominated by grandfathering in terms of aggregated cost with probability one. As a policy implication, the specific design of the auction turns out to be crucial for cost-effectiveness. The chances of the auction to outperform grandfathering require that the former is capable of diluting the market power that is present in the secondary market.
Francisco Alvarez; Francisco J. André. Auctioning emission permits in a leader-follower setting. 2015, 1 .
AMA StyleFrancisco Alvarez, Francisco J. André. Auctioning emission permits in a leader-follower setting. . 2015; ():1.
Chicago/Turabian StyleFrancisco Alvarez; Francisco J. André. 2015. "Auctioning emission permits in a leader-follower setting." , no. : 1.
Prior research has shown, on the one hand, that firms subject to a cap-and-trade system can enjoy scarcity rents and, on the other hand, that cost effectiveness in a competitive emission permit market could be affected by tacit collusion and price manipulation when the corresponding polluting product market is oligopolistic. It has also been argued that this type of collusive behavior might be responsible for the high prices of permits observed during the first phase of the EU ETS. We analyze these cross market links using a Stackelberg model to show that, under reasonable assumptions, there are no incentives to collude in order to manipulate prices up. However, incentives for manipulating the price of permits upward appear if there is an initial free allocation of permits, which is a policy argument against grandfathering and in favor of auctioning. This effect is increasing with the amount of permits allocated to the leader. The likelihood of observing price manipulation increases with those changes that tend to undermine the leader’s advantage in output production or to reduce the leader’s abatement cost.
Francisco J. André; Luis Miguel De Castro. Scarcity Rents and Incentives for Price Manipulation in Emissions Permit Markets with Stackelberg Competition. 2015, 1 .
AMA StyleFrancisco J. André, Luis Miguel De Castro. Scarcity Rents and Incentives for Price Manipulation in Emissions Permit Markets with Stackelberg Competition. . 2015; ():1.
Chicago/Turabian StyleFrancisco J. André; Luis Miguel De Castro. 2015. "Scarcity Rents and Incentives for Price Manipulation in Emissions Permit Markets with Stackelberg Competition." , no. : 1.
We compare auctioning and grandfathering as allocation mechanisms of emission permits when there is a secondary market with market power and firms have private information on their own abatement technologies. Based on real-life cases such as the EU ETS, we consider a multi-unit, multi-bid uniform auction. At the auction, each firm anticipates its role in the secondary market, either as a leader or a follower. This role affects each firms’ valuation of the permits (which are not common across firms) as well as their bidding strategies and it precludes the auction from generating a cost-effective allocation of permits, as it occurs in simpler auction models. Auctioning tends to be more cost-effective than grandfathering when the firms’ abatement cost functions are sufficiently different from one another, especially if the follower has lower abatement costs than the leader and the dispersion of the marginal costs is large enough.
Francisco Alvarez; Francisco J. André. Auctioning Versus Grandfathering in Cap-and-Trade Systems with Market Power and Incomplete Information. Environmental and Resource Economics 2014, 62, 873 -906.
AMA StyleFrancisco Alvarez, Francisco J. André. Auctioning Versus Grandfathering in Cap-and-Trade Systems with Market Power and Incomplete Information. Environmental and Resource Economics. 2014; 62 (4):873-906.
Chicago/Turabian StyleFrancisco Alvarez; Francisco J. André. 2014. "Auctioning Versus Grandfathering in Cap-and-Trade Systems with Market Power and Incomplete Information." Environmental and Resource Economics 62, no. 4: 873-906.
While fossil energy dependency has declined and energy supply has grown in the postwar world economy, future resource scarcity could cast its shadow on world economic growth soon if energy markets are forward looking. We develop an endogenous growth model that reconciles the current aggregate trends in energy use and productivity growth with the intertemporal dynamics of forward looking resource markets. Combining scarcity-rent driven energy supply (in the spirit of Hotelling) with profit-driven Directed Technical Change (in the spirit of Romer/Acemoglu), we generate transitional dynamics that can be qualitatively calibrated to current trends. The long-run properties of the model are studied to examine whether current trends are sustainable. We highlight the role of extraction costs in mining
Francisco J. André; Sjak Smulders. Fueling growth when oil peaks: Directed technological change and the limits to efficiency. European Economic Review 2014, 69, 18 -39.
AMA StyleFrancisco J. André, Sjak Smulders. Fueling growth when oil peaks: Directed technological change and the limits to efficiency. European Economic Review. 2014; 69 ():18-39.
Chicago/Turabian StyleFrancisco J. André; Sjak Smulders. 2014. "Fueling growth when oil peaks: Directed technological change and the limits to efficiency." European Economic Review 69, no. : 18-39.
We compare auctioning and grandfathering as allocation mechanisms of emission permits when there is a secondary market with market power and the firms have private information. Based on real-life cases such as the EU ETS, we consider a multi-unit, multi-bid uniform auction, modelled as a Bayesian game of incomplete information. At the auction each firm anticipates his role in the secondary market, which affects the firms’ valuation of the permits (that are not common across firms) as well as their bidding strategies and it precludes the auction from generating a cost-effective allocation of permits, as it would occur in simpler auction models. Auctioning tends to be more cost-effective than grandfathering when the firms’ costs are asymmetric enough, especially if the follower has lower abatement costs than the leader and uncertainty about the marginal costs is large enough. If market power spills over the auction, the latter is always less cost-effective than grandfathering. One central policy implication is that the specific design of the auction turns out to be crucial for cost-effectiveness. The chances of the auction to outperform grandfathering require that the former is capable of diluting the market power that is present in the secondary market.
Francisco Alvarez; Francisco J. André. Auctioning vs. Grandfathering in Cap-and-Trade Systems with Market Power and Incomplete Information. 2013, 1 .
AMA StyleFrancisco Alvarez, Francisco J. André. Auctioning vs. Grandfathering in Cap-and-Trade Systems with Market Power and Incomplete Information. . 2013; ():1.
Chicago/Turabian StyleFrancisco Alvarez; Francisco J. André. 2013. "Auctioning vs. Grandfathering in Cap-and-Trade Systems with Market Power and Incomplete Information." , no. : 1.
Francisco J. André; Manuel Alejandro Cardenete; M. Carmen Lima. USING A CGE MODEL TO IDENTIFY THE POLICY TRADE-OFF BETWEEN UNEMPLOYMENT AND INFLATION. THE EFFICIENT PHILLIPS CURVE. Economic Systems Research 2012, 24, 349 -369.
AMA StyleFrancisco J. André, Manuel Alejandro Cardenete, M. Carmen Lima. USING A CGE MODEL TO IDENTIFY THE POLICY TRADE-OFF BETWEEN UNEMPLOYMENT AND INFLATION. THE EFFICIENT PHILLIPS CURVE. Economic Systems Research. 2012; 24 (4):349-369.
Chicago/Turabian StyleFrancisco J. André; Manuel Alejandro Cardenete; M. Carmen Lima. 2012. "USING A CGE MODEL TO IDENTIFY THE POLICY TRADE-OFF BETWEEN UNEMPLOYMENT AND INFLATION. THE EFFICIENT PHILLIPS CURVE." Economic Systems Research 24, no. 4: 349-369.
We build a principal-agent model to analyze the firm's decision to adopt an environmental management system (EMS) and the EMS type, either informal (I) or stand
Eduard Alonso-Paulí; Francisco J. André. Standardized Environmental Management Systems as an Internal Management Tool. SSRN Electronic Journal 2012, 1 .
AMA StyleEduard Alonso-Paulí, Francisco J. André. Standardized Environmental Management Systems as an Internal Management Tool. SSRN Electronic Journal. 2012; ():1.
Chicago/Turabian StyleEduard Alonso-Paulí; Francisco J. André. 2012. "Standardized Environmental Management Systems as an Internal Management Tool." SSRN Electronic Journal , no. : 1.
Francisco J. André; Abderrahmane Sokri; Georges Zaccour. Public Disclosure Programs vs. traditional approaches for environmental regulation: Green goodwill and the policies of the firm. European Journal of Operational Research 2011, 212, 199 -212.
AMA StyleFrancisco J. André, Abderrahmane Sokri, Georges Zaccour. Public Disclosure Programs vs. traditional approaches for environmental regulation: Green goodwill and the policies of the firm. European Journal of Operational Research. 2011; 212 (1):199-212.
Chicago/Turabian StyleFrancisco J. André; Abderrahmane Sokri; Georges Zaccour. 2011. "Public Disclosure Programs vs. traditional approaches for environmental regulation: Green goodwill and the policies of the firm." European Journal of Operational Research 212, no. 1: 199-212.