This workshop is intended for researchers and doctoral students in economics who are interested in resource and environmental economics. The webinar is led by a team of researchers composed of Geir B. Asheim (Oslo University), Hassan Benchekroun (McGill University), Sophie Bernard (Polytechnique Montréal), Etienne Billette de Villemeur (Université de Lille, UQAM), Robert Cairns (McGill University), Justin Leroux (HEC Montréal), and Charles Séguin (UQAM).

This workshop on natural resource and environmental economics will host Nicolas Pinsonneault, PhD student at HEC Montréal, and Noémie Martin, PhD student at the University of Montreal.

→ This event will be in English.

• Nicolas Pinsonneault, PhD student at HEC Montréal,
  Political Turnover and the Design of Carbon Contracts for difference. 

Abstract

We study how political turnover affects clean investment under carbon pricing uncertainty. In a dynamic model with electoral risk, firms invest in emissions-reducing technologies while facing uncertain future carbon taxes. Carbon Contracts for Difference (CCfDs) reduce carbon price risk and can mitigate underinvestment by stabilising the expected return to abatement. However, once output is endogenous, CCfDs alter production incentives. We show that while an appropriately chosen strike price can restore strong investment incentives, CCfDs act as state-contingent transfers, leading to overproduction when carbon prices are low and under-production when they are high. We characterise the optimal strike price and show that it lies between the policy preferences of competing political parties and that it increases with the probability of policy continuity. Finally, we show that limiting the volume of output eligible for compensation reduces production distortions while preserving investment incentives.

• Noémie Martin, PhD student at the University of Montreal.
  Carbon Taxes and Inequalities: the Case of Transport in the US

Abstract

This paper examines the distributional impacts of carbon taxation on household transport emissions in the United States, with a focus on the interaction between income disparities and residential location. Using a model that explicitly incorporates spatial heterogeneity and household behavior, I analyze how differences in access to low-carbon alternatives and commuting costs shape both emissions reductions and welfare outcomes. The analysis further evaluates the role of revenue-recycling mechanisms in mitigating inequitable burdens. Results indicate that horizontal heterogeneity - particularly the availability of public transit in urban versus rural location - drives variation in both behavioral responses and welfare impacts more strongly than income differences. Urban households can substitute toward lower-emission modes, reducing emissions more efficiently and limiting utility losses, whereas rural households face constrained adjustment options. Importantly, redistribution of tax revenues can alleviate the regressive effects of carbon taxation without compromising overall efficiency, challenging the conventional trade-off between equity and efficiency.