- مبلغ: ۸۶,۰۰۰ تومان
- مبلغ: ۹۱,۰۰۰ تومان
The negative impacts of climate change on the environment and economic activities are increasingly obvious and relevant. Private response to this threat often proves to be inadequate. For example, empirical evidence reveals a sub-optimal investment by firms in energy efficiency projects capable of reducing energy costs and CO2 emissions, as well as adaptation projects able to reduce the vulnerability of the ecosystem. On the other hand, past public programs that provided financial subsidies to the above-mentioned projects have proven to be not particularly cost-effective or able to enhance final performances. In this paper, as an alternative to public subsidies, we propose and assess the opportunity to implement Public-Private Partnerships (PPPs) where the public regulator plays a more active role in the investment choice. Precisely, we model the decision-making process through a Nash bargaining procedure between public and private actors. We end up with two main results: (i) compared to public subsidies, the use of PPPs leads to higher outcomes/performances and allows governments to overcome incompleteness in contracts; (ii) PPPs are optimally chosen only when there is a fair allocation of the bargaining power between the two sides and when bargaining procedures are not perceived as being too lengthy or costly.
5. Conclusion and policy implications
Our findings are related to the optimal method of government participation to support private investment with social spillovers. In this paper, we developed the model with the idea in mind of a climate change project. Precisely, the project involves two stages that are connected through an externality parameter (investment and management), final payoffs are uncertain, and society receives a benefit from its termination. For instance, there is an initial investment in technologies/plants that can facilitate subsequent energy cost savings or adaptation practices whose payoffs are uncertain but also beneficial for society.
As a major finding, we show that in such contexts where contracts based on contractible outcomes are often not feasible due to the high level of future uncertainty, PPPs may represent an interesting option to eliminate the presence of contract incompleteness, enhance performances and overcome operational constraints (Tompkins and Eakin, 2012; Agrawala and Fankhauser, 2008). Several academic and institutional documents exist that suggest the use of PPPs in the energy, forestry, agriculture and tourist sectors to enhance innovative and/or clean investments (Knoot and Rickenbach, 2014; Sturla, 2012; Wong et al., 2012; Spielman et al., 2010; Brown, 2001; Sperling, 2001). With this paper, we demonstrate if and why PPPs may improve welfare within such contexts. In fact, we are able to show that PPPs as opposed to public subsidies lead to higher levels of final outcomes (investment and effort) thanks to direct government involvement in the decisionmaking process that places more emphasis on the social returns of the project in the final outcomes. This result is even more relevant in a context of budget constraints (high level of λ). Indeed, if governments are not able to provide relevant public subsidies, they can eliminate the problem by using a PPP that, as a public policy, is more cost efficient.