Environmental Capital,Negative Externality and Carbon Finance Innovation

In the context of global climate change,the internalization of negative externality,which is brought about by the traditional mode of economic growth,has become an inevitable choice.In order to achieve the internalization,it is necessary to make innovations on the market mechanism and system,find the value of environmental capital,establish a new mode of economic growth based on environmental capital,and then transform the environmental capital,an exogenous factor of economic growth,into an endogenous factor.Of this,the key of market mechanism and system innovation is the financial innovation that is based on environmental capital and negative externality;the government defines the initial property right of environmental resources and establishes environment energy trading market,so as to guide enterprises to trade environmental resources(represented by carbon emission permit trading) based on the Clean Development Mechanism,and to vigorously develop environmental finance and carbon finance.

Modified Ramsey Rule, Optimal Carbon Tax and Economic Growth

In contrast to the overlapping-generations model, it is allowable to discount the future utility in a dynasty model without the ethical difficulty related to intergenerational conflicts. Much precedent research uses Ramsey-type optimal growth theory in order to estimate the social discount rate. However, one must note that almost all the formulations neglect the existence of negative intertemporal externalities. This problem is vital when one analyzes the global warming problem mainly caused by the excess concentration of carbon dioxide (CO2). This is because an adjoining effect of capital accumulation exists besides the improvement of product capacity, which is reflected in the rate of interest (or equivalently, the marginal productivity of capital). That is, one cannot neglect a negative externality to the future productivity that originates from the excess emissions of CO2. Accordingly, following the optimal growth theory, the effective social discount rate should be heightened by a proportional carbon tax to suppress future excess consumption/ emissions than in the case of the existing analyses, which exclude such an intertemporal external diseconomy.

Rural Carbon Emissions Based on Community Management

Rural community is an effective way to simultaneously achieve manage- ment of ecological resources and protection of natural resources, depending on its management mode based on cooperation, motivation, local experiences and extensi- ble boundary. In the research, carbon emission in community is a kind of ecological resources and negative externality is the cause of increase of rural carbon emission. Compared with governmental ruling and marketing approach, community manage- ment mode proves more effective to solve the problem of negative externality of carbon emission in community. Furthermore, rural carbon, emission was analyzed in detail on basis of community management mode and extending mode of carbon emis- sion in rural areas. In addition, some policies and suggestions were proposed to im- prove community management of carbon emission in rural areas, providing an ef- fective way for low-carbon economy in rural areas.

Optimal adoptions of freemium version and patching strategy:Network and security externalities

The freemium pricing model has become mainstream in the software industry.A large user base can induce positive network effects while expanding security risks associated with unpatched users.This study explores a two-stage decision problem faced by software vendors that involves a freemium versioning strategy and a subsequent security-patching strategy when taking both the positive network externality and negative security externality into consideration.It is noteworthy that a joint effect of the two externalities on the vendor’s management decisions exists.First,we analytically derive three patching strategies for the vendor:PS_(1)(rebates all users),PS_(2)(rebates only freeware users),and PS_(3)(rebates no users).Our results indicate that,if the strength of the positive network externality is relatively low,the optimal security-patching strategy will be significantly affected by the negative security externality.Specifically,when the intensity of the negative security externality is low,the vendor’s optimal patching strategy will be PS_(1).However,with the increase in the negative security externality,the optimal patching strategy changes to PS_(2) and then to PS_(3),whereas the strategy spaces of PS_(1) and PS_(2) decrease in the positive network externality to zero.Nevertheless,if the strength of the positive network externality is relatively high,the vendor is better off selecting PS_(1) when the negative security externality is low.However,when the negative security externality is high,PS_(3) is optimal.Furthermore,based on optimal patching strategies,we reveal the optimal conditions required for the vendor to adopt the freemium model compared with commercial only.Of interest,we find that the vendor adopting the freemium version is also influenced by the interaction of the two externalities.Finally,through numerical experiments,we find that the vendor and social planner’s interests can be aligned under certain conditions.However,this is not always the case.