In this policy brief, we offer an introduction to the family of policy instruments known as “flexible performance standards.” We describe and examine the attributes of performance standards that elevate them to be chosen in many jurisdictions, often as a precursor to carbon pricing, and we explain why flexibility improves their cost effectiveness and the potential they may have as complementary policies to strengthen carbon pricing to drive innovation, with a specific focus on the industrial sector.

Forest plantations have increased rapidly in the last three decades, to a large extent due to direct and indirect financial incentives. At the farm level, forestry incentives can affect the investment decisions of small forest landowners and bring socioeconomic externalities or unintended effects associated with farm management. The purpose of this study is to assess the ex post impacts of a forestry subsidy on land use changes and off-farm income experienced by Chilean small forest landowners.

Forecasting the risk of extreme losses is an important issue in the management of financial risk and has attracted a great deal of research attention. However, little attention has been paid to extreme losses in a higher frequency intraday setting. This paper proposes a novel marked point process model to capture extreme risk in intraday returns, taking into account a range of trading activity and liquidity measures. A novel approach is proposed for defining the threshold upon which extreme events are identified taking into account the diurnal patterns in intraday trading activity.

We propose a multivariate dynamic intensity peaks‐over‐threshold model to capture extremes in multivariate return processes. The random occurrence of extremes is modeled by a multivariate dynamic intensity model, while temporal clustering of their size is captured by an autoregressive multiplicative error model. Applying the model to daily returns of three major stock indexes yields strong empirical support for a temporal clustering of both the occurrence and the size of extremes.

This paper empirically analyzes the determinants of fuel choices and intensity of fuelwood use for residential heating and cooking in central-southern Chile. By using information from a sample of 2761 households in nine urban areas, we first investigate households’ choices of the main fuel used for heating by means of multinomial models. Then we examine the intensity of fuelwood use through fractional probit models. These models allow analyzing the interdependence of fuel use by households, while taking into account households’ individual heterogeneity.

We investigate whether a social information campaign aimed at reducing water use causes a spillover effect on the use of electricity. On average, water use decreased by 6 percent for the treatment group. We identify a positive spillover effect on electricity use among households that had efficient use of water before the campaign. The effect is sizeable: almost a 9 percent reduction. We argue that these results are consistent with a model of cognitive dissonance where the efficient households infer information about electricity use from the water use information.