Capital markets and the costs of climate policies

Globalization is accompanied by increasing current account imbalances. They can undermine the positive impacts of increasing international cooperation and trade on economic growth and income convergence. At the same time, climate change challenges the global community and requests for co-operative action. Regional energy transformation due to climate policies and the resulting regional mitigation costs are key variables of climate economic analysis. This study is the first that include current account imbalances and imperfect capital markets to investigate potential market feedback mechanisms between climate policies, energy sector transformation and capital markets. Furthermore, it answers the question whether the capital-intensive transformation towards zero-carbon economies increases the policy cost of mitigation under the condition of imperfect capital markets. First results demonstrate a dominant baseline effect of capital market imperfections on macroeconomic variables, and moderate effects on mitigation costs in global climate policy scenarios. For some regions (e.g. Middle East) estimates of relatively high mitigation costs are revised downwards, if imperfect capital markets are considered.

The impacts of government reimbursement negotiation on targeted anticancer medication price, volume and spending in China

IntroductionNew targeted therapies have changed cancer treatment in the past decades. However, high prices of targeted anticancer medications have increased economic burden for both patients and health insurance systems. In July 2017, China implemented combined medication price negotiation and mandatory reimbursement policies for 15 targeted anticancer medications. This study assesses effects of the policy on hospital procurement prices, volumes and spending.MethodsUsing a quasi-experimental interrupted time series design, we analysed procurement data from the Chinese Medical Economic Information of 789 public hospitals in 30 provinces between January 2016 and September 2018. The intervention group consisted of 15 targeted anticancer medications with negotiated prices in 2017. The comparison group consisted of six targeted anticancer medications without negotiated prices by 2018. The effective date of the policy was September 2017.ResultsAfter the implementation of the 2017 medication price negotiation and reimbursement policy, cost per defined daily dose (DDD) of the 15 targeted anticancer medications dropped US$71.21 on average from an average US$169.24/DDD before (p=0.000). Compared with what would have happened without the intervention, cost/DDD of price-negotiated medications decreased by 48.9% (p=0.000), procurement volumes increased by 143.0% (p=0.000) and hospital medication spending decreased by 6.9% (p=0.146).ConclusionsThe 2017 medication price negotiation and reimbursement policy decreased targeted medication procurement costs per DDD, increased volumes procured and at least temporarily contained spending. These changes should result in better access to and affordability of targeted anticancer medications in China.

P019 Audit of prostanoid use in severe Raynaud’s and adherence to treatment of digital ulcers in patients with SSc NHSE pathway: commissioning policy cost analysis and alternative therapeutic pathway proposed

Background/Aims Severe Raynaud’s phenomenon (RP) can lead to digital ulcers (DU), ischaemia, infection and gangrene. In 2015, NHS England published a commissioning policy enabling the use of bosentan for digital ulceration in SSc in patients refractory to intravenous 6-8 weekly prostanoid in combination with sildenafil following standard therapy (including calcium channel blockers (CCB), ACE inhibitors, losartan and fluoxetine). Bosentan is licensed to prevent new DUs in SSc. Specialist MDT ratification and Blueteq registration is required. RCTs showed bosentan reduced the formation of new DU by 30-50% in at risk individuals. It is a well-tolerated drug. It is now off-patent so its cost has reduced from £22,000 to £650 per year. Aim To audit current departmental practice in patients receiving prostanoid (epoprostenol) for severe RP from any cause and check adherence to the patient pathway for treatment escalation prior to prostanoid therapy. To determine approximate costs of alternative therapeutic approaches. Methods We retrospectively audited patients attending our day unit for epoprostenol infusions over a 12-month period between 2018 and 2019. Using our centre’s admissions database and electronic patient records, we identified which oral medications patients were currently co-prescribed or had previously trialled. Using pharmacy data and tariff costings, we calculated the cost of epoprostenol infusions and oral medications with blood monitoring. Results Between 2018 and 2019, 73 patients attended for epoprostenol infusions: 31 SSc, 25 RP, 17 other diagnoses (mixed/undifferentiated CTD, SLE, vasculitis). The mean number of epoprostenol infusions per patient per year was 5.92 days (range 1-25). The percentage of patients who had first been trialled on the following medications include: CCB 77.4%, ACEi/ARB 41.1%, fluoxetine 9.59%, sildenafil 87.1% and tadalafil 25.8%. In the SSc group 22.6% had also trialled bosentan. Only 2 SSc patients (6.45%) had trialled all of the drugs on the pathway prior to prostanoid reflecting the relative lack of efficacy of some first line therapies. The departmental tariff per prostanoid infusion is £450, resulting in an estimated average annual cost of £2700 per patient. The annual cost of supplying bosentan 125mg twice daily plus blood monitoring for the first year is approximately £1350. Conclusion Epoprostenol is used in our unit for patients with severe RP from a range of conditions. Sildenafil and CCB have been trialled in the majority of our patients prior to escalation. Only a minority of patients have received bosentan according to current guidelines and licensing. Given the reduction in cost, combined with the importance of avoiding hospital admissions with COVID-19, we would suggest that bosentan could be used earlier in the treatment pathway for a broader range of indications. NHSE is revising the SSc commissioning policy. Disclosure A. Young: None. B. Griffiths: None. J. Vila: None.

Using an emulator to apply a Carbon Takeback Obligation alongside demand-side carbon pricing in Integrated Assessment Models

<p>Integrated Assessment Model (IAM) design philosophy currently focuses on demand-side global carbon pricing as the principal policy tool to drive mitigation. However, ambitious mitigation scenarios produced with these IAMs rely heavily on the availability of carbon capture and storage (CCS) technologies in the mid-century, at the scale of billions of tonnes. If integrated assessment continues to employ demand-side policies exclusively we risk a gap forming between the requirements of economically-optimal mitigation trajectories in these IAMs and the reality of developed CCS capacity.</p><p>If CCS capacity fails to keep up with the ambition of mitigation policy, carbon prices could rise well above the cost of direct air capture as markets aim to drive residual emissions down. To avoid this, scenarios could include both supply and demand-side policies in tandem, where supply-side policies are targeted to increase CCS capacity to appropriate levels.</p><p>One such supply-side policy option is a Carbon Takeback Obligation (CTBO), where suppliers of fossil carbon are required to recapture and store an increasing fraction of the carbon in their products. This ‘stored fraction’ would be increased from near zero at present, up to 100% at the time of net-zero. By applying such a policy suppliers of fossil carbon products are forced to take responsibility for decarbonising their own products and provide the drive to develop the CCS capacity necessary to achieve net-zero emissions in the mid-century. In theory, if a CTBO was enforced globally the costs associated with the production of one tonne of CO<sub>2</sub> would be capped around the price for the capture, transport and storage of diffuse, mobile, or otherwise hard-to-abate CO<sub>2</sub> emission sources (i.e. the cost of direct air capture).</p><p>Here, we discuss the implementation of a global CTBO. Using an Integrated Assessment Model emulator, tuned to existing IAM carbon price/abatement rate relationships, we explore the total policy cost of applying a CTBO globally to achieve net-zero by 2050. Using the emulator we harmonise the combined CTBO and demand-side carbon price policies, and show how a SSP2-26 level of ambition can be achieved using these policies with a similar total policy cost. Further, we explore what additional near-term carbon prices can be included to achieve SSP2-19 level policy ambition. These results suggest there are significant benefits to defining climate policy around measures targeting suppliers of fossil carbon, including for long-term planning, implementation and governance of the policy, and overall cost. For further insight, and to provide a greater variety of policy options feeding into IPCC’s WG3, we argue IAMs should look to include CTBO-like policies in future scenario design.</p>

The role of renewables in the Japanese power sector: implications from the EMF35 JMIP

The Japanese power system has unique characteristics with regard to variable renewable energies (VREs), such as higher costs, lower potentials, and less flexibility with the grid connection compared to other major greenhouse-gas-emitting countries. We analyzed the role of renewable energies (REs) in the future Japanese power sector using the results from the model intercomparison project Energy Modeling Forum (EMF) 35 Japan Model Intercomparison Project (JMIP) using varying emission reduction targets and key technological conditions across scenarios. We considered the uncertainties for future capital costs of solar photovoltaics, wind turbines, and batteries in addition to the availability of nuclear and carbon dioxide capture and storage. The results show that REs supply more than 40% of electricity in most of the technology sensitivity scenarios (median 51.0%) when assuming an 80% emission reduction in 2050. The results (excluding scenarios that assume the continuous growth of nuclear power and/or the abundant availability of domestic biomass and carbon-free hydrogen) show that the median VRE shares reach 52.2% in 2050 in the 80% emission reduction scenario. On the contrary, the availability of newly constructed nuclear power, affordable biomass, and carbon-free hydrogen can reduce dependence on VREs to less than 20%. The policy costs were much more sensitive to the capital costs and resource potential of VREs than the battery cost uncertainties. Specifically, while the doubled capital costs of VRE resulted in a 13.0% (inter-model median) increase in the policy cost, the halved capital costs of VREs reduced 8.7% (inter-model median) of the total policy cost. These results imply that lowering the capital costs of VREs would be effective in achieving a long-term emission reduction target considering the current high Japanese VRE costs.

The economic value of tropical forests in meeting global climate stabilization goals

Non-technical summary Conserving tropical forests has many benefits, from protecting biodiversity, sustaining indigenous and local communities, and safeguarding climate. To achieve the ambitious climate goals of the Paris Agreement, forest protection is essential. Yet deforestation continues to diminish the world's forests. Halting this trend is the objective of the international framework for Reducing Emissions from Deforestation and forest Degradation (REDD+). While previous studies have demonstrated the contribution of tropical forests to mitigate climate change, here we show that tropical forest protection can ‘flatten the curve’ of the costs of transition to climate stability, estimating tens of trillions of dollars in policy cost savings.

Challenges of Payment Methods in the Iranian Health System and Solutions: A Qualitative Study

Background: The implementation of different reimbursement methods has various positive and negative effects on the health system of different countries. Identifying the challenges of these methods is essential to improve these reimbursement methods and modify them if required. This article aimed to qualitatively assess the challenges of current hospitals' payment systems in the Iranian health system and determine the required solutions for modifying these payment systems. Methods: This qualitative study was conducted in 2019. Semi-structured interviews were conducted recruiting 20 experts including operational, middle and top managers working in three different levels of health systems. Data collection was continued until it reached a saturation point. MAXQDA 10 was used for data analysis. The data content analysis method was used to analyze the data and the themes and categories were determined. Results: The challenges of the payment systems were categorized into four main themes regarding policy, cost, regulatory and functional challenges, and 15 sub-themes. The findings related to the proposed strategies were presented in six main themes consisting of legal solutions, structural reform, cost, quality improvement, service provider and client, and monitoring and evaluation; and 12 sub-themes. Conclusion: This study showed that the health systems in Iran face various structural and procedural challenges in terms of reimbursement mechanisms. Therefore, it is recommended that policymakers pay attention to these challenges before making any changes. Using hybrid payment systems can be one of the proper solutions.

The Effect of Business Ethics Principles on Operational Budget Control Policy (Cost Transport)

The research aimed to determine the effect of business ethics on budgeting control at PT. Patra Niaga (PT. PN). The research used a quantitative approach by basing a rational principle study. The analysis was carried out using the regression method and processed using SPSS 22. Data from permanent employees of PT. PN was determined based on proportional sampling. A total of 30 respondents. Data collection used questionnaires as the main instrument, interviews, and observations. The results showed that the autonomy principle, the honesty principle, the justice principle, and the mutual benefit principles have a positive and significant effect on budgetary control at the office of PT. PN. Interestingly, the justice variable is the most dominant positive and significant effect on budget control at the office of PT. PN.

Mass Shootings

Understanding the international perspective discerning mass shootings is complicated and difficult to understand due to the lack of complete data. The problem that the world is facing with mass shootings in the last couple of decades is a fairly new phenomenon that has been a common topic in the news and media. Mass shootings that have cost the lives of dozens of people per event has been due to a variety of reasons including drug markets, terrorism, mentally unstable individuals, availability of firearms, ethnic and religious tensions, and much more. The impact of mass shootings is vast including mental health trauma for survivors and their families, change in public policy, cost of billions of dollars, the cost of human life, and much more. These shootings vary widely throughout countries and regions in each country. The chapter focuses on specific nations throughout the world, common firearms involved in the shootings, the environments in which these shootings take place, the characteristics of the shooter and much more.

Implementing the SWF Framework

The SWF framework is a fully generic methodology for policy assessment. One important application in the economic literature concerns taxation (termed “optimal tax” scholarship); but the framework is applicable to any type of governmental policy choice. This chapter illustrates the implementation of the SWF framework, using the regulation of fatality risks as a case study. Risk regulation is chosen because this is the major application of cost-benefit analysis (CBA) in the U.S. government. The chapter focuses on the utilitarian and continuous-prioritarian SWFs. Utilitarianism gives priority to the young in reducing fatality risks and to those with higher income. Continuous prioritarianism intensifies the preference for the young, but mitigates or reverse the preference for those with higher income. CBA is significantly different from both utilitarianism and continuous prioritarianism. It markedly intensifies the utilitarian preference for reducing the risks of those with higher incomes; and, unlike both SWF-based approaches, is insensitive to the distribution of policy cost.