Economic Evaluation of Wind Power Projects in a Mix of Free and Regulated Market Environments in Brazil

The electricity market in Brazil is basically organized under two parts: the regulated market, where energy is traded through auctions, and the free market, where market participants freely negotiate the price and quantity of electricity. Although revenues obtained in the regulated market tend to be lower than in the free market, the auctions’ results show that investors still value the lesser degree of uncertainty associated with the regulated market. However, a growing interest in the free market by investors is recognized since the price of electricity tends to be higher. Therefore, this study investigates four free market price scenarios to assess the expected return for investors, using the traditional discounted cash flow approach complemented with Monte Carlo simulation to address market uncertainty. The study breaks new ground by capturing the weekly price fluctuations and including the price elasticity of demand of the free market. The results seem to indicate that the disclosure of the ceiling and floor price limits for the spot price can signal important information about the agents’ price expectation in the free market and can be used for investment project evaluation.

Neoliberalism, Rationality, and the Savage Slot

This chapter upends usual discussions of neoliberal governmentality by focusing on the relation of neoliberalism to the irrational. The central task of neoliberalism in its early days was to resurrect a discredited liberalism. WW I and the problematic Versailles Peace of 1919 convinced many that irrationality lay at the core of the “civilized” European world. Those who became neo-liberal (before the hyphen was eliminated) embraced that which was irrational while resolutely attacking all kinds of collectivism. Early neoliberals such as Mises equated socialists with savages and put socialists in what Trouillot called “The Savage Slot,” thanks to their wilful overthrow of the free market price system, without which rationality itself could not exist. Hayek and the next generation of neoliberals shifted the source of irrationality into the physiology of individual humans. After the dissolution of the Soviet Union against which early neoliberal polemics were aimed, tacit knowledge moved out of the body to the corporation via Jean Lave’s concept of communities of practice. The chapter draws on classic works in anthropology; history of economic thought; US corporate history; and obscure annals of the public sector in Egypt to make these arguments.

Free market for the environment

The tragedy of the commons is responsible for many, if not all, of the environmental problems concerning natural resource preservation that we face in modern society. The tragedy of the commons describes a situation in which resources held “in common”, namely, public resources, are depleted or mistreated by collective action. Basically it means lack of private ownership and almost inevitably leads to a misallocation of resources. And yet, the predominating kinds of solutions proposed to solve these problems involve increased government regulation—effectively expanding the scope of the very tragedy of the commons which lies at the heart of the problem in the first place. The present paper advocates an alternative: free market environmentalism. It is not a contradiction in terms, despite how that phrase sounds to the modern ear. In this paper we attempt to demonstrate that laissez-faire capitalism is our last best hope for protecting the environment. Free market environmentalism centers around private property rights and thus a decentralization of environmental decision-making. Effective choices made about scarce resources must be based upon free market price signals and incentives. The lack of laissez-faire capitalism applied to earth’s natural resources distorts both of these indicators—causing poorly made and oftentimes destructive decisions. A free market solution to the environment creates the most value for society, allows for open and continuous entrepreneurial innovation, and economically empowers those who are the most environmentally vulnerable.

Measuring abnormal pricing – an alternative approach

Purpose – The purpose of this study is to examine the degree of trade mispricing in the US fresh banana trade with Latin American and Caribbean countries using a new alternative measure in estimating arm’s length price. Design/methodology/approach – A key feature of the research design is that we use the actual free market price of commodity (e.g. fresh banana price) as a benchmark for arm’s length price rather than relying on interquartile range, which is known to be problematic. Findings – The paper finds that when the degree of mispricing is measured by two widely used methods, interquartile price filter and partner-country methods, we find little evidence of undervaluation or overvaluation of US banana import. However, when we use the free-market price of fresh banana as a benchmark for arm’s length price, first adopted in this study, the average undervalued amount of trade compared to the total banana import declared value by the US importers is on average 54 per cent during the period between 2000 and 2009. Originality/value – This study suggests a new simple measure in estimating arm’s length traction price in studying trade mispricing.

Gold Value Clauses and Public Policy

Gold value clauses are rarely used in England. In the United States, before the Joint Resolution of both Houses of Congress of January 5, 1933, which abrogated gold clauses in the U.S. retrospectively and prospectively, declaring them to be against public policy, gold coin clauses were a common occurrence. In the past on the European continent much use has been made of gold value clauses.In England gold value clauses may assume greater importance in the future. Lately, the two-tier system of gold prices has been introduced, one between Central Banks and another at the free market price. In an individual gold value clause, the question of which price is recognized by the parties, who probably did not in fact foresee the possibility of the creation of a two-tier system, is one of construction. Even today, a party to a gold value clause which refers to the free market price may gain a profit, if there is an appreciation of the price of gold on the free market above the U.S. government minimum level of $35.00 per ounce.