*This paper investigates sectoral reallocations in an economy where climate policy is uncertain. To this end, it develops a Dynamic General Equilibrium model with two sectors  - a polluting one and a non-polluting one, along with climate externality and endogenous firm entry. Climate policy uncertainty stems from the possibility that the government may introduce a carbon tax in the next period. I show that, compared to a scenario without climate policy uncertainty, the probability of implementing carbon taxation prompts entrepreneurs to curtail investment in polluting firms' entry while promoting entry into the non-polluting sector. Through general equilibrium effects, these sectoral reallocations deteriorate welfare, generate a drop in economic activity, and increase CO$_2$ emissions. I provide additional empirical evidence through a VAR model that supports these results. Overall, this paper points out the economic and environmental costs of climate policy uncertainty.

**This paper studies the emergence of violence in legal markets, with a particular focus on the informal commuter transport sector in South Africa, where minibus taxis are integral to urban mobility. Despite being a legal sector, the taxi industry is plagued by significant and persistent violence, imposing substantial social costs. Using novel administrative data from the government’s operating license system, route-level pricing information, and a unique dataset of taxi-related violence compiled from print and online media, I examine the interplay between competition, firm growth, and violence. I leverage variation from a sudden decline in rail service quality to estimate the effect of local demand shocks on taxi-related violence in a difference-in-differences framework. The taxi associations most positively affected by this demand shock experience both a large growth in their membership and substantial increases in violence. The results are interpreted through the lens of contest theory, highlighting that even legal but informal markets can suffer from violence due to failures in contract enforcement, akin to those observed in illegal markets.