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on Environmental Economics |
| By: | Karsten Neuhoff; Michael Grubb; Kim Keats |
| Abstract: | Successful cap and trade programs for SO2 and NOx in the US allocate allowances to large emitters based on a historic base line for a period of up to thirty years. National Allocation Plans in Europe allocate CO2 allowances in an iterative approach first for a three then for a five-year period. The potential updating of the base line creates perverse incentives for operation and investment. Some allowances are also reserved for new entrants further distorting the scheme. We use analytic models and numeric simulations for the UK power sector to illustrate and quantify how these effects contribute to an inflation of the allowance price while reducing utilisation and investment in efficient technologies. The inflated allowance prices are likely to increase the European allowance budget and emissions, e.g. through the Linking Directive. As a result opportunity costs of emitting CO2 are reduced relative to an efficient cap and trade program. |
| Keywords: | : Emission Trading, Allowance Allocation, Investment Decision, Operation, Inefficiencies. |
| JEL: | D24 D92 Q28 L10 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:0552&r=env |
| By: | S.E. Satchell; S.M.Wright |
| Abstract: | The purpose of this paper is to present a rank based approach to cross-sectional linear factor modelling. The emphasis is on approximating factor exposures in a consistent manner in order to facilitate the merging of subjective information (from professional investors) with objective information (from accounting data and/or state of the art quantitative models) in a statistically rigorous way without needing to impose the unrealistic simplifying assumptions typical of more standard time series models. We deal with the problems of identifying country and sector returns by an innovative hierarchical factor structure. This is all discussed from the perspective that investment models are not immutable but rather need to be designed with characteristics that are fit for their purpose; for example, returning aggregate county and sector forecasts that are consistent by construction. |
| Keywords: | : Linear Factor Models, Ranking, Robustness Exposures, Forecasting. |
| JEL: | G11 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:0553&r=env |
| By: | Drosdowski, Thomas |
| Abstract: | The article examines conditions, under which the degree of democratization influences environmental policy outcomes, with a given resource endowments' heterogeneity as a crucial feature of a politico-economic process. We develop an OLG model with pollution as an aggregate externality. The decisive voter, whose income can differ from the median one, chooses redistribution to finance abatement. By comparing the optimal taxation under alternative political regimes we analyze their implications for environment, efficiency and growth. We find that left regimes, choosing more progressive redistribution, maintain better environmental quality, which supports empirical research. Inequality does not appear to be harmful for the environment, and it dampens the effect of democracy imperfections on redistribution. |
| Keywords: | pollution, political economy, inequality, redistribution, growth |
| JEL: | D31 D63 D72 H23 Q53 Q58 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:han:dpaper:dp-323&r=env |
| By: | Mathew Forstater |
| Abstract: | The job numbers in the United States and around the globe continue to look bleak. Not only are the absolute numbers dismal, but also job growth has dragged on with no hope for a substantial change in prospects. This situation supports the view that we are facing a long-term problem that requires critical and creative problem-solving responses. Since unemployment is the major cause of poverty, many of our most pressing social problems are directly or indirectly related to joblessness. I argue that not only the quantity but also the quality of jobs is at issue. |
| Date: | 2005–01 |
| URL: | http://d.repec.org/n?u=RePEc:lev:levypn:05-1&r=env |
| By: | David Clingingmsith; Jeffrey G. Williamson |
| Abstract: | India was a major player in the world export market for textiles in the early 18th century, but by the middle of the 19th century it had lost all of its export market and much of its domestic market. India underwent secular deindustrialization as a consequence. While India produced about 25 percent of world industrial output in 1750, this figure had fallen to only 2 percent by 1900. We ask how much of India's deindustrialization was due to local supply-side forces -- such as political fragmentation in the 18th century and rising incidence of drought between the early 18th and 19th century, and how much to world price shocks. We use an open, three-sector neo-Ricardian model to organize our thinking about the relative role played by domestic and foreign forces. A newly compiled database of relative price evidence is central to our analysis. We document trends in the ratio of export to import prices (the external terms of trade) from 1800 to 1913, and that of tradable to non-tradable goods and own-wages in the tradable sectors back to 1765. Whether Indian deindustrialization shocks and responses were big or small is then assessed by comparisons with other parts of the periphery. |
| JEL: | F1 N7 O2 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11730&r=env |
| By: | David I. Stern (Department of Economics, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA) |
| Abstract: | Prior to Mexico's entry to NAFTA predictions of the consequent impact on the environment in that country ranged from the dire to the very optimistic. This paper investigates NAFTA's outcomes in terms of energy use and the emission of atmospheric pollutants. Specifically, has entry into NAFTA led to a convergence or divergence in indicators of emissions, environmental efficiency, and emissions specific technology in Mexico, the United States, and Canada? Four emissions variables are considered: energy, carbon, sulfur, and NOx. Three different indicators of emissions and environmental efficiency are computed and tested for both convergence and the presence of a structural break associated with the introduction of NAFTA: energy or emissions per capita; energy or emissions intensity of GDP; and the state of technology in sulfur abatement and energy efficiency derived from a production frontier model estimated using the Kalman filter. Three convergence tests test for beta-convergence, sigma-convergence, and cointegration of the trends and the effect of NAFTA on these measures. I also test whether NAFTA induced a structural break in the trend of the various indicators. The results show that the extreme predictions of the outcomes of NAFTA have not materialized. Rather, trends that were already present before the introduction of NAFTA continue and in some cases improve post-NAFTA, but not yet in a dramatic way. There is strong evidence of convergence for all four intensity indicators across the three countries towards a lower intensity level. Though intensity is rising initially in some cases in Mexico, it eventually begins to fall post-NAFTA. Per capita measures for the two criteria pollutants also show convergence, but this is not the case for energy and carbon and the latter variables also drift moderately upwards. The state of technology in energy efficiency and sulfur abatement is improving in all countries, though there is little if any sign of convergence and NAFTA has no effect on the rate of technology diffusion. However, total energy use and carbon emissions increase both pre- and post- NAFTA and total NOx emissions increase in Mexico. Only total sulfur emissions are stable and falling in all three NAFTA partners. |
| JEL: | Q56 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:rpi:rpiwpe:0511&r=env |
| By: | Hrabrin Bachev (Institute of Agricultural Economics, Sofia, Bulgaria) |
| Abstract: | This paper presents the dominating farming structure in Bulgaria on the eve of EU accession, and evaluates recent policies for farm and agricultural income support, and assesses likely consequences of CAP implementation on farming structures and sustainability. We demonstrate that a specific farming structure dominates in the country consisting of numerous subsistence and small farms; and few large farms, cooperatives, and agro-firms; and widely used informal, vertically integrated, and mix forms. Public support to farming has been in an increase in recent years but is still far bellow the European level. Besides, only a fraction of farms benefit from some form of public support most of them being large farms, cooperatives, and tobacco producers. Farming is still an important income source for a good part of population. However, there is a significant gap in the monetary income in the large and some smaller- scale (intensive) enterprises, and the great majority of farms. Besides, development programs contribute less to agrarian and rural sustainability, and to decreasing divergence between richer and poor regions of the country. Assessment of likely short-term impact of the CAP implementation in Bulgaria shows that it will increase sustainability of farms bringing net financial benefits, enhancing competitiveness, and improving environmental performance. However, the chief beneficiary from the direct payments and other support measures will be the biggest farms in the most developed regions of the country. CAP programs will also give new possibility for extending activities of existing forms and bring to a life new organizational arrangements. All that will create more employment and income opportunities, and revitalize agrarian and rural economy. On the other hand, some effective smaller-size and family structure and livestock farms will have no or limited access to EU funding. Consequently, income and performance gap between farms of different types, sub-sectors and regions will widened unless special supplementary measures (“coupled” with production and regions) are taken. Besides, CAP will likely support “ineffective” and non-market modes (such as part-time and subsistence farming, production cooperatives), and therefore raise their sustainability and delay further restructuring. Last but not least important, there will be significant difficulties for introducing CAP and EU standards which will require more costs than in other countries, and will be associated with some time lag until “full” implementation, and would not involve less commercialized and subsistent farming. |
| Keywords: | farms structures, support to farms, impact on CAP implementation on farm sustainability |
| JEL: | O P |
| Date: | 2005–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpdc:0511006&r=env |
| By: | Hrabrin Bachev (Institute of Agricultural Economics, Sofia, Bulgaria) |
| Abstract: | The New Institutional and Transaction Costs Economics framework is incorporated to transitional Bulgarian agriculture, and level of sustainability of dominating subsistent farming, production cooperatives, small-scare commercial farms, and large agro-firms assessed. New framework for assessing sustainability of farms and for governing of sustainable development is suggested taking into account: role of specific institutional environment, comparative efficiency of various market, private, public and hybrid governing modes, transaction costs and critical factors (frequency, uncertainty, asset specificity, and appropriability) of farm transactions. Analysis of sustainability of different types of Bulgarian farms is made, and further domination of subsistence farming, cooperatives, large agro-firms, and some part of small commercial farms projected. |
| Keywords: | assessment of sustainability of farms, governing of agrarian sustainability, sustainability of Bulgarian farms |
| JEL: | O P |
| Date: | 2005–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpdc:0511007&r=env |
| By: | Roberto Martinez-Espineira (St Francis Xavier University); Joe Amoako-Tuffour (St Francis Xavier University) |
| Abstract: | Using on-site survey data from Gros Morne National Park in Newfoundland, this paper estimates and compares several truncated count data models of recreation demand. The model that not only accounts for the truncated and overdispersed nature of the data but also for endogenous stratification duet o the oversampling of avid users, while allowing for flexible specification of the overdispersion parameter dominates on the basis of goodness of fit. The results are used to estimate the users’ value of access to the park. |
| Keywords: | on-site sampling, endogenous stratification, consumer surplus, count data, overdispersion, recreation demand, travel cost method, truncation. |
| JEL: | Q26 C24 |
| Date: | 2005–11–07 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpem:0511007&r=env |
| By: | Houda Haffoudhi (LAEP) |
| Abstract: | International environmental agreements (IEAs) are increasingly important in a globalized economy. The aim of our paper is study the effect of political pressure groups-lobbies on the size and stability of IEAs. To this purpose we use the framework of two-level games to explain how national political situation influences the decisions of governments at the international negotiations arena. We present an endogenous lobbying model in which we assume that lobbies try to influence the policy choice of governments by offering political contribution in return for policy compromise. Indeed, we use the "interest based explanation" of international environmental policy to describe the incentives of countries to join an agreement. This approach classifies countries in four categories : pushers, bystanders, intermediate and draggers. We found that, when government gives the same weight to contribution and to social welfare, the contributions from the industrial lobby give incentives to government (Pushers, intermediate) to participate in the grand coalition making it stable. Our results suggest that in order to sustain the grand coalition, weak global environmental agreements -i.e. those involving small abatement targets- should be negotiated. The result is similar if governments are more interested by political contribution. However, if governments care less about political contribution than about social welfare, industrial contribution is not enough to limit the free riding incentives of each type of government. In this situation, pushers are the more expected to sustain a small stable coalition. |
| Keywords: | Non-cooperative game, interest group, coalition theory, environmental policy. |
| JEL: | C72 D72 D78 Q28 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:mse:wpsorb:j05054&r=env |
| By: | Jean-Christophe Caffet (EUREQua) |
| Abstract: | Most studies on the green tax reform issue point out that environmental taxes exacerbate pre-existing tax distortions, thereby increasing the welfare costs associated with the overall tax code. As a result, the optimal environmental tax should lie below the Pigovian level (or marginal social damages). This article challenges this finding by arguing that health benefits from reduced pollution may sufficiently affect labor supply to create benefit-side tax interactions which, in turn, may be of the same magnitude as cost-side ones. Using a simple general equilibrium model that assumes the existence of a social security system, this paper shows that the optimal environmental tax rate could be greater than traditionally thought. |
| Keywords: | Environmental tax, double dividend, employment, health, social security. |
| JEL: | D60 H21 H23 I18 J22 Q28 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:mse:wpsorb:v05049&r=env |