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on Environmental Economics |
| By: | Persson, Lars (Department of Economics, Umeå University) |
| Abstract: | This paper analyzes the consequences of lobby group activity for policy outcomes in economies with transboundary pollution and international environmental policies. In our framework, international environmental policies are characterized as pollution taxes determined in a negotiation between two countries. We find, among other things, that the presence of local lobbying tends to reduce the level of pollution taxes. We also find that an increase in the environmental concern (i.e. stronger preferences for a clean environment) may reduce the pollution tax in both countries. It is also possible that increased environmental concern in one country reduces the pollution tax in the other country. |
| Keywords: | transboundary pollution; lobbying; taxes; pollution; Nash bargain; negotiations; environmental policy |
| JEL: | D62 F18 H21 H23 H70 |
| Date: | 2007–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0722&r=env |
| By: | Gary Koop (University of Strathclyde, UK and The Rimini Centre for Economics Analysis, Italy.); Lise Tole (University of Strathclyde, UK) |
| Keywords: | Bayesian stochastic frontier analysis; efficiency; environmental regulations and plant performance; pollution havens; regulatory chill; gold mining. |
| JEL: | Q3 Q56 C11 C23 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:26-07&r=env |
| By: | Alain Jean-Marie; Philippe Fabien Prieur; Philippe Mabel Tidball |
| Abstract: | We consider an OLG model with emissions arising from production and potential irreversible pollution. Pollution control goes through a system of permits and private agents can also maintain the environment. In this setting, we prove that there exist multiple equilibria. Due to the possible irreversibility of pollution, the economy can be dragged into both environmental and poverty traps. First, we show that choosing a global quota on emissions at the lowest level beyond a critical threshold is a means to avoid the two types of traps. Next, we analyze the impact of a political reform on other equilibria. When the agents do not engage in maintenance, a fall in the quota implies a reduction of pollution but is detrimental to capital accumulation while, in the other case, it procures a double dividend. |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpaper:07-11&r=env |
| By: | Richard L. Revesz; Robert Stavins |
| Abstract: | This chapter for the Handbook of Law and Economics provides an economic perspective of environmental law and policy. We examine the ends of environmental policy, that is, the setting of goals and targets, beginning with normative issues, notably the Kaldor-Hicks criterion and the related method of assessment known as benefit-cost analysis. We examine this analytical method in detail, including its theoretical foundations and empirical methods of estimation of compliance costs and environmental benefits. We review critiques of benefit-cost analysis, and examine alternative approaches to analyzing the goals of environmental policies. <br><br>We examine the means of environmental policy, that is, the choice of specific policy instruments, beginning with an examination of potential criteria for assessing alternative instruments, with particular focus on cost-effectiveness. The theoretical foundations and experiential highlights of individual instruments are reviewed, including conventional, command-and-control mechanisms, market-based instruments, and liability rules. Three cross-cutting issues receive attention: uncertainty; technological change; and distributional considerations. We identify normative lessons in regard to design, implementation, and the identification of new applications, and we examine positive issues: the historical dominance of command-and-control; the prevalence in new proposals of tradeable permits allocated without charge; and the relatively recent increase in attention given to market-based instruments. <br><br>We also examine the question of how environmental responsibility is and should be allocated among the various levels of government. We provide a positive review of the responsibilities of Federal, state, and local levels of government in the environmental realm, plus a normative assessment of this allocation of regulatory responsibility. We focus on three arguments that have been made for Federal environmental regulation: competition among political jurisdictions and the race to the bottom; transboundary environmental problems; and public choice and systematic bias. |
| JEL: | K32 Q28 Q38 Q48 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13575&r=env |
| By: | Robert N. Stavins |
| Abstract: | This article provides an overview of the economics of environmental policy, including the setting of goals and targets, notably the Kaldor-Hicks criterion and the related method of assessment known as benefit-cost analysis. Also reviewed are the means of environmental policy, that is, the choice of specific policy instruments, featuring an examination of potential criteria for assessing alternative instruments, with focus on cost-effectiveness. The theoretical foundations and experiential highlights of individual instruments are reviewed, including conventional command-and-control mechanisms and market-based instruments. |
| JEL: | K32 Q28 Q38 Q48 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13574&r=env |
| By: | Bosetti, Valentina; Carraro, Carlo; Massetti, Emanuele; Tavoni, Massimo |
| Abstract: | The stabilisation of GHG atmospheric concentrations at levels expected to prevent dangerous climate change has become an important, global, long-term objective. It is therefore crucial to identify a cost-effective way to achieve this objective. In this paper we use WITCH, a hybrid climate-energy-economy model, to obtain a quantitative assessment of some cost-effective strategies that stabilise CO2 concentrations at 550 or 450 ppm. In particular, this paper analyses the energy investment and R&D policies that optimally achieve these two GHG stabilisation targets (i.e. the future optimal energy mix consistent with the stabilisation of GHG atmospheric concentrations at 550 and 450 ppm). Given that the model accounts for interdependencies and spillovers across 12 regions of the world, optimal strategies are the outcome of a dynamic game through which inefficiency costs induced by global strategic interactions can be assessed. Therefore, our results are somehow different from previous analyses of GHG stabilisation policies, where a central planner or a single global economy are usually assumed. In particular, the effects of free-riding incentives in reducing emissions and in investing in R&D are taken into account. Technical change being endogenous in WITCH, this paper also provides an assessment of the implications of technological evolution in the energy sector of different stabilisation scenarios. Finally, this paper quantifies the net costs of stabilising GHG concentrations at different levels, for different allocations of permits and for different technological scenarios. In each case, the optimal long-term investment strategies for all available energy technologies are determined. The case of an unknown backstop energy technology is also analysed. |
| Keywords: | climate policy; energy R&D; investments; stabilisation costs |
| JEL: | H4 O3 Q4 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6549&r=env |
| By: | Cathrine Hagem (Statistics Norway) |
| Abstract: | The clean development mechanism of the Kyoto Protocol may induce technological change in developing countries. As an alternative to the clean development mechanism regime, developing countries may accept a (generous) cap on their own emissions, allow domestic producers to invest in new efficient technologies, and sell the excess emission permits on the international permit market. The purpose of this article is to show how the gains from investment, and hence the incentive to invest in new technology in developing countries, differ between the two alternative regimes. We show that the difference in the gains from investment depends on whether the producers in developing countries face competitive or noncompetitive output markets, whether the investment affects fixed or variable production costs, and whether producers can reduce emissions through means other than investing in new technology. |
| Keywords: | Climate Policy; Technology Adoption; Emission Trading; Clean Development Mechanism; Technological Change; Cournot Competition |
| JEL: | L13 Q54 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:521&r=env |
| By: | Pavlina R. Tcherneva |
| Abstract: | There is a body of literature that favors universal and unconditional public assurance policies over those that are targeted and means-tested. Two such proposals—the basic income proposal and job guarantees—are discussed here. The paper evaluates the impact of each program on macroeconomic stability, arguing that direct job creation has inherent stabilization features that are lacking in the basic income proposal. A discussion of modern finance and labor market dynamics renders the latter proposal inherently inflationary, and potentially stagflationary. After studying the macroeconomic viability of each program, the paper elaborates on their environmental merits. It is argued that the “green” consequences of the basic income proposal are likely to emerge, not from its modus operandi, but from the tax schemes that have been advanced for its financing. By contrast, the job guarantee proposal can serve as an institutional vehicle for achieving various environmental goals by explicitly targeting environmental rehabilitation, conservation, and sustainability. Finally, in the hope of consensus building, the paper advances a joint policy proposal that is economically viable, environmentally friendly, and socially just. |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:lev:wrkpap:wp_517&r=env |
| By: | Pamela Kaval (University of Waikato); Richard Yao; Terry Parminter |
| Abstract: | New Zealand’s biodiversity consists of over 80,000 native plants, animals and fungi, many of which are indigenous and located on private property. To enhance native biodiversity and discourage activities that may deplete it, policies can be introduced that can encourage individual self-interest to coincide with social interest. Economic values for biodiversity can help to determine the best policy tools to use. In this project, we surveyed Greater Wellington Region households to determine their biodiversity enhancement values using the contingent valuation approach. Greater Wellington respondents placed a significant value on both private land biodiversity as well as public land biodiversity. |
| Keywords: | biodiversity; non-market valuation; native species; private landholders; New Zealand |
| JEL: | Q56 Q57 Q51 |
| Date: | 2007–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:wai:econwp:07/22&r=env |
| By: | Rabah Arezki; Frederick van der Ploeg |
| Abstract: | We criticise existing empirical results on the detrimental effects of natural resource dependence on the rate of economic growth after controlling for institutional quality, openness and initial income. These results do not survive once we use instrumental variables to correct for the endogenous nature of the explanatory variables. Furthermore, they suffer from omitted variables bias as they over-estimate the effect of initial income per capita and thus under-estimate the speed of conditional convergence. Instead, we provide new evidence for the impact of natural resource dependence on income per capita in a systematic empirical cross-country framework. In addition to a significant negative direct impact of natural resources on income per capita, we find significant indirect effect of natural resources on institutions. We allow for interaction effects and provide evidence that the natural resource curse is particularly severe for economic performance in countries with a low degree of trade openness. Adopting policies directed toward more trade openness may thus soften the impact of a resource curse. We also check the robustness of our results by using a variety of instruments and also employing the ratio of natural capital rather than natural resource exports to national income as an explanatory variable. We find evidence that resource abundance, measured by the stock of natural capital, also induces a resource curse, but less severely for countries that are relatively open. |
| Keywords: | resource curse, resource dependence, resource abundance, natural capital, institutional quality, openness, geography, interaction effects, instruments, trade policies, growth performance, income per capita, cross-country evidence |
| JEL: | C21 C82 O11 O41 Q30 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:eui:euiwps:eco2007/35&r=env |
| By: | Sandra Saïd; Sophie Thoyer |
| Abstract: | Auctions are increasingly used in agri-environmental contracting. However, the issue of synergy effect between agri-environmental measures has been consistently overlooked, both by decision-makers and by the theoretical literature on conservation auction. Based on laboratory experiments, the objective of this paper is to compare the performance of different procurement auction designs (simultaneous, sequential and combinatorial) in the case of multiple heterogeneous units where bidders may potentially want to sell more than one unit and where their supply cost structure displays positive synergies. The comparison is made by using two performance criteria: budget efficiency and allocative efficiency. We also test if performance results are affected by information feedback to bidders after each auction period. Finally we explain performance results by the analysis of bidding behaviour in the three mechanisms. |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpaper:07-07&r=env |
| By: | Christine Schleupner (Research unit Sustainability and Global Change, Hamburg University) |
| Abstract: | Hurricanes as the main drivers of coastal erosion and inundation are frequent in the Caribbean region even under consideration of projected continuation of global warming. A GIS-based model for the island Martinique was developed that evaluates the sensitivity of the coastal areas to erosion, flooding and inundation. This includes the analysis of the potential impact area extension. The results are illustrated in sensitivity and risk area maps for the Martinique coast. They revealed a high impact potential along low lying coastal parts but also along those coastal stripes with erosive rocks. The maps serve as base for further vulnerability studies. The overall aim was to develop an appropriate methodology that is easily applicable and transferable to other coasts. |
| Keywords: | coastal zones, tsunami |
| JEL: | Q20 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:152&r=env |
| By: | Charles Raux (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat) |
| Abstract: | Congestion pricing as a transport demand management measure is difficult to implement because most of motorists expect a deterioration of their welfare. Tradable driving rights (TDR), that is allocating quotas of driving rights for free to urban inhabitants, could be a more acceptable alternative. This mechanism provides also a supplementary incentive to save whether trips or distance travelled by car, because of the possibility of selling unused rights. A complete system of TDR is designed in detail, aiming whether at reducing trips or vehicles-kilometres, in order to control congestion, or the same target modulated on the basis of the pollutant emission categories of vehicles in order to control atmospheric pollution. An assessment is carried out on the Lyon urban area, which points at some welfare distributive issues between motorists and the community, when compared with conventional congestion pricing. |
| Keywords: | transport demand management (TMD) ; tradable driving rights (TDR) ; automobile traffic ; congestion pricing ; air pollution ; urban areas ; Lyon (France) |
| Date: | 2007–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00185012_v1&r=env |
| By: | Petrescu, Ion; Stefanescu, Camelia; Iancu, Iulian |
| Abstract: | If in seventy the green energy was considered a utopia and treated as a dream of scientists, the situation was changed over the years and the vision of “a future of regenerable energy” has become a subject of debate. Durable development of energetic sector and capitalization at a superior level of efficiency of all sources of energy, inclusive of the regenerables one, can insure the continuity and quality of providing the energy in European economy, with keeping the protections norms of environment. |
| Keywords: | durable development; green energy; energetical policy; sources of regenerables energy; management of regenerable energy. |
| JEL: | M20 |
| Date: | 2007–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:5630&r=env |
| By: | Katrin Rehdanz (Research unit Sustainability and Global Change, Hamburg University) |
| Abstract: | Economic valuation of biodiversity is generally carried out by applying revealed or stated preference approaches to determine people’s willingness to pay for small changes in management options. Studies on species preservation investigating passive or nonuse values typically rely on stated preference methods such as the contingent valuation approach and often focus on single animal species. The total value of species preservation can only be derived by aggregating the various values. This paper proposes a different approach by investigating country level data on life-satisfaction attempting to explain differences in subjective well-being by reference to amongst other things species diversity. While most recent papers have concentrated on finding determinants of life-satisfaction other than income, little attention has been drawn to spatial interdependencies. Most researchers investigating the determinants of life-satisfaction implicitly assume that subjective well-being is unaffected by events in neighbouring locations. The existence of spatial relationships in the data has implications for the econometric techniques typically employed including misleading inference testing procedures, bias and inconsistency depending on the precise form of the spatial relationship. We extend our analysis by a spatial econometric approach investigating whether and to what extend spatial relationships exist. Spatially weighted variables are shown to be a highly significant determinant of life-satisfaction. As nature does not respect man-made borders, neither does peoples happiness. Furthermore, even when controlling for a range of other factors we find a significant relationship with species diversity; the higher a countries number of bird or mammal species or the lower the percentage of bird species threatened the more satisfied the people are. Overall and from a human perspective, bird species seem to be a better indicator for biodiversity. |
| Keywords: | amenity value, biodiversity, life-satisfaction, spatial econometrics, species diversity, well-being |
| JEL: | R19 Q57 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:151&r=env |
| By: | Bianchi Adele; Di Giovanni Parisio |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:ter:wpaper:0025&r=env |
| By: | Juan Antonio Duro Moreno (Departament d'Economia, Universitat Rovira i Virgili); Emilio Padilla Rosa (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona) |
| Abstract: | La medida de la polarización está ligada a la inestabilidad potencial -la aparición de grupos con intereses opuestos- generada por una situación de distribución específica. Esta investigación analiza la distribución internacional de las emisiones de CO2 per cápita a través de la adaptación del concepto y las medidas de polarización. La descripción agrupada más interesante que se deriva del análisis de polarización es la de dos grupos. Estos grupos coinciden ampliamente con los países del Anexo B del Protocolo de Kyoto y los que no lo son, lo que podría indicar la capacidad del análisis de polarización para explicar la generación de grupos en el mundo real. El análisis muestra una reducción significativa en la polarización internacional de las emisiones de CO2 per cápita entre 1971 y 2001. Esto se explica en gran parte por el aumento en las emisiones experimentado por China e India. Una reducción en la polarización puede implicar una reducción en la dificultad de alcanzar acuerdos. No obstante, la polarización no ha cambiado mucho desde 1995 o 1997 (año en que tuvieron lugar las negociaciones de Kyoto), lo que podría indicar que la polarización de la distribución de emisiones entre países es aún uno de los factores importantes llevando a la dificultad en alcanzar nuevos acuerdos respecto a las políticas globales de |
| Keywords: | acuerdos internacionales; distribución internacional de CO2; emisiones de CO2; formación de grupos de países; polarización |
| JEL: | D39 Q43 Q56 |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:uab:wprdea:wpdea0708&r=env |
| By: | Céline Gisèle Jung (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels.); André Fontana (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels.) |
| Abstract: | De tout temps, le recyclage a été une priorité pour l’homme. C’est une évidence pour les métaux précieux et objets de parure. A l’âge du bronze, les objets déclassés étaient récupérés pour être refondus et coulés sous forme d’ustensiles, outils ou éléments d’armements. A l’âge du fer, la production de ce métal était réservée aux régions propices riches en minerais accessibles et charbon de bois. Il en résultait un commerce important à longue distance qui justifiait le recyclage de ce métal qui était reconditionné dans des forges. Aujourd’hui, un nouveau moteur de développement réside dans des soucis écologiques et économiques. La théorie exposée par Pierce , fait état de ces deux aspects en évoquant les points de vue de l’Entreprise et celui des Collectivités c-à-d de la Société. |
| Keywords: | Déchets, recyclage, coûts de production, objectifs entreprise, objectifs société, recyclage et collectivités, incitants fiscaux. |
| Date: | 2007–11 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:07-031&r=env |