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on Environmental Economics |
| By: | Meredith Fowlie |
| Abstract: | For political, jurisdictional and technical reasons, environmental regulation of industrial pollution is often incomplete: regulations apply to only a subset of facilities contributing to a pollution problem. Policymakers are increasingly concerned about the emissions leakage that may occur if unregulated production can be easily substituted for production at regulated firms. This paper analyzes emissions leakage in an incompletely regulated and imperfectly competitive industry. When regulated producers are less polluting than their unregulated ounterparts, emissions under incomplete regulation can exceed the level of emissions that would have occurred in the absence of regulation. Converseley, when regulated firms are relatively more polluting, aggregate emissions under complete regulation can exceed aggregate emissions under incomplete regulation. In a straightforward application of the theory of the second best, I show that incomplete regulation can welfare dominate complete regulation of emissions from an asymmetric oligopoly. The model is used to simulate greenhouse gas emissions from California's electricity sector under a source-based cap-and-trade program. Incomplete regulation that exempts out-of-state producers achieves approximately a third of the emissions reductions achieved under complete regulation at more than twice the cost per ton of emissions abated. |
| JEL: | Q48 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14421&r=env |
| By: | Benno Torgler; Maria A. Garcia-Valinas; Alison Macintyre |
| Abstract: | We explore whether environmental motivation affects environmental behavior by focusing on volunteering. The paper first introduces a theoretical model of volunteering in environmental organizations. In a next step, it tests the hypothesis working with a large micro data set covering 32 countries from both Western and Eastern Europe using several different proxies to measure environmental motivation. Our results indicate that environmental motivation has a strong impact on individuals’ voluntary engagement in environmental organizations. A higher level of environmental motivation due to higher environmental moral standards may lead to a stronger voluntary involvement in environmental organizations. |
| Keywords: | environmental participation, environmental motivation, environmental morale, pro-environmental attitudes, social capital |
| JEL: | D11 H41 H26 H73 D64 |
| Date: | 2008–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:qut:dpaper:238&r=env |
| By: | Valentina Bosetti (Fondazione Eni Enrico Mattei and CMCC); Carlo Carraro (Fondazione Eni Enrico Mattei, University of Venice, CEPR, CESifo and CMCC); Alessandra Sgobbi (Fondazione Eni Enrico Mattei and CMCC); Massimo Tavoni (Fondazione Eni Enrico Mattei, Catholic University of Milan and CMCC) |
| Abstract: | This paper provides a quantitative comparison of the main architectures for an agreement on climate policy. Possible successors to the Kyoto protocol are assessed according to four criteria: economic efficiency; environmental effectiveness; distributional implications; and their political acceptability which is measured in terms of feasibility and enforceability. The ultimate aim is to derive useful information for designing a future agreement on climate change control. |
| Keywords: | Climate Policy, Integrated Modelling, International Agreements |
| JEL: | C72 H23 Q25 Q28 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2008.85&r=env |
| By: | Robert N. Stavins (Harvard University) |
| Abstract: | There is growing impetus for a domestic U.S. climate policy that can provide meaningful reductions in emissions of CO2 and other greenhouse gases. In this article, I propose and analyze a scientifically sound, economically rational, and politically feasible approach for the United States to reduce its contributions to the increase in atmospheric concentrations of greenhouse gases. The proposal features an up-stream, economy-wide CO2 cap-and-trade system which implements a gradual trajectory of emissions reductions over time, and includes mechanisms to reduce cost uncertainty. I compare the proposed system with frequently discussed alternatives. In addition, I describe common objections to a cap-and-trade approach to the problem, and provide responses to these objections. |
| Keywords: | Cap-and-Trade System, Carbon Dioxide, Greenhouse Gas Emissions, Global Climate Change, Carbon Taxes |
| JEL: | Q54 Q28 Q38 Q48 Q58 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2008.82&r=env |
| By: | Jeffrey Milyo (Department of Economics, University of Missouri-Columbia); David M. Konisky; Lilliard E. Richardson, Jr. |
| Abstract: | Objectives. This article examines environmental policy attitudes, focusing on the differences in preferences across issue type (i.e., pollution, resource preservation) and geographical scale (i.e., local, national, global). In addition, we study whether an individuals trust in government influences environmental policy attitudes. Methods. Analyzing data from the 2007 Cooperative Congressional Election Study, we estimate a series of OLS regression models to examine the publics environmental policy attitudes. Results. We find stronger public support for government action to address pollution issues than resources issues, and stronger support for local and national pollution abatement than dealing with global problems. We also find that Republicans and ideological conservatives are less likely to support further government effort to address the environment, and that more trusting individuals are more favorable to government action to address pollution and global issues. Conclusion. Environmental policy attitudes vary by the nature of the issue; however, political ideology and partisan affiliation are consistent predictors of preferences across issues, even when controlling for an individuals level of trust in government. |
| Keywords: | Environment, NIMBY, Public Opinion, Political Economy |
| JEL: | Q5 H1 |
| Date: | 2008–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:0811&r=env |
| By: | Yan Dong; John Whalley |
| Abstract: | This paper discusses both the potential contribution that trade policy initiatives can make towards the achievement of significant global carbon emissions reduction and the potential impacts of proposals now circulating for carbon reduction motivated geographical trade arrangements, including carbon free trade areas. We first suggest that trade policy is likely to be a relatively minor consideration in climate change containment. The dominant influence on carbon emissions globally for next several decades will be growth more so than trade and its composition, and in turn, the size of trade seemingly matters more than its composition given differences in emission intensity between tradables and nontradables. We also note that differences in emissions intensity across countries are larger than across products or sectors and so issues of country discrimination in trade policy (and violations of MFN) arises. <br><br>We next discuss both unilateral and regional carbon motivated trade policy arrangements, including three potential variants of carbon emission reduction based free trade area arrangements. One is regional trade agreements with varying types of trade preferences towards low carbon intensive products, low carbon new technologies and inputs to low carbon processes. A second is the use of joint border measures against third parties to counteract anti-competitive effects from groups of countries taking on deeper emission reduction commitments. A third is third country trade barriers along with free trade or other regional trade agreements as penalty mechanisms to pressure other countries to join emission reducing environmental agreements. We differentiate among the objectives, forms and possible impacts of each variant. We also speculate as to how the world trading system may evolve in the next few decades as trade policy potentially becomes increasingly dominated by environmental concerns. We suggest that the future evolution of the trading system will likely be with environmentally motivated arrangements acting as an overlay on prevailing trade and financial arrangements in the WTO and IMF, and eventually movement to linked global trade and environmental policy bargaining. |
| JEL: | F18 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14431&r=env |
| By: | Valentina Bosetti (Fondazione Eni Enrico Mattei and CMCC); Carlo Carraro (Fondazione Eni Enrico Mattei, University of Venice, CEPR, CESifo and CMCC); Massimo Tavoni (Fondazione Eni Enrico Mattei, Catholic University of Milan and CMCC) |
| Abstract: | This paper analyses the cost implications for climate policy in developed countries if developing countries are unwilling to adopt measures to reduce their own GHG emissions. First, we assume that a 450 CO2 (550 CO2e) ppmv stabilisation target is to be achieved and that Non Annex1 (NA1) countries decide to delay their GHG emission reductions by 30 years. What would be the cost difference between this scenario and a case in which both developed and developing countries start reducing their emissions at the same time? Then, we look at a scenario in which the timing of developing countries’ participation is uncertain and again we compute the costs of climate policy in developed and developing countries. We find that delayed participation of NA1 countries has a negative impact on climate policy costs. Economic inefficiencies can be as large as 10-25 TlnUSD. However, this additional cost wanes when developing countries are allowed to trade emission reductions from their baseline emission paths during the 30-year delay period. Thus, irrespective of whether NA1 countries are immediately assigned an emission reduction target or not, they should nonetheless be included in a global carbon market. Technology deployment is also affected by the timing of developing countries’ mitigation measures. Delayed NA1-country participation in a climate agreement would scale down the deployment of coal with CCS throughout the century. On the other hand, innovation in the form of energy R&D investments would be positively affected, since it would become crucial in developed countries. Finally, uncertainty about the timing of NA1-country participation does not modify the optimal abatement strategy for developed countries and does not alter policy costs as long as a global carbon market is in place. |
| Keywords: | Delayed Action, Climate Policy, Stabilisation Costs, Uncertain Participation |
| JEL: | C72 H23 Q25 Q28 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2008.70&r=env |
| By: | Powers, Nicholas; Blackman, Allen (Resources for the Future); Lyon, Thomas P.; Narain, Urvashi |
| Abstract: | Public disclosure programs that collect and disseminate information about firms’ environmental performance are increasingly popular in both developed and developing countries. Yet little is known about whether they actually improve environmental performance, particularly in the latter setting. We use detailed plant-level survey data to evaluate the impact of India’s Green Rating Project (GRP) on the environmental performance of the country’s largest pulp and paper plants. We find that the GRP drove significant reductions in pollution loadings among dirty plants but not among cleaner ones. This result comports with statistical and anecdotal evaluations of similar disclosure programs. We also find that plants located in wealthier communities were more responsive to GRP ratings, as were single-plant firms. |
| Keywords: | public disclosure, pollution control, India, pulp and paper |
| JEL: | Q53 Q56 Q58 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-08-38&r=env |
| By: | Martin F. Quaas (University of Kiel); Sjak Smulders (University of Calgary and Tilburg University) |
| Abstract: | We analyze the efficiency of urbanization patterns in a dynamic model of endogenous urban growth with two sectors of production. Production exhibits increasing returns to scale on aggregate. Urban environmental pollution, as a force that discourages agglomeration, is caused by domestic production. We show that cities are too large and too few in number in equilibrium, compared to the efficient urbanization path, if economic growth implies increasing aggregate emissions. If, on the other hand, production becomes cleaner over time (`quality growth') the urbanization path approximates the efficient outcome after finite time. |
| Keywords: | Cities, Urbanisation, Pollution, Growth, Migration, Sustainable Development |
| JEL: | Q56 R12 O18 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2008.75&r=env |
| By: | Snorre Kverndokk (Ragnar Frisch Centre for Economic Research); Adam Rose (Energy Institute and School of Policy, Planning, and Development University of Southern California) |
| Abstract: | Many countries are implementing or at least considering policies to counter increasingly certain negative impacts from climate change. An increasing amount of research has been devoted to the analysis of the costs of climate change and its mitigation, as well as to the design of policies, such as the international Kyoto Protocol, post-Kyoto negotiations, regional initiatives, and unilateral actions. Although most studies on climate change policies in economics have considered efficiency aspects, there is a growing literature on equity and justice. Climate change policy has important dimensions of distributive justice, both within and across generations, but in this paper we survey only studies on the intragenerational aspect, i.e., within a generation. We cover several domains including the international, regional, national, sectoral and inter-personal, and examine aspects such as the distribution of burdens from climate change, climate change policy negotiations in general, implementation of climate agreements using tradable emission permits, and the uncertainty of alternatives to emission reductions. |
| Keywords: | Economics of Climate Change, Intragenerational Equity, Distributive Justice |
| JEL: | D62 D63 H23 H41 Q00 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2008.80&r=env |
| By: | Valentina Bosetti (Fondazione Eni Enrico Mattei); Massimo Tavoni (Fondazione Eni Enrico Mattei); Carlo Carraro (Fondazione Eni Enrico Mattei, University of Venice, CEPR, CESifo and CMCC); Alessandra Sgobbi (Fondazione Eni Enrico Mattei) |
| Abstract: | Despite the growing concern about actual on-going climate change, there is little consensus about the scale and timing of actions needed to stabilise the concentrations of greenhouse gases. Many countries are unwilling to implement effective mitigation strategies, at least in the short-term, and no agreement on an ambitious global stabilisation target has yet been reached. It is thus likely that some, if not all countries, will delay the adoption of effective climate policies. This delay will affect the cost of future policy measures that will be required to abate an even larger amount of emissions. What additional economic cost of mitigation measures will this delay imply? At the same time, the uncertainty surrounding the global stabilisation target to be achieved crucially affects short-term investment and policy decisions. What will this uncertainty cost? Is there a hedging strategy that decision makers can adopt to cope with delayed action and uncertain targets? This paper addresses these questions by quantifying the economic implications of delayed mitigation action, and by computing the optimal abatement strategy in the presence of uncertainty about a global stabilisation target (which will be agreed upon in future climate negotiations). Results point to short-term inaction as the key determinant for the economic costs of ambitious climate policies. They also indicate that there is an effective hedging strategy that could minimise the cost of climate policy under uncertainty, and that a short-term moderate climate policy would be a good strategy to reduce the costs of delayed action and to cope with uncertainty about the outcome of future climate negotiations. By contrast, an insufficient short-term effort significantly increases the costs of compliance in the long-term. |
| Keywords: | Uncertainty, Climate Policy, Stabilisation Costs, Delayed Action |
| JEL: | C72 H23 Q25 Q28 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2008.69&r=env |
| By: | Robert N. Stavins (Harvard University); Forest L. Reinhardt (Harvard Business School); Richard H. K. Vietor (Harvard Business School) |
| Abstract: | Business leaders, government officials, and academics are focusing considerable attention on the concept of "corporate social responsibility" (CSR), particularly in the realm of environmental protection. Beyond complete compliance with environmental regulations, do firms have additional moral or social responsibilities to commit resources to environmental protection? How should we think about the notion of firms sacrificing profits in the social interest? May they do so within the scope of their fiduciary responsibilities to their shareholders? Can they do so on a sustainable basis, or will the forces of a competitive marketplace render such efforts and their impacts transient at best? Do firms, in fact, frequently or at least sometimes behave this way, reducing their earnings by voluntarily engaging in environmental stewardship? And finally, should firms carry out such profit-sacrificing activities (i.e., is this an efficient use of social resources)? We address these questions through the lens of economics, including insights from legal analysis and business scholarship. |
| Keywords: | Corporate Social Responsibility, Voluntary Environmental Performance |
| JEL: | M14 L51 Q50 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2008.84&r=env |
| By: | Peter Forsyth |
| Abstract: | This paper examines how climate change policy can impact on competition, prices and profitability in the air transport industry. It begins with an outline of the climate change policies that have been suggested, and it gives particular attention to the inclusion of air transport in an emissions trading scheme (ETS).This is likely to prove an important policy direction, with the EU, Australia and New Zealand all planning to include air transport in their ETSs. The scope for airlines to reduce their emissions intensity in the short run and long run is examined- it is concluded that the scope in the short run is quite limited. After this, the application of the emissions trading schemes of the EU, Australia and New Zealand to air transport is discussed, and the possible impacts on air fares are assessed. Allowance is made for the cost of permits for both direct and indirect emissions. The impacts of climate change policies, such as carbon taxes or requirements to purchase emissions permits, on airline competition, prices and profitability are analysed next. Impacts differ according to market structure- whether airline city pair markets are competitive, monopolistic or oligopolistic. They also depend on the time scale- airlines are unlikely to be able to pass on the full cost of their permits to their passengers in the short run, though in the long run, it is likely that airlines will exit from some city pairs, and this will enable to remaining airlines to raise their fares and restore their profitability. This may not occur in markets constrained by airport slots or capacity limits imposed in air services agreements on international routes, though the airlines’ problems are not likely to be as severe as has been suggested. |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaaa:2008/18-en&r=env |
| By: | Andreas Ziegler (CER-ETH - Center of Economic Research at ETH Zurich, Switzerland) |
| Abstract: | Based on a unique firm-level data set from the German manufacturing sector, this paper disentangles environmental and non-environmental product and process innovations. The multivariate probit analysis shows that the various innovation types are determined by different factors. The estimation results suggest a policy mix which comprises the encouragement of R&D activities, certified management systems, and specific management activities referring to environmentally friendly products when the implementation of all innovation types is to be supported. |
| Keywords: | Product and process innovations, Environmental and non-environmental innovations, Management systems, Multivariate probit models |
| JEL: | Q55 O31 O32 C35 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:08-100&r=env |
| By: | Dirk T.G. Rübbelke (CICERO); Anil Markandya (Fondazione Eni Enrico Mattei, Italy and University of Bath) |
| Abstract: | Analyses of public goods regularly address the case of pure public goods. However, a large number of (international) public goods exhibit characteristics of different degrees of publicness, i.e. they are impure public goods. In our analysis of transfers helping to overcome the inefficient provision of such goods, we therefore apply the Lancastrian characteristics approach. In contrast to the existing literature, we consider the case of a continuum of impure public goods. We employ the example of international conditional transfers targeting to overcome suboptimal low climate protection efforts by influencing the abatement technology choice of countries. |
| Keywords: | Impure Public Goods, Lancastrian Characteristics Approach, Conditional Transfers, Ancillary Benefits of Climate Policy |
| JEL: | H87 Q54 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2008.76&r=env |
| By: | OECD |
| Abstract: | This short outlook is designed to test the potential for key policy instruments for mitigating emissions from road transport, and particularly from light duty vehicles, the largest source of CO2 emissions from transport (see Figure 1 and Table 1). It also examines uncertainties in the baseline scenario for the development of CO2 emissions from the sector. In contrast to the OECD’s Economic Outlook and the IEA’s World Energy Outlook, the Transport Outlook is produced making use of external modeling tools. The work uses the most transparent and robust model developed to date for the sector, the MoMo modeli constructed and maintained by the International Energy Agency and initially developed for the World Business Council for Sustainable Development. We are grateful to the MoMo-team for their willingness to share this product. The present document is only a first step towards the development of a full-fledged Transport Outlook. It is limited in scope, with its focus on road transport and on emissions of CO2. Despite the limitations, this mini-Outlook provides elements of a useful framework for discussions on the policy challenges presented by the risk of costly consequences from anthropogenic emissions of greenhouse gases. As will become clear, permanent reductions of CO2-emissions from transport are difficult to achieve because of strong underlying global growth in transport demand. At the same time, our scenarios suggest that emissions could be stabilized even with strong growth of demand, given immediate and continued efforts to reduce the sector’s carbon intensity. If stabilization is the goal, then finding cost-effective ways of achieving it becomes the critical issue. |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaaa:2008/13-en&r=env |
| By: | Judson Jaffe; Robert N. Stavins |
| Abstract: | Cap-and-trade systems have emerged as the preferred national and regional instrument for reducing emissions of greenhouse gases throughout the industrialized world, and the Clean Development Mechanism — an international emission-reduction-credit system — has developed a substantial constituency, despite some concerns about its performance. Because linkage between tradable permit systems can reduce compliance costs and improve market liquidity, there is great interest in linking cap-and-trade systems to each other, as well as to the CDM and other credit systems. We examine the benefits and concerns associated with various types of linkages, and analyze the near-term and long-term role that linkage may play in a future international climate policy architecture. In particular, we evaluate linkage in three potential roles: as an independent bottom-up architecture, as a step in the evolution of a top-down architecture, and as an ongoing element of a larger climate policy agreement. We also assess how the policy elements of climate negotiations can facilitate or impede linkages. Our analysis throughout is both positive and normative. |
| JEL: | F50 Q20 Q40 Q50 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14432&r=env |
| By: | Dorothée Boccanfuso (GREDI, Faculte d'administration, Université de Sherbrooke); Antonio Estache (World Bank and, the European Centre for Advanced Research in Economics and Statistics at the Free University of Brussels); Luc Savard (GREDI, Faculte d'administration, Université de Sherbrooke) |
| Abstract: | In this paper we present a survey of distributional impact analysis of environmental policies envisaged or implemented to reduce greenhouse gasses emissions. Implementation of policies by developed countries has an objective of reducing greenhouse gasses directly or indirectly. However, these policies can produce important changes in factor allocation, relative prices in specific countries as well as on world markets when large countries of when policies are adopted by a large number of countries. These policies can produce important changes in welfare for important portion of vulnerable groups of population in developing countries. This survey reveals that the computable general equilibrium (CGE) microsimulation approach has not been fully exploited in the context of distributional impact analysis of CC policies and that developing economics exhibit features that warrant country specific applications to draw clear conclusions on the regressivity or progressivity of CC policies. |
| Keywords: | Global warming, environmental policies, income distribution, developing countries |
| JEL: | D58 D60 H23 O13 Q52 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:shr:wpaper:08-14&r=env |
| By: | Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Gao, Weiyu (Shanghai Development Research Center); Neustadt, Ilja (Socioeconomic Institute, University of Zurich); Zweifel, Peter (Socioeconomic Institute, University of Zurich) |
| Abstract: | The search for economically efficient policy instruments designed to promote the diffusion of renewable energy technologies in liberalized markets has led to the introduction of quota-based tradable `green' certificate (TGC) schemes for renewable electricity. However, there is a debate about the pros and cons of TGC, a quantity control policy, compared to guaranteed feed-in tariffs, a price control policy. In this paper we contrast these two alternatives in terms of cost effectiveness and social welfare, taking into account that electricity markets are not perfectly competitive. |
| Keywords: | Tradable green certifcates; Renewable portfolio standard; Quota target; Feed-in tarif; Cournot duopoly |
| JEL: | Q42 Q48 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:ris:fcnwpa:2008_001&r=env |
| By: | Andrea Ghermandi (School for Advanced Studies in Venice Foundation); J.C.J.M. van den Bergh (VU Amsterdam); L.M. Brander (Institute for Environmental Studies (IVM)); H.L.F. de Groot (VU Amsterdam); P.A.L.D. Nunes (School for Advanced Studies in Venice Foundation) |
| Abstract: | The rationale for conservation and creation of wetlands stems from the recognition of both their ecological and economic values. This paper examines the welfare impacts of goods and services provided by wetlands. We collected 385 estimates of the economic value of 181 natural and man-made wetlands from 167 studies worldwide. The resulting database is less biased towards North America than previous reviews of the literature. The relative importance of characteristics of the valuation study, of the wetland site, and of the socio-economic and geographical context is estimated by means of a meta-regression analysis of wetland values. Provision of amenities, flood control and storm buffering, and water quality improvement are the most highly valued wetland services. The relevance of the socio-economic and geographical context clearly emerges from the analysis and, in particular, the proximity to other wetland sites is negatively correlated with valuations. An analysis of the effect of environmental stress on wetland value shows that the latter increases with stress from human development activities and uses. In addition to the basic meta-regression model, the influence of authorship effects and of the geographic regions is examined by means of a multi-level approach. A second extended meta-regression model including cross-effects shows that the valuations of specific services vary according to the type of wetland producing them. |
| Keywords: | Constructed Ecosystems, Economic Valuation, Man-Made Wetlands, Meta-Regression, Wetland Values |
| JEL: | C81 Q24 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2008.79&r=env |
| By: | David von Below; Torsten Persson |
| Abstract: | The paper illustrates how one may assess our comprehensive uncertainty about the various relations in the entire chain from human activity to climate change. Using a modified version of the RICE model of the global economy and climate, we perform Monte Carlo simulations, where full sets of parameters in the model's most important equations are drawn randomly from pre-specified distributions, and present results in the forms of fan charts and histograms. Our results suggest that under a Business-As-Usual scenario, the median increase of global mean temperature in 2105 relative to 1900 will be around 4.5 °C. The 99 percent confidence interval ranges from 3.0 °C to 6.9 °C. Uncertainty about socio-economic drivers of climate change lie behind a non-trivial part of this uncertainty about global warming. |
| JEL: | E17 O13 Q54 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14426&r=env |
| By: | Norimichi Matsueda (Kwansei Gakuin University); Yoko Nagase (Portland State University) |
| Abstract: | By constructing a static model of a recyclable product market where the product can be manufactured by using both a recycled material and a harvested natural resource, we examine how different types of economic policy instruments affect resource harvesting activities of individual producers. In particular, we show that an increase in a recycling subsidy for consumers and an increase in a waste disposal fee on consumers can respectively lead to an increase in the resource harvest level. We explore the conditions under which these economic instruments are likely to backfire in terms of natural resource conservation. |
| Keywords: | economic instruments, recycling, natural resource. |
| JEL: | Q20 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:kgu:wpaper:41&r=env |
| By: | Cohen, Mark A. (Resources for the Future); Vandenbergh, Michael P. |
| Abstract: | In this article, we explore the implications of this literature for understanding the relationship between climate change policies and consumption. We identify a number of ways in which accounting for the implications of the new happiness literature could lead to laws and policies that influence consumption in ways that increase the prospects for reducing greenhouse gas emissions in developed and developing countries. We do not examine every nuance of the growing happiness literature, but we provide a brief introduction and observations that we hope will stimulate further efforts by academicians and policymakers. |
| Keywords: | happiness, life satisfaction, subjective well-being |
| JEL: | Q54 I31 D31 |
| Date: | 2008–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-08-39&r=env |
| By: | Natalia Zugravu (CES - Université Paris-I Panthéon Sorbonne); Sonia Ben Kheder (CES - Université Paris-I Panthéon Sorbonne) |
| Abstract: | Although based on theoretical foundations, the pollution haven hypothesis has never been clearly proven empirically. In this study, we re-examine this hypothesis by a fresh take on both its theoretical and empirical aspects. While applying a geographic economy model on French firm-level data, we confirm the hypothesis for the global sample. Through sensitivity analysis, we validate it for Central and Eastern European countries, emerging and high-income OECD countries, but not for the major part of the Commonwealth of Independent States countries. Finally, we show that the pollution haven hypothesis is confirmed in the strongest manner for emerging economies. |
| Keywords: | FDI, Environmental Regulation, Economic Geography, Pollution Haven Hypothesis |
| JEL: | F12 F18 Q28 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2008.73&r=env |
| By: | Dirk T.G. Rübbelke (CICERO); Vivekananda Mukherjee (Jadavpur University); Tilak Sanyal (Jadavpur University) |
| Abstract: | The paper considers a situation where two countries – the North and the South – use a non-traded polluting input to produce the goods for final consumption. The North is more efficient in both, production and abatement processes. The study compares the effects of the transfer of abatement technology by the North to the South under autarky with the free trade situation, assuming that the North pre-commits to an international protocol to keep the global pollution under a fixed level. The conditions under which either full or partial technology is transferred in autarky are determined. It is shown that under free trade no such transfer is possible. With trade even though the North wants a complete transfer of technology, the South refuses it. |
| Keywords: | GHG Emissions, Mitigation, Technology Transfer, International Trade |
| JEL: | F18 F35 Q54 Q56 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2008.78&r=env |
| By: | Genevieve Giuliano; Thomas O’Brien |
| Abstract: | Rapid growth in international trade over the last two decades has generated both benefits and costs. Costs have become increasingly visible in metropolitan areas -- growing congestion, air pollution – and local communities are demanding solutions. Congestion and air pollution associated with increased international trade have become so severe in the Los Angeles region that port-related trade is facing increased regulation by both state and local agencies. Historically US ports have been remarkably autonomous. Their role as economic development engines is wellrecognized by local leaders. Thus recent regulatory efforts represent a significant change in public policy. This report begins with an overview of trends in port-related trade and its impacts on US metropolitan areas, and discusses changing public perceptions of port-related trade as impacts have increased. Using Southern California as a case study, the report examines responses by the ports, terminal operators, and allied industries to a changed regulatory regime. Two examples are discussed in detail: 1) a state regulation requiring appointments or extended hours at terminal gates, and 2) the OFFPeak extended gate hours program. We use a political economy framework to explain outcomes. I describe the main economic actors and their competitive positions, and we explain the key aspects of the US regulatory system affecting these actors. Those with significant market power within the international trade supply chain were successful in staving off several regulatory attempts to force changes in operating practices. When regulations were imposed, they were able to structure responses to protect their economic interests. Results suggest that “dominant actors” – ports, terminal operators, steamship lines, and their major clients – will continue to be a strong influence in efforts to solve trade-related environmental problems. |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaaa:2008/12-en&r=env |
| By: | Dimitri Uzunidis (Labrii, ULCO) |
| Abstract: | Dans cet article, nous nous intéressons à l’émergence du « développement durable » comme champ d’accumulation et d’innovations sur lequel prendra, peut-être, appui l’activité économique pour les décennies à venir. Dans un premier temps, nous explorons les rapports du « développement durable » avec la théorie économique. Celleci a toujours une référence : le développement industriel. Puis, c’est dans un contexte de crise économique que les économistes intègrent la contrainte environnementale, puis sociale, dans leurs analyses. Cette contrainte alimente un système techno-économique porteur d’innovations « éco-protectrices » et « éco-réparatrices », mais toujours ancré dans la même logique et dans les mêmes rapports économiques et politiques. Les stratégies d’innovation des grandes entreprises illustrent un double phénomène d’apparence contradictoire (deuxième partie) : d’un côté elles freinent, pour des raisons de coût, la réorientation des relations de système et, d’un autre côté, elles profitent de la contrainte pour investir, pour innover et pour réaliser des profits. Dans un troisième temps, nous explorons le chemin du possible et celui des conditions selon lesquelles le nouveau système techno-économique pourrait émerger et s’affirmer. Nous discutons des thèses de la théorie de la décroissance pour montrer que, historiquement, le changement de paradigme techno-économique (en l’occurrence le passage de l’industrialisme à l’éco-économie) suppose une remise en cause fondamentale des rapports économiques de propriété et d’appropriation. This paper deals with the emergence of « sustainable development » as an accumulation and innovation field, which will perhaps be the basis of economic activity for the next decades. We first explore the relations between « sustainable development » and economic theory. The latter main reference has always been industrial development. Then, it is in a context of economic crisis that economist have integrated the environmental and social constraints in their analysis. This constraint feeds a technoeconomic system bringing « eco-protecting » and « eco-repairing » innovations, but which is always based on the same logic and the same economic and politic relationships. The innovation strategies of big firms illustrate a double contradictory phenomenon (second part): on the one hand, they slow down, for cost reasons, they reorientation of systemic relations and, on the other hand, they take advantage of the constraint to invest, innovate and make profits. In a third part, we explore the possible path and the conditions that would favor the emergence and the affirmation of the new techno-economic system. We discuss the thesis of uneconomic growth to show that, historically, the change of techno-economic (the shift from industrialism to eco-economy) needs a fundamental questioning of economic relations of property and appropriation. |
| Keywords: | sustainable development, accumulation field, atmospheric pollution,environment |
| JEL: | Q56 |
| Date: | 2008–04 |
| URL: | http://d.repec.org/n?u=RePEc:rii:riidoc:180&r=env |
| By: | Alice Baccheschi; Salvatore Bimonte; Silvia Ferrini |
| Abstract: | Recent regulation on waste fees establishes the change from tax to tariff to cover the total management cost of the collection and selection services. It does not consider the external costs (externalities). This causes a distortion in the system of relative prices. In this paper, we focus on one particular type of externality: the odour due to the waste treatment and we estimate the damage produced by a selection and composting centre. In the literature, we can find different hedonic price and contingent valuation studies that aim to estimate individual willingness to pay (WTP) to improve air quality reducing contaminants with (direct or indirect) effects on human health. However, few studies focus on reversible externalities, such as odour. This study intends to enrich the literature on this area. To the authors’ knowledge, it is the first attempt to estimate the WTP to reduce odour emissions due to a selection and composting centre. Considering the peculiarity of the case study, we produce our estimates with the relatively new method of Contingent Behaviour. |
| Keywords: | Contingent Behaviour, odor nuisance, external effects. |
| JEL: | Q51 Q53 D62 H23 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:542&r=env |
| By: | Matthew Littleton |
| Abstract: | Despite numerous international commitments to promote transfer of climate-change related technologies to developing countries, such transfers are not occurring at a sufficient rate to aid these nations in mitigating and adapting to the effects of climate change. The impact of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) on transfer of these technologies is discussed through a detailed examination of relevant TRIPS provisions. The paper also addresses options for improving technology transfer through exploitation of existing TRIPS flexibilities, modification of the Agreement, and other public and private legal and policy avenues. |
| Keywords: | TRIPS Agreement, climate-change-related technologies, and technology transfer |
| JEL: | O34 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:une:wpaper:71&r=env |
| By: | Salerno, Gillian; Beard, Rodney; McDonald, Stuart |
| Abstract: | In this paper we extend earlier work on the economics of shallow lakes by M\"aler, Xepapadeas and de Zeeuw (2003) to the case where two communities have incommensurable preferences about lake eutrophication. In the case of incommensurable preferences interest group behavior arises, we therefore consider the case where society is divided into two interest groups and is thus unable to agree on a single management objective. In particular, the communities that share the use of the lake disagree on the relative importance of the shallow lake acting as a waste sink for phosphorus run-off as opposed to other ecosystem services. A dynamic game in which communities maximize their use of the lake results in a Nash equilibrium where the lake is in a eutrophic state when in fact the Pareto optimum would be for the lake to be in an oligotrophic state. Our paper differs from previous work by considering two communities or interest groups with different preferences for environmental services. The tax that would induce, in a noncooperative context, all of society's members to behave in such a way as to achieve a Pareto optimal outcome is derived under the assumption that a social planner does not favor one community or another. We then ask whether or not such a tax rate would in fact be implemented if each community were able to bear political pressure on the social planner and the social planner were a public representative seeking re-election. In this case both types of communities lobby to have their preferred level of tax applied based on their relative preferences for a clean lake and phosphorus loading. The effects of the lobbying on the application of the optimal tax are investigated numerically for particular values of relative preferences and the relative size of each group. The representative seeking election proposes a different tax rate in order to maximize their probability of electoral success. This problem is solved numerically assuming that the lake is in a eutrophic equilibrium. It is shown that political representatives have an incentive to propose tax rates that are insufficient to achieve a return to an oligotrophic steady-state |
| Keywords: | Pollution of shallow lakes; optimal eco-taxation; dynamic rent seeking. |
| JEL: | Q52 C63 Q53 C61 C73 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:11225&r=env |
| By: | Reyer Gerlagh (University of Manchester); Matti Liski (Helsinki School of Economics) |
| Abstract: | We consider a situation where an exhaustible-resource seller faces demand from a buyer who has a perfect substitute but there is a time-to-build delay for the substitute. We that find in this simple framework the basic implications of the Hotelling model (1931) are reversed: over time the stock declines but supplies increase up to the point where the buyer decides to switch. Under such a threat of demand change, the supply does not reflect the true current resource scarcity but leads to increased future scarcity, felt during the transition to the substitute supplies. The analysis suggests a perspective on costs of oil dependence. |
| Keywords: | Dynamic Bilateral Monopoly, Markov-Perfect Equilibrium, Depletable Resources, Energy, Alternative Fuels, Oil Dependence |
| JEL: | D4 D9 O33 Q40 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2008.72&r=env |
| By: | Luiza Badin; Cinzia Daraio; Léopold Simar |
| Abstract: | In productivity analysis an important issue is to detect how external (environmental) factors, exogenous to the production process and not under the control of the producer, might influence the production process and the resulting efficiency of the firms. Most of the traditional approaches proposed in the literature have serious drawbacks. An alternative approach is to describe the production process as being conditioned by a given value of the environmental variables (Cazals, Florens and Simar, 2002, Daraio and Simar, 2005). This defines conditional efficiency measures where the production set in the input × output space may depend on the value of the external variables. The statistical properties of nonparametric estimators of these conditional measures are now established (Jeong, Park and Simar, 2008). These involve the estimation of a nonstandard conditional distribution function which requires the specification of a smoothing parameter (a bandwidth). So far, only the asymptotic optimal order of this bandwidth has been established. This is of little interest for the practitioner. In this paper we fill this gap and we propose a data-driven technique for selecting this parameter in practice. The approach, based on a Least Squares Cross Validation procedure (LSCV), provides an optimal bandwidth that minimizes an appropriate integrated Mean Squared Error (MSE). The method is carefully described and exemplified with some simulated data with univariate and multivariate environmental factors. An application on real data (performances of Mutual Funds) illustrates how this new optimal method of bandwidth selection outperforms former methods. |
| Keywords: | Nonparametric efficiency estimation, conditional efficiency measures, environmental factors, conditional distribution function, bandwidth. |
| JEL: | C14 C40 C60 D20 |
| Date: | 2008–10–24 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2008/22&r=env |
| By: | Mathieu Couttenier (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | This article analyses through a rent seeking model, the relationship between institutions' quality and natural resources. Depending on the institutions quality, each country has a specific structural capacity to stand natural resources dependency. It is shown that for each country, a threshold exists, such that beyond this point, any additional amounts of natural resources begin to have a negative impact on institutions. As the stock of natural resources increases, this improves the expected profitability of rent seeking, which in turn lowers the quality of institutions. The mechanism comes from a new balance of power within the country. However, the institutional degradation's intensity is determined by social interactions and depends on both the resources nature and their appropriability level. The inverse U-shaped curve obtained from empirical studies presented in this article supports the natural resources non-monotonic effect on institutions found in the model. |
| Keywords: | Natural resources, institutions, rent seeking. |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00332490_v1&r=env |
| By: | Mathieu Couttenier (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | This article analyses through a rent seeking model, the relationship between institutions' quality and natural resources. Depending on the institutions quality, each country has a specific structural capacity to stand natural resources dependency. It is shown that for each country, a threshold exists, such that beyond this point, any additional amounts of natural resources begin to have a negative impact on institutions. As the stock of natural resources increases, this improves the expected profitability of rent seeking, which in turn lowers the quality of institutions. The mechanism comes from a new balance of power within the country. However, the institutional degradation's intensity is determined by social interactions and depends on both the resources nature and their appropriability level. The inverse U-shaped curve obtained from empirical studies presented in this article supports the natural resources non-monotonic effect on institutions found in the model. |
| Keywords: | Natural resources, institutions, rent seeking. |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00332490_v1&r=env |
| By: | Matthew J. Kotchen; Laura E. Grant |
| Abstract: | The history of Daylight Saving Time (DST) has been long and controversial. Throughout its implementation during World Wars I and II, the oil embargo of the 1970s, consistent practice today, and recent extensions, the primary rationale for DST has always been to promote energy conservation. Nevertheless, there is surprisingly little evidence that DST actually saves energy. This paper takes advantage of a natural experiment in the state of Indiana to provide the first empirical estimates of DST effects on electricity consumption in the United States since the mid-1970s. Focusing on residential electricity demand, we conduct the first-ever study that uses micro-data on households to estimate an overall DST effect. The dataset consists of more than 7 million observations on monthly billing data for the vast majority of households in southern Indiana for three years. Our main finding is that—contrary to the policy's intent—DST increases residential electricity demand. Estimates of the overall increase are approximately 1 percent, but we find that the effect is not constant throughout the DST period. DST causes the greatest increase in electricity consumption in the fall, when estimates range between 2 and 4 percent. These findings are consistent with simulation results that point to a tradeoff between reducing demand for lighting and increasing demand for heating and cooling. We estimate a cost of increased electricity bills to Indiana households of $9 million per year. We also estimate social costs of increased pollution emissions that range from $1.7 to $5.5 million per year. Finally, we argue that the effect is likely to be even stronger in other regions of the United States. |
| JEL: | H43 Q4 Q5 Q51 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14429&r=env |
| By: | Bachewe, Fantu; Lazarus, William; Goodrich, Philip; Drewitz, Matt; Balk, Becky |
| Abstract: | Minnesota can improve the utilization of manure and organic wastes via the production of biogas that can be used to produce heat and electricity. Denmark serves as a role model for Minnesota in the number of central anaerobic digesters that it supports. During anaerobic digestion methane is produced when naturally occurring anaerobic bacteria decompose organic matter in the absence of oxygen. This process produces what is called biogas, which usually is a mixture of 55 Â€Ó 65 percent methane plus carbon dioxide with trace gases such as hydrogen sulfide. Co-generation using manure and other feedstocks can produce more energy than manure alone. Central digesters are more likely to process wastes from food processing plants and other sources resulting in the need for more specialized unloading facilities and larger storage spaces. Digesters can be owned by farmers or consumers cooperatives, third party/non-farming investor(s), state or municipal government, or established as a cooperative or limited liability corporation. Problems associated with centralized digester operation include capital constraints, low profitability, lower-than-expected waste availability, electricity connection and pricing, and waste disposal constraints. |
| Keywords: | Livestock Production/Industries, Resource /Energy Economics and Policy, |
| Date: | 2008–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:ags:umaesp:44116&r=env |
| By: | Cho, Yongsung; Konishi, Yoshifumi; Easter, K. William |
| Abstract: | Our primary concern in this paper is to determine to what extent small communities have difficulty meeting the new stricter 2001 standard for arsenic levels in their drinking water. To do this we survey water users in rural Minnesota communities that had arsenic levels in their water supply exceeding 10 Ïͧ/L during 2001-2006. Our survey results show that after obtaining complete information concerning the arsenic levels in their drinking water consumers with relatively low levels of arsenic were willing to pay $8-9 annually, while those with high levels of arsenic are willing to pay $15-17 annually. We also found that consumer€ٳ willingness to pay (WTP) didn€ٴ vary by community size. Thus, we conclude that compared to compliance costs ($58-327 per capita annually) small rural communities were likely to find it difficult to cover the cost of compliance through increased water charges. Since many of the communities have to cover these costs of compliance by raising water charges, we ask the basic question: are there better treatment options for these rural communities that will lower the cost to consumers? One option might be to encourage individual householders to use household water treatment devices for communities serving fewer than 500 people. The devices could be made available by the local entity supplying the community€ٳ water possibly at a subsidized rate along with complete information about the arsenic level in the water supply. |
| Keywords: | Community/Rural/Urban Development, Resource /Energy Economics and Policy, |
| Date: | 2008–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:ags:umaesp:7353&r=env |