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on Environmental Economics |
| By: | Breen, James P. |
| Abstract: | The increasing concern over climate change has led to a number of international agreements to control greenhouse gas emissions. Agriculture currently accounts for 28 percent of Ireland€ٳ total greenhouse gas emission and therefore has a major role to play in Ireland achieving its emissions targets. To date research into reducing emissions from Irish agriculture has focused on devising abatement strategies at the farm level such as changes in animal feeding practices. Alternatively emissions could be controlled using market-based emissions abatement strategies such as emissions taxes or permit trading, which are in theory a least cost means of cutting emissions. This paper uses data from the Irish National Farm Survey to construct a farm-level Linear Programming model and to simulate a market for tradable emission permits. The impact on average gross margin of allowing farmers to reduce greenhouse gas emissions by trading permits is compared with a scenario where emissions are unconstrained and a scenario where a command and control approach is adopted to reduce emissions. |
| Keywords: | Greenhouse Gas Emissions, Farm-level Modeling, Linear Programming, Irish Agriculture, Environmental Economics and Policy, Farm Management, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa107:6498&r=env |
| By: | Stranlund, John K.; Murphy, James J.; Spraggon, John M. |
| Abstract: | This paper uses laboratory experiments to investigate the performance of emission permit markets when compliance is imperfectly enforced. In particular we examine deviations in observed aggregate payoffs and expected penalties from those derived from a model of risk-neutral payoff-maximizing firms. We find that the experimental emissions markets were reasonably efficient at allocating individual emission control choices despite imperfect enforcement and significant noncompliance. However, violations and expected penalties were lower than predicted when these are predicted to be high, but were about the same as predicted values when these values were predicted to be low. Thus, although a standard model of compliance with emissions trading programs tends to predict significantly higher violations than we observe when subjects have strong incentives to violate their emissions permits, individual emissions control responsibilities are distributed among firms as predicted. |
| Keywords: | enforcement, compliance, emissions trading, permit markets, pollution, laboratory experiments, Environmental Economics and Policy, Public Economics, C91, L51, Q58, |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:umamwp:42124&r=env |
| By: | Benson, Verel |
| Abstract: | This study used a combination of methods to evaluate the value of Missouri's Department of Natural Resources (MODNR)conservation programs for the affected regional economies. |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy, |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:faprre:44774&r=env |
| By: | Chavez, Carlos A.; Stranlund, John K. |
| Abstract: | In contrast with what we perceive is the conventional wisdom about setting emissions taxes under uncertainty, we demonstrate that setting a uniform tax equal to expected marginal damage is not generally efficient under incomplete information about firms€٠abatement costs and damages from pollution. We show that efficient taxes will deviate from expected marginal damage if there is uncertainty about the slopes of the marginal abatement costs of regulated firms. Moreover, efficient emissions tax rates will vary across firms if a regulator can use observable firm-level characteristics to gain some information about how the firms€٠marginal abatement costs vary. |
| Keywords: | Emissions Taxes, Incomplete Information, Uncertainty, Environmental Economics and Policy, Public Economics, Risk and Uncertainty, L51, Q28, |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:umamwp:42129&r=env |
| By: | Stranlund, John K.; Zhang, Wei |
| Abstract: | Under favorable but reasonable conditions, an imperfectly enforced emissions tax produces the efficient allocation of individual emissions control; aggregate emissions are independent of whether enforcement of the tax is sufficient to induce the full compliance of firms, and differences in individual violations are independent of firm-level differences. All of these desirable characteristics disappear when some firms under an emissions tax risk bankruptcy€Դhe allocation of emissions control is inefficient, imperfect enforcement causes higher aggregate emissions, and financially insecure firms choose higher violations. |
| Keywords: | Bankruptcy, Emissions Taxes, Limited Liability, Environmental Economics and Policy, Public Economics, Risk and Uncertainty, L51, Q28, Q58, |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:umamwp:42127&r=env |
| By: | Venot, Jean-Philippe; Sharma, Bharat R.; Rao, K. V. G. K. (Venot, Jean-Philippe; Sharma, Bharat R. - IWMI; Rao, K. V. G. K. – Independent consultant and Head, Consultancy Services of Indwa Technologies Pvt. Ltd., 506, Topaz Building, Panjagutta, Hyderabad 500 082, Andhra Pradesh, India) |
| Keywords: | River basin development / Lakes / Environmental degradation / Ecosystems / Mangroves / Water allocation / Groundwater / Water quality / Salinity / Irrigated farming / Institutions / Irrigation canals / Rural development |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:iwt:rerpts:h041463&r=env |
| By: | David A. Hennessy (Center for Agricultural and Rural Development (CARD)); Harvey E. Lapan |
| Abstract: | Growing demand for cropland products has placed intense pressure on the ability of land resources to support nature, straining public budgets to purchase environmental goods. Fixing overall agricultural output, two policy options are whether to promote more extensive and nature friendly farming practices or to produce intensively on some land and leave the rest wild. Microeconomic models of the topic have not accommodated widely recognized complementary spatial externalities in providing ecological services. This article does so, identifying also a third policy possibility. This is that environmental services can follow a smoothly varying spatial path characterized by harmonic functions. |
| Keywords: | biofuels, environmental policy, spatial externalities, Wirtinger's inequality. |
| JEL: | H40 Q28 D62 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:08-wp482&r=env |
| By: | Carpenter, Brent |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:faprre:37773&r=env |
| By: | Coria, Jessica (Department of Economics, School of Business, Economics and Law, Göteborg University); Sterner, Thomas (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | Santiago was one of the first cities outside the OECD to implement a tradable permit program to control air pollution. This paper looks closely at the program’s performance over the past ten years, stressing its similarities and discrepancies with trading programs implemented in developed countries, and analyzing how it has reacted to regulatory adjustments and market shocks. Studying Santiago's experience allows us to discuss the drawbacks and advantages of applying tradable permits in less developed countries |
| Keywords: | air pollution; environmental policy; tradable permits; developing countries |
| JEL: | Q53 Q58 |
| Date: | 2008–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0326&r=env |
| By: | Hennessy, David A.; Lapan, Harvey E. |
| Abstract: | Growing demand for cropland products has placed intense pressure on the ability of land resources to support nature, straining public budgets to purchase environmental goods. Fixing overall agricultural output, two policy options are whether to promote more extensive and nature friendly farming practices or to produce intensively on some land and leave the rest wild. Microeconomic models of the topic have not accommodated widely recognized complementary spatial externalities in providing ecological services. This article does so, identifying also a third policy possibility. This is that environmental services can follow a smoothly varying spatial path characterized by harmonic functions. |
| Keywords: | biofuels, environmental policy, spatial externalities, Wirtinger’s inequality. |
| Date: | 2008–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:13005&r=env |
| By: | Tisdell, Clem |
| Abstract: | This article draws mostly (but not entirely) on new institutional economics to consider the likely behaviours of non-government conservation organizations and the implications of these behaviours for biodiversity conservation. It considers how institutional factors may result in behaviour of conservation NGOs diverging from their objectives, including their support for biodiversity conservation; examines aspects of rent capture and conservation alliances; specifies social factors that may restrict the diversity of species supported by NGOs for conservation; considers bounded rationality in relation to the operation of conservation NGOs; and using game theory, shows how competition between NGOs for funding can result in economic inefficiencies and narrow the diversity of species supported for conservation. It also considers generally how the social role of conservation NGOs might be assessed. |
| Keywords: | Australia, biodiversity conservation, bounded rationality, civil society, Common Agricultural Policy, European Union, Landcare, mixed goods, new institutional economics, New Zealand, NGOs, principal-and-agent problem, political acceptability, Environmental Economics and Policy, Institutional and Behavioral Economics, Political Economy, Q00, Q2, Q5, Q57, Z13, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:huiain:6185&r=env |
| By: | Haimanti Bhattacharya; Dan Osgood |
| Abstract: | This paper presents a theoretical model to investigate the potential environmental consequences of weather index based insurance, a tool for mitigating weather risk that is gaining momentum in developing countries. We model potential effects of index insurance for pastoralists on animal stocking decisions and the resulting effects on common property resource quality. We find that although this proposed financial tool has the potential of significantly enhancing the welfare of pastoralists by enhancing expected payoffs and reducing the exit of pastoralists, under certain conditions the insurance can worsen overstocking problems in low rainfall states of nature. In these cases, the insurance has an unintended negative effect on pasture quality that can undermine the long run sustainability of the common pool resource. Model extensions show that low error seasonal climate forecasts and/or reduction in ex-post stock readjustment costs arising from market imperfections can help in mitigating this potential negative effect. |
| Keywords: | : Index Insurance, Pasture, Common Property |
| JEL: | G2 O13 P14 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:uta:papers:2008_21&r=env |
| By: | Nagar, A.L. (National Institute of Public Finance and Policy); Shovon Ray, Amit; Sawhney, Aparna; Samanta, Sayan |
| Abstract: | This paper analyses interrelationships between `economic development', `health', and `environment' in a simultaneous equations framework. Four structural equations have been postulated to explain changes in four endogenous variables in terms of several predetermined variables. The endogenous variables chosen for the model are GDPPC (per capita gross domestic product), LE (life expectancy), NOCRD (number of cases of respiratory diseases) and PM10 (respirable suspended particulate matter). We assume that GDPPC describes economic development prominently and, therefore, use it as one of the endogenous variables in lieu of economic development. LE and NOCRD are assumed to reflect health effects in the economy, and PM10 is used as a proxy of environmental stress. The four endogenous variables are supposed to be jointly determined in terms of several exogenous variables represented through indices of physical infrastructure (PI), social infrastructure (SI) and air pollution index (API). We construct the three indices by the principal components method and thus effectively use only these three predetermined (exogenous) variables to simultaneously determine changes in the four endogenous variables listed above. The model is postulated in loglinear form and estimated by the two-stage least-squares method using data from the Indian economy 1980-81 to 2004-05. It follows from the estimated structural equations that while physical infrastructure is significant in determining GDPPC, the GDPPC is also directly influenced by improved health outcomes like longevity (LE) and lower morbidity from respiratory diseases (NOCRD). The long term health outcome (LE) is determined by the level of per capita GDP and it is positively affected by social infrastructure. The third structural equation shows that the immediate, or short run, health outcomes like morbidity from respiratory disorders are influenced by environmental stress (PM10) besides the level of GDPPC. Finally, the environmental stress (PM10) is determined by the level of per capita GDP and the air pollution index (API) representing various sources of air pollution. It is true that our simplified model illustrates the effects of specific type of air pollutant, viz., respirable particulate matter, however, it is among the most significant environmental problems threatening human health in India. Nevertheless, there is scope to build more comprehensive environmental stress indices which reflect surface water quality, ground water quality, soil pollution etc. which have feedback effects with health and economic development. Also many of the components of PI, SI and API may not be truly exogenous in a larger model (e.g. transport and communication in PI, education and health care systems in SI, and industrial production, vehicular traffic, urbanisation in API.) The two weaknesses of our model stem from data limitation and a concern to simplify the model. Although our model is highly simplified, nonetheless, it provides key insights into the nature of economic development in India during the last 25 years: First, the environmental stress has had a high cost on income and health . from the derived reduced form, a 1 percent increase in the air pollution index leads to a decrease of about 8 percent in the per capita income, a decrease of about 0.7 percent in the life expectancy, and an increase of about 19 percent in the number of cases of respiratory diseases. Second, the social infrastructure plays a more vital role in economic development, health, and environment than the physical infrastructure, since the absolute values of elasticities of endogenous variables with respect to SI are invariably greater than those with respect to PI. Although physical infrastructure is important for economic development, it comes in the last of our preference order. In the final run-up, there is need to pay more attention to provide better social infrastructure and to reduce air pollution. |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:npf:wpaper:56&r=env |
| By: | Benson, Verel |
| Abstract: | This report outlines enhanced existing local cooperative water quality efforts, sumarizes economic and physical data, and discusses how that information was used to develop analytical models. |
| Keywords: | Agricultural and Food Policy, Public Economics, |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:faprre:44514&r=env |
| By: | Czajkowski, Mikołaj; Buszko-Briggs, Małgorzata; Hanley, Nick |
| Abstract: | The paper offers an innovative approach to valuation of biodiversity. Instead of the prevailing approach of using only one indicator of biodiversity (usually number of species) we provide evidence that it is possible to provide attributes describing complex characteristics of biodiversity based on sound ecological knowledge. We argue that our approach managed to value the multiâ€level changes in the biological diversity, by using the attributes which described structural, species and functional diversity at the same time. Our study shows that it even complex indicators of multiâ€level biodiversity might be successfully communicated to respondents in a comprehensible and meaningful way. The empirical application of the method is provided based on a choice experiment study conducted in BiaÅ‚owieża Forest, Poland. The results underline the importance to use multilevel indicators and question validity of only speciesâ€level indicators. Interestingly, the respondents appreciated passive protection regimes, resulting in preservation of natural ecological processes. In addition, the respondents seemed to be concerned by means, and not only the results of protection programmes. Finally, some conclusions for future applications and policy making are drawn. |
| Keywords: | Biodiversity; Forests; Valuation; Choice Experiment |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2008-17&r=env |
| By: | Kurt Niquidet; Brad Stennes; G.Cornelis van Kooten |
| Abstract: | In light of the large volumes of pine killed in the Interior forests in British Columbia by the mountain pine beetle, many are keen to employ forest biomass as an energy source. To assess the feasibility of a wood biomass-fired power plant in the BC Interior it is necessary to know both how much physical biomass might be available over the life of a plant, but also its location because transportation costs are likely to be a major operating cost for any facility. To address these issues, we construct a mathematical programming model of fiber flows in the Quesnel Timber Supply Area of BC over a 25-year time horizon. The focus of the model is on minimizing the cost of supplying feedstock throughout space and time. Results indicate that over the life of the project feedstock costs will more than double, increasing from $54.60/BDt ($0.039/kWh) to $116.14/BDt ($0.083/kWh). |
| Keywords: | forest economics, biomass and bio-energy, forest pests |
| JEL: | O13 Q23 Q42 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:rep:wpaper:2008-11&r=env |
| By: | Lopez, Maria Claudia; Murphy, James J.; Spraggon, John M.; Stranlund, John K. |
| Abstract: | In this paper we describe a field experiment conducted among mollusk harvesters in a community on the Pacific Coast of Columbia. The experiment is based on a standard linear public good and consists of two stages. In the first stage we compare the ability of monetary and nonmonetary sanctions among community members to increase contributions to the public good. In the second stage we add a government regulation with either a high or low sanction for noncompliance to community enforcement efforts. The results for the first stage are consistent with other comparisons of monetary and nonmonetary sanctions within groups; both led to higher contributions. The results from the second stage reveal that government regulations always complemented community enforcement efforts. While the subjects tended to reduce their sanctioning efforts under the government regulations, contributions and earnings were significantly higher than without government interventions. In fact, the combination of community and government enforcement efforts generated near-perfect contributions to the public good. However, more research into the combined roles of government intervention and community enforcement efforts is needed because the complementarity we find may be situation-specific. |
| Keywords: | Field experiments, public goods, government regulation, community enforcement, Environmental Economics and Policy, Institutional and Behavioral Economics, Public Economics, C93, H41, Q2, |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:umamwp:42128&r=env |
| By: | Lange, Ian |
| Abstract: | The use of long-term contracts in the procurement of coal for electricity generation is common. The data that is observed from contracts and their transactions are from different levels of the pricing process. Contracts contain the parameters by which all future deliveries are structured, specifying the length of the agreement and acceptable coal attributes. Based on these parameters, a price is later determined for successive coal deliveries and the transaction occurs. This data structure fits well into multi-level models, where each level of the process is empirically estimated. A random intercept model is estimated where the first level is a hedonic model of coal prices. The contract that initiates the delivery is used to connect the two levels of the model. In the second level, contract coefficients from the first level are regressed on contract parameters to determine their impact on how coal is priced. Results find that many contract parameters are statistically significant in the price of coa l. |
| Keywords: | Tradable Permits; Contracts; Coal; Sulfur Dioxide |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2008-26&r=env |