|
on Environmental Economics |
| By: | Peggy Schrobback (Risk & Sustainable Management Group, School of Economics, University of Queensland); David Adamson (Risk and Sustainable Management Group, University of Queensland); John Quiggin (Risk & Sustainable Management Group, School of Economics, University of Queensland) |
| Abstract: | Large scale forest plantations in the Murray-Darling Basin may be embraced as a carbon sequestration mechanism under a Carbon Pollution Reduction Scheme. However, increased tree plantation will be associated with reduced inflows to river systems because of increased transpiration, interception and evaporation. Therefore, an unregulated change in land management is most likely to have a dramatic impact on the water availability. This will exacerbate the impacts of climate change projected in the Garnaut Review. This paper examines the implications of unrestricted changes in land use. These results should suggest the true costs to society from carbon sequestration by determining the tradeoffs between timber production and agricultural products. |
| Keywords: | Murray Darling Basin, water, environmental flows |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:rsm:murray:m09_2&r=env |
| By: | Atkinson, Giles; Hamilton, Kirk; Ruta, Giovanni; Van Der Mensbrugghe, Dominique |
| Abstract: | The fact that developing countries do not have carbon emission caps under the Kyoto Protocol has led to the current interest in high-income countries in border taxes on the"virtual"carbon content of imports. The authors use Global Trade Analysis Project data and input-output analysis to estimate the flows of virtual carbon implicit in domestic production technologies and the pattern of international trade. The results present striking evidence on the wide variation in the carbon-intensiveness of trade across countries, with major developing countries being large net exporters of virtual carbon. The analysis suggests that tax rates of $50 per ton of virtual carbon could lead to very substantial effective tariff rates on the exports of the most carbon-intensive developing nations. |
| Keywords: | Climate Change Mitigation and Green House Gases,Environmental Economics&Policies,Climate Change Economics,Economic Theory&Research,Environment and Energy Efficiency |
| Date: | 2010–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5194&r=env |
| By: | Fabio Antoniou; Panos Hatzipanayotou; Phoebe Koundouri |
| Abstract: | We construct a strategic trade model of an international duopoly, whereby production by exporting firms generates a local pollutant. Governments use environmental policies, i.e., an emissions standard or a tax, to control pollution and for rent shifting purposes. Contrary to their firm, however, governments are unable to perfectly foresee the actual level of demand, the cost of abatement and the damage caused from pollution. Under these modes of uncertainty we derive sufficient conditions under which the governments optimally choose an emissions tax over an emissions standard. |
| Keywords: | Strategic Environmental Policy, Pollution, Choice of Policy Instrument, Uncertainty. |
| JEL: | F12 F18 Q58 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:lnd:wpaper:492010&r=env |
| By: | Claudia Kettner (WIFO); Angela Köppl (WIFO); Stefan Schleicher (WIFO) |
| Abstract: | The EU Emission Trading Scheme (EU ETS) is a key instrument in European climate policy. Evidence from the first trading period (2005-2007) and the first year of the Kyoto period 2008 dampened, however, ex-ante enthusiasm: because of substantial over-allocation of emissions allowances in the first trading period the overall emissions cap was not stringent which caused a sharp drop in carbon prices. In 2008 a more stringent cap but still high price volatility was observed. Based on experience from the first years of the EU ETS the design of the EU ETS will be changed for the post-Kyoto period (2013-2020) including an EU-wide cap and the use of auctioning as the main allocation principle. So far, no measures to control price volatility are envisaged. This issue however gains in importance in the political and economic debate as prices are an important signal for investment decisions. More or less stable price signals are essential for the environmental effectiveness of an emissions trading scheme. As evidence shows, this is not necessarily guaranteed by the market process. Based on an analysis of the first trading years the paper provides an argumentation for the implementation of price stabilisation measures in the post-Kyoto period. |
| Keywords: | climate policy, emissions trading, EU Emission Trading Scheme |
| Date: | 2010–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2010:i:368&r=env |
| By: | Fischer, Carolyn (Resources for the Future); Preonas, Louis (Resources for the Future) |
| Abstract: | Since the energy crisis in the 1970s and later the growing concern for climate change in the 1990s, policymakers at all levels of government and around the world have been enthusiastically supporting a wide range of incentive mechanisms for electricity from renewable energy sources (RES-E). Motivations range from energy security to environmental preservation to green jobs and innovation, and measures comprise an array of subsidies to mandates to emissions trading. But do these policies work together or at cross-purposes? To evaluate RES-E policies, one must understand how specific policy mechanisms interact with each other and under what conditions multiple policy levers are necessary. In this article, we review the recent environmental economics literature on the effectiveness of RES-E policies and the interactions between them, with a focus on the increasing use of tradable quotas for both emissions reduction and RES-E expansion. |
| Keywords: | environment, technology, externality, policy, climate change, renewable energy |
| JEL: | Q21 Q28 Q48 O38 |
| Date: | 2010–03–12 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-19&r=env |
| By: | You, Gene Jiing-Yun; Ringler, Claudia |
| Abstract: | Ethiopia is susceptible to frequent climate extremes such as disastrous droughts and floods. These disastrous climatic events, which have caused significant adverse effects on the country’s economy and society, are expected to become more pronounced in the future under climate change. To identify the potential threat of climate change to the Ethiopian economy, this study analyzes three major factors that are changing under global warming: water availability under higher temperatures and changing precipitation patterns, the impact of changing precipitation patterns on flooding, and the potential impact on crop production of the carbon dioxide (CO2) fertilization effect. These issues are analyzed based on an existing multi-market-sector model for the Ethiopian economy, with a focus on agriculture. Our analysis finds that the major impact of climate change on Ethiopia’s economy will result from more frequent occurrence of extreme hydrologic events, which cause losses in both the agricultural and nonagricultural sectors. To adapt to these long-term changes, Ethiopia should invest in enhanced water control to expand irrigation and improve flood protection. |
| Keywords: | carbon dioxide (CO2) fertilization effect, Climate change, Droughts, floods, Global warming, hydro-economic modeling, hydrologic events, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:960&r=env |
| By: | David I Stern (Arndt-Corden Division of Economics, Crawford School of Economics and Government, the Australian National University); Frank Jotzo (ANU Climate Change Institute, Crawford School of Economics and Government, The Australian National University) |
| Abstract: | the negotiating process for a post-Kyoto climate policy regime. China and India’s commitments are framed as reductions in the emissions intensity of the economy by 40-45% and 20-25% respectively between 2005 and 2020. How feasible are the proposed reductions in emissions intensity for China and India, and how do they compare with the targeted reductions in the US and the EU? In this paper, we use a stochastic frontier model of energy intensity to decompose energy intensity into input and output mix, climate, and a residual technology variable. We use the model to produce emissions projections for China and India under a number of scenarios regarding the pace of technological change and changes in the share of non-fossil energy. We find that China is likely to need to adopt ambitious carbon mitigation policies in order to achieve its stated target, and that its targeted reductions in emissions intensity are on par with those implicit in the US and EU targets. India’s target is less ambitious, and might be met with only limited or even no dedicated mitigation policies. |
| Keywords: | carbon emissions, climate change, developing countries, projections |
| JEL: | O13 Q54 Q56 Q58 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:een:eenhrr:1051&r=env |
| By: | Paul Missios (Department of Economics, Ryerson University, Toronto, Canada); Halis Murat Yildiz (Department of Economics, Ryerson University, Toronto, Canada); Ida Ferrara (DEpartment of Economics, York University, Toronto, Canada) |
| Abstract: | We use a simple two-country oligopoly model of intra-industry trade to examine the implications of foreign direct investment for the pollution haven hypothesis and environmental policy. Countries which lower environmental standards to be more competitive in world markets generate pollution havens if environmental policy is exogenous. However, if FDI is a viable option as a mode of entry, profit-shifting considerations weaken in favour of environmental considerations and FDI recipients tighten environmental policy, reducing incentives to relocate production. Interestingly, when countries are sufficiently similar in their environmental awareness, "grey" countries can become greener than originally "green" countries but firms in the latter still engage in FDI in the former, in spite of the stricter standard they face, in order to level the playing field. We derive conditions under which FDI-receiving countries have incentives to manipulate their environmental standards to prevent or attract FDI, potentially eliminating or creating pollution havens. |
| Keywords: | Environmental policy; Foreign Direct Investment; Pollution Haven Hypothesis. |
| JEL: | F18 Q28 F12 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:rye:wpaper:wp004&r=env |
| By: | Ghosh, Gaurav (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Shortle, James (Environmental and Natural Resources Institute, Department of Agricultural Economics and Rural Sociology, Pennsylvania State University) |
| Abstract: | We compare two tradable permit markets in their ability to meet a stated environmental target at least cost when some polluters have stochastic and non-measurable emissions. The environmental target is of the safety-first type, which requires probabilistic emissions control. One market is built around the trading ratio, which defines the substitution rate between stochastic and deterministic pollution, and is modeled on existing markets for water quality trading. The other market is built around a new definition of the pollution credit as a multi-attribute good, where the attributes supply information to the market on the environmental risks associated with stochastic pollution loads. The market with multi-attribute credits is found to out-perform the trading ratio market in its ability to satisfy the safety-first environmental target at least cost. This result comes about because polluters are able to directly price risk in this market. In the trading ratio market risk is not a factor in polluters' trading decisions and is only controlled, through the trading ratio, under highly restrictive conditions. |
| Keywords: | Water Quality Trading; Stochastic Pollution; Market |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:ris:fcnwpa:2009_010&r=env |
| By: | Ley, Eduardo; Boccardo, Jessica |
| Abstract: | This paper assesses whether the level of taxation of motor fuel is broadly appropriate in a group of countries (OECD, BRICs and South Africa) accounting for more than 80 percent of world greenhouse gas emissions. The analysis deals with emissions from oil combustion in transport, which account for about 40 percent of carbon dioxide emissions. In the benchmark specification, six countries (responsible, in turn, for more than 40 percent of worldwide motor-fuel greenhouse gas world emissions) would be undertaxing motor fuel. The authors evaluate the sensitivity of the results to the values of the elasticities and externalities that used in the analysis. They find that varying the values of these parameters (within the level of uncertainty reasonably associated with them) significantly affects the results. This implies that, while informative, the results must be taken as indicative. Further analysis for a particular country must rely on a well-informed choice for the values of the country-specific parameters. |
| Keywords: | Transport Economics Policy&Planning,Energy Production and Transportation,Taxation&Subsidies,Climate Change Mitigation and Green House Gases,Climate Change Economics |
| Date: | 2010–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5212&r=env |
| By: | Marit Kragt (Crawford School of Economics and Government, the Australian National University) |
| Abstract: | Natural resource management (NRM) typically involves complex decision problems that affect a wide variety of stakeholder values. Efficient NRM that achieves the greatest environmental, social and financial net benefits, necessitates assessments of the environmental impacts, costs and benefits of investments in an integrated manner. Integrated assessment (IA) provides an approach to incorporate the several dimensions of catchment NRM by considering multiple issues and knowledge from various disciplines and stakeholders. Despite the need for IA, there are few studies that integrate biophysical modelling tools with economic valuation. In this paper, we demonstrate how economic non-market valuation tools can be used to support an IA of catchment NRM changes. We develop a Bayesian Network model that integrates a process-based water quality model, ecological assessments of native riparian vegetation, estimates of management costs and non- market (intangible) values of changes in riparian vegetation. The modelling approach illustrates how information from different sources can be integrated in one framework to evaluate the environmental and economic impacts of NRM actions, as well as the uncertainties associated with the estimated welfare effects. The estimation of marginal social costs and benefits enables a Cost-Benefit Analysis of alternative management intervention, providing more economic rationality to NRM decisions. |
| Keywords: | Bayesian Networks; Bio-economic modelling; Catchment Management; Cost-Benefit Analysis; Environmental values; Integrated Assessment and Modelling; Non-market valuation; Riparian Vegetation |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:een:eenhrr:1053&r=env |
| By: | John Stranlund (Department of Resource Economics, University of Massachusetts Amherst) |
| Abstract: | This paper considers the optimal design of an emissions trading program that includes a safety valve tax that allows pollution sources to escape the emissions cap imposed by the aggregate supply of emissions permits. I demonstrate that an optimal hybrid emissions trading/emissions tax policy involves a permit supply that is strictly less than under a pure emissions trading scheme and a safety valve tax that exceeds the optimal pure emissions tax as long as expected marginal damage is an increasing function. While the expected level of emissions under a hybrid policy may be more or less than under pure emissions trading or a pure emissions tax, under the assumption that uncertainty about aggregate marginal abatement costs is symmetric the most likely outcome is that emissions will turn out to be less under the hybrid. Finally, a steeper expected marginal damage function calls for higher permit supply and safety valve, which reduces expected aggregate emissions and the probability that the safety valve will be employed. |
| Keywords: | Emissions Taxes, Emissions Trading, Uncertainty, Safety Valve, Hybrid Emissions Control |
| JEL: | L51 Q28 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:dre:wpaper:2009-4&r=env |
| By: | John Quiggin (Risk and Sustainable Management Group, University of Queensland); David Adamson (Risk and Sustainable Management Group, University of Queensland); Sarah Chambers (Risk & Sustainable Management Group, School of Economics, University of Queensland); Peggy Schrobback (Risk & Sustainable Management Group, School of Economics, University of Queensland) |
| Abstract: | Climate change is likely to have substantial effects on irrigated agriculture. It is anticipated that many areas that are already dry will become drier, while areas that already receive high rainfall may experience further increases. Extreme climate events such as droughts are likely to become more common. These patterns are evident in projections of climate change for the Murray–Darling Basin in Australia. To understand the effects of climate change, as modified by mitigation and adaptation, active management responses designed to improve returns in particular states of nature, such as in the case of drought must be considered. A change in the frequency of drought will induce a change in the allocation of land and water between productive activities. Even with action to stabilize atmospheric concentrations of CO2 at or near current levels, climate change will continue for some decades and adaptation will therefore be necessary. Conversely, most adaptation strategies are feasible only if the rate and extent of climate change is limited by mitigation. In this paper, a simulation model of state-contingent production is used to analyze these issues. |
| Keywords: | Irrigation, Uncertainty, Climate Change |
| JEL: | Q25 Q54 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:rsm:murray:m09_3&r=env |
| By: | Rob Aalbers |
| Abstract: | We use a dynamic stochastic general equilibrium model to determine efficient discount rates for climate (mitigation and adaptation) and non-climate investment in the face of climate change. Our main result is that the non-diversifiable risk in the economy may be related to both shocks in aggregate wealth and shocks in global average temperature. Therefore, both aggregate wealth and global average temperature will carry a risk premium reflecting their contribution to the total amount of non-diversifiable risk. We characterize both climate and non-climate investments by means of a contingent claim and show that climate and non-climate investments will in general be discounted at different rates. We discuss the conditions under which the discount rates of climate investments will be lower than the discount rate of non-climate investments. |
| Keywords: | discounting; adaptation; mitigation; climate change; risk premia; dynamic stochastic general equilibrium model |
| JEL: | G12 H43 Q5 Q54 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:126&r=env |
| By: | Don Bredin (University College Dublin); Cal Muckley (University College Dublin) |
| Abstract: | The European Union’s Emissions Trading Scheme (ETS) is the key policy instrument of the European Commission’s Climate Change Program aimed at reducing green- house gas emissions to eight percent below 1990 levels by 2012. A critically important element of the EU ETS is the establishment of a market determined price for EU allowances. This article examines the extent to which several theoretically founded factors including, energy price movements, economic growth, temperature and stock market activity determine the expected prices of the European Union CO2 allowances during the 2005 through to the 2009 period. The novel aspect of our study is that we examine the heavily traded futures instruments that have an expiry date in Phase 2 of the EU ETS. Our study adopts both static and recursive versions of the Johansen multivariate cointegration likelihood ratio test as well as a variation on this test with a view to controlling for time varying volatility effects. Our results are indicative of a new pricing regime emerging in Phase 2 of the market and point to a maturing market driven by the fundamentals. These results are valuable both for traders of EU allowances and for those policy makers seeking to improve the design of the European Union ETS. |
| Keywords: | CO2 prices, EU ETS, Energy, Kyoto Protocol, Weather |
| JEL: | Q49 G12 G15 |
| Date: | 2010–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:201003&r=env |
| By: | Fabio Antoniou; Panos Hatzipanayotou; Phoebe Koundouri |
| Abstract: | In this paper we examine an alternative policy scenario, where governments allow polluting firms to trade permits in a strategic environmental policy model. We demonstrate, among other things, that with no market power in the permits market, governments of the exporting firms do not have an incentive to under-regulate pollution in order to become more competitive. This strategic effect is reversed and leads to a welfare level closer to the cooperative one and strictly higher to that when permits are non-tradable. Allowing for market power in the permits market, the incentive to underregulate pollution re-appears regardless of whether permits are tradable or not. With tradable permits, however, the incentive to under-regulate pollution is comparatively weaker relative to the case of non-tradable permits. This entails potential benefits for the exporting firms and countries since the prisoners’ dilemma is moderated. |
| Keywords: | Strategic environmental policy, Tradable permits, Race to the top. |
| JEL: | F12 F18 Q58 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:lnd:wpaper:502010&r=env |
| By: | Prowse, Martin (International Initiative for Impact Evaluation); Snilstveit, Birte (International Initiative for Impact Evaluation) |
| Abstract: | Substantial and increasing amounts of funding are available for climate change interventions. This paper argues that to ensure effective allocation of these resources, the selection and design of climate change mitigation and adaptation interventions should be based on evidence of what works, what doesn’t, under what circumstances and at what cost. Currently the evidence base for bringing about behaviour change in the context of climate change interventions is minimal and there is a need for wider application of rigorous impact evaluation (IE) in the field. Climate change interventions have much to learn from experiences in the related fields of international development and conservation. The paper highlights some of the challenges faced when conducting IEs of climate change interventions and how these can be tackled. We argue that there are ample opportunities to conduct IE of climate change interventions. Increased financing of climate change interventions is urgently needed to mitigate global warming and enable countries and communities to adapt to its impact. However, if calls for increasing financing of climate change mitigation and adaptation by hundreds of billions of dollars a year are to remain credible, and gain and maintain support, evidence of the effectiveness of current spending is essential. |
| Keywords: | Climate change; Impact evaluation; Mitigation; Adaptation; and Clean Development Mechanism |
| Date: | 2010–03–19 |
| URL: | http://d.repec.org/n?u=RePEc:ris:iiierp:2010_007&r=env |
| By: | Ghosh, Gaurav (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Ribaudo, Marc (Economic Research Service, U.S. Department of Agriculture); Shortle, James (Environmental and Natural Resources Institute, Department of Agricultural Economics and Rural Sociology, Pennsylvania State University) |
| Abstract: | The Environmental Protection Agency and the U.S. Department of Agriculture are promoting point/nonpoint trading as a way of reducing the costs of meeting water quality goals while giving nonpoint sources a larger role in meeting those goals. Farms can create offsets or credits in a point/nonpoint trading program by implementing management practices such as conservation tillage, nutrient management, and buffer strips. To be eligible to sell credits, farmers must first comply with baseline requirements. The EPA defines a baseline as the pollutant control requirements that apply to a seller in the absence of trading. EPA guidance recommends that the baseline for nonpoint sources be management practices that are consistent with the water quality goal. A farmer would not be able to create credits until the minimum practice standards are met. An alternative baseline is those practices being implemented at the time the trading program starts. The selection of the baseline has major implications for which farmers benefit from trading, the cost of nonpoint source credits, and ultimately the number of credits that nonpoint sources can sell to regulated point sources. We use a simple model of the average profit-maximizing dairy farmer operating in the Conestoga (PA) watershed to evaluate the implications of baseline requirements on the cost and quantity of credits that can be produced for sale in a water quality trading market, and which farmers benefit most from trading. |
| Keywords: | nonpoint pollution; emissions trading; management practices |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:ris:fcnwpa:2009_011&r=env |
| By: | Hadjidema, Stamatina; Eleftheriou, Konstantinos |
| Abstract: | In recent years, the pollution tax instrument has become a focus of the environmental policy debate. Many countries are presently considering implementing or increasing the rate of pollution taxes, while pollution abatement subsidies are used by local governments. However, a great part of the literature argues that environmental taxation fails to create a “double-dividend” outcome and leads to a trade off between pollution levels and unemployment. In this context, a simple search and matching model of labour market is developed, where workers are characterized by heterogeneous productive abilities, so as to examine the impact of a pollution tax on employment. Furthermore, an attemption is made in order to determine the efficient level of taxation in the short run, where the assumption of free entry of firms (zero profits) is dropped. |
| Keywords: | pollution; search; taxes; unemployment |
| JEL: | H21 H23 |
| Date: | 2010–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:21861&r=env |
| By: | Jean Pierre Amigues; Gilles Lafforgue; Michel Moreaux |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:ler:wpaper:10.05.311&r=env |
| By: | Soo Jung Ha (Department of Economics, University of Strathclyde); Geoffrey Hewings (Regional Economics Applications Laboratory, University of Illinois, US); Karen Turner (Department of Economics, University of Strathclyde) |
| Abstract: | In this paper we attempt an empirical application of the multi-region input-output (MRIO) method in order to enumerate the pollution content of interregional trade flows between five Mid-West regions/states in the US –Illinois, Indiana, Iowa, Michigan and Wisconsin – and the rest of the US. This allows us to analyse some very important issues in terms of the nature and significance of interregional environmental spillovers within the US Mid-West and the existence of pollution ‘trade balances’ between states. Our results raise questions in terms of the extent to which authorities at State level can control local emissions where they are limited in the way some emissions can be controlled, particularly with respect to changes in demand elsewhere in the Mid-West and US. This implies a need for policy co-ordination between national and state level authorities in the US to meet emissions reductions targets. The existence of an environmental trade balances between states also raises issues in terms of net losses/gains in terms of pollutants as a result of interregional trade within the US and whether, if certain activities can be carried out using less polluting technology in one region relative to others, it is better for the US as a whole if this type of relationship exists. |
| Keywords: | Multi-region input-output models, environmental trade balance, air pollution |
| JEL: | C67 Q53 Q56 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:0920&r=env |
| By: | Brännlund, Runar (Department of Economics, Umeå University); Persson, Lars (Department of Economics, Umeå University) |
| Abstract: | Today, many countries around the world respond to the global warming and its consequences with various policy instruments such as e.g. taxes, subsidies, emission permit trading, regulations and information campaigns. In the economic literature, policy instruments have typically been analyzed with respect to efficiency, while little effort has been put on public preferences for these instruments. In this paper, an Internet-based choice experiment is conducted where respondents are asked to choose between two alternative policy instruments that both reduce the emissions of CO2 by the same amount. The policy instruments are characterized by a number of attributes; a technology-effect, an awareness-effect, cost distribution, geographic distribution and private cost (presented in more detail in the paper). By varying the levels of each of the attributes, respondents indirectly reveal their preferences for these attributes. Half of the respondents are faced with instruments labeled by ‘tax’ and ‘other’, whereas the other half are faced with unlabeled instruments. As for the label, the results show that people dislike the ‘tax’. The results also show that people prefer instruments with a positive effect on environmentally-friendly technology and climate awareness. A progressive-like cost distribution is preferred to a regressive cost distribution, and the private cost is negatively related to the choice. Finally, the results indicate that Swedes want the reduction to take place in Europe but not necessarily in Sweden. |
| Keywords: | preferences; climate policy measures; choice experiment; web-survey |
| JEL: | H20 H31 Q48 Q50 |
| Date: | 2010–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0802&r=env |
| By: | Coria, Jessica (Department of Economics, School of Business, Economics and Law, Göteborg University); Löfgren, Åsa (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: | Whether tradable permits are appropriate for use in transition and developing economies—given special social and cultural circumstances, such as the lack of institutions and lack of expertise with marketbased policies—is much debated. We conducted interviews and surveyed a sample of firms subject to emissions trading programs in Santiago, Chile, one of the first cities outside the OECD that has implemented such trading. The information gathered allow us to study what factors affect the performance of the trading programs in practice and the challenges and advantages of applying tradable permits in less developed countries.<p> |
| Keywords: | Tradable Permits; Developing Countries; Environmental Policy; Environmental Institutions |
| JEL: | Q56 Q58 R52 |
| Date: | 2009–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0390&r=env |
| By: | John Rolfe (Faculty of Business and Informatics at Central Queensland University); Jill Windle (Faculty of Business and Informatics at Central Queensland University) |
| Abstract: | evaluate appropriate management responses. While some deliberately introduced species contribute significantly to agricultural production and other purposes, many invasive weed and animal pests have the potential to generate substantial costs through impacts on agricultural production, biodiversity, ecosystem services, infrastructure and communities. Red imported fire ants, an aggressive ant species, were introduced by accident to Australia, with infestations found in Brisbane in February 2001. Modelling suggested that the pest could invade half of Australia within 35 years if it was not controlled (Kompas and Che 2001; Scanlon and Vanderwoude 2006). While control efforts are reducing the rate of new discoveries, the pest had still not been eradicated by 2009. The benefits of controlling red imported fire ants are largely non-use benefits in terms of avoiding health impacts, maintaining lifestyle and amenity values, and avoiding environmental impacts. Accordingly, these benefits are assessed with an application of choice modelling, a non-market valuation technique. |
| Keywords: | Invasive species, red imported fire ants, choice modelling experiments, non-market valuation. |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:een:eenhrr:0944&r=env |
| By: | Christoph Boehringer; Andreas Lange; Thomas F. Rutherford |
| Abstract: | Carbon control policies in OECD countries commonly differentiate emission prices in favor of energy-intensive industries. While leakage provides a efficiency argument for differential emission pricing, the latter may be a disguised beggar-thy-neighbor policy to exploit terms of trade. Using an optimal tax framework, we propose a method to decompose the leakage motive and the terms-of-trade motive for emission price differentiation. We illustrate our method with a quantitative impact assessment of unilateral climate policies for the U.S. and EU economies. We conclude in these instances that complex optimal emission price differentiation does not substantially reduce the overall economic costs of carbon abatement compared with a simple rule of uniform emission pricing. |
| JEL: | D58 H21 Q43 R13 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:15899&r=env |
| By: | Blackman, Allen (Resources for the Future); Guerrero, Santiago |
| Abstract: | Advocates claim that voluntary programs can help shore up poorly performing command-and-control environmental regulation in developing countries. Although literature on this issue is quite thin, research on voluntary environmental programs in industrialized countries suggests that they are often ineffective because they mainly attract relatively clean plants free-riding on prior pollution control investments. We use plant-level data on some 59,000 facilities to identify the drivers of participation in the ISO 14001 certification program in Mexico. We find that regulatory fines spur certification: on average, a fine roughly doubles the likelihood of certification for three years. Hence, the program attracts dirty firms and at least has the potential to improve environmental performance. We also find that plants that sold their goods in overseas markets, used imported inputs, were relatively large, and were in certain sectors and states were more likely to be certified. |
| Keywords: | voluntary environmental regulation, duration analysis, Mexico |
| JEL: | Q56 Q58 O13 O54 C41 |
| Date: | 2010–04–08 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-26&r=env |
| By: | NKUIYA MBAKOP, R. Bruno; GAUDET, Gérard |
| Abstract: | This paper extends the standard model of self-enforcing dynamic international environmental agreements by allowing the length of the period of commitment of such agreements to vary as a parameter. It analyzes the pattern of behavior of the size of stable coalitions, the stock of pollutant and the emission rate as a function of the length of the period of commitment. It is shown that the length of the period of commitment can have very significant effects on the equilibrium. Three distinct intervals for the length of the period of commitment are identified, across which the equilibrium and its dynamic behavior differ considerably. Whereas for sufficiently high values of the period of commitment only self-enforcing agreements of two countries are possible, for sufficiently low such values full cooperation can be generated. Lengths of periods of commitment between those two thresholds are characterized by an inverse relationship between the length of commitment and the membership size of the agreement. This suggests that considerable attention should be given to the determination of the length of such international agreements. |
| Keywords: | International environmental agreements, global pollution, stock pollution, dynamic games |
| JEL: | Q5 C73 F53 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:mtl:montec:02-2010&r=env |
| By: | Deichmann, Uwe; Meisner, Craig; Murray, Siobhan; Wheeler, David |
| Abstract: | Accelerating development in Sub-Saharan Africa will require massive expansion of access to electricity -- currently reaching only about one-third of households. This paper explores how essential economic development might be reconciled with the need to keep carbon emissions in check. The authors develop a geographically explicit framework and use spatial modeling and cost estimates from recent engineering studies to determine where stand-alone renewable energy generation is a cost effective alternative to centralized grid supply. The results suggest that decentralized renewable energy will likely play an important role in expanding rural energy access. But it will be the lowest cost option for a minority of households in Africa, even when likely cost reductions over the next 20 years are considered. Decentralized renewables are competitive mostly in remote and rural areas, while grid connected supply dominates denser areas where the majority of households reside. These findings underscore the need to de-carbonize the fuel mix for centralized power generation as it expands in Africa. |
| Keywords: | Energy Production and Transportation,Climate Change Mitigation and Green House Gases,Transport Economics Policy&Planning,Power&Energy Conversion,Carbon Policy and Trading |
| Date: | 2010–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5193&r=env |
| By: | Hanley, Nick; MacKenzie, Ian A. |
| Abstract: | The establishment of a tradable permit market requires the regulator to select a level of aggregate emissions and then distribute the associated permits (rent) to specific groups. In most circumstances, these decisions are often politically contentious and frequently influenced by rent seeking behaviour. In this paper, we use a contest model to analyse the effects of rent seeking effort when permits are freely distributed (grandfathered). Rent seeking behaviour can influence both the share of permits which an individual firm receives and also the total supply of permits. This latter impact depends on the responsiveness of the regulator to aggregate rent seeking effort. Using a three-stage game, we show that rent seeking can influence both the distribution of rents and the ex post value of these rents, whilst welfare usually decreases in the responsiveness of the regulator. |
| Keywords: | initial allocation; rent seeking; tradable permit market |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2010-02&r=env |
| By: | Joëlle Noailly |
| Abstract: | This paper investigates the impact of alternative environmental policy instruments on technological innovations aiming to improve energy efficiency in buildings. The empirical analysis focuses on three main types of policy instruments, namely regulatory energy standards in buildings codes, energy taxes as captured by energy prices and specific governmental energy R&D expenditures. Technological innovation is measured using patent counts for specific technologies related to energy efficiency in buildings (e.g. insulation, high-efficiency boilers, energy-saving lightings). The estimates for seven European countries over the 1989-2004 period imply that a strengthening of 10% of the minimum insulation standards for walls would increase the likelihood to file additional patents by about 3%. In contrast, energy prices have no significant effect on the likelihood to patent. Governmental energy R&D support has a small positive significant effect on patenting activities. |
| Keywords: | Innovation; technological change; patents; energy-efficiency; buildings; environmental policy |
| JEL: | O31 O34 Q55 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:137&r=env |
| By: | Stefan Boeters; Joris Koornneef |
| Abstract: | What are the excess costs of a separate 20% target for renewable energy as a part of the EU climate policy for 2020? We answer this question using a computable general equilibrium model, WorldScan, which has been extended with a bottom-up module of the electricity sector. The model set-up makes it possible to directly use available estimates of costs and capacity potentials for renewable energy sources for calibration. In our base case simulation, the costs of EU climate policy with the renewables target are 6% higher than those of a policy without this target. As information on the supply of renewable energy is scarce and uncertain, we perform an extensive sensitivity analysis with respect to the level and steepness of the supply curves for wind energy and biomass. In the range we explore, the excess costs vary from zero (when the target is not binding) to 23% (when the cost progression and the initial cost disadvantage for renewables are doubled). |
| Keywords: | EU climate policy; renewable energy; computable general equilibrium model |
| JEL: | Q42 Q54 D58 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:142&r=env |
| By: | Hugh Scorah; Amy Sopinka; G. Cornelis van Kooten |
| Abstract: | British Columbia’s electricity grid is comprised primarily of hydroelectric generating assets. The ability to store water in reservoirs is a significant advantage for the province allowing it to import from Alberta when prices are favourable. Alberta, has a heavily fossil-fuel based electricity portfolio, but has seen substantial growth in its wind energy capacity. However this variable energy technology impacts the province’s grid operations. Wind energy is both variable and uncertainty. However, wind energy in Alberta can be stored via BC’s reservoir systems. In this paper, we examine the extent that drought impacts the both overall operating costs as well as the cost of reducing CO2 emissions. We model the Alberta and BC interconnected grids varying both the impact of the drought and the transmission capacity between the provinces. We determine that storing wind energy leads to an overall cost reduction and that emission costs are between $20 and $60 per tonne of CO2. |
| Keywords: | Wind power, carbon costs, electrical grids, mathematical programming |
| JEL: | Q54 Q41 C61 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:rep:wpaper:2010-03&r=env |
| By: | David I.Stern (Arndt-Corden Division of Economics, Crawford School of Economics and Government, the Australian National University) |
| Abstract: | This study uses a stochastic production frontier to model trends in energy efficiency over time in a panel of 85 countries. No a priori structure is imposed on technological change over time though differences in the level of technology across countries are modeled as a stochastic function of explanatory variables. These variables are selected on the basis of a literature survey and theoretical model of the choice of energy efficiency technology. An improvement in a country’s energy efficiency is measured as a reduction in energy intensity while holding constant the input and output structure of that economy. The country using the least energy per unit output, ceteris paribus, is on the global best practice frontier. The model is used to derive decompositions of energy intensity and carbon emissions and to examine the whether there is a convergence across countries. I find that energy efficiency rises with increasing general total factor productivity but is also higher in countries with more undervalued exchange rates in PPP terms. Higher fossil fuel reserves are associated with lower energy efficiency. Energy efficiency converges over time across countries and technological change was the most important factor mitigating the global increase in energy use and carbon emissions due to economic growth. |
| Keywords: | Energy, efficiency, carbon, emissions, technological change, between estimator |
| JEL: | O13 O33 O47 Q43 Q54 Q55 Q56 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:een:eenhrr:1054&r=env |
| By: | Bartleet, Matthew (Ministry of Economic Development, New Zealand); Iyer, Kris (Ministry of Economic Development, New Zealand); Lawrence, Gillian (Ministry of Economic Development, New Zealand); Numan-Parsons, Elisabeth (Ministry of Economic Development, New Zealand); Stroombergen, Adolf (Infometrics) |
| Abstract: | An orderly transition to lower emission intensity in a small open economy requires a careful balance of exposing the economy to emissions costs but at a manageable level and pace. What is considered manageable for the economy is subject to debate, as is the size and distribution of impacts on emissions intensive industry. This study bridges existing long run, economy wide models and individual firm case studies by exploring the emissions intensity and short-run implications of emissions pricing for 51 manufacturing industry groups. |
| Keywords: | Greenhouse gas emissions pricing; industry emissions intensity; trade exposed; maximum value-at-stake |
| JEL: | Q52 Q58 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:ris:nzmedo:2010_002&r=env |
| By: | Löfgren, Åsa (Department of Economics, School of Business, Economics and Law, Göteborg University); Martinsson, Peter (Department of Economics, School of Business, Economics and Law, Göteborg University); Hennlock, Magnus (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: | Earlier research has shown that using a default option has a decisive effect on individuals’ choices. In many cases, however, the low proportion of subjects who switch from the pre-set default option might partly explained by inexperience with the goods or services offered, and high transaction costs for switching. By conducting a natural field experiment when environmental economists registered on the web to a conference, the default option to offset CO2 emissions was randomly pre-set. Either the participants had to opt-in to offset, opt-out to offset or there was no default option, i.e. an active choice had to be made with no implicit “guidance” from the default. We used experienced subjects and had low transaction costs of switching. Our findings show that the default has no significant effect on the decision to offset.<p> |
| Keywords: | CO2-offsetting; Default option; Field experiment; Public goods |
| JEL: | C93 D62 Q53 |
| Date: | 2009–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0391&r=env |
| By: | Macauley, Molly K. (Resources for the Future); Shih, Jhih-Shyang (Resources for the Future) |
| Abstract: | We extend the theory of quality-adjusted expenditure indices to estimate benefits from public investment. In particular, we model the selection of new instruments (in the form of remote-sensing devices) to enhance the longest-operating U.S. satellite-based land-observing program, Landsat. We then apply the model to the use of Landsat in measuring global forest carbon sequestration. Improving measurement of the role of forests in storing carbon has become a prominent concern in climate policy. By characterizing the value of Landsat data in forest measurement, the expenditure function allows us to help inform public investment decisions in the satellite system. The expenditure function also makes explicit the sensitivity of the selection of instruments for the satellites to the value of Landsat information, thus linking instrument choice explicitly to policy design. |
| Keywords: | value of information, satellite data, forests, carbon, sequestration, Landsat |
| JEL: | Q0 Q2 O3 |
| Date: | 2010–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-14&r=env |
| By: | John Rolfe (Faculty of Business and Informatics at Central Queensland University, Australia); Jill Windle (Faculty of Business and Informatics at Central Queensland University, Australia) |
| Abstract: | The focus of this paper is to compare different evaluation frameworks for selecting landholder proposals to improve water quality. The case study is a water quality tender performed in the Burdekin region in Northern Australia in 2007/2008 where bids could be assessed using an inputs-based best management practice scorecard or an outputs-based auction metric. The scorecard approach and other variants of multi-criteria analysis are commonly applied in grant schemes, where landholder proposals are rated by a range of inputs-based criteria. Output-based approaches are typically applied in water quality and conservation tenders, where an environmental benefits index is constructed to summarise the cost-effectiveness of each proposal. The case study evaluation reported in this paper demonstrates that multi-criteria analysis type assessments are flawed, and that the efficiency of public funding can be more than doubled by using auction metrics to assess proposals for landholders to improve water quality. |
| Keywords: | water quality tender; auction metric, best management practice, input-based; output-based; Great Barrier Reef |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:een:eenhrr:0943&r=env |
| By: | Carlos Ordás Criado (Center for Energy Policy and Economics CEPE, Department of Management, Technology and Economics, ETH Zurich, Switzerland); Jean-Marie Grether (Institute of economic research IRENE, Faculty of Economics, University of Neuchâtel, Switzerland) |
| Abstract: | This paper investigates the convergence hypothesis for per capita CO2 emissions with a panel of 166 world areas covering the period 1960-2002. The analysis is based on the evolution of the spatial distributions over time. Robust measures of dispersion, asymmetry, peakedness and two nonparametric distributional tests - shape equality and multimodality - are used to assess spatial time differences. A robust normal reference bandwidth is also applied to estimate Markov’s transition laws and its subsequent ergodic (long-run) distributions. Our results point toward non-stationary, flattening and rightskewed spatial distributions before the oil price shocks of the 1970s and more stable shapes between 1980 and 2000 at the world level and for many country groupings (similar income, geographic neighbors, institutional partners). In the latter period, group-specific convergence patterns emerge with the clearest single-peaked and compact density shapes being reached in the wealthy, well-integrated and European countries during the last years of the panel. No significant multimodality is formally detected in the world distribution over the whole period. The Markov analysis suggests more divergence and larger per capita emissions for the world before stabilization occurs. A variety of steady state distributions are identified in the country subsets. |
| Keywords: | carbon dioxide emissions, air pollution, convergence, distribution dynamics, stochastic kernels, robustness |
| JEL: | C14 D30 Q53 Q56 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:cee:wpcepe:10-70&r=env |
| By: | Stefan Baumgärtner (Department of Sustainability Sciences, Leuphana University of Lüneburg, Germany); Martin F. Quaas (Department of Economics, University of Kiel, Germany) |
| Abstract: | While economists have been contributing to the discussion of various aspects of sustainability for decades, it is just recently that the term “sustainability economics” was used explicitly in the ecological, environmental, and resource economics community. Yet, the contributions that use the term “sustainability economics” do not refer to any explicit definition of the term, and are not obviously joined by common or unifying characteristics, such as subject focus, methodology, or institutional background. The question thus arises: What is “sustainability economics”? In this essay, we make an attempt at systematically defining and delineating what “sustainability economics” could be in terms of its normative foundation, aims, subject matter, ontology, epistemology, and genuine research agenda. |
| Keywords: | economics, efficiency, epistemology, fairness, future, justice, human-nature-relationship, ontology, philosophy of science, sustainability, uncertainty |
| JEL: | Q0 D63 B0 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:138&r=env |
| By: | Kasia Mazur (Crawford School of Economics and Government, the Australian National University); Jeff Bennett (Crawford School of Economics and Government, the Australian National University) |
| Abstract: | This research report presents results of a study designed to investigate the effects of including a provision rule in choice modelling non-market valuation studies. Split samples with and without a provision rule were used to test for differences in household willingness to pay (WTP) for improvements in environmental quality in the Hawkesbury-Nepean catchment. Local/rural and distant/urban sub-samples of residents were selected. The results of the study show that the inclusion of a provision rule had an effect on preferences in the distant/urban communities. However, the impact of a provision rule in the local/rural community sub-samples was negligible. |
| Keywords: | Choice modelling, Incentive comparability, Provision rule, Non-market valuation, Environment |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:een:eenhrr:1049&r=env |
| By: | Paul Twomey (Australian School of Business and member of the Centre for Energy and Environmental Markets at UNSW); Regina Betz (School of Economics, UNSW and member of the Centre for Energy and Environmental Markets at UNSW); Iain MacGill (Centre for Energy and Environmental Markets at UNSW and the School of Electrical Engineering and Telecommunications, UNSW); Robert Passey (Centre for Energy and Environmental Markets at UNSW) |
| Abstract: | An Additional Action Reserve (AAR) is proposed as a mechanism to allow for initiatives by government and voluntary private interests to make additional emissions reductions beyond a nationally set cap. The key idea of the AAR is to annually set aside a proportion of the Australian Emission Units (AEUs) which can then be retired if state or local government, businesses or individuals take specific emission reduction measures which go beyond those expected to be driven by the CPRS. AEUs allocated to the reserve that are not retired through additional activities would then be made available to CPRS participants. By providing an upper bound to such actions, the scheme would limit the uncertainty as to the quantity of available permits for emitters and provide a limit to the potential losses of auctioning revenue from AEU retirements. Compared to some other options to allow for additional action (such as buying-and-retiring of permits or future reductions of the national cap) the scheme combines the favorable features of accounting for tangible, psychologically-satisfying actions (such as installing a home solar PV system) with a transparent process that assures the participant that such actions are having an immediate effect in reducing national emissions. Elements of this approach have already been seen in the Regional Greenhouse Gas Initiative (RGGI), an inter-state emissions trading scheme which began in the United States in 2009. |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:een:eenhrr:1048&r=env |
| By: | Edwin Muchapondwa; Tafara Ngwaru |
| Abstract: | The conservation of fugitive natural resources across national boundaries poses significant challenges in Africa. This realisation has resulted in the creation of transfrontier parks. While transfrontier parks help de-fragment wildlife habitats, in the presence of governance heterogeneity the same arrangements create uncertainty as they allow a diverse range of park managers to make decisions about wildlife. This paper formulates a bioeconomic model to examine the determinants of successful conservation of migratory wildlife across a transfrontier park with patch heterogeneity. The examination shows three key results. Firstly, it is both ecologically and economically worthwhile to establish a unified transfrontier park rather than have disjointed national ones only if stronger governance institutions exist in higher-resource potential areas. Secondly, the local communities will cooperate with transfrontier conservation effort only if they derive greater benefit flows from transfrontier park-based wildlife conservation than from anti-conservation activities such as wildlife poaching. Thirdly, successful conservation requires transfrontier arrangements that equalise the long-run costs and benefits for all constituent partners. Given the presence of patch and governance heterogeneity, successful elephant conservation in Southern Africa requires that South Africa shares benefits with Mozambique and Zimbabwe despite their weaker institutions to prevent resource leakages from threatening the transfrontier park. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:170&r=env |
| By: | R. Quentin Grafton (Crawford School of Economics and Government, the Australian National University); Clay Landry (West Water Research); Gary D. Libecap (Bren School of Environmental Science and Management and Economics Department, University of California Santa Barbara); R.J. (Bob) O’Brien (Percat Water.) |
| Abstract: | Water markets in Australia’s Murray-Darling Basin and the western US are compared in terms of their ability to mitigate water scarcity. The two regions share: (1) climate variability that requires large investment in water storages; (2) the need for internal and cross-border (state) water management; (3) an historical over allocation of water to irrigators; and (4) increasing competition among different uses (agricultural, environmental and recreational in situ uses, urban demand). The evaluation of the two markets suggests that on-going water market reform along with processes to account for the public interest can promote equity, environmental sustainability and economic efficiency. |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:een:eenhrr:0947&r=env |
| By: | Andrea Podhorsky (York University, Toronto) |
| Abstract: | This paper studies how voluntary environmental labeling programs affect consumer welfare and international trade in an open world economy. I develop a two-country model with differentiated products and imperfectly-informed consumers. Consumers in both countries are concerned about the environmental characteristics of goods, but cannot discern these characteristics unless goods are labeled. Firms in each country differ in their abilities to develop “clean” technologies, but the distribution of technological ability is superior in the home country. Consequently, the proportion of firms that have sufficient incentive to upgrade their technology in response to a labeling program is greater there. I first consider the circumstance in which the home country employs a voluntary labeling program, which certifies products that satisfy a minimum standard of environmental quality, while the foreign country lacks such an institution. I show that the home country’s terms of trade are increasing in the standard. It follows that the standard set unilaterally by the home country is greater than the standard that would be chosen by a world welfare maximizing authority. Also, I show that the volume of trade is lower under the home country program than if the labeling standard were chosen by the world authority. The volume of trade and foreign welfare, however, are greater under the home country’s program than if there is no labeling program at all. Next, I consider the possibility that both countries utilize labeling programs and assume labeling standards are set non-cooperatively by the two labeling authorities. I show that the home and foreign country standards are strategic complements, and hence an exogenous increase in the choice of labeling standard by one country will lead to an optimal choice of a greater labeling standard by the other. The paper concludes with a discussion of the global inefficiencies that result from the non-cooperative setting of environmental labels and their policy implications. |
| Keywords: | credence goods, environmental policy, international trade, product labeling. |
| JEL: | L15 Q58 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:yca:wpaper:2010_1&r=env |
| By: | Toni Darbas; Neil MacLeod; Fiachra Kearney; Timothy F Smith; Simone Grounds (CSIRO Sustainable Ecosystems, Australia) |
| Abstract: | Peri-urban development pressure on and near Australian coastlines is resulting in the conversion of agricultural land for rural-residential use. The impact of larger and more diverse human populations upon the ecological assets remaining in agricultural landscapes has consequently become a policy concern. This paper contributes to these policy debates by integrating the results of parallel social and ecological research projects commissioned to improve natural resource management in peri-urbanising regions. The research was undertaken in the case study region of South East Queensland, the region supporting Australia’s most rapid population growth. Our results indicate that both social and ecological communities cross a fragmentation threshold due to peri-urban development whereby they become ecologically simple and socially heterogeneous in a coupling that cedes a poor diagnosis for biodiversity retention. |
| Keywords: | stored soil water, dryland grain cropping, extension, social systems, RD&E, differentiation |
| JEL: | Q56 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:cse:wpaper:2010-03&r=env |
| By: | Mueller, Valerie; Quisumbing, Agnes |
| Abstract: | Natural disasters have particularly devastating impacts on economic growth in developing countries because they impede the accumulation of capital. The resilience of labor markets is crucial especially for the poor who rely only on labor to diversify their income portfolio and buffer against risk. Such a risk management strategy may become more challenging as global climate change increases the frequency of natural disasters. We use the Bangladesh Flood Impact panel household survey to evaluate how the 1998 “flood of the century” affected wages in Bangladesh. We find long-term declines in wages where nonagricultural labor markets are more severely affected. We also evaluate how soil quality and proximity to auxiliary labor markets cushion labor markets against the disaster. The most compelling evidence shows that workers in areas further from centers of economic activity are more vulnerable to flood-induced wage losses. Our findings suggest that future emergency relief and climate change programs should consider the protection of labor markets by improving infrastructure to facilitate job searches in alternative locations or reduce migration costs. |
| Keywords: | accumulation of capital, Climate change, Disasters, economic growth, flood, labor markets, migration costs, Risk management, Soil quality, Wages, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:956&r=env |
| By: | KAKEU, Johnson; GAUDET, Gérard |
| Abstract: | This paper builds on the assumption that countries behave in such a way as to improve, via their economic strength, the probability that they will attain the hegemonic position on the world stage. The quest for hegemony is modeled as a game, with countries being differentiated initially only by some endowment which yields a pollution free ow of income. A country's level of pollution is assumed directly related to its economic strength, as measured by its level of production. Two types of countries are distinguished: richly-endowed countries, for whom the return on their endowment is greater than the return they can expect from winning the hegemony race, and poorly-endowed countries, who can expect a greater return from winning the race than from their endowment. We show that in a symmetric world of poorly-endowed countries the equilibrium level of emissions is larger than in a symmetric world of richly-endowed countries: the former, being less well endowed to begin with, try harder to win the race. In the asymmetric world composed of both types of countries, the poorly-endowed countries will be polluting more than the richly endowed countries. Numerical simulations show that if the number of richly-endowed countries is increased keeping the total number of countries constant, the equilibrium level of global emissions will decrease; if the lot of the poorly-endowed countries is increased by increasing their initial endowment keeping that of the richly-endowed countries constant, global pollution will decrease; increasing the endowments of each type of countries in the same proportion, and hence increasing the average endowment in that proportion, will decrease global pollution; redistributing from the richly-endowed in favor of the poorly-endowed while keeping the average endowment constant will in general result in an increase in the equilibrium level of global pollution. |
| Keywords: | Hegemony, global pollution, dynamic games |
| JEL: | Q54 Q50 F5 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:mtl:montec:03-2010&r=env |
| By: | Emanuel Shachmurove (Independent); Yochanan Shachmurove (Department of Economics,The City College of the City University of New York) |
| Abstract: | What are the effects of macroeconomic variables on venture-backed capital investment in environmentally friendly industries in the United States? What is the significance of location in determining both the number of deals and amount of investment by venture capital in the Clean-tech industry? The Clean-tech sector encompasses those firms that actively incorporate environmental concerns into their products and services. The sector contains environmentally progressive companies from many different traditional, functionality-based industries such as software, energy, telecommunications, etc. This paper ascertains the effects of macroeconomic variables and the location on venture-capital backed investment in the Clean-tech industry in the United States. |
| Keywords: | Venture Capital; Clean-Technology Industry; Economic Geography; Location; Environmental Economics; Industrial Sector |
| JEL: | C12 D81 D92 E22 G12 G24 G3 M13 M21 O16 O3 |
| Date: | 2010–04–12 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:10-013&r=env |
| By: | Hertel, Thomas; Burke, Marshall; Lobell, David |
| Abstract: | Accumulating evidence suggests that agricultural production could be greatly affected by climate change, but there remains little quantitative understanding of how these agricultural impacts would affect economic livelihoods in poor countries. Here we consider three scenarios of agricultural impacts of climate change by 2030 (impacts resulting in low, medium, or high productivity) and evaluate the resulting changes in global commodity prices, national economic welfare, and the incidence of poverty in a set of 15 developing countries. Although the small price changes under the medium scenario are consistent with previous findings, we find the potential for much larger food price changes than reported in recent studies which have largely focused on the most likely outcomes. In our low productivity scenario, prices for major staples rise 10-60% by 2030. The poverty impacts of these price changes depend as much on where impoverished households earn their income as on the agricultural impacts themselves, with poverty rates in some non-agricultural household groups rising by 20-50% in parts of Africa and Asia under these price changes, and falling by equal amounts for agriculture-specialized households elsewhere in Asia and Latin America. The potential for such large distributional effects within and across countries emphasizes the importance of looking beyond central case climate shocks and beyond a simple focus on yields - or highly aggregated poverty impacts. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:gta:workpp:3196&r=env |
| By: | David Hoyos Ramos (Unidad de Economía Ambiental, Instituto de Economía Pública, UPV/EHU) |
| Abstract: | This paper provides with a review of the state of the art of environmental valuation with discrete choice experiments (DCE). The growing body of literature on this field serves to emphasise the increasing role that DCE are playing in environmental decision making in the last decade. The paper attempts to cover the full process of undertaking a choice experiment, including survey and experimental design, econometric analysis of choice data and welfare analysis. The research on this field is found to be intense, although many challenges are put forward (e.g. choice task complexity and cognitive effort, experimental design, endogeneity or model uncertainty). Reviewing the state of the art of DCE serves to draw attention to the main challenges that this methodological approach will need to overcome in the coming years and to identify the frontiers in discrete choice analysis. |
| Keywords: | discrete choice experiments, choice modelling; survey; environmental valuation |
| JEL: | Q51 |
| Date: | 2010–03–12 |
| URL: | http://d.repec.org/n?u=RePEc:ehu:biltok:201003&r=env |
| By: | Fredrik Carlsson (University of Gothenburg, Sweden); Mitesh Kataria (Max Planck Institute of Economics, Jena, Germany); Elina Lampi (University of Gothenburg, Sweden); Asa Löfgren (University of Gothenburg, Sweden); Thomas Sterner (University of Gothenburg, Sweden) |
| Abstract: | By using a choice experiment, this paper focuses on citizens' preferences for effort-sharing rules of how carbon abatement should be shared among countries. We find that Swedes do not rank the rule favoring their own country highest. Instead, they prefer the rule where all countries are allowed to emit an equal amount per person, a rule that favors Africa at the expense of high emitters such as the U.S. The least preferred rule is reduction proportional to historical emissions. Using two different treatments, one where the respondents were informed about the country names and one where the country names were replaced with anonymous labels A-D, we also test whether people's preferences for effort-sharing rules depend on the framing of the problem. We find that while the ranking of the principles is the same in both treatments, the strength of the preferences is significantly increased when the actual names of the countries are used. |
| Keywords: | climate change, fairness, framing, ethics, effort-sharing rules |
| JEL: | Q54 |
| Date: | 2010–03–22 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2010-019&r=env |
| By: | BENCHEKROUN, Hassan; WITHAGEN, Cees |
| Abstract: | We provide the closed form solution to the Dasgupta-Heal-Solow-Stiglitz (DHSS) model. The DHSS model is based on the seminal articles Dasgupta and Heal (Rev. Econ. Stud.,1974), Solow (Rev. Econ. Stud.,1974) and Stiglitz (Rev. Econ. Stud.,1974) and describes an economy with two assets, man-made capital and a nonrenewable resource stock. We explicitly characterize, for such an economy, the dynamics along the optimal trajectory of all the variables in the model and from all possible initial values of the stocks. We use the analytical solution to prove several properties of the optimal consumption path. In particular, we show that the initial consumption under a utilitarian criterion starts below the maximin rate of consumption if and only the resource is abundant enough and that under a utilitarian criterion, it is not necessarily the present generation that benefits most from a windfall of resources. |
| Keywords: | Exhaustible resources, Dasgupta-Heal-Solow-Stiglitz economy, exponential integral |
| JEL: | E20 Q30 C65 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:mtl:montec:04-2010&r=env |
| By: | Paul Missios (Department of Economics, Ryerson University, Toronto, Canada); Ida Ferrara (DEpartment of Economics, York University, Toronto, Canada) |
| Abstract: | One of the objectives of the 1992 Convention on Biological Diversity is to create access to genetic resources and benefit-sharing (ABS) systems that incorporate the environmental, social, and economic aspects of sustainable development. Under the Convention, governments have sovereignty over their genetic resources but also the responsibility of using them sustainably. This provision is particularly relevant for biologically-abundant developing countries as it offers a direct means of reducing the financial pressures against conservation of ecosystems and natural habitats, particularly in light of recent. This paper examines the impacts of a benefit-sharing system involving royalties and governmental ownership of genetic resources in a two-firm research and development (R&D) market with uncertainty and information spillovers. Royalties are shown to reduce the research output of the taxed firm, which results in much lower expected government revenues when the research output of a competing rm is a strategic subsitute relative to when it is a strategic complement. Further, taxation alone is generally inferior to a combination of taxation/subsidization of successful products and research costs. The paper shows that subsidization rather than taxation of successful products may even be optimal under particular types of uncertainty. |
| Keywords: | Biodiversity prospecting; research and development (R&D); uncertainty; spillovers; imperfect competition. |
| JEL: | Q3 Q38 H41 |
| Date: | 2009–10 |
| URL: | http://d.repec.org/n?u=RePEc:rye:wpaper:wp003&r=env |
| By: | Joelle Noailly; Svetlana Batrakova; Ruslan Lukach |
| Abstract: | This document provides a case study of policies aiming to foster technological innovations for ‘green’ buildings in the Netherlands. The study aims to provide 1) a detailed overview of the policy framework over the last thirty years, and 2) a picture of the level of innovations related to energy efficiency in buildings in the Netherlands. The analysis shows an intensification of environmental policy in the Dutch building sector in the mid-1990s, followed by a slight decline after 2001. A striking feature of environmental policy in this sector is the large number of policy programs implemented successively for short periods of time. This might affect the stability and continuity of the policy framework and be damaging for innovation. Faced with high levels of uncertainty about future policies, firms may prefer to postpone risky investments in innovative activities. Finally, governmental R&D support for green innovations in general remains very low in the Netherlands. Descriptive data on patenting activities show that Dutch firms file nowadays about 150 patents annually in the field of energy efficiency in buildings. The Netherlands have a clear comparative advantage in the field of energy-saving lighting technologies, mainly due to intensive patenting activities by Philips. High-efficiency boilers also represent a substantial share of Dutch innovation activities in this domain over the last decades. In many other fields (such as insulation, heat-pumps and co-generation, solar boilers, etc), however, Germany, Austria and Scandinavian countries rank much higher than the Netherlands. |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:docmnt:198&r=env |
| By: | Roger Fouquet |
| Keywords: | energy transition; low carbon economy; technological innovation and diffusion |
| URL: | http://d.repec.org/n?u=RePEc:bcc:wpaper:2010-05&r=env |
| By: | Thomas BLONDIAU; Sandra ROUSSEAU |
| Abstract: | We investigate the influence of a judge’s objective function on the type of sanctions used for enforcing environmental standards. We focus on the difference between monetary and non-monetary penalties. Therefore, we examine the extent to which judges take social costs of sanctions into account when making judgments in court in the context of environmental violations. Furthermore, we conduct an empirical analysis to test the main findings of the theoretical model using court data from several Belgian jurisdictions. We find that besides minimizing environmental damages judges also take social costs of sanctions into account in their decisionmaking. The first part of this paper uses quantitative methods to assess the success of party affiliation, personal interests and the economic profile of the constituencies in predicting voting behavior. Thanks to the detailed censuses of 1846 on agriculture, industry and population, it is possible to typify the economic make-up of the electoral districts in much more detail than in the British case. However, the analysis of roll-call voting proves that party affiliation and personal and constituency economic interests are insufficient to explain the shift towards free trade. The second part of the paper then discusses the role played by political strategy and ideas in the liberalization of corn tariffs, using a qualitative analysis of the debates on tariff policy. The large number of votes over a forty year period allows us to document the relationship between ideas and interests in a new way. |
| Keywords: | Environmental policy; monitoring and enforcement; non-monetary sanctions |
| JEL: | K32 K41 K42 Q58 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:ces09.21&r=env |
| By: | Cuong Le Van (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, University of Exeter Business School - University of Exeter Business School); Katheline Schubert (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); Tu-Anh Nguyen (Central Insitute of Economic Management - Central Insitute of Economic Management) |
| Abstract: | This paper studies the optimal growth of a developing non-renewable natural resource producer. It extracts the resource from its soil, and produces a single consumption good with man-made capital. More- over, it can sell the extracted resource abroad and use the revenues to buy an imported good, which is a perfect substitute of the domes- tic consumption good. The domestic technology is convex-concave, so that the economy may be locked into a poverty trap. We show that the extent to which the country will escape from the poverty trap depends, besides the interactions between its technology and its impatience, on the characteristics of the resource revenue function, on the level of its initial stock of capital, and on the abundance of the natural resource. |
| Keywords: | optimal growth, non-renewable resource, convex-concave technology, poverty trap, resource curse. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00470655_v1&r=env |
| By: | Mechler, Reinhard; Hochrainer, Stefan; Pflug, Georg; Lotsch, Alexander; Williges, Keith |
| Abstract: | National governments are key actors in managing the impacts of extreme weather events, yet many highly exposed developing countries -- faced with exhausted tax bases, high levels of indebtedness, and limited donor assistance -- have been unable to raise sufficient and timely capital to replace or repair damaged infrastructure and restore livelihoods after major disasters. Such financial vulnerability hampers development and exacerbates poverty. Based on the record of the past 30 years, this paper finds many developing countries, in particular small island states, to be highly financially vulnerable, and experiencing a resource gap (net disaster losses exceed all available financing sources) for events that occur with a probability of 2 percent or higher. This has three main implications. First, efforts to reduce risk need to be ramped-up to lessen the serious human and financial burdens. Second, contrary to the well-known Arrow-Lind theorem, there is a case for country risk aversion implying that disaster risks faced by some governments cannot be absorbed without major difficulty. Risk aversion entails the ex ante financing of losses and relief expenditure through calamity funds, regional insurance pools, or contingent credit arrangements. Third, financially vulnerable (and generally poor) countries are unlikely to be able to implement pre-disaster risk financing instruments themselves, and thus require technical and financial assistance from the donor community. The cost estimates of financial vulnerability -- based on today's climate -- inform the design of"climate insurance funds"to absorb high levels of sovereign risk and are found to be in the lower billions of dollars annually, which represents a baseline for the incremental costs arising from future climate change. |
| Keywords: | Hazard Risk Management,Debt Markets,Insurance&Risk Mitigation,Banks&Banking Reform,Climate Change Economics |
| Date: | 2010–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5232&r=env |
| By: | José-Antonio Monteiro (Institute of economic research IRENE, Faculty of Economics, University of Neuchâtel, Switzerland) |
| Abstract: | The growing popularity of national efforts to promote eco-labeling raises important questions. In particular, developing countries fear that the eco-label can deliberately impose the environmental concern of (high income) importing countries on their production methods. Yet, empirical studies of the adoption of eco-labelling schemes at the cross-country level are scarce due to the lack of data availability. In this paper, the decision to introduce an eco-label is analyzed through a heteroskedastic Bayesian spatial probit, which allows the government’s decision to introduce an eco-label to be influenced by the behaviour of the neighbouring countries. The estimation is performed by extending the joint updating approach proposed by Holmes & Held (2006) to a spatial framework. Empirical evidence highlights the importance of a high stage of development, innovation experience and potential scale effects in the implementation of an eco-label scheme. In addition, results confirm the existence of a strategic interdependence in the eco-label decision. |
| Keywords: | Bayesian Spatial Probit, International Trade, Environmental Policy, Eco-labelling |
| JEL: | F18 C11 C25 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:irn:wpaper:10-01&r=env |
| By: | Iain Fraser; Robert Waschik |
| Abstract: | Employing a CGE model we examine the Double Dividend (DD) hypothesis for Australia and UK. Following Bento and Jacobsen (2007), we analyze specific factors in the production of energy goods and the impact on the DD. By incorporating endogenous labour supply we examine the labour market effect of targeted abatement policies. For Australia the DD is significantly larger with the specific factor characterisation of the economy when recycling revenue through reductions in consumption taxes, but there is no evidence of a DD when employing income tax. We find minimal evidence of a DD for UK for either recycling instrument. |
| Keywords: | Environmental Taxes, Double Dividend, Specific Factors. |
| JEL: | Q52 Q48 C68 |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:1001&r=env |
| By: | Nicolas Bouleau (CERMICS - Centre d'Enseignement et de Recherche en Mathématiques, Informatique et Calcul Scientifique - INRIA - Ecole Nationale des Ponts et Chaussées, CIRED - Centre international de recherche sur l'environnement et le développement - CIRAD : UMR56 - CNRS : UMR8568 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole Nationale des Ponts et Chaussées - Ecole Nationale du Génie Rural des Eaux et Forêts) |
| Abstract: | Nous explicitons ce qui, dans la pensée économique, enfonce irrémédiablement dans le dilemme du prisonnier tel qu'il se pose à propos du changement climatique et de la crise des ressources. Le jeu "un, deux, trois, soleil" est pris comme exemple générique : une course où l'on dit à tout le monde de ralentir mais où le premier arrivé gagne quand même. Ceci permet de faire un tour assez complet des positions, des enjeux et des risques de la négociation post-Kyoto. Notre conclusion est fondée sur l'idée de base qu'il faut de l'argent pour faire bouger les choses. Cela va dans le sens du rapport de septembre 2009 de la Banque Mondiale. |
| Keywords: | GIEC; carbone; club de Rome; réduction; droits négociables; taxe; Cassandre; Keynes; traité de Versailles; pluralisme |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00435995_v1&r=env |
| By: | Grant Allan (Department of Economics, University of Strathclyde); Igor Eromenko (Department of Economics, University of Strathclyde); Peter Mcgregor (Department of Economics, University of Strathclyde); Kim Swales (Department of Economics, University of Strathclyde) |
| Abstract: | Standalone levelised cost assessments of electricity supply options miss an important contribution that renewable and non-fossil fuel technologies can make to the electricity portfolio: that of reducing the variability of electricity costs, and their potentially damaging impact upon economic activity. Portfolio theory applications to the electricity generation mix have shown that renewable technologies, their costs being largely uncorrelated with non-renewable technologies, can offer such benefits. We look at the existing Scottish generation mix and examine drivers of changes out to 2020. We assess recent scenarios for the Scottish generation mix in 2020 against mean-variance efficient portfolios of electricity-generating technologies. Each of the scenarios studied implies a portfolio cost of electricity that is between 22% and 38% higher than the portfolio cost of electricity in 2007. These scenarios prove to be “inefficient” in the sense that, for example, lower variance portfolios can be obtained without increasing portfolio costs, typically by expanding the share of renewables. As part of extensive sensitivity analysis, we find that Wave and Tidal technologies can contribute to lower risk electricity portfolios, while not increasing portfolio cost. |
| Keywords: | Electricity generation mix, portfolio theory, regional energy policy |
| JEL: | D81 L94 R15 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:1010&r=env |
| By: | Murty, Sushama (Department of Economics, University of Warwick); Russell, R. Robert (Department of Economics, University of California, Riverside) |
| Abstract: | We distinguish between intended production and residual generation and introduce the concept of by-production. We show that by-production provides the fundamental explanation for the positive correlation that is observed between intended production and residual generation. Most of the existing literature attributes the observed positive correlation to abatement options available to firms. We show that abatement options of firms add to the phenomenon of by-production in strengthening the observed positive correlation. The existing literature usually does not explicitly model abatement options of firms, but considers a reduced form of he technology, which satisfies standard disposability assumptions with respect to all inputs and intended outputs. We show that more than one implicit production relation is needed to capture all the technological trade-offs that are implied by by-production. From our model, we are able to derive a reduced form of the technology that is in the spirit of the one that is usually studied in the literature. However, we nd that our reduced form technology violates standard disposability with respect to inputs and intended outputs that cause pollution. We derive implications from the phenomenon of by-production for the econometric and Data Envelopment Analysis (DEA) speci cations of pollution-generating technologies. We derive a DEA specification of technologies that satisfy by-production. Such a specification can be used to study issues relating to measurement of efficiency, marginal abatement costs, productivity, etc., of firms with technologies that generate pollution. JEL Codes: D20 ; D24 ; D62 ; Q50 |
| Keywords: | pollution-generating technologies ; free disposability ; weak disposability ; data envelope analysis ; technical efficiency measurement |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:931&r=env |
| By: | Lyssenko, Nikita; Martinez-Espineira, Roberto |
| Abstract: | Endogeneity bias arises in contingent valuation studies when the error term in the willingness to pay (WTP) equation is correlated with explanatory variables because observable and unobservable characteristics of the respondents affect both their WTP and the value of those variables. We correct for the endogeneity of variables that capture previous experience with the resource valued, humpback whales, and with the area of study. We consider several endogenous behavioral variables, so we apply a multivariate probit approach to jointly model them with WTP. In this case, correcting for endogeneity increases econometric efficiency and substantially corrects the bias affecting the estimated coefficients of the experience variables, by isolating the decreasing effect on option value caused by having experienced the resource. Stark differences are unveiled between the marginal effects on willingness to pay of experience of the resources in an alternative location versus experience in the location studied. |
| Keywords: | contingent valuation; respondent experience; option values; multivari-ate probit; endogeneity; whales |
| JEL: | Q5 Q51 |
| Date: | 2009–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:21976&r=env |
| By: | Silva Larson; Lynn Brake (CSIRO Sustainable Ecosystems, Australia) |
| Abstract: | This paper presents an overview of the formal institutional arrangements for natural resource management (NRM) in the Lake Eyre Basin (LEB) and the role of these arrangements as an enabling environment for community engagement in NRM. The appropriate scale of NRM management and the complexity and expense of effective community engagement is discussed. The paper highlights challenges faced by NRM groups in remote regions and their need for proper support and sharing in significant decision making processes. Regional interface groups are presented as relatively recent experiments in ecological intervention that have operated in a rapidly changing policy environment. The paper concludes with a summary of potential key challenges for NRM in the LEB region and suggests that interface organisations require understanding, capacity and support to utilise their investments and program activities to learn about how to improve and adapt to meet the challenges of their operating environment. |
| Keywords: | institutional arrangements, NRM, participation, public consultation |
| JEL: | Q58 N57 D78 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:cse:wpaper:2010-01&r=env |
| By: | Ahamad, Mazbahul Golam; Khondker, Rezai Karim |
| Abstract: | This paper presents the food insecurity status and coping strategies among the households in the Northern Bangladesh. A three stage stratified random sampling followed by a structured questionnaire was employed to collect primary data from nine different primary sampling units. Locally adjusted reduced consumption coping strategy index is used to quantify the food security status, especially for mainland and flood affected riverbanks of the study areas. Nine explanatory variables are considered for an interval regression to assess the impacts of these predictors on changing reduced consumption coping strategy index score. Moreover, body mass index of household heads and dependency ratio of respective households are analyzed to compare strata-wise food insecurity. |
| Keywords: | Food Insecurity; Climate Risks; Consumption Coping Strategy Index; Interval Regression; Northern Bangladesh. |
| JEL: | Q54 Q58 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:21906&r=env |
| By: | Zerfu, Daniel; Larson, Donald F. |
| Abstract: | While the economic returns to using chemical fertilizer in Africa can be large, application rates are low. This study explores whether this is due to missing and imperfect markets. Results based on a panel survey of Ethiopian farmers suggest that while fertilizer markets are not altogether missing in rural Ethiopia, high transport costs, unfavorable climate, price risk, and illiteracy present formidable hurdles to farmer participation. Moreover, the combination of factors that promote or impede effective fertilizer markets differs among locations, making it difficult to find a single production technology that is uniformly profitable -- perhaps explaining the inconsistency between field studies finding large returns to fertilizer use in Ethiopia and survey-based studies finding fertilizer use to be uneconomic. The results suggest that households with greater stores of wealth, human capital and authority can overcome these hurdles. The finding offers some encouragement, but also implies a self-enforcing link between low agricultural productivity and poverty, since low-asset households are less able to overcome these problems. The study suggests that the provision of extension services can be effective and that lowering transport costs can raise the intensity of fertilizer use by lowering the cost of fertilizer and boosting the farmgate value of output. |
| Keywords: | Climate Change and Agriculture,Fertilizers,Crops&Crop Management Systems,Access to Finance,Fertilizers&Agricultural Chemicals Industry |
| Date: | 2010–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5235&r=env |
| By: | Macauley, Molly K. (Resources for the Future); Maher, Joe (Resources for the Future); Shih, Jhih-Shyang (Resources for the Future) |
| Abstract: | We demonstrate the diffusion in use of Earth observations data in social science research. Our study is motivated by the continuing debate among policymakers over the value of the nation’s investment in Earth observations. We also consider the role of related factors including the spread of geographical information systems (GIS; a complementary tool for using Earth observations data) and the role of data prices. We first estimate a diffusion curve and then draw from standard bibliometric methods to evaluate further the extent to which the research field is growing. We realize that these aspects of the value of Earth observations are often part of policy debate, but we offer insights into how to substantiate and document these claims. We find evidence of increasingly widespread use of Earth observations in an ever-widening number of applications and geographic regions. GIS and data prices influence this diffusion. However, we see less evidence of a community of practice within the large social science literature represented in our data. These findings have implications for steps to take to increase the benefits of Earth observations. |
| Keywords: | Earth observations, Landsat, natural resources policy, technical diffusion, knowledge diffusion, remote sensing, environmental management |
| JEL: | Q28 R10 Q19 Q38 |
| Date: | 2010–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-03&r=env |
| By: | Patnaik, Unmesh; Narayanan, K |
| Abstract: | Disaster risk is a major concern in a developing country like India as people living in disaster prone regions of the country are subject to variety of risks concerning their livelihoods. Preliminary assessments reveal that the severity and intensity of floods in various parts of India might increase due to climate change. This paper attempts to understand the various risks faced by households living in disaster prone regions of rural India and specifically examine the effectiveness of coping mechanisms adopted by households living in these areas to hedge against the risks. The study area (districts of eastern Uttar Pradesh, India) is highly susceptible to floods with a major flood occurring every ten years and smaller ones happening every one-two years. The data is drawn from primary household surveys undertaken in the study area for flood affected households. The analysis is carried out using a risk sharing and self insurance framework and econometric modeling is carried out using binary outcomes and multivariate probit estimation through GHK (Geweke- Hajivassiliou- Keane) estimator. Based on the empirical analysis, and subject to the assumptions and the usual limitations of data used, the findings of the study suggest that: (i) overall the impacts of disasters on the consumption level of the household exhibit an inverse relationship, (ii) consumption smoothening behaviour is not exhibited by the households and (iii) household specific characteristics along with the geographical location of the households have no significant role to play with respect to the changes in consumption in the flood prone districts of eastern Uttar Pradesh. |
| Keywords: | Vulnerability; Coping; Disasters; Flood; Household Behaviour |
| JEL: | C12 C81 D1 Q54 C2 C01 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:21992&r=env |
| By: | Roland Olbrich (Department of Sustainability Sciences, Leuphana University of Lüneburg, Germany); Martin F. Quaas (Department of Economics, University of Kiel, Germany); Stefan Baumgärtner (Department of Sustainability Sciences, Leuphana University of Lüneburg, Germany) |
| Abstract: | Studying the sustainable use of ecosystem services under uncertainty requires the consideration of the stochastic dynamics of the system under study, risk and time preferences, risk management strategies and normative views pertaining to sustainability. To gather this information for an important ecological-economic system, we conducted a survey of commercial cattle farmers in semi-arid rangelands of Namibia, a system that features risks on various space and time scales. Here we present a description of the research aims, design and conduction of the survey, and analyze and discuss the homogeneity and representativeness of our survey population. The survey consisted of a mail-in questionnaire and in-field experiments. We combined two existing farm-address databases, reaching 77% of the estimated 2,500 cattle farmers. The return rate of questionnaires exceeded 20%, and response rate to individual questions surpassed 95% and 90% for the majority of non-sensitive and sensitive questions, respectively. Distinct sub-sample groups within the survey population did not differ in the analyzed characteristics with the exception of ethnicity, regional location of farmland and an intentionally induced bias for residency on farm. It has turned out that we have undersampled distinct population segments of farmers, such as indigenous farmers or farmers not belonging to the main interest group of commercial cattle farming. Notwithstanding, we consider the survey to be highly successful, yielding a rich dataset which allows diverse analyses. |
| Keywords: | survey, cattle farming, semi-arid, rangeland management, sustainability, risk |
| JEL: | Q12 Q15 Q24 Q56 Q57 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:137&r=env |
| By: | Vidar Christiansen; Stephen Smith (Institute for Fiscal Studies and University College London) |
| Abstract: | <p>Much of the literature on externalities has considered taxes and direct regulation as alternative policy instruments. Both instruments may in practice be imperfect, reflecting informational deficiencies and other limitations. We analyse the use of taxes and regulation in combination, to control externalities arising from individual consumption behaviour. We consider cases where taxes are either imperfectly differentiated to reflect individual differences in externalities, or where some consumption escapes taxation. In both cases we characterise the optimal instrument mix, and show how changing the level of direct regulation alters the optimal externality tax.</p> |
| Keywords: | externalities, Pigouvian taxes, regulations |
| JEL: | H21 H23 |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:09/16&r=env |