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on Environmental Economics |
| By: | Maurizio Ciaschini, Rosita Pretaroli, Francesca Severini, Claudio Socci (University of Macerata, Politechnical University of Marche) |
| Abstract: | <div style="text-align: justify;">The increasing attention to environmental damage and the problem of climate changes have led many studies to concentrate on environmental taxation as an incentive-based instrument of environmental policy. Focusing on the relationship among environmental, labour market policies and institutional sectors, this paper aims to investigate the economic effects of a fiscal reform designed with the intent of reducing the Greenhouse Gas (GHG) emissions, according to Kyoto Protocol. For this purpose, a Computable General Equilibrium (CGE) model is used with imperfection market for labour factor and a green tax on commodity output depending on the level of CO2 emission is introduced. Tax revenues are than completely distributed to the economy in order to reduce the income tax or to cut the regional tax on commodity value added. In this way a revenue-neutral environmental policy is tested and the double dividend and any other effect on national economy are assessed. The application will be done on a Social Accounting Matrix (SAM) for Italy for the 2003 year.</div> |
| Keywords: | Environmental taxation,CGE model,SAM |
| JEL: | O1 O11 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:mcr:wpaper:wpaper00025&r=env |
| By: | Pizer, William A.; Morgenstern, Richard (Resources for the Future); Shih, Jhih-Shyang (Resources for the Future) |
| Abstract: | Despite serving as the principal basis of U.S. climate policy over the past two decades, corporate voluntary environmental programs have been subject to quite limited evaluation. The self-selection of participants—an essential element of such initiatives—poses particular challenges to researchers because the decision to participate may not be random and, in fact, may be correlated with the outcomes. The present study is designed to overcome these problems by gauging the environmental effectiveness of two early voluntary climate change programs with established track records, the U.S. Environmental Protection Agency’s Climate Wise program and the U.S. Department of Energy’s Voluntary Reporting of Greenhouse Gases Program, or 1605(b). Both programs provide quite flexible criteria for firms to participate. Particular attention is paid to the participation decision and how various assumptions affect estimates of program outcomes using propensity score matching methods applied to plant-level Census data. Overall, we find quite modest effects: the reductions in fuel and electricity expenditures from Climate Wise and 1605(b) are no more than 10 percent and probably less than 5 percent. Virtually no evidence suggests a statistically significant effect of either Climate Wise or 1605(b) on fuel costs. Some evidence indicates that participation in Climate Wise led to a slight (3–5 percent) increase in electricity costs that vanished after two years. Stronger evidence suggests that participation in 1605(b) led to a slight (4–8 percent) decrease in electricity costs that persisted for at least three years. |
| Keywords: | voluntary, regulation, energy, climate change |
| JEL: | Q2 Q4 |
| Date: | 2010–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-08-13-rev&r=env |
| By: | Luis-Miguel Chevin; Georgina M Mace; Russell Lande |
| Abstract: | A simple evolutionary model is used to understand the critical rate of environmental change beyond which a population must decline and go extinct. The model is used to highlight the major determinants of extinction risk in a changing environment, and identify research needs for improved predictions based on projected changes in environmental variables. |
| Keywords: | climate change, demography, ecologically, heritability, quantitative trait, evolutionary model, environmental change, extinction risk, environment, vaiables, population, Adaptation, Plasticity, Predictive Theory, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2494&r=env |
| By: | Boyd, James (Resources for the Future) |
| Abstract: | The paper addresses the definition and measurement of liability for marine oil pollution accidents. The economic value of lost or injured ecosystem goods and services is argued to be the most legally, economically, and ecologically defensible measure of damages. This is easier said than done, however. Calculating lost ecological wealth with any precision is an enormous scientific and economic undertaking. The paper proposes practical ways to improve our future ability to calculate such losses. |
| Keywords: | environmental liability, ecosystem services, marine pollution |
| Date: | 2010–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-31&r=env |
| By: | Carlsson, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University); Kataria, Mitesh (Max Planck Institute of Economics, Jena, Germany); Krupnick, Alan (Resources for the Future, Washington, DC, USA); Lampi, Elina (Department of Economics, School of Business, Economics and Law, Göteborg University); Löfgren, Åsa (Department of Economics, School of Business, Economics and Law, Göteborg University); Qin, Ping (Department of Economics, School of Business, Economics and Law, Göteborg University); Chung, Susie (Resources for the Future, Washington, DC, USA); Sterner, Thomas (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | Unique survey data from a contingent valuation study conducted in three different countries (China, Sweden, and the United States) were used to investigate the ordinary citizen’s willingness to pay (WTP) for reducing CO2 emissions. We find that a large majority of the respondents in all three countries believe that the mean global temperature has increased over the last 100 years and that humans are responsible for the increase. A smaller share of Americans, however, believes these statements, when compared to the Chinese and Swedes. A larger share of Americans is also pessimistic and believes that nothing can be done to stop climate change. We also find that Sweden has the highest WTP for reductions of CO2, while China has the lowest. Thus, even though the Swedes and Chinese are similar to each other in their attitudes toward climate change, they differ considerably in their WTP. When WTP is measured as a share of household income, the willingness to pay is the same for Americans and Chinese, while again higher for the Swedes.<p> |
| Keywords: | Climate change; willingness to pay; multi-country; China; United States; Sweden |
| JEL: | Q51 Q54 |
| Date: | 2010–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0447&r=env |
| By: | Acemoglu, Daron (Harvard); Aghion, Philippe (Institute for International Economic Studies, Stockholm University); Bursztyn, Leonardo (Harvard); Hemous, David (Harvard) |
| Abstract: | This paper introduces endogenous and directed technical change in a growth model with environmental constraints. A unique final good is produced by combining inputs from two sectors. One of these sectors uses “dirty” machines and thus creates environmental degradation. Research can be directed to improving the technology of machines in either sector. We characterize dynamic tax policies that achieve sustainable growth or maximize intertemporal welfare. We show that: (i) in the case where the inputs are sufficiently substitutable, sustainable long-run growth can be achieved with temporary taxation of dirty innovation and production; (ii) optimal policy involves both “carbon taxes” and research subsidies, so that excessive use of carbon taxes is avoided; (iii) delay in intervention is costly: the sooner and the stronger is the policy response, the shorter is the slow growth transition phase; (iv) the use of an exhaustible resource in dirty input production helps the switch to clean innovation under laissez-faire when the two inputs are substitutes. Under reasonable parameter values and with sufficient substitutability between inputs, it is optimal to redirect technical change towards clean technologies immediately and optimal environmental regulation need not reduce long-run growth. |
| Keywords: | environment; exhaustible resources; directed technological change; innovation |
| JEL: | C65 O30 O31 O33 |
| Date: | 2010–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iiessp:0762&r=env |
| By: | Timothy J. Brennan (University of Maryland-Baltimore County) |
| Abstract: | Among the many complex issues of technology, governance, and market design affecting the electricity sector, climate policy has become dominant. From the perspective of a nonspecialist looking at this changing dominance, a quiz illuminates some of the peculiar uses of language one can find in climate change and energy efficiency policy. Six economic challenges are then examined: cap-and-trade vs. taxes, non-price regulations, energy efficiency policies, mitigation vs. adaptation, trade effects, and transmission planning. Three additional challenges affect not just the means to the climate policy end but also the end itself: the “fat tails†problem, discount rates, and whether environmental protection should be evaluated by aggregating willingness to pay across persons. Planners in the public and private sectors need to be aware of not only the economic policy challenges but also arguments that may influence the intensity of the climate policies with which they have to cope. |
| Keywords: | climate change, energy policy, electricity |
| JEL: | Q54 Q48 L94 |
| Date: | 2009–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:umb:econwp:09111&r=env |
| By: | David Wheeler; Saurabh Shome |
| Abstract: | Until recently, India’s intransigent negotiating posture has conveyed the impression that it will not accept any carbon emissions limits without full compensation and more stringent carbon limitation from rich countries. However, our assessment of India’s proposed renewable energy standard (RES) indicates that this impression is simply wrong. India is seriously considering a goal of 15 percent renewable energy in its power mix by 2020, despite the absence of any meaningful international pressure to cut emissions, no guarantees of compensatory financing, and a continuing American failure to adopt stringent emissions limits. If India moves ahead with this plan, it will promote a massive shift of new power capacity toward renewables within a decade. The estimated cost of this change from coal-fired to renewable power to be about $50 billion—an enormous sum for a society that must still cope with widespread extreme poverty. If India moves ahead with its current plan, it should give serious pause to those who have resisted U.S. carbon regulation on the grounds on that it will confer a cost advantage on “intransigent†countries such as India. |
| Keywords: | India, American, climate change, carbon emissions, poverty, US, regulation, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2492&r=env |
| By: | Kousky, Carolyn (Resources for the Future); Rostapshova, Olga (Harvard U); Toman, Michael (Resources for the Future); Zeckhauser, Richard (Harvard U) |
| Abstract: | There is a low but uncertain probability that climate change could trigger "mega-catastrophes," severe and at least partly irreversible adverse effects across broad regions. This paper first discusses the state of current knowledge and the defining characteristics of potential climate change mega-catastrophes. While some of these characteristics present difficulties for using standard rational choice methods to evaluate response options, there is still a need to balance the benefits and costs of different possible responses with appropriate attention to the uncertainties. To that end, we present a qualitative analysis of three options for mitigating the risk of climate mega-catastrophes--drastic abatement of greenhouse gas emissions, development and implementation of geoengineering, and large-scale ex ante adaptation--against the criteria of efficacy, cost, robustness, and flexibility. We discuss the composition of a sound portfolio of initial investments in reducing the risk of climate change mega-catastrophes. |
| JEL: | D81 Q54 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp10-008&r=env |
| By: | Owen, Ann L.; Conover, Emily; Videras, Julio; Wu, Stephen |
| Abstract: | Using data from a new household survey on environmental attitudes, behaviors, and policy preferences, we find that current weather conditions affect preferences for environmental regulation. Individuals who have recently experienced extreme weather (heat waves or droughts) are more likely to support laws to protect the environment even if it means restricting individual freedoms. We find evidence that the channel through which weather conditions affect policy preference is via perceptions of the importance of the issue of global warming. Furthermore, individuals who may be more sophisticated consumers of news are less likely to have their attitudes towards global warming changed by current weather conditions. |
| Keywords: | environmental regulation; global warming; environmental attitudes |
| JEL: | Q58 |
| Date: | 2010–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:22787&r=env |
| By: | Maurizio Ciaschini, Rosita Pretaroli, Francesca Severini, Claudio Socci (University of Macerata, Politechnical University of Marche) |
| Abstract: | <div style="text-align: justify;">In the last decade, as many other European countries, the Italian Government adopted several reforms in order to increase the use of Renewable Energy Sources (RES). The liberalization of the electricity market that represent one of these reforms aims to reach environmental benefits from the substitution of fossil fuel with renewable sources.The Italian Green Certificate market was introduced in 2002 in order to accomplish this objective and represents a mechanism where a quota of renewable electricity is imposed to suppliers in proportion to their sales. The electricity industries are obliged to meet this condition by producing the quantity of renewable electricity by means of a change in their production process, otherwise they must buy a number of certificates corresponding to the quota. This mechanism changes the importance of the electricity industry first in promoting climate protection, than in terms of the impact in the economy as a whole. A policy aimed to develop the market of green certificates may lead to environmental improvement by switching the energy production process to renewable resources. But above all an increase in demand for green certificates, resultant from a reform on the quota of renewable electricity, can generate positive change in all components of the industrial production. For this purpose, the paper aims to quantify the economic impact of a reform on Green Certificate market for the Italian system by means of the Macro Multiplier (MM) approach. The analysis is performed through the Hybrid Input-Output (I-O) model that allows expressing the energy flows in physical terms (GWh) while all other flows are expressed in monetary terms (e). Moreover, through the singular value decomposition of the inverse matrix of the model, which reveals he set of key structures of the exogenous change of final demand, we identify the appropriate key structure ble to obtain both the expected positive total output change and the increase of electricity roduction from RES.</div> |
| Keywords: | Hybrid I-O model,Macro Multiplier,Environmental Policy |
| JEL: | O1 O11 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:mcr:wpaper:wpaper00026&r=env |
| By: | Ian J. Bateman (Centre for Social and Economic Research on the Global Environment (CSERGE) School of Environmental Sciences, University of East Anglia); Diane P. Dupont (Department of Economics, Brock University) |
| Abstract: | Previous literature has found that politically conservative individuals express a lower willingness to pay (WTP) for environmental goods than left-wing supporters. Using data from three surveys valuing water we investigate the role of context by evaluating whether the means of provision (public or private) matters. While left-wing voters have higher WTP for publically provided public goods, right-wing voters have a higher WTP when a good is privately provided. Our findings have implications for values typically obtained for environmental public goods using survey data from constructed markets since scenarios typically describe improvements as being publically provided. |
| Keywords: | stated preference, public provision, private provision, valuation, political affiliation, water |
| JEL: | Q51 Q25 H41 H42 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:brk:wpaper:1003&r=env |
| By: | Jacob Funk Kirkegaard (Peterson Institute for International Economics); Thilo Hanemann (Rhodium Group); Lutz Weischer (World Resources Institute); Matt Miller |
| Abstract: | Policymakers seem to face a trade-off when designing national trade and investment policies related to clean energy sectors. They have pledged to address climate change and accelerate the large-scale deployment of renewable energy technologies, which would benefit from increased global integration, but they are also tempted to nurture and protect domestic clean technology markets to create green jobs at home and ensure domestic political support for more ambitious climate policies. This paper analyzes the global integration of the solar photovoltaic (PV) sector and looks in detail at the industry’s recent growth patterns, industry cost structure, trade and investment patterns, government support policies and employment generation potential. In order to further stimulate both further growth of the solar industry and local job creation without constructing new trade and investment barriers, we recommend the following: (1) Governments must provide sufficient and predictable long-term support to solar energy deployment. Such long-term frameworks bring investments forward and encourage cost cutting and innovation, so that government support can decrease over time. A price on carbon emissions would provide an additional long-term market signal and likely accelerate this process. (2) Policymakers should focus not on solely the manufacturing jobs in the solar industry, but on the total number of jobs that could possibly be created including those in research, project development, installation, operations and maintenance. (3) Global integration and broader solar PV technology deployment through lower costs can be encouraged by keeping global solar PV markets open. Protectionist policies risk slowing the development of global solar markets and provoking retaliatory actions in other sectors. Lowering existing trade barriers—by abolishing tariffs, reducing non-tariff barriers and harmonizing industry standards—would create a positive policy environment for further global integration. |
| Keywords: | Solar PV, climate change, renewable energy, government support, green protectionism, green jobs, global integration |
| JEL: | F14 F18 F23 H23 Q27 |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:iie:wpaper:wp10-6&r=env |
| By: | Fell, Harrison; Burtraw, Dallas; Morgenstern, Richard; Palmer, Karen; Preonas, Louis (Resources for the Future) |
| Abstract: | We use a stochastic dynamic framework to compare price collars (price ceilings and floors) in a cap-and-trade system. Sources of uncertainty include shocks to baseline emissions, affecting corresponding abatement costs, and shocks to the supply of offsets. We consider a continuum between soft collars, which have a limited volume of additional emission allowances (a reserve) available at the price ceiling, and hard collars, which provide an unlimited supply of additional allowances, thereby preventing allowance prices from exceeding the price ceiling. For all cases considered, we set the price floors and ceiling such that the expected cumulative emissions net of offsets are equal to the cumulative allowances. Consequently, increasing the size of the allowance reserve requires higher price ceilings and floors, and a lower probability of reaching the ceiling. Across most parameter values examined, we find that increasing the size of the allowance reserve leads to lower expected net present values of compliance costs, although the differences are not large. However, when offset supply shocks are highly persistent and exhibit strong (negative) correlation with baseline emission shocks, hard collars deliver noticeably lower expected costs, though with a wider range of emission outcomes than the soft collars. |
| Keywords: | climate change, offsets, cap-and-trade, price collars, stochastic dynamic programming |
| JEL: | Q54 Q58 C61 |
| Date: | 2010–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-27&r=env |
| By: | Alexandra Ferreira Lopes (Departamento de Economia, ISCTE); Tiago Sequeira e Catarina Roseta Palma (Departamento de Gestão e Economia, Universidade da Beira Interior; Departamento de Economia, ISCTE.) |
| Abstract: | We derive a model of endogenous growth with physical capital, human capital and technological progress through quality-ladders. We introduce welfare-decreasing pollution in the model, which can be reduced through the development of cleaner technologies. From the quantitative analysis of the model we show clear evidence that the new externality from technological progress to pollution considered in this model is sufficiently strong to induce underinvestment in R&D as an outcome of the decentralized equilibrium. An important policy implication of the main result of this article is a justification to subsidize the research in cleaner technologies. |
| Keywords: | Environmental Pollution, R&D, Social Capital, Human Capital, Economic Growth |
| JEL: | O13 O15 O31 O41 Q50 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:csh:wpecon:td09_2010&r=env |
| By: | Cooke, Roger M. (Resources for the Future); Kelly, G.N. |
| Abstract: | Between 1990 and 2000 the U.S. Nuclear Regulatory Commission and the Commission of the European Communities conducted a joint uncertainty analysis of accident consequences for nuclear power plants. This study remains a benchmark for uncertainty analysis of large models involving high risks with high public visibility, and where substantial uncertainty exists. The study set standards with regard to structured expert judgment, performance assessment, dependence elicitation and modeling and uncertainty propagation of high dimensional distributions with complex dependence. The integrated assessment models for the economic effects of climate change also involve high risks and large uncertainties, and interest in conducting a proper uncertainty analysis is growing. This article reviews the EU-USNRC effort and extracts lessons learned, with a view toward informing a comparable effort for the economic effects of climate change. |
| Keywords: | uncertainty analysis, expert judgment, expert elicitation, probabilistic inversion, dependence modeling, nuclear safety |
| Date: | 2010–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-10-29&r=env |
| By: | Claudio ARAUJO (Centre d'Etudes et de Recherches sur le Développement International); Catherine ARAUJO BONJEAN (Centre d'Etudes et de Recherches sur le Développement International); Jean-Louis COMBES (Centre d'Etudes et de Recherches sur le Développement International); Pascale COMBES MOTEL (Centre d'Etudes et de Recherches sur le Développement International); Eustaquio J. REIS |
| Abstract: | The purpose of this paper is to highlight the detrimental impact of land tenure insecurity on deforestation in the Brazilian Amazon. It is related to recent controversies about the detrimental impact of land laws on deforestation, which seem to legitimize land encroachments. The latter is mainly the result of land tenure insecurity which is a key characteristic of this region and results from a long history of interactions between rural social unrest and land reforms or land laws. A simple model is developed where strategic interactions between farmers lead to excessive deforestation. One of the empirical implications of the model is a positive relationship between land tenure insecurity and the extent of deforestation. The latter is tested on data from a panel of Brazilian Amazon municipalities. The negative effect of land tenure insecurity proxied by the number of squatters on deforestation is not rejected when estimations are controlled for the possible endogeneity of squatters. One of the main policy implications is that ex post legalizations of settlements must be accompanied by the enforcement of environmental obligations. |
| Keywords: | deforestation, land tenure insecurity, squatters, Panel Data Analysis, Brazil |
| JEL: | Q23 Q15 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1163&r=env |
| By: | James Forder |
| Abstract: | The idea of the ‘L-shaped aggregate supply curve’, supposedly a feature of primitive macroeconomic models, is in fact a reasonable reconstruction of a well developed way of thinking that specifically denied a relation between wage change and aggregate employment. Neither that approach nor the idea of cost-push inflation to which it is related need be crude or superficial. Although the ideas in question were swept away by the Phillips curve, they have much merit and their reintroduction to mainstream macroeconomics might pay large dividends. |
| Keywords: | Phillips curve, Wage determination, Keynesianism |
| JEL: | B22 E24 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:486&r=env |
| By: | Hsiao-I Kuo; Chi-Chung Chen; Michael McAleer (University of Canterbury) |
| Abstract: | After a commercial whaling moratorium was enacted in 1986, whale watching became one of the fastest growing tourism industries worldwide. As whaling is regarded as an activity that is incompatible with whale watching, the possible resumption of commercial whaling has caused an urgent need to investigate the potential negative effects of whaling on the whale-watching industry. We examine the potential impacts of whaling on the global whale-watching tourism industry using an unbalanced panel data model. The empirical results indicate that the resumption of commercial whaling has the potential for a negative effect on the global whale-watching industry, especially for nations that are engaged in whaling. |
| Keywords: | Global whale watching; Commercial whaling; Delay-difference equation model; Unbalanced panel data model |
| JEL: | Q22 Q26 Q57 C33 |
| Date: | 2010–05–24 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:10/30&r=env |
| By: | Jean-Louis COMBES (Centre d'Etudes et de Recherches sur le Développement International); Pascale COMBES MOTEL (Centre d'Etudes et de Recherches sur le Développement International); Alexandru MINEA (Centre d'Etudes et de Recherches sur le Développement International); P. VILLIEU |
| Abstract: | The forest still covers an important share of land area in many developing countries and represents an important source of revenue for governments. Another major contribution to government revenues comes from printing money, namely the seigniorage. Building on a simple theoretical model where governments target inflation and aim at reducing deforestation while minimising a welfare loss function, we exhibit the potential substitution effect between seigniorage and deforestation revenues. Regressions run on a panel of developing countries show that there exists a non-negligible substitution effect between seigniorage and deforestation revenues, which is, as suggested by the theoretical model, even stronger if the endogenous character of seigniorage is taken into account. Adding variables suggested by the theoretical model as well as usual control variables in deforestation equations, do not alter the main result. As a consequence, disinflation policies as recommended by the IMF, may hasten deforestation. The model is extended to address this problem, which shows that international transfers dedicated to rainforest protection may upturn the positive correlation between tighter monetary policies and deforestation and give some additional support to REDD's advocates. |
| Keywords: | deforestation, seigniorage, inflation, developing countries, Panel Data Analysis |
| JEL: | O13 Q23 E42 E52 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:cdi:wpaper:1164&r=env |