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on Environmental Economics |
| By: | Amigues, Jean-Pierre (Toulouse School of Economics (INRA and LERNA)); Lafforgue, Gilles (Toulouse School of Economics (INRA-LERNA)); Moreaux, Michel (Toulouse Business School and Toulouse School of Economics (INRA-LERNA)) |
| Abstract: | We characterize the optimal exploitation paths of two primary energy resources. The first one is a non-renewable polluting resource, the second one a pollution-free renewable resource. Both resources can supply the energy needs of two sectors. Sector 1 is able to reduce the potential carbon emissions generated by its non-renewable energy consumption at a reasonable cost while sector 2 cannot. Another possibility is to capture the carbon spread in the atmosphere but at a significantly higher cost. We assume that the atmospheric carbon stock cannot exceed some given ceiling and that this constraint is effective. We show that there may exist paths along which it is optimal to begin by fully capturing the sector 1's potential emission flow before the ceiling constraint begins to be effective. Also there may exist optimal paths along which both capture devices have to be activated, in which case the potential emission flow of sector 1 is firrst fully abated and next the society must resort to the atmospheric carbon reducing device. |
| JEL: | Q31 Q32 Q41 Q42 Q54 |
| Date: | 2010–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:22752&r=env |
| By: | M.N. Murty |
| Abstract: | This paper examines the possibility of using economic instruments, especially pollution taxes and bargaining approaches, as a means to encourage or improve people’s participation in environmental management in India. It provides an intuitive description of methods for designing economic instruments and bargaining approaches. A case study describes the estimation of pollution taxes for controlling air pollution in thermal power generation in India. Another case study examining some bargaining methods that are already in force in India shows their usefulness in controlling industrial pollution. [SANDEE Working Paper No. 48-10] |
| Keywords: | Pollution tax, Bargaining, Collective action, Transaction costs, Decentralized solutions, India |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2676&r=env |
| By: | B. Sudhkara Reddy (Indira Gandhi Institute of Development Research); Hippu Salk Kristle Nathan (Indira Gandhi Institute of Development Research) |
| Abstract: | Presently India is facing the twin challenge of energy universalization as well as emission reduction. Nearly 0.4 billion people in India- mostly residing in rural areas- do not have access to electricity and more than 0.8 billion people do not use modern cooking fuels. Provision of energy services however needs to take into account the global temperatures rise, which if to be limited to 2øC more from its pre-industrial value, Green House Gas (GHG) emissions must be halved by 2050 from its 1990 level. Energy infrastructure plays a key role to meet this dual challenge of universalization of energy services and reduction of energy-induced emissions. Assessing India's infrastructure, this study presents the high humane (Energy universalization) and low carbon scenarios and discusses investment needs, financing mechanisms and the key policy issues. |
| Keywords: | Energy climate nexus, Energy universalization, Infrastructure Investments, Financing mechanisms, Energy efficiency |
| JEL: | P28 Q41 Q42 Q48 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:ind:igiwpp:2010-007&r=env |
| By: | De Pinto, Alessandro; Magalhaes, Marilia; Ringler, Claudia |
| Abstract: | While agriculture accounts for an estimated 10 to 14 percent of total greenhouse gas emissions, its role as a mitigating force is receiving increasing attention. This discussion paper provides a quick overview of the literature on the climate change mitigation potential of agriculture, the regulatory and voluntary frameworks under which such a contribution could be rewarded, and the economic literature that focuses on agriculture’s participation in climate change mitigation efforts. While there is general agreement on the potential for mitigation, several barriers have prevented farmers from entering the so-called carbon markets. The paper reviews the main challenges faced by smallholder farmers in accessing such markets. |
| Keywords: | carbon markets, Carbon sequestration, Smallholder farmers, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1004&r=env |
| By: | Marin, Giovanni |
| Abstract: | The relationships between emissions ad economic drivers differ substantially both across countries and across sectors. In this paper I investigate cross-sector heterogeneity of emissions (CO2 and SOx) / investments relationships of Italian branches for the period 1990-2006 by using the Italian NAMEA (National Accounting Matrix including Environmental Accounts). The ‘environmental’ direction of investments in different types of capital goods is crucial in the prediction of future patterns of environmental efficiency due to the persistence of the choices regarding the features of the capital stock. Within this relationship, the role of variations in prices of energy fuels and in environmental taxes is considered to identify relevance and the direction of the technical changes induced by prices and taxes. I compare homogeneous estimates (FE) with heterogeneous estimates (SUR): homogeneity of slopes across branches is always rejected (aggregation bias). Furthermore, results differ substantially between CO2 and SOx, due to different environmental and economic features of the two types of emissions. Results show a relevant role of economic forces (investments) in explaining CO2 dynamics while SOx trends are determined to higher extent by exogenous events. The potential role of ICTs in promoting more environmental efficient production processes has not been exploited yet by Italian manufacturing sectors. |
| Keywords: | NAMEA; SUR; eco-innovation; emissions efficiency |
| JEL: | Q55 O33 C33 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24077&r=env |
| By: | Peter Cramton (Economics Department, University of Maryland); Steven Stoft |
| Abstract: | Greenhouse gas abatement is a public good, so climate policy is a public-goods game and suffers from the free-rider incentives that make the outcome of such games notoriously uncooperative. Adopting an international agreement can change the nature of the game, reducing or exacerbating the uncooperative tendencies of the players. We analyze alternative international agreements as variations of the public-goods game, and examine the incentives for cooperation under each alternative. The addition of cap-and-trade rules to the basic public-goods game is found to polarize the free-rider incentives of that game, encouraging those who would abate the most to target even higher abatement levels and those who would abate the least to target lower, and even negative, abatement levels. Such polarization between developed and developing countries is familiar from both the Kyoto and Copenhagen climate summits. Since cap-and-trade rules decrease cooperation by developing countries, developed countries are led to reject the game’s outcome and in the process prevent agreement on a set of quantity targets. To break this deadlock and shift the equilibrium toward cooperation, a modification of the public-goods game based on price rather than quantities is needed. This involves a global price target and equity transfers via a Green Fund that rewards adoption of and compliance with such a target. The Nash equilibrium of one such game is analyzed for a group of three countries similar to the United States, China and India. |
| Keywords: | global warming, climate change, climate treaty, cap and trade, carbon tax, carbon price, public goods |
| JEL: | Q54 Q56 Q58 H41 D78 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pcc:pccumd:10icg&r=env |
| By: | Marius-Cristian Frunza (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Sagacarbon - Sagacarbon SA); Dominique Guegan (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | The aim of this work is to use a new modelling technique for CO2 emission prices, in order to estimate the risk associated with a related, structured product. After a short discussion of the specificities of this market, we investigate several modelling methods for CO2 emission prices. We use these results for risk modeling of the swap between two CO2 related instruments : the European Union Allowances and the Certified Emission Reductions. We estimate the counterparty risk for this kind of transaction and evaluate the impact of different models on the risk measure and the allocated capital. |
| Keywords: | Carbon ; Generalized Hyperbolic Distribution ; CER ; EUA ; Swap ; Value at Risk |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00504209_v1&r=env |
| By: | Marius-Cristian Frunza (Centre d'Economie de la Sorbonne et Sagacarbon); Dominique Guegan (Centre d'Economie de la Sorbonne - Paris School of Economics) |
| Abstract: | The aim of this work is to use a new modelling technique for CO2 emission prices, in order to estimate the risk associated with a related, structured product. After a short discussion of the specificities of this market, we investigate several modelling methods for CO2 emission prices. We use these results for risk modeling of the swap between two CO2 related instruments : the European Union Allowances and the Certified Emission Reductions. We estimate the counterparty risk for this kind of transaction and evaluate the impact of different models on the risk measure and the allocated capital. |
| Keywords: | Carbon, generalized hyperbolic distribution, value-at-risk, CER, EUA, Swap. |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:10054&r=env |
| By: | Girja Sharan; T. Madhavan |
| Abstract: | This paper explores the process of Environmental Control in Greenhouse and Animal Houses with Earth-Tube-Heat-Exchangers in hot semi-arid north-west India. [Working Paper No. 2009-11-04] |
| Keywords: | earth-tube-heat- exchanger; greenhouse; semi- arid areas |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2683&r=env |
| By: | Mireille Chiroleu-Assouline (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); Sébastien Roussel (LAMETA - Laboratoire Montpellierain d'économie théorique et appliquée - CNRS : UMR5474 - INRA : UR1135 - CIHEAM - Université Montpellier I - Montpellier SupAgro) |
| Abstract: | According to several studies, agricultural carbon sequestration could be a relatively low cost opportunity to mitigate greenhouse gas (GHG) concentration and a promising means that could be institutionalised. However the potential for additional carbon quantities in agricultural soils is critical and comes from the agricultural firms behaviour with regards to land heterogeneity. In this paper, our aim is to set incentive mechanisms to enhance carbon sequestration by agricultural firms. A policymaker has to arrange incentives as agricultural firms have private information and do not spontaneously switch to the required practices. Moreover, a novelty in our paper is to show that the potential for additional carbon sequestration is similar to an exhaustible resource. As a result, we construct an intertemporal principal-agent model with adverse selection. Our contribution is to specify contracts in order to induce truthful revelation by the firms regarding their intrinsic characteristics towards carbon sequestration, while analytically characterizing the optimal path to sequester carbon as an exhaustible resource. |
| Keywords: | Adverse selection ; agriculture ; carbon sequestration ; incentives ; land-use |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00505137_v1&r=env |
| By: | Mireille Chiroleu-Assouline (Centre d'Economie de la Sorbonne - Paris School of Economics); Sébastien Roussel (LAMETA - Université Montpellier 1) |
| Abstract: | According to several studies, agricultural carbon sequestration could be a relatively low cost opportunity to mitigate greenhouse gas (GHG) concentration and a promising means that could be institutionalised. However the potential for additional carbon quantities in agricultural soils is critical and comes from the agricultural firms behaviour with regards to land heterogeneity. In this paper, our aim is to set incentive mechanisms to enhance carbon sequestration by agricultural firms. A policymaker has to arrange incentives as agricultural firms have private information and do not spontaneously switch to the required practices. Moreover, a novelty in our paper is to show that the potential for additional carbon sequestration is similar to an exhaustible resource. As a result, we construct an intertemporal principal-agent model with adverse selection. Our contribution is to specify contracts in order to induce truthful revelation by the firms regarding their intrinsic characteristics towards carbon sequestration, while analytically characterizing the optimal path to sequester carbon as an exhaustible resource. |
| Keywords: | Adverse selection, agriculture, carbon sequestration, incentives, land-use. |
| JEL: | D60 D62 E62 H23 Q28 |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:10060&r=env |
| By: | de Villemeur, Étienne (Toulouse School of Economics (IDEI & GREMAQ)); Vinella, Annalisa (University of Bari) |
| Abstract: | We consider electricity generation industries where thermal operators imper- fectly compete with hydro operators that manage a (scarce) water stock stored in reservoirs over a natural cycle. We explore how the exercise of intertemporal market power a¤ects social welfare and environmental quality. We show that, as compared to the outcome of spot markets, long-term contracting either exacerbates or alleviates price distortions, depending upon the consumption pattern over the water cycle. Moreover, it induces a second-order environmental e¤ect that, in the presence of a thermal competitive fringe, is critically related to the thermal mar- ket shares in the di¤erent periods of the cycle. We conclude by providing policy insights. |
| JEL: | L13 L93 |
| Date: | 2010–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:22882&r=env |
| By: | Tanzir Chowdhury; Mohammad Imran |
| Abstract: | This study estimates the morbidity costs of reduction in air pollution in Dhaka, the capital of Bangladesh, using the Cost-of-Illness (COI) approach. COI is defined as the sum of lost earnings due to workdays lost or restricted activity days and the mitigation expenditure borne due to illness. The data for the research comes from seasonal household surveys using health diaries. We use a random-effects Zero Inflated Poisson regression model to estimate the equation for lost earnings and use a random-effects Tobit Regression to estimate the equation for mitigation expenditure. We find that the annual savings from reducing air pollution to meet national safety standards is Taka 131.37 (USD 1.88) per person from reductions in lost earnings and Taka 150.49 (USD 2.15) per person from reductions in medical expenditure. The annual saving to the population of Dhaka is Taka 2.39 billion or USD 34.09 million. Our estimates, which are based on primary data, provide significantly lower estimates of the benefits of reducing air pollution in Dhaka relative to previous analyses that has relied on the benefit-transfer approach. [SANDEE Working Paper No. 47-10] |
| Keywords: | Air Pollution, Health Benefit, Health Production Function, Cost-of-Illness, Panel Data, Random-Effects Zero Inflated Poisson Model, Random-Effects Tobit Model |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2677&r=env |
| By: | Marius-Cristian Frunza (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Sagacarbon - Sagacarbon SA); Dominique Guegan (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); Antonin Lassoudière (Sagacarbon - Sagacarbon SA) |
| Abstract: | The aim of this paper is to identify the fundamental factors that drive the allowances market and to built an APT-like model in order to provide accurate forecasts for CO2. We show that historic dependency patterns emphasis energy, natural gas, oil, coal and equity indexes as major factors driving the carbon allowances prices. There is strong evidence that model residuals are heavily tailed and asymmetric, thereby generalized hyperbolic distribution provides with the best fit results. Introducing dynamics inside the parameters of the APT model via a Hidden Markov Chain Model outperforms the results obtained with a static approach. Empirical results clearly indicate that this model could be used for price forecasting, that it is effective in and out of sample producing consisten results in allowances futures price prediction. |
| Keywords: | Carbon, EUA, energy, Abritrage Pricing Theory, switching regimes, hidden Markov Chain Model, forecast. |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00505145_v1&r=env |
| By: | Environment and Development Division |
| Abstract: | The greening of economic growth series ESCAP, its partners and Asia-Pacific countries have advocated "green growth" as a strategy to achieve sustainable development in the resource-constrained, high-poverty context of the Asian and the Pacific region. The conventional "grow now, clean up later" approaches to economic growth are increasingly placing the futures of regional economies and societies at risk. The forward-thinking policymaker is tasked to promote development based on eco-efficient economic growth and, at the same time, record more inclusive gains in human welfare and socio-economic progress. In order to assist policymakers in responding to such challenges, ESCAP’s activity on green growth has been developed to focus on five paths: sustainable infrastructure development; investment in natural capital; green tax and budget reform; sustainable consumption and production; and the greening of business and markets. The ESCAP “Greening of economic growth†series provides policymakers with quick access to clear, easy-to-read guidance to specific "green growth" policy tools and actions. This publication, Eco-efficiency Indicators: Measuring Resource-use Efficiency and the Impact of Economic Activities on the Environment, is produced as an output of an ESCAP project entitled “Pursuing Green Growth by improving eco-efficiency of economic growth in Asia and the Pacific†under the Korea-ESCAP Cooperation Fund. |
| Keywords: | economic growth, sustainable developmen, eco-efficient, policymaker, socio-economic, Korea-ESCAP Cooperation Fund |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2684&r=env |
| By: | Marius-Cristian Frunza (Centre d'Economie de la Sorbonne et Sagacarbon - Caisse des Dépôts); Dominique Guegan (Centre d'Economie de la Sorbonne - Paris School of Economics); Antonin Lassoudière (Sagacarbon - Caisse des dépôts) |
| Abstract: | The aim of this paper is to identify the fundamental factors that drive the allowances market and to built an APT-like model in order to provide accurate forecasts for CO2. We show that historic dependency patterns emphasis energy, natural gas, oil, coal and equity indexes as major factors driving the carbon allowances prices. There is strong evidence that model residuals are heavily tailed and asymmetric, thereby generalized hyperbolic distribution provides with the best fit results. Introducing dynamics inside the parameters of the APT model via a Hidden Markov Chain Model outperforms the results obtained with a static approach. Empirical results clearly indicate that this model could be used for price forecasting, that it is effective in and out of sample producing consisten results in allowances futures price prediction. |
| Keywords: | Carbon, EUA, energy, Arbitrage Pricing Theory, switching regimes, hidden Markov Chain model, forecast. |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:10062&r=env |
| By: | Sandra Cavaco (LEM - Laboratoire d'Economie Moderne - Université Panthéon-Assas - Paris II); Patricia Crifo (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, University Paris X - (-), Catholic University of Louvain - (-)) |
| Abstract: | This article analyzes the relationship between corporate social responsibility (CSR) and firm performance by proposing a theoretical model and by testing empirically its main predictions on a matched panel database for the biggest European listed firms over the 2002-2007 period. Our dataset gathers two sources of information: environmental, social and governance (ESG) ratings from the Vigeo database, and economic and financial performance data from the Orbis database. Using the System GMM estimator for dynamic panel data model, we test the complementarity and substitutability, that is the super- and sub- modularity between various corporate social responsibility practices, along with its impact on firm performance. We do observe that a complementarity premium on specific CSR dimensions (human resources and business behavior towards customers and suppliers) exists but also that some practices are relative substitutes (environment and business behaviors). |
| Keywords: | Corporate social responsibility ; supermodularity ; panel data |
| Date: | 2010–07–21 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00504747_v1&r=env |
| By: | Urvashi Narain; Klaas Van't Veld; Shreekant Gupta |
| Abstract: | Using purpose-collected survey data from 535 households in 60 different villages of the Jhabua district of India, this paper investigates the extent to which rural households depend on common-pool natural resources for their daily livelihood. Previous studies have found that resource dependence— defined as the fraction of total income derived from common-pool resources—strongly decreases with income. This study uncovers a more complex relationship. [Working Paper No. 134] |
| Keywords: | India, Madhya Pradesh, poverty, environment, common-pool natural resources, rural households |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2700&r=env |
| By: | Dasgupta, Purnamita; Sirohi, Smita |
| Abstract: | This paper presents a brief review of the trends in foodgrain production in India, the determinants of its growth and domestic foodgrain supply projections to draw inferences about the future foodgrain production trends. The foodgrain supply forecasts are examined in relation to the likely demand of foodgrains to answer whether India would have a situation of food surplus or deficit. The paper summarizes the supply and demand side aspects of food security in the context of climate change- covering on one hand, the climate change impact on availability and stability of food supplies and on the other, its likely influence on the access and utilization dimensions of food demand. |
| Keywords: | food security; climate change |
| JEL: | Q11 O13 Q54 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24067&r=env |