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on Environmental Economics |
| By: | Marrouch, W.; Ray Chaudhuri, A. (Tilburg University, Center for Economic Research) |
| Abstract: | We show that adaptive measures undertaken by countries in the face of climate change, apart from directly reducing the damage caused by climate change, may also indirectly mitigate greenhouse gas emissions by increasing the stable size of international agreements on emission reductions. Moreover, we show that the more effective the adaptive measure in terms of reducing the marginal damage from emissions, the larger the stable size of the international environmental agreement. In addition, we show that larger coalitions, in the presence of adaptation, may lead to lower global emission levels and higher welfare. |
| Keywords: | international environmental agreements;adaptation;coalition formation;cli- mate change. |
| JEL: | Q54 Q59 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2011023&r=env |
| By: | Elettra Agliardi; Luigi Sereno |
| Abstract: | The effects of two environmental policy options for the reduction of pollution emissions, i.e. taxes and non-tradable quotas, are analyzed. In contrast to the prior literature this work endogenously takes into account the level of emissions before and after the adoption of the new environmental policy. The level of emissions is determined by solving the firm's profit maximization problem under taxes and fixed quotas. We find that the optimal adoption threshold under taxes is always larger than the adoption threshold under fixed quota, even in a setting characterized by ecological uncertainty and ambiguity - in the form of Choquet-Brownian motions - on future costs and benefits over adopting environmental policies. |
| Keywords: | Environmental taxation; Non-tradable quotas; Optimal implementation time; Choquet-Brownian uncertainty; Real options |
| JEL: | Q28 Q L51 H23 |
| Date: | 2011–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:pie:dsedps:2011/109&r=env |
| By: | Habermacher, Florian; Kirchgässner, Gebhard |
| Abstract: | The increase of fuel extraction costs as well as of temperature will make it likely that in the medium-term future technological or political measures against global warming may be implemented. In assessments of a current climate policy the possibility of medium-term future developments like backstop technologies is largely neglected but can crucially affect its impact. Given such a future measure, a currently introduced carbon tax may more generally mitigate climate change than recent reflections along the line of the Green Paradox would suggest. Notably, the weak and the strong version of the Green Paradox, related to current and longer-term emissions, may not materialize. Moreover, the tax may allow the demanding countries to extract part of the resource rent, further increasing its desirability. |
| Keywords: | Climate change policy, greenhouse gas tax, carbon tax, Green Paradox, anticipation effects, exhaustible resources, fossil fuels market, backstop technology, uncertainty, resource rent. |
| JEL: | Q54 Q31 Q38 Q41 Q42 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:usg:econwp:2011:10&r=env |
| By: | Anna Strutt (University of Waikato); Allan N. Rae (Massey University) |
| Abstract: | Agriculture remains a major sector of the New Zealand economy, with the vast majority of farm and food production exported. The accelerating intensification of farming in New Zealand over recent decades raises concern over the current sustainability of New Zealand farming, and whether it can remain so in the future. In this study, we focus on the impacts of policies to reduce environmental impacts of dairy farming, with a particular focus on nitrogen pollution and greenhouse gases (GHG) emissions. We use a modified version of the Global Trade Analysis Project (GTAP) model and database, with improved specification of the agricultural sector and land-use. We augment the model with environmental indicators for New Zealand, including nitrogen balances and GHG emissions. |
| Keywords: | global CGE model; dairy production; environmental impacts; environmental policy |
| JEL: | F14 F17 F18 O13 Q15 Q17 Q53 Q58 |
| Date: | 2011–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:wai:econwp:11/04&r=env |
| By: | John Quiggin (Risk & Sustainable Management Group, School of Economics, University of Queensland); David Adamson (Risk and Sustainable Management Group, University of Queensland); Sarah Chambers (Risk and Sustainable Management Group, 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. Extreme climate events such as droughts are likely to become more common. These patterns are evident in median projections of climate change for the Murray–Darling Basin in Australia. Understanding climate change effects on returns from irrigation involves explicit representation of spatial changes in natural stocks (i.e. water supply) and their temporal variability (i.e. frequency of drought states of nature) and the active management responses to capital stocks represented by mitigation and alternative adaptation strategies by state of nature . A change in the frequency of drought will induce a change in the allocation of land and water between productive activities. In this paper, a simulation model of state-contingent production is used to analyze the effects of climate change adaptation and mitigation. In the absence of mitigation, climate change will have severe adverse effects on irrigated agriculture in the Basin. However, a combination of climate mitigation and adaptation through changes in land and water use will allow the maintenance of agricultural water use and environmental flows. |
| Keywords: | Irrigation, Uncertainty, Climate Change |
| JEL: | Q25 Q54 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:rsm:climte:c10_1&r=env |
| By: | Juan Pablo Montero. |
| Abstract: | It is widely accepted that one of the most important characteristics of an effective climate policy is to provide firms with credible incentives to make long-run investments in R&D that can drastically reduce emissions. Recognizing that a government may be tempted to revise its policy design after innovations become available, this note shows how the performance of two policy instruments –prices (uniform taxes) and quantities (tradeable pollution permits)– differ in such a setting.I also discuss the gains from combining either instrument with subsidies to adopting firms. |
| Keywords: | Pollution control, Innovation, Commitment |
| JEL: | D42 Q55 Q58 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ioe:doctra:394&r=env |
| By: | John K. Stranlund (Department of Resource Economics, University of Massachusetts Amherst); Carlos A. Chavez (Departmento de Economics, Universidad de Concepcion Chile) |
| Abstract: | All environmental policies involve administrative costs, the costs of implementing and managing policies that extend beyond abatement costs. We examine theoretically the optimal distribution of these costs between the public and regulated sources of pollution. The distribution of administrative costs affects social welfare only if public funds are more expensive than private funds, or if the distribution of administrative costs affects the size of a regulated industry. If having the public take on a larger part of administrative costs increases the size of the industry and this does not lead to lower emissions for a given emissions tax, then it is optimal to make the pollution sources bear all of the administrative costs. A necessary, but not sufficient, reason for having the public bear part of the cost burden is if aggregate emissions decrease as a result. |
| Keywords: | Emissions Taxes, Pigouvian Taxes, Administrative Costs, Pollution Control |
| JEL: | L51 Q58 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:dre:wpaper:2011-3&r=env |
| By: | Melenberg, B.; Vollebergh, H.R.J.; Dijkgraaf, E. (Tilburg University, Center for Economic Research) |
| Abstract: | This paper presents the results from our investigation of the per-capita, long- term relation between carbon dioxide emissions and gross domestic product (GDP) for the world, obtained with the use of a new, exible estimator. Consistent with simple economic growth models, we find that regional, population-weighted per- capita emissions systematically increase with income (scale effect) and usually de- cline over time (composition and technology effect). Both our in-sample results and out-of-sample scenarios indicate that this negative time effect is unlikely to compen- sate for the upward-income effect at a global level, in the near future. In particular, even if China's specialization in carbon-intensive industrial sectors would come to a halt, recent trends outside China make a reversal of the overall global trend very unlikely. |
| Keywords: | CO2 Emissions;Environmental Kuznets Curve;Panel Data;(Semi)parametric Estimation. |
| JEL: | C33 O50 Q40 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2011020&r=env |
| By: | Paul Lanoie (IEA, HEC Montréal); Alexandra Rochon-Fabien |
| Abstract: | The Enviroclub initiative was developed by three federal government agencies—Canada Economic Development for Quebec Regions, Environment Canada and the National Research Council Canada—and launched in 2001 to assist small and medium-sized enterprises (SMEs) in improving their profitability and competitiveness through enhanced environmental performance. An Enviroclub consists of a group of 10-15 SMEs involved in training sessions on environmental management and carrying out at least one profitable in-plant pollution prevention project. The objective of this article is to provide a cost benefit analysis (CBA) of this original initiative in order to inform policy makers as to the social desirability of such programs. One of the main social benefits of this initiative is to reduce emissions of various pollutants, so that one of our largest challenges is to place a value on these environmental improvements. To do so, we use the “environmental value transfer” method to obtain values from previous relevant studies. We conduct our CBA at three different levels: we consider the costs and benefits first for the whole of society, then from the participating firms’ point of view and, finally, from the governments’ perspective. We conclude that, whichever perspective we choose, The Enviroclub initiative has been highly profitable. |
| Keywords: | cost-benefit analysis, SMEs, environment training, environmental performance |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:iea:carech:1102&r=env |
| By: | Jianquiao Liu (Department of Economics, University of Ottawa, Ottawa, ON); Leslie Shiell (Department of Economics, University of Ottawa, Ottawa, ON) |
| Abstract: | We test whether the principle of targeting (alternatively Sandmo’s (1975) additivity property and Kopczuk’s (2003) decomposition involving the Pigovian rule) has relevance for environmental taxation in a second best world consisting of an exogenous revenue requirement and pre-existing distortionary taxes. In the context of differentiated commodity taxes, we find that Sandmo’s additivity property breaks down once one solves explicitly for the marginal cost of public funds (MCPF). Further, in the more realistic setting of a uniform commodity tax and a dedicated emissions tax, we find that the additivity property no longer holds even in the form Sandmo studied it, i.e. without solving explicitly for the MCPF. Finally, we argue that Koczuk’s decomposition is not persuasive, as it requires that a second government agency must apply a corrective tax or subsidy to adjust the choice of the Pigovian rule by the environmental agency. In a same-numbers exercise (i.e. the number of tax instruments is not increased), we show that there is no presumption in favour of a direct emissions tax over a uniform commodity tax; rather, the choice depends upon the size of the environmental damages. We conclude that there does not exist a principle of targeting in environmental taxation. |
| Keywords: | environmental taxation; second best; principle of targeting |
| JEL: | H23 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:1102e&r=env |
| By: | Muris, C.H.M. (Tilburg University) |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ner:tilbur:urn:nbn:nl:ui:12-4578467&r=env |
| By: | Michael Greenstone; Elizabeth Kopits; Ann Wolverton |
| Abstract: | The United States Government recently concluded a year-long process to develop a range of values representing the monetized damages associated with an incremental increase in carbon dioxide (CO2) emissions, commonly referred to as the social cost of carbon (SCC). These values are currently used in benefit-cost analyses to assess potential federal regulations. For 2010, the central value of the SCC is $21 per ton of CO2 emissions and sensitivity analyses are to be conducted at $5, $35, and $65 (2007$). This paper summarizes the methodology and process used to develop the SCC values, complemented with our own commentary about how the SCC can be used to inform regulatory decisions and areas where further research would be particularly useful. |
| JEL: | Q51 Q54 Q58 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16913&r=env |
| By: | Bronwyn H. Hall; Christian Helmers |
| Abstract: | This paper explores the characteristics of 238 patents on 94 “inventions” contributed by major multinational innovators to the “Eco-Patent Commons”, which provides royalty-free access to third parties to patented climate change related innovations. By comparing the pledged patents to other patents in the same technologies or held by the same multinationals, we investigate the motives of the contributing firms as well as the potential for such commons to encourage innovation and diffusion of climate change related technologies. This study, therefore, indirectly provides evidence on the role of patents in the development and diffusion of green technologies. More generally, the paper sheds light on the performance of hybrid forms of knowledge management that combine open innovation and patenting. |
| JEL: | H23 H42 K11 O33 O34 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16920&r=env |
| By: | R. Inglesi-Lotz; J. Blignaut |
| Abstract: | Improving a country’s electricity efficiency is considered one of the important ways to reduce its greenhouse gas emissions and to meet its commitments concerning climate change mitigation. In this paper, we conduct a comparative analysis between South Africa and OECD members’ total and sectoral electricity intensities. This is done to establish a sense of South Africa’s relative performance in this regard, to ascertain the possible scope for improvement and, if such scope exists, to determine in which of the industrial sectors |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:204&r=env |
| By: | Godal, Odd (Göteborg University and University of Bergen); Meland, Frode (University of Bergen, Department of Economics) |
| Abstract: | This paper discusses coalition formation with side payments in markets for transferable property rights where strategic agents prevail on both sides of the market. Our concern is emissions permit trading under the Kyoto Protocol. While a seller cartel is not profitable, our analysis indicates that coalitions between sellers and buyers pay off. Three stable cartels are found. None involve all agents, yet they all induce overall e¢ ciency. To support a stable coalition, the EU, Japan and Canada may pay together between 0 and 13 billion US dollars per year to Russia. The permit price and society-wide emission reductions are nil. |
| Keywords: | Emissions trading; Kyoto Protocol; cartel formation; merger profitability. |
| JEL: | C71 C72 Q58 |
| Date: | 2011–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bergec:2006_004&r=env |
| By: | Numan-Parsons, Elisabeth (Ministry of Economic Development, New Zealand); Stroombergen, Adolf Stroombergen (Infometrics Ltd); Fletcher, Ngaio |
| Abstract: | This study creates a 2010 baseline of business responses to the introduction of the New Zealand Emissions Trading Scheme (NZ ETS) and the reasons for those responses. It is too soon to judge the effectiveness of the NZ ETS. Indeed at the time of this study many firms were still coming to terms with the scheme. What has been observed, however, are early signs that the price incentive is starting to have an effect. Potential issues that may in the future require policy intervention are also identified. |
| Keywords: | Emissions trading scheme; abatement; business strategy |
| JEL: | Q52 Q58 |
| Date: | 2011–03–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:nzmedo:2011_004&r=env |
| By: | Chevallier, Julien; Etner, Johanna; Jouvet, Pierre-André |
| Abstract: | This article proposes a theory of banking of emission permits under conditions of regulatory uncertainty. Based on a two-period partial equilibrium framework, we examine the effects of increasing risk - in the sense of a mean-preserving spread - regarding a future permits allocation at the firm-level. We also examine the role of an agency to pool risks by re-allocating permits for a group of firms. Our results are twofold. First, an increase in risk may lead to changes in a firm’s banking strategy, depending on the third partial derivative of its production function with respect to pollution. Second, we define an optimal risk-sharing rule between agents to respond to political decision changes. Our results overall suggest that the bankability of permits may be used as a risk-management tool. |
| Keywords: | Banking; Emission permits; Policy risk; Uncertainty; |
| JEL: | Q58 D80 D21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ner:dauphi:urn:hdl:123456789/5385&r=env |
| By: | Thapa, Sridhar; Joshi, Ganesh Raj |
| Abstract: | This paper applies Ricardian approach to measure the effect of climate change on crop production in Nepal using cross-section data of Nepal Living Standard Survey 2003/04 and climate data from Department of Hydrology and Meteorology, Nepal. The study examines the relationship between net farm revenue and climate variables using 656 households of 14 districts covering all climatic zones of Nepal. Net farm revenue is regressed on climate and socio-economic variables. The findings show that these variables have significant impact on the net farm value per hectare. More specifically, relatively low precipitation and high temperature seem to have positive impact on net farm income during the fall and spring seasons. Net farm income is likely to be increased by summer precipitation, but not by temperature. Marginal impacts are mostly in line with the Ricardian model, showing marginally increasing precipitation during summer and winter would increase net farm income, but reduce by the quarter terms and temperature of these seasons. Moreover, marginally increasing precipitation would increase farm income in the hilly region, but reduce in Terai region. Other variables such as ratio of irrigated farm land and obtaining credit are found to be positive impact on net farm value but not by farm size. Conclusively, the impact of climate change on agriculture seems to be varied with the temperature and precipitation in different climatic zones. |
| Keywords: | climate change; agriculture; Ricardian approach; marginal impact; Nepal |
| JEL: | Q24 C31 Q54 |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29785&r=env |
| By: | Eric BROUILLAT (GREThA, CNRS, UMR 5113); Vanessa OLTRA (GREThA, CNRS, UMR 5113) |
| Abstract: | This paper presents an original approach to the impact of extended producer responsibility instruments for waste prevention upon firms\' innovative strategies and market structure. Our analysis is based on a stylised framework of waste prevention developed in Brouillat (2009a, b). In this framework, products are modelled as multi-characteristic technologies whose evolution depends on firms\' innovation strategies and on the interactions with consumers and post-consumption activities (recycling). This model has been adapted to explore the impact of waste prevention instruments upon industrial dynamics, and more particularly upon firms\' innovative strategies and upon the evolution of products\' characteristics and market structure. We focus on two types of policy instruments: recycling fees and norms. For each instrument, we will consider different policy designs in order to study their effects on industrial dynamics. The main contribution of this paper is to show how this type of simulation model can be used to explore the impact of waste prevention policy instruments on the technological evolution of products, on innovation strategy and on the evolution of firms\' market shares. The introduction of policy instruments in a simulation agent-based model of industrial dynamics enables us to analyse more thoroughly how different policy designs can modify the dynamics of the system and, more particularly, how the incentives and the constraints linked to the policy instruments under consideration shape market selection. |
| Keywords: | waste prevention; industrial dynamics; environmental policy; simulation model; extended producer responsibility |
| JEL: | O33 D21 Q53 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2011-14&r=env |
| By: | Yuyu Chen; Ginger Zhe Jin; Naresh Kumar; Guang Shi |
| Abstract: | To prepare for the 2008 Olympic Games, China adopted a number of radical measures to improve air quality. Using officially reported air pollution index (API) from 2000 to 2009, we show that these measures improved the API of Beijing during and after the Games, but 60% of the effect faded away by the end of October 2009. Since the credibility of API data has been questioned, an objective and indirect measure of air quality at a high spatial resolution – aerosol optimal depth (AOD), derived using the data from the NASA satellites – was analyzed and compared with the API trend. The analysis confirms that the improvement was real but temporary and most improvement was attributable to plant closure and traffic control. Our results suggest that it is possible to achieve real environmental improvement in an authoritarian regime but the magnitude of the effect and how long it lasts depend on the political motivation behind the policy interventions. |
| JEL: | D0 Q53 Q58 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16907&r=env |
| By: | Guo Xu |
| Abstract: | Exploiting Tangshan 1976 - the deadliest earthquake in the 20th century - as a source of exogenous variation, we estimate the long-run effect of a historical shock on contemporary socio-economic outcomes. Cohorts born after the earthquake were not only larger, but exhibit lower school completion rates, particularly among the female today. Despite lower schooling levels, there is no evidence for adverse labour market outcomes. We conduct robustness checks and argue that the effect is causal. |
| Keywords: | Environmental shock, earthquake, natural disaster, education, fertility |
| JEL: | I20 J00 O18 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1117&r=env |
| By: | Skoufias, Emmanuel; Essama-Nssah, B.; Katayama, Roy S. |
| Abstract: | The authors use regression analysis to assess the potential welfare impact of rainfall shocks in rural Indonesia. In particular, they consider two shocks: (i) a delay in the onset of monsoon and (ii) a significant shortfall in the amount of rain in the 90 day post-onset period. Focusing on households with family farm businesses, the analysis finds that a delay in the monsoon onset does not have a significant impact on the welfare of rice farmers. However, rice farm households located in areas exposed to low rainfall following the monsoon are negatively affected. Rice farm households appear to be able to protect their food expenditure in the face of weather shocks at the expense of lower nonfood expenditures per capita. The authors use propensity score matching to identify community programs that might moderate the welfare impact of this type of shock. Access to credit and public works projects in communities were among the programs with the strongest moderating effects. This is an important consideration for the design and implementation of adaptation strategies. |
| Keywords: | Science of Climate Change,Climate Change Mitigation and Green House Gases,Housing&Human Habitats,Rural Poverty Reduction,Regional Economic Development |
| Date: | 2011–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5615&r=env |
| By: | Ballinger, Clint |
| Abstract: | This paper proposes that the resurgence of geographic factors in the study of uneven development is not due simply to the recurrent nature of intellectual fashions, nor necessarily because arguments that rely on geographic factors are less simplistic than before, nor because they avoid racialist, imperialistic, and deterministic forms they sometimes took in the past. Rather, this paper argues that geographic factors have been turned to once again because they are an indispensable part of explanation, playing a special role that has not been properly understood, a role especially crucial for the explanation of the inherently spatial questions that development studies seek to address. The paper is made up of two sections and an appendix. The first section discusses why geographic factors are necessary for explanations of uneven development with a brief example from the ‘institutions versus geography’ debate. The second section discusses why the reflexive rejection by social scientists of geographic and environmental factors is misguided, with a separate note on geography and geographers. The ideas in this paper were in part arrived at inductively while surveying instances where social scientists in some way attempt to account for real-world locations/distributions of social phenomena (as opposed to discussing a social theory or process aspatially or with its distribution taken as a starting point). A number of these are included with discussion as an appendix. |
| Keywords: | geographic determinism; environmental determinism; economic development; Daron Acemoglu; Jeffrey Sachs; Jared Diamond; explanation; exogenous factors; location; distribution; colonialism; biogeography; |
| JEL: | Z1 O10 N90 O15 O19 F54 A13 A12 O57 C21 B41 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29750&r=env |
| By: | Magnus, J.R.; Melenberg, B.; Muris, C.H.M. (Tilburg University, Center for Economic Research) |
| Keywords: | Global warming;Dimming;Aerosols;Dynamic panel data. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2011004&r=env |