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on Environmental Economics |
| By: | Muhammad , Anees; Ishfaq, Ahmed |
| Abstract: | The debate of environmental issues and their analysis is of vital interest for economic policies. Institutions are engaged in identifying and estimating the extent of environmental impact of determinants controllable via policy measures. Annual data from the on Carbon Dioxide emission, economic growth, consumption of energy, openness for foreign trade, urbanization, industrial growth and agriculture growth on Pakistan is used for 1971 to 2007. Augmented Vector Autoregression technique and cointegration analysis is implemented to test Granger causality. Gross domestic product significantly Granger causes emission of Carbon Dioxide and energy consumption. On the other hand emissions of CO2 affect economic growth, agriculture and industrial growth in the long run. It is also evident that energy consumption unidirectional Granger causes emission of Carbon Dioxide. Industrialization and urbanization bidirectional Granger causes each other. The results indicate the more careful industrial and energy policies to reduce emissions and control global warming. |
| Keywords: | Pakistan; Carbon Dioxide emission; Environment; Energy Consumption; Economic Growth; Foreign Trade |
| JEL: | C32 A12 O13 C22 |
| Date: | 2011–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33469&r=env |
| By: | Sven Rudolph (University of Kassel); Christine Lenz (University of Kassel); Barbara Volmert (University of Kassel); Achim Lerch (Hesse University of Cooperative Education) |
| Abstract: | Domestic climate policy emissions trading schemes appear to be spreading all over the word. However, carbon markets in existence often suffer from dilution in terms of ecological effectiveness, economic efficiency, and social justice. Thus, in order to firmly base carbon markets on the main pillars of Sustainable Development, this paper defines the criteria of ecological effectiveness, economic efficiency and social justice and operationalizes them for giving design recommendations for sustainable carbon markets. Methodologically, the paper uses welfare and institutional economics, jurisprudential reasoning, and modern climate justice thinking in order to discuss the three criteria. In addition, design and implication analysis is applied in order to develop design recommendations for sustainable carbon markets. By doing so, the paper provides evaluation criteria for emissions trading schemes in existence and in planning, but also allows for improvements in order to make emissions trading a valuable instrument of a sustainable global climate policy. |
| Keywords: | sustainability, emissions trading, climate policy, justice, efficiency, effectiveness |
| JEL: | D62 D63 Q48 Q54 Q58 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201134&r=env |
| By: | Paul J Burke |
| Abstract: | This paper examines why some countries have experienced environmental Kuznets curve (EKC)-type reductions in carbon dioxide (CO2) emissions, while others have not. The hypothesis that climbing to the upper rungs of the electricity ladder (nuclear power and modern renewables) has been the primary mechanism via which countries have achieved substantial reductions in per capita CO2 emissions is tested using a binomial dependent variable modelling approach for a sample of 105 countries. The findings suggest that electricity mix transitions caused by long-run growth in per capita incomes are indeed the primary determinant of carbon Kuznets curve downturns. The paper explores additional mechanisms via which carbon Kuznets curves may have been generated, but the results indicate that these are of lesser overall importance than the electricity mix effect. The evidence also suggests that countries with larger fossil fuel endowments are less likely to experience carbon Kuznets curve downturns, an additional curse of natural resources. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:acb:camaaa:2011-31&r=env |
| By: | Pycroft, Jonathan; Vergano, Lucia; Hope, Chris; Paci, Daniele; Ciscar, Juan Carlos |
| Abstract: | Recent thinking about the economics of climate change has concerned the uncertainty about the upper bound of both climate sensitivity to greenhouse gases and the damages that might occur at high temperatures. This argument suggests that the appropriate probability distributions for these factors may be fat-tailed. The matter of tail shape has important implications for the calculation of the social cost of carbon dioxide (SCCO2). In this paper a probabilistic integrated assessment model is adapted to allow for the possibility of a thin, intermediate or fat tail for both (i) the climate sensitivity parameter and (ii) the damage function exponent. Results show that depending on the tail shape of the climate sensitivity parameter the mean SCCO2 rises by 29 to 85 percent. Changes in the mean SCCO2 due to the adjustments to the damage function alone range from a reduction of 7 percent to a rise of 12 percent. The combination of both leads to rises of 33 to 115 percent. Greater rises occur for the upper percentiles of the SCCO2 estimates. Given the uncertainties in both the science and the economics of climate change different tail shapes deserve consideration due to their important implications for the range of possible values for the SCCO2. -- |
| Keywords: | Climate change,integrated assessment models,social cost of carbon dioxide,uncertainty |
| JEL: | Q54 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201136&r=env |
| By: | Jaraite, Jurate (CERE); Kažukauskas, Andrius (CERE) |
| Abstract: | The EU farmers are subject to mandatory cross compliance measures requiring them to meet environmental conditions to be eligible for public support. These obligations reinforce incentives for the farmers to change their behaviour towards the environment. We apply quasi-experimental methods to measure the causal relationship between cross-compliance and farm environmental performance. We find that cross compliance reduced farm fertiliser and pesticide expenditure. This result also holds for farmers who participated in other voluntary agro-environmental schemes. However, the results do not support our expectations that farmers who relied on larger shares of public payments had a stronger motivation to improve their environmental performance. |
| Keywords: | agriculture; Common Agriculture Policy; cross-compliance; environment; EU; farm |
| JEL: | Q12 |
| Date: | 2011–09–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2011_013&r=env |
| By: | Anthoff, David; Rose, Steven K.; Tol, Richard S. J.; Waldhoff, Stephanie |
| Abstract: | We estimate the growth rate of the social cost of carbon. This is an indication of the optimal rate of acceleration of greenhouse gas emission reduction policy over time. We find that the social cost of carbon increases by 1.3% to 3.9% per year, with a central estimate of 2.2%. Previous studies found an average rate of 2.3% and a range of 0.9-4.1%. The rate of increase of the social carbon depends on a range of factors, including the pure rate of time preference, the rate of risk aversion, equity weighting, the socio-economic and emission scenarios, the climate sensitivity, dynamic vulnerability, and the curvature of the impact functions. |
| Keywords: | agency/cost/equity/Greenhouse Gas emission reduction/growth/Policy/protection/risk/risk aversion/scenarios/Social cost of carbon |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp405&r=env |
| By: | Tausch, Arno |
| Abstract: | This article looks at the long-term, structural determinants of environmental performance in the world system. In multiple standard OLS regression models, we test the effects of 26 standard predictor variables, including the ‘four freedoms’ of goods, capital, labour and services, on the following indicators of sustainable development • avoiding net trade of ecological footprint gha per person • Carbon emissions per million US dollars GDP • CO2 per capita • Environmental Performance Index (EPI) • Global footprint per capita • Happy Life Years • Happy Planet Index • ln (number of people per mill inhabitants 1980-2000 killed by natural disasters per year+1) Our research shows that the apprehensions of quantitative globalization critical research are fully vindicated by the significant negative environmental effects of the foreign savings rate. High foreign savings are indeed a driver of global footprint, and are a blockade against a satisfactory Happy Planet Index performance. The New International Division of Labour (NIDL)-model (Froebel et al., 1980) is one of the prime drivers of high CO2 per capita emissions. MNC penetration, the master variable of most quantitative dependency theories, blocks environmental performance (EPI-Index) and several other socially important processes. Worker remittances have a significant positive effect on the Happy Planet Index, and Happy Life Years. |
| Keywords: | International Relations and International Political Economy; International Migration |
| JEL: | F22 F15 F5 |
| Date: | 2011–09–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33227&r=env |
| By: | David L. Millimet; Jayjit Roy |
| Abstract: | The validity of existing empirical tests of the Pollution Haven Hypothesis (PHH) is constantly under scrutiny due to two shortcomings. First, the issues of unobserved heterogeneity and measurement error in environmental regulation are typically ignored due to the lack of a credible, traditional instrumental variable. Second, while the recent literature has emphasized the importance of geographic spillovers in determining the location choice of foreign investment, such spatial eects have yet to be adequately incorporated into empirical tests of the PHH. As a result, the impact of environmental regulations on trade patterns and the location decisions of multinational enterprises remains unclear. In this paper, we circumvent the lack of a traditional instrument within a model incorporating geographic spillovers utilizing three novel identication strategies. Using state-level panel data on inbound U.S. FDI, relative abatement costs, and other determinants of FDI, we consistently nd (i) evidence of environmental regulation being endogenous, (ii) a negative impact of own environmental regulation on inbound FDI in pollution-intensive sectors, particularly when measured by employment, and (iii) larger eects of environmental regulation once endogeneity is addressed. Neighboring environmental regulation is not found to be an important determinant of FDI. Key Words: Foreign Direct Investment, Environmental Regulation, Spillovers, Instrumental Variables, Control Function, Heteroskedasticity |
| JEL: | C31 F21 Q52 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:apl:wpaper:11-10&r=env |
| By: | Kögel, Tomas |
| Abstract: | This paper derives analytically the growth rate of the social cost of carbon (SSC) on an optimal balanced growth path. More specifically, the paper examines a deterministic Ramsey model of optimal economic growth with carbon emissions. In this model, restrictions on technology and preferences are imposed that guarantee optimal balanced growth, i.e., that guarantee an optimal path with constant and positive economic growth and a constant stock of carbon in the atmosphere. The paper exploits these restrictions to show that the growth rate of the SCC on the optimal balanced growth path is negative, provided the elasticity of marginal utility of consumption with respect to consumption is larger than or equal to one. There seems to be consensus in the literature that this latter requirement is fulfilled in reality. -- |
| Keywords: | Climate change,sustainability,social cost of carbon |
| JEL: | D61 Q54 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201135&r=env |
| By: | Alain de Serres; John Llewellyn; Preston Llewellyn |
| Abstract: | Developments over the past few years have shown that reforms to address climate change are no less difficult to implement than reforms in other areas, even if the objective of limiting global warming is broadly accepted. In the case of global public goods such as the climate, the political challenge is further complicated by the need to convince voters that domestic action to reduce greenhouse gas emissions is worth taking, notwithstanding the cost and uncertainties regarding other countries’ commitments. This paper seeks to draw a number of political-economy lessons from reform experience in other economic areas, and considers how these lessons can be applied to the particular case of climate change mitigation policy. It examines the main ingredients for building a constituency for greenhouse gas (GHG) emissions reduction policies at home, stressing the need to establish the credibility of the overall objective and intermediate targets. It also reviews the challenges faced in securing successful implementation of the least-cost set of policies, focusing on how to address the concerns raised by the uneven distribution of costs and benefits of pricing instruments without undermining their effectiveness.<P>L'économie politique de l'atténuation du changement climatique : comment assurer un soutien populaire en faveur d'actions pour enrayer le réchauffement planétaire<BR>Les discussions des dernières années ont montré que la mise en place de mesures pour atténuer le changement climatique peut s’avérer aussi difficile que la conduite de réformes économiques dans d’autres secteurs, même si l’objectif de limiter le réchauffement de la planète est largement accepté. Dans le cas d’un bien public comme le climat, le défi politique est accentué par la nécessité de convaincre les électeurs du bien fondé de l’action au plan national, malgré les coûts et les incertitudes concernant l’engagement des autres pays. Cette étude vise à tirer certains enseignements de l’expérience en matière de politique économique acquise lors de la mise en place de réformes majeures dans d’autres champs d’action, et à voir dans quelle mesure ces enseignements peuvent s’appliquer au cas particulier de la lutte au changement climatique. Les principaux ingrédients pour assurer un large soutien à des mesures efficaces de réduction des émissions de gaz à effet de serres sont passés en revue, de même que les défis que posent leur mise en place, ce qui nécessite de prendre en compte les inquiétudes concernant la distribution inégale des coûts et des bénéfices des instruments de prix en tout évitant de saper leur efficacité. |
| Keywords: | competitiveness, political economy, carbon tax, cost-effectiveness, climate change mitigation, compétitivité, économie politique, taxes carbone, efficacité par rapport aux coûts, atténuation du changement climatique |
| JEL: | Q52 Q54 |
| Date: | 2011–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:887-en&r=env |
| By: | Anthoff, David; Tol, Richard S. J. |
| Abstract: | We report the results of an uncertainty decomposition analysis of the social cost of carbon as estimated by FUND, a model that has a more detailed representation of the economic impact of climate change than any other model. Some of the parameters particularly influence impacts in the short run whereas other parameters are important in the long run. Some parameters are influential in some regions only. Some parameters are known reasonably well, but others are not. Ethical values, such as the pure rate of time preference and the rate of risk aversion, therefore affect not only the social cost of carbon, but also the importance of the parameters that determine its value. Some parameters, however, are consistently important: cooling energy demand, migration, climate sensitivity, and agriculture. The last two are subject to a large research effort, but the first two are not. |
| Keywords: | cost/decomposition/Social cost of carbon/uncertainty/Economic Impact/Climate change/impacts/risk/risk aversion/migration |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp404&r=env |
| By: | Daiju Narita; Ulrich J. Wagner |
| Abstract: | The production of bioenergy is considered to be a promising energy source for a sustainable energy mix and it is politically promoted in many countries. With the exception of Brazilian ethanol, bioenergy not competitive to fossil energy sources, and therefore needs to be subsidised. Several types of bioenergy are based on bulky raw biomass with high per unit transport costs, importantly impacting on the plant’s production costs and profitability. In addition, considerable quantities of digestates are released, causing disposal costs. Various studies in the past aimed primarily at analysing transport costs of inputs. In this paper we focus on disposal costs of fermentation digestates from biogas production in Germany and analyse different processing techniques and their impact on profitability for three plant size in three case study areas. Our results show that especially in regions with only a small amount of agricultural land and a large heterogeneity in its agricultural area, processing of digestates increases the profitability of biogas production. The same accounts for regions with high livestock density, where the area needed for disposal is comparatively large. The cost efficiency is enforced by a high share of animal excrements on input and the biogas plant size |
| Keywords: | International environmental agreements (IEAs), climate policy, technology choice, expectations, multiple equilibria |
| JEL: | Q54 O33 H87 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1732&r=env |
| By: | Martimort, David; Sand-Zantman, Wilfried |
| Abstract: | We analyze environmental agreements in contexts with asymmetric information, voluntary participation by sovereign countries and possibly limited enforcement. Taking a mechanism design perspective, we study how countries can agree on effort levels and compensations to take into account multilateral externalities. We delineate conditions for efficient agreements and trace out possible inefficiencies to the conjectures that countries hold following disagreement. We show how optimal mechanisms admit simple approximations with attractive implementation properties. Finally, we also highlight how limits on commitment strongly hinder performances of optimal mechanisms. |
| JEL: | D82 |
| Date: | 2011–08–31 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:24929&r=env |
| By: | Stocker, Andrea (Sustainable Europe Research Institute (SERI)); Großmann, Anett (Institute of Economic Structures Research (GWS)); Wolter, Marc Ingo (Institute of Economic Structures Research (GWS)); Madlener, Reinhard (E.ON Energy Research Center, Institute for Future Energy Consumer Needs and Behavior (FCN), RWTH Aachen University) |
| Abstract: | This paper reports on the Austrian research project “Renewable energy in Austria: Modeling possible development trends until 2020”. The project investigated possible economic and ecological effects of a substantially increased use of renewable energy sources in Austria. Together with stakeholders and experts, three different scenarios were defined, specifying possible development trends for renewable energy in Austria. The scenarios were simulated for the period 2006–2020, using the integrated environment–energy–economy model “e3.at”. The modeling results indicate that increasing the share of renewable energy sources in total energy use is an important but insufficient step towards achieving a sustainable energy system in Austria. A substantial increase in energy efficiency and a reduction of residential energy consumption also form important cornerstones of a sustainable energy policy. |
| Keywords: | renewable energy; macro-econometric modeling; scenario development |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:ris:fcnwpa:2011_013&r=env |
| By: | Aoyagi, Midori (Asian Development Bank Institute); Suda, Eiko (Asian Development Bank Institute); Shinada, Tomomi (Asian Development Bank Institute) |
| Abstract: | There is increasing evidence that climate change has an impact on natural disasters, such as flooding, and on agricultural production, both of which have implications for gender issues. In this paper the authors briefly review issues related to gender and poverty and examine the relationships between gender and various indices. They then look at systems of land ownership and inheritance, and discuss an example of job recovery after a disaster through interviews with three female agricultural workers in Japan. The results of the interviews demonstrate the recent empowerment of women in agricultural production and that these women have strong adaptive abilities. |
| Keywords: | climate change; natural disasters; gender issues; agricultural production |
| JEL: | J16 Q54 Q58 |
| Date: | 2011–09–12 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0309&r=env |
| By: | Stephen S. Golub; Céline Kauffmann; Philip Yeres |
| Abstract: | This paper was developed at the request of the OECD Working Party of the Investment Committee to document efforts to date to define and measure green FDI and to investigate the practicability of various possible definitions, as well as to identify investment policy restrictions to green FDI. It does so by reviewing the literature and existing work on the contributions of FDI to the environment; by providing a two-part definition of green FDI; and by discussing various assumptions necessary to estimate the magnitude of 'green' FDI. |
| Keywords: | technology transfer, foreign investment, international investment, green growth, green FDI, FDI measurement, environmental goods and services |
| JEL: | E01 F21 F23 Q01 Q56 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:oec:dafaaa:2011/2-en&r=env |
| By: | Robin Burgess; Matthew Hansen; Benjamin A. Olken; Peter Potapov; Stefanie Sieber |
| Abstract: | Tropical deforestation accounts for almost one-fifth of greenhouse gas emissions worldwide and threatens the world's most diverse ecosystems. The prevalence of illegal forest extraction in the tropics suggests that understanding the incentives of local bureaucrats and politicians who enforce forest policy may be critical to understanding tropical deforestation. We find support for this thesis using a novel satellite-based dataset that tracks annual changes in forest cover across eight years of institutional change in post-Soeharto Indonesia. Increases in the numbers of political jurisdictions are associated with increased deforestation and with lower prices in local wood markets, consistent with a model of Cournot competition between jurisdictions. Illegal logging increases dramatically in the years leading up to local elections, suggesting the presence of "political logging cycles". And, illegal logging and rents from unevenly distributed oil and gas revenues are short run substitutes, but this effect dissapears over time as political turnover occurs. The results illustrate how incentives faced by local government officials affect deforestation, and provide an example of how standard economic theories can explain illegal behavior. |
| JEL: | D73 L73 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17417&r=env |
| By: | Raffaele Della Croce; Christopher Kaminker; Fiona Stewart |
| Abstract: | It is estimated that transitioning to a low-carbon, and climate resilient economy, and more broadly „greening growth? over the next 20 years to 2030 will require significant investment and consequently private sources of capital on a much larger scale than previously. With their USD 28 trillion in assets, pension funds - along with other institutional investors - potentially have an important role to play in financing such green growth initiatives... |
| Keywords: | infrastructure, pension fund, green growth, green bonds |
| JEL: | G15 G18 G23 G28 J26 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:oec:dafaad:10-en&r=env |
| By: | Tausch, Arno |
| Abstract: | For some years now, the Happy Planet Organization presents the so-called ‘Happy Planet Index’ (HPI), which is an index of measuring the trade-off between ecological footprint data and life quality (Happy Life Years, HLYE). Costa Rica emerges from these comparisons as the world’s ‘best practice nation’, using a minimum amount of natural resources to achieve a maximum of human happiness. So is Costa Rica the pathway for humanity? There are shortcomings in the formula, with which the index is calculated (Happy Life Years divided by Ecological Footprint per capita, and some constants added). Using a re-formulation, the global ranking with Costa Rica on top is indeed confirmed. We present some evidence on the cross-national drivers and bottlenecks of our re-formulated Happy Planet Index (HPI) performance on a global scale: a wide variety of standard globalization variables have little influence on HPI performance. Big countries with large population resources perform somewhat better, and low military expenditures per GDP are a constraint on HPI performance. Beneficial effects are also wielded by received worker remittances. Efficiency tends to increase and then to decrease with rising development levels. |
| Keywords: | Ecological and environmental phenomena; ecological footprint; globalization; Happy Planet Index; inequality; migration; military expenditures |
| JEL: | C43 F5 Q5 H51 Q56 Q51 |
| Date: | 2011–09–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33226&r=env |