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on Environmental Economics |
| By: | Mani, Muthukumara; Markandya, Anil; Sagar, Aarsi; Sahin, Sebnem |
| Abstract: | One of the key environmental problems facing India is that of particle pollution from the combustion of fossil fuels. This has serious health consequences and with the rapid growth in the economy these impacts are increasing. At the same time, economic growth is an imperative and policy makers are concerned about the possibility that pollution reduction measures could reduce growth significantly. This paper addresses the tradeoffs involved in controlling local pollutants such as particles. Using an established Computable General Equilibrium model, it evaluates the impacts of a tax on coal or on emissions of particles such that these instruments result in emission levels that are respectively 10 percent and 30 percent lower than they otherwise would be in 2030. The main findings are as follows: (i) A 10 percent particulate emission reduction results in a lower gross domestic product but the size of the reduction is modest; (ii) losses in gross domestic proudct from the tax are partly offset by the health gains from lower particle emissions; (iii) the taxes reduce emissions of carbon dioxide by about 590 million tons in 2030 in the case of the 10 percent reduction and 830 million tons in the case of the 30 percent reduction; and (iv) taken together, the carbon dioxide reduction and the health benefits are greater than the loss of gross domestic product in both cases. |
| Keywords: | Environmental Economics&Policies,Climate Change Mitigation and Green House Gases,Climate Change Economics,Energy Production and Transportation,Environment and Energy Efficiency |
| Date: | 2012–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6208&r=env |
| By: | Färe, Rolf (Dept. of Economics); Grosskopf, Shawna (Dept. of Applied Economics); Lundgren, Tommy (CERE); Marklund, Per-Olov (CERE); Zhou, Wenchao (CERUM) |
| Abstract: | technology. Pollutants, or bads, are explicitly modeled by imposing technology properties of disposability and null-jointness. With data on firms from Swedish manufacturing, we investigate the potential to reduce emissions, and we take a closer look at the pulp and paper sector. Dividing the firms into “brown” and “green” firms, we find that there is significant potential, in both categories, to improve environmental efficiency, and hence lower emissions, of three air pollutants. Furthermore, we suggest that treating biofuels as entirely carbon neutral (as is common practice) may underestimate environmental efficiency scores and generate misleading policy implications. |
| Keywords: | Pollution; Environmental Efficiency |
| JEL: | D24 Q01 Q53 |
| Date: | 2012–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2012_016&r=env |
| By: | Mani, Muthukumara S. |
| Abstract: | One of the strong messages that came out of the recent United Nations Climate Change conference in Durban was that the private sector has to play an important role if we are to globally move toward a low carbon, climate resilient -- or"climate compatible"-- future. However, private investment will only flow at the scale and pace necessary if it is supported by clear, credible, and long-term policy frameworks that shift the risk-reward balance in favor of less carbon-intensive investment. The private sector also needs information on where to invest in clean energy in emerging markets, and it needs policy support to lower investment risk. Barriers to low carbon investments often include unclear and inconsistent energy policies, monopoly structures for existing producers, stronger incentives for conventional energy than clean energy, and a domestic financial sector not experienced in new technologies. With the long-term goal of promoting and accelerating the implementation of climate mitigation technologies, this study aims to facilitate development of a policy framework for promoting sustainable investment climates for clean energy investments in South Asia and elsewhere. A key aspect of the study is also the pilot construction of the Climate Investment Readiness Index for several countries. The index is a tool to objectively evaluate the enabling environment for supporting private sector investment in select climate mitigation or low carbon technologies. |
| Keywords: | Energy Production and Transportation,Environmental Economics&Policies,Climate Change Mitigation and Green House Gases,Climate Change Economics,Debt Markets |
| Date: | 2012–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6211&r=env |
| By: | Xavier d'Haultfoeuille (Crest); Pauline Givord (INSEE); Xavier Boutin (European Commission-Team) |
| Abstract: | At the beginning of 2008 was introduced in France a feebate on the purchase of new cars called the “Bonus/Malus”. Since January 2008, the less polluting cars benefited from a price reduction of up to 1,000 euros, while the most polluting ones were subject to a taxation of 2,600 euros. We estimate the impact of this policy on carbon dioxide emissions in the short and long run. These emissions depend on the market shares and the average emissions per kilometer of each car, but also on their manufacturing and the number of kilometers traveled by their owners. We first develop a simple tractable model that relates car choice and mileage. We then estimate this model, using both the exhaustive dataset of car registrations and a recent transportation survey which provides information on individual journeys. We show that if the shift towards the classes benefiting from rebates is spectacular, the environmental impact of the policy is negative. The reform has notably increased sales, leading to an important increase in manufacturing and traveling emissions. We thus stress that such policies may be efficient tools for reducing CO2 emissions (French consumers do react to the feebate in their car choice), but should be designed with care to achieve their primary goal |
| Keywords: | Environmental taxation, automobiles, carbon dioxide emissions, policy evaluation |
| JEL: | C25 D12 H23 L62 Q53 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:crs:wpaper:2012-13&r=env |
| By: | Massimiliano Mazzanti; Davide Antonioli; Susanna Mancinelli |
| Abstract: | Along the line of the Porter hypothesis, firm’s might react to and challenge environmental policy in a forward looking way. This needs a full restructuring of firm’s assets, technologies and competencies. We empirically show through a bivariate probit analysis of environmental innovations (EI) drivers that manufacturing firms that are subject to more stringent policies might use complementarity between organizational strategies to enhance the adoption of EI more extensively. |
| Keywords: | Complementarity; environmental innovations; human resource management; organizational change |
| JEL: | L6 M53 O3 Q55 |
| Date: | 2012–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:udf:wpaper:201212&r=env |
| By: | Massimiliano Mazzanti; Antonio Musolesi |
| Abstract: | This paper documents the structural differences among advanced countries with regard to their long run carbon-income relationships. On the basis of a first application of intervention analysis to Environmental Kuznets curves, we show that time related effects, namely structural breaks, have been predominantly relevant in explaining the eventual occurrence of such bell shaped curves. We indeed find great heterogeneity of effects in comparing advanced countries long run performances. The different response in terms of environmental policy and innovation efforts of northern EU to exogenous policy events such as the 1992 climate change Rio convention, that gave earth to the Kyoto era, and to the second oil shock that preceded it in the 80’s are among the underlying causes. Environmental policy can be or create the pre conditions to exert long run beneficial shocks to the energy-economic system. Evidence provides food for thought for the post Kyoto era policy making, just after the Rio+20 step. |
| Keywords: | Carbon Kuznets Curves; Rio convention; policy events; oil shocks; intervention analysis; structural breaks |
| JEL: | C22 Q53 |
| Date: | 2012–09–23 |
| URL: | http://d.repec.org/n?u=RePEc:udf:wpaper:201214&r=env |
| By: | Baez, Javier E. (World Bank); Kronick, Dorothy (World Bank); Mason, Andrew D. (World Bank) |
| Abstract: | This paper argues that climate change poses two distinct, if related, sets of challenges for poor rural households: challenges related to the increasing frequency and severity of weather shocks and challenges related to long-term shifts in temperature, rainfall patterns, water availability, and other environmental factors. Within this framework, we examine evidence from existing empirical literature to compose an initial picture of household-level strategies for adapting to climate change in rural settings. We find that although households possess numerous strategies for managing climate shocks and shifts, their adaptive capacity is insufficient for the task of maintaining – let alone improving – household welfare. We describe the role of public policy in fortifying the ability of rural households to adapt to a changing climate. |
| Keywords: | climate change, rural households, adaptation, risk-coping mechanisms, long-term effects |
| JEL: | Q12 Q54 O13 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6872&r=env |
| By: | Lan-Fen Chu (National Science and Technology Center for Disaster Taiwan); M. McAleer (Econometric Institute Erasmus School of Economics Erasmus University Rotterdam and Institute of Economic Research Kyoto University andDepartment of Quantitative Economics Complutense University of Madrid); Chi-Chung Chen (Department of Applied Economics National Chung Hsing University Taiwan) |
| Abstract: | This paper analyzes two indexes in order to capture the volatility inherent in El Ninos Southern Oscillations (ENSO), develops the relationship between the strength of ENSO and greenhouse gas emissions, which increase as the economy grows, with carbon dioxide being the major greenhouse gas, and examines how these gases affect the frequency and strength of El Nino on the global economy. The empirical results show that both the ARMA(1,1)-GARCH(1,1) and ARMA(3,2)-GJR(1,1) models are suitable for modelling ENSO volatility accurately, and that 1998 is a turning point, which indicates that the ENSO strength has increased since 1998. Moreover, the increasing ENSO strength is due to the increase in greenhouse gas emissions. The ENSO strengths for Sea Surface Temperature (SST) are predicted for the year 2030 to increase from 29.62% to 81.5% if global CO2 emissions increase by 40% to 110%, respectively. This indicates that we will be faced with even stronger El Nino or La Nina effects in the future if global greenhouse gas emissions continue to increase unabated. |
| Keywords: | El Ninos Southern Oscillations (ENSO), Greenhouse Gas Emissions, Global Economy, Southern Oscillation Index (SOI), Sea Surface Temperature (SST), Volatility. |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:829&r=env |
| By: | Armon Rezai; Frederick van der Ploeg; Cees Withagen |
| Abstract: | In a calibrated integrated assessment model we investigate the differentia impact of additive and multiplicative damages from climate change for both a socially optimal and a business-as-usual scenario in the market economy within the context of a Ramsey model of economic growth. The sources ofenergy are fossil fuel which is available at a cost which rises as reserves diminish and a carbon-free backstop supplied at a decreasing cost. if damages are not proportional to aggregate production output, and the economy is along a development path, the social cost of carbon and the optimal carbon tax are smaller as damages can more easily be compensated for by higher output. As a result, the economy switches later from fossil fuel to the carbon-free backstop and leaves less fossil fuel in situ. This is in contrast to a partial equilibrium analysis with dmages in utility rather than in production which finds that the willingness to forsake current consumption to avoid future global warming is higher (lower) under additive damages in a growing economy if the elasticity of intertemporal substitution is smaller (bigger) than one. |
| Keywords: | climate change, multiplicative damages, additive damages, integrated assessment models, Ramsey growth model, fossil fuel, carbon-free backstop |
| JEL: | H21 Q51 Q54 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:oxcrwp:093&r=env |
| By: | Lau-Fen Chu; Michael McAleer (University of Canterbury); Chi-Chung Chen |
| Abstract: | This paper analyzes two indexes in order to capture the volatility inherent in El Niños Southern Oscillations (ENSO), develops the relationship between the strength of ENSO and greenhouse gas emissions, which increase as the economy grows, with carbon dioxide being the major greenhouse gas, and examines how these gases affect the frequency and strength of El Niño on the global economy. The empirical results show that both the ARMA(1,1)-GARCH(1,1) and ARMA(3,2)-GJR(1,1) models are suitable for modelling ENSO volatility accurately, and that 1998 is a turning point, which indicates that the ENSO strength has increased since 1998. Moreover, the increasing ENSO strength is due to the increase in greenhouse gas emissions. The ENSO strengths for Sea Surface Temperature (SST) are predicted for the year 2030 to increase from 29.62% to 81.5% if global CO2 emissions increase by 40% to 110%, respectively. This indicates that we will be faced with even stronger El Nino or La Nina effects in the future if global greenhouse gas emissions continue to increase unabated. |
| Keywords: | El Niños Southern Oscillations (ENSO); Greenhouse Gas Emissions; Global Economy; Southern Oscillation Index (SOI); Sea Surface Temperature (SST); Volatility |
| JEL: | Q54 Q56 |
| Date: | 2012–09–20 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:12/15&r=env |
| By: | Humberto Llavador; John E. Roemer; Joaquim Silvestre (Department of Economics, University of California Davis) |
| Abstract: | Sustainability has been largely replaced by discounted utilitarianism in contemporary climate-change economics. Our approach rejuvenates sustainability by expanding the conception of the quality of life, along the lines of the UN Human Development Reports, to include not only consumption, but also education, leisure, the stock of knowledge and the quality of the biosphere. We report on our results showing that the quality of life can be sustained forever at levels higher than present levels, while reducing GHG emissions to converge to carbon concentrations of 450 ppm. Here we repeat our optimization but substituting consumption for the quality of life. Our sustainability results carry over. As it should be expected, optimal consumption is higher when the objective is consumption rather than the quality of life, but not by much (7% higher). On the other hand, the stock of knowledge is twice as large, and education is four times as large. So if the “true” social welfare index were consumption, a planner who “mistakenly” maximized the quality of life would be making a relatively small error. But the converse error would be large. If the quality of life provides an appropriate welfare index, but the public policy aims at maximizing consumption, the quality of life would be reduced by 60%. The expansion of the concept of welfare beyond consumption renders possible responding to the climate-change challenge by moving away from energy-intensive commodities and towards less intensive ones, like knowledge, education, and leisure. |
| Keywords: | Sustainability, climate change, growth, GHG, CO2 emissions, quality of life, education, knowledge. |
| JEL: | D62 D63 D90 H41 O40 Q54 Q55 Q56 Q58 |
| Date: | 2012–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:cda:wpaper:12-22&r=env |
| By: | Randy A. Becker; Ronald J. Shadbegian; Carl Pasurka |
| Abstract: | It remains an open question whether the impact of environmental regulations differs by the size of the business. Such differences might be expected because of statutory, enforcement, and/or compliance asymmetries. Here, we consider the net effect of these three asymmetries, by estimating the relationship between plant size and pollution abatement expenditures, using establishment-level data on U.S. manufacturers from the Census Bureau’s Pollution Abatement Costs and Expenditures (PACE) surveys of 1974-1982, 1984-1986, 1988-1994, 1999, and 2005, combined with data from the Annual Survey of Manufactures and Census of Manufactures. We model establishments’ PAOC intensity – that is, their pollution abatement operating costs per unit of economic activity – as a function of establishment size, industry, and year. Our results show that PAOC intensity increases with establishment size. We also find that larger firms spend more per unit of output than do smaller firms. |
| Keywords: | Environmental Regulation, costs, Business size, U. S.manufactoring |
| JEL: | L51 L60 Q52 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp201206&r=env |
| By: | Sergey Rabotyagov; Adriana Valcu; Catherine L. Kling (Center for Agricultural and Rural Development (CARD)) |
| Abstract: | Nonpoint-source pollution remains a troubling source of water quality problems despite decades of economics research on the matter. Among the chief difficulties for addressing the issue are the property rights assignments implicit in the current policy environment that favor agricultural nonpoint-source pollution, the unobservability of field-level emissions, and complex fate and transport relationships linking them to ambient water quality. Theoretical and practical considerations lead to the focus on observable abatement actions (conservation practices). Biophysical models are increasingly more capable of linking abatement actions to policy-relevant water quality outcomes. If costs of abatement actions are known, finding the least-cost mix of abatement actions is possible, while incorporating the nonlinearity of the pollution process. When costs are not known or information is incomplete, regulators can rely on flexible incentive-based programs, but the design of such programs is complicated by the complexities of emission aggregation. In this work, we focus on the regulator capable of focusing on nonpoint-source emitters. We address the design and performance of three practice-based approaches, ranging from the command-and-control approach mandating practices, to the more flexible performance standard approach where farmers are free to select the optimal mix of on-farm conservation practices, to a fully flexible approach where credits for conservation practices are freely tradable. We do so by utilizing the representation of the nonlinear emission aggregation (fate and transport) process (the Soil and Water Assessment Tool model), and consider cases ranging from the regulator having perfect information on the costs of conservation practices to no information at all. We show how workable programs utilizing the biophysical models and simulation-optimization approaches can be designed, and assess their performance relative to the efficient case. We find that flexible programs perform well both in terms of cost and water quality goals attainment. In particular, a trading program designed around an approximation of the nonlinear pollution process performs well, relative to first-best under no information on the cost of conservation practices. |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:12-wp533&r=env |
| By: | Cristina Barbot; Ofelia Betancor; M. Pilar Socorro; M. Fernanda Viecens |
| Abstract: | Emission trading systems (ETS) are being applied worldwide and in different economic sectors as an environmental regulatory tool that induces reductions of CO2 emissions. In Europe such a system is in place since 2005 for energy intensive installations and, since 1st January 2012, for airlines with flights arriving and departing from Community airports. The efficiency of the system should consider not only how it allows reaching an environmental goal, but also it should take into account its implications for market competition. In this work we develop a theoretical model that analyses the European ETS’s main features as devised for airlines, focusing on its effects on potential competition and entry deterrence. Contrary to other economic activities under ETS, potential competition is usual in most airline markets. Our results indicate that the share of capped allowances allocated initially for free to air operators may be a key element in deterring or allowing entry into the market. This result may be in collision with the general European principle of promoting competition and may represent a step backwards in the construction of a single European air transport market. |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:fda:fdaddt:2012-05&r=env |
| By: | Eduardo A. Haddad; Alexandre A. Porsse, Paula C. Pereda |
| Abstract: | This paper evaluates the systemic impact of climate variations in a regional perspective using an interregional CGE model integrated with a physical model estimated for agriculture in order to catch the effects of climate change. The climate anomalies are estimated for 2005 and represent deviations over the historic trend. The results of this paper suggest that the economic costs of climate anomalies can be significantly underestimated if only partial equilibrium effects (direct impact/damage) are accounted for. The results show that a general equilibrium approach can provide a better comprehension about the systemic impact of climate anomalies, suggesting the economic costs are higher than those that would be observed in a partial equilibrium analysis. In addition, intersectoral and interregional linkages as well price effects seem to be important transmission channels in the context of systemic impact of climate anomalies. |
| Keywords: | climate anomalies, systemic impact, interregional CGE analysis |
| JEL: | Q54 R13 |
| Date: | 2012–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2012wpecon20&r=env |
| By: | Ellerman Denny; Delarue Erik; Hannes Weigt (University of Basel) |
| Abstract: | <p style="text-indent:0cm"><span lang="EN-GB">The overlapping impact of the Emission Trading System (ETS) and renewable energy (RE) deployment targets creates a classic case of interaction effects. Whereas the price interaction is widely recognized and has been thoroughly discussed, the effect of an overlapping instrument on the abatement attributable to an instrument has gained little attention. </span><span style="line-height:150%" lang="EN-GB">This paper estimates the actual reduction in demand for European Union Allowances that has occurred due to RE deployment focusing on the German electricity sector, for the five years 2006 through 2010. </span><span lang="EN-US">Based on a unit commitment model we estimate that CO2 emissions from the electricity sector are reduced by 33 to 57 Mtons, or 10% to 16% of what estimated emissions would have been without any RE policy. Furthermore,</span><span style="line-height:150%" lang="EN-US"> </span><span style="line-height:150%" lang="EN-GB">we find that the abatement attributable to RE injections is greater in the presence of an allowance price than otherwise. The same holds for the ETS effect in presence of RE injection. T</span><span lang="EN-US">his interaction effect is consistently positive for the German electricity system, at least for these years, and on the order of 0.5% to 1.5% of emissions.</span></p> |
| Keywords: | ETS, RE policy, interaction, emission abatement, Germany |
| JEL: | L94 Q58 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2012/14&r=env |
| By: | Christopher Kaminker; Fiona Stewart |
| Abstract: | Decarbonising the world?s energy system, moving towards a resource efficient economy and providing energy access for all will require doubling existing investment levels to around USD 2 trillion a year or 2% of GDP. Governments understand that large sums of capital will be required, and many are also realising the need for further recourse to private capital as public finances have become strained in many developed countries. Simultaneously, banking sector provision of long-term finance has become tighter due deleveraging and new financial regulations. With their USD 71 trillion in assets, institutional investors potentially have an important role to play. Given the current low interest rate environment and weak economic growth prospects in many OECD countries, institutional investors are increasingly looking for real asset classes which can deliver steady, preferably inflation-linked, income streams with low correlations to the returns of other investments. Clean energy projects may combine these sought-after characteristics.<P> Yet – outside the major pension funds and insurance companies – institutional investor allocations to clean energy projects remain limited, particularly when it comes to the types of direct investment which can help close the financing gap. Reasons for institutional investor hesitancy include a lack of information and expertise when it comes to the type of direct infrastructure investment required to finance clean energy projects, and a potentially unsupportive regulatory backdrop. These problems are compounded by a lack of suitable investment vehicles providing the risk/return profile that institutional investors need to manage the risks specific to clean energy projects. There are many species of risk, including regulatory risk stemming from a lack of clarity in terms of environmental and climate policy, and retroactive changes to support mechanisms. Progress is being made – with investor groups coming together to use their scale and build their expertise in clean energy investment. From the public and private sectors, actions are underway to scale up green bond offerings, create risk-mitigating public finance mechanisms and co-investment funding structures. These initiatives need to be encouraged, carefully monitored, and expanded where successful. |
| Keywords: | infrastructure, insurance companies, green growth, green bonds, pension funds |
| JEL: | G15 G18 G23 G28 J26 |
| Date: | 2012–09–24 |
| URL: | http://d.repec.org/n?u=RePEc:oec:dafaad:23-en&r=env |
| By: | Francesco Nicolli; Giulia Bettin |
| Abstract: | The evolution of worldwide climatic conditions doubtless represents one of the major and uncertain challenges in the near future. The adaptation strategies might differ a lot according to local institutional, political and financial constraints but migration is certainly one of the main possibilities individuals have to escape from the most affected regions. Regional – maybe temporary - small-scale movements might be the first, immediate response but international mobility as well is likely to take place in response to climatic variations. Empirical literature dealing with the effects of climate change on international migration is still rather scarce. In particular, it focuses on international migration to developed countries as a consequence of weather-related natural disasters while alternative measures for climate change based on deviations in temperature and rainfall from the long term means have been used only in a few studies. Building on this little empirical evidence, we collect ten-year bilateral data on international migration from 1960 to 2000 and look simultaneously at both anomalies in precipitations and temperature and weather-related natural disaster as determinants of international movements. The use of bilateral data let us consider not only long-distance migration (typically from low income to developed countries) but also short-distance regional movements. International migration is found to be significantly affected by different climate change proxies in the overall sample of countries, but results are confirmed also when focusing on specific geographical areas like Africa or Asia. |
| Keywords: | international migration; climate change; natural disasters |
| JEL: | F22 Q54 |
| Date: | 2012–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:udf:wpaper:201210&r=env |
| By: | Frederick van der Ploeg |
| Abstract: | We show how a monopolistic owner of oil reserves responds to a carbon-free substitute becoming available at some uncertain point in the future if demand is isoelaastic and variable extraction costs are zero but upfron exploration investment costs have to be made. Not the arrival of this substitute matters for efficiency, but the uncertainty about the timing of this substitute coming on stream. Before the carbon-free substitute comes on stream, oil rserves are depleted too rapidly; as soon as the substitute has arrived, the oil depletion rate drops and the oil price jumps up by a discrete amount. Subsidizing green R&D to speed up the introduction of breakthrough renewables leads to more rapid oil extraction before the breakthrough, but more oil is left in situ as exploration investment will be lower. The latter offsets the Green Paradox. |
| Keywords: | Hotelling principle, exhaustible resources, carbon-free substitute, regime switch, oil stock, uncertainty, hold-up problem, green R&D, Green Paradox |
| JEL: | D81 H20 Q31 Q38 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:oxcrwp:091&r=env |
| By: | Maung, Thein A.; Ripplinger, David G.; McKee, Gregory J.; Saxowsky, David M. |
| Abstract: | The feasibility analysis begins by examining the economic potential of using flared natural gas as a feedstock to produce a low-cost, reliable, and sustainable supply of nitrogen fertilizer for North Dakota farmers. Specific objectives include • Determining the most profitable facility size, location, and configuration for a natural gas nitrogen fertilizer production facility in North Dakota. • Calculating the financial returns and capital requirements of gas-based nitrogen fertilizer production. • Identifying possible business structures for the fertilizer production facility. Project objectives are achieved by evaluating the technological and economic feasibility of alternative nitrogen fertilizer production and distribution systems. • Flared Gas Collection: the economics of flared gas collection in western North Dakota analyzes the availability of flared gas supplies. • Ammonia Plant Preliminary Design: several ammonia production plants based on commercially available technologies are used to estimate capital and operating cost. • Business Structure: the effect of alternative business structures, including new generation cooperatives, on incorporation, capitalization, taxation, and fertilizer marketing are investigated. • Facility Siting: factors in determining optimal plant site include fertilizer form (e.g. ammonia, urea), technological and economies of scale, transportation and utility infrastructure, and nitrogen fertilizer demand. The use of natural gas in western and eastern North Dakota and co-location by existing coal-fired power plants or refineries are considered. Topics originally intended to study but not yet completed or are no longer relevant include • Preparing a financial pro forma, including pro forma balance sheet, income and cash flow statements for the nitrogen fertilizer production plant to demonstrate the financial viability of the enterprise. • Incorporating a supply chain model to estimate storage and transportation costs and efficiencies, including capturing and retaining value, and reducing cost and risks. • Determining the willingness of food manufacturers, bioenergy producers, and other current and potential buyers of North Dakota crops to pay the premiums for green inputs. • Estimating the impact of using of green fertilizer on farm profit. The focus of the study was refined when initial findings revealed that initiating an enterprise to capture and process flared gas was not economical at this time, but that relying on the energy industry to supply conventional natural gas for fertilizer manufacturing is more feasible at the present time. However, a premium for crops produced with green inputs and need for carbon sequestration in the future should be subsequently studied at appropriate times. |
| Keywords: | Environmental Economics and Policy, Production Economics, |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nddaae:133410&r=env |
| By: | José-María Da Rocha and Anders Skonhoft (Department of Economics, Norwegian University of Science and Technology and Universitat Autònoma de Barcelona and RGEA-Universidade deVigo) |
| Abstract: | The paper studies the economy and ecology of sheep farming at the farm level in a Nordic context, with a crucial distinction between the outdoors grazing season and the winter indoors feeding season, and where climate conditions fix the length of the grazing season. Two different categories of animals, ewes (adult females) and lambs, and one plant species are included in our ecological model. The farmer is assumed to maximize present-value profit where the revenue is made up income from meat and wool production, and we find that livestock cycles may represent an optimal management policy. We also show that, in a possible steady state with a constant number of animals and constant vegetation quantity, slaughtering either only lambs or only ewes is optimal. |
| Keywords: | sheep farming, vegetation growth, dynamics |
| JEL: | Q12 |
| Date: | 2012–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:nst:samfok:13612&r=env |
| By: | Lenzen, Manfred; Bhaduri, Anik; Moran, Daniel; Kanemoto, Keiichiro; Bekchanov, Maksud; Geschke, Arne; Foran, Barney |
| Abstract: | Recent analyses of the evolution and structure of trade in virtual water revealed that the number of trade connections and volume of virtual water trade have more than doubled over the past two decades, and that developed countries increasingly draw on the rest of the world to alleviate the pressure on their domestic water resources. Our work builds on these studies, but fills three important gaps in the research on global virtual water trade. First, we note that in previous studies virtual water volumes are lumped together from countries experiencing vastly different degrees of water scarcity. We therefore incorporate water scarcity into assessments of virtual water flows. Second, we note that some previous studies assess virtual water networks only in terms of immediate water used for food production, but omit indirect virtual water used throughout the supply chains underlying all traded goods. In our analysis we therefore use input-output analysis to also include indirect virtual water. We note existing conflicting views about whether trade in virtual water can lead to overall savings in global water resources. We re-visit the Heckscher-Ohlin Theorem in the context of direct as well as indirect virtual water in order to determine whether international trade can be seen as a feasible demand management instrument in alleviating water scarcity. We find that the structure of global virtual water networks changes significantly after adjusting for water scarcity. In addition, when indirect virtual water is appraised the Heckscher-Ohlin Theorem can be validated. |
| Keywords: | Virtual water, multi-region input-output analysis, regional aggregation, scarcity, international trade, Environmental Economics and Policy, International Relations/Trade, Resource /Energy Economics and Policy, |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ubzefd:133478&r=env |
| By: | Jann Lay (GIGA German Institute of Global and Area Studies); Janosch Ondraczek (GIGA German Institute of Global and Area Studies); Jana Stoever (GIGA German Institute of Global and Area Studies) |
| Abstract: | We study the determinants of households’ choices of lighting fuels in Kenya, including the option of using solar home systems (SHSs). The paper adds new evidence on the factors that influence the introduction and adoption of decentralized and less carbon-intensive energy sources in developing countries. We capitalize on a unique representative survey on energy use and sources from Kenya, one of the few relatively well-established SHSs markets in the world. Our results reveal some very interesting patterns in the fuel transition in the context of lighting-fuel choices. While we find clear evidence for a crosssectional energy ladder, the income threshold for modern fuel use – including solar energy use – is very high. Income and education turn out to be key determinants of SHSs adoption, but we also find a very pronounced effect of SHSs clustering. In addition, we do not find a negative correlation between grid access and SHSs use. |
| Keywords: | renewable energy, household fuel choice, lighting-fuel choice, solar power use, solar home systems, Kenya, energy ladder, KIHBS |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:gig:wpaper:198&r=env |
| By: | Klinge Jacobsen, Henrik; Hansen, Lise-Lotte P; Schröder, Sascha T; Kitzing, Lena |
| Abstract: | There are considerable benefits from cooperating among member states on meeting the 2020 RES targets. Today countries are supporting investments in renewable energy by many different types of support schemes and with different levels of support. The EU has opened for cooperation mechanisms such as joint support schemes for promoting renewable energy to meet the 2020 targets. The potential coordination benefits, with more efficient localisation and composition of renewable investment, can be achieved by creating new areas/sub-segments of renewable technologies where support costs are shared and credits are transferred between countries. Countries that are not coordinating support for renewable energy might induce inefficient investment in new capacity that would have been more beneficial elsewhere and still have provided the same contribution to meeting the 2020 RES targets. Furthermore, countries might find themselves competing for investment in a market with limited capital available. In both cases, the cost-efficiency of the renewable support policies is reduced compared to a coordinated solution. Barriers for joint support such as network regulation regarding connection of new capacity to the electricity grid and cost sharing rules for electricity transmission expansion are examined and solutions are suggested. The influence of additional renewable capacity on domestic/regional power market prices can be a barrier. The market will be influenced by for example an expansion of the wind capacity resulting in lower prices, which will affect existing conventional producers. This development will be opposed by conventional producers whereas consumers will support such a strategy. A major barrier is the timing of RES targets and the uncertainty regarding future targets. We illustrate the importance of different assumptions on future targets and the implied value of RES credits. The effect on the credit price for 2020 is presented in an exemplary case study of 200MW wind capacity. |
| Keywords: | RES target; cooperation mechanisms; policy coordination; renewables; European energy policy |
| JEL: | Q48 Q01 Q20 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:41400&r=env |
| By: | McLennan, D.; Sharma, R. (Rimisp) |
| Abstract: | This document is the result of the Rural Territorial Dynamics Program, implemented by Rimisp in several Latin American countries in collaboration with numerous partners. The program has been supported by the International Development Research Center (IDRC, Canada). We authorize the non-for-profit partial or full reproduction and dissemination of this document, subject to the source being properly acknowledged. |
| Keywords: | Delivering, Ecological, Services, Index, DESI |
| JEL: | D44 D82 L86 C72 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:rms:wpaper:119&r=env |
| By: | Li, Chuan-Zhong (Uppsala University); Löfgren, Karl-Gustaf (CERE) |
| Abstract: | This paper shows how utility based welfare measures in dynamic general equilibrium under imperfect markets can be transferred into a money metrics. In order to do this, we need to price forward looking components measured in units of utility. The typical comprehensive (green or inclusive) quasi-static welfare measure contains a core that looks like a comprehensive NNP component, as well as additional consumer surplus terms for both consumption goods and the externality. In addition, it contains a forward looking component with the discounted value of the marginal externality as the function to be integrated over time is also required. To accomplish this, we need a price index that is independent of the market basket, or to assume that the marginal utility of income is constant over time. With respect to local welfare measures it turns out that growth in traditional NNP will surprisingly work, provided that we condition on a positive average marginal rate of return of investment, and use an augmented genuine saving concept. |
| Keywords: | Welfare measurement; comprehensive NNP; imperfect markets; money metrics |
| JEL: | D61 D91 Q01 |
| Date: | 2012–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2012_015&r=env |
| By: | Lisette IBANEZ; Nathalie MOUREAU; Sébastien ROUSSEL |
| Abstract: | Cet article traite du rôle joué par les émotions incidentes dans les préférences altruistes. Nous envisageons cette question dans le cadre des comportements pro- environnementaux à travers les dons que font les individus pour les associations de protection de lenvironnement. La méthodologie mise en place sinscrit dans le champ de léconomie comportementale. Le jeu utilisé est celui du dictateur où chaque individu est placé dans un contexte émotionnel réel, les émotions étant induites par des photogra- phies préalablement choisies en nous appuyant sur la littérature en psychologie. Nous montrons que les émotions incidentes modi ent de manière signi cative la générosité. De manière étonnante, le cas dans lequel la générosité est la plus faible est celui où les individus sont exposés à une photographie en lien direct avec l'environnement induisant une émotion incidente positive. |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpaper:12-29&r=env |