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on Environmental Economics |
| By: | Milena Breisinger |
| Abstract: | This document provides the methodology prepared and used by IDB to assess the impact of its direct investments loans on greenhouse gas (GHG) emissions since 2009. The document provides the methodology behind a series of tools developed to assess GHG emissions for IDB operations in key sectors. |
| Keywords: | Environment & Natural Resources :: Climate Change, GHG Emissions Assessment |
| JEL: | Q54 C13 |
| Date: | 2012–08 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:76299&r=env |
| By: | Mireille Chiroleu-Assouline; Mouez Fodha |
| Abstract: | European countries have increased their use of environmental tax instruments by designing new tax bases. But, many countries have to face the opposition of the public opinion, for fear of the distributive consequences of these environmental tax reforms. This paper sheds light on the distrib-utive consequences of environmental tax policies when households are heterogeneous. The objective is to assess whether an environmental tax reform could be Pareto improving, when the revenue of the pollution tax is recycled by a change in the labor tax properties. We show that, whatever the degree of regressivity of the environmental tax alone, it is possible to design a recycling mechanism that renders the tax reform Pareto improving, by simultaneously decreasing the average rate of the wage tax and increasing its progressivity. |
| Keywords: | Environmental tax reform,heterogeneity, welfare analysis, tax progressivity. |
| JEL: | D60 D62 E62 H23 |
| Date: | 2012–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:eus:ce3swp:0312&r=env |
| By: | Grimaud, André (TSE,IDEI,LERNA); Rougé, Luc (TBS) |
| Abstract: | The possibility of capturing and sequestering some fraction of the CO2 emissions arising from fossil fuel combustion, often labeled as carbon capture and storage (CCS), is drawing an increasing amount of attention in the business and academic communities. We present here a model of endogenous growth in which the use of a non-renewable resource in production yields flows of pollution whose accumulated stock negatively a¤ects welfare. A CCS technology allows, via some effort, for the partial reduction of CO2 emissions in the atmosphere. We characterize the social optimum and how the availability of the CCS technology affects it, and we study the decentralized economy's trajectories. We then analyze economic policies. We first characterize the first-best policy. We derive the expression of the Pigovian carbon tax, and we give a full interpretation of its level, which is unique. We then study the impacts of three different second-best policies: a carbon tax, a subsidy to sequestered carbon, and a subsidy to labor in CCS. The first two tools foster CCS activity; so does the third, but only if it is coupled with one of the other two. While the tax postpones resource extraction, the two subsidies accelerate it's possibly yielding a rise in short-term CO2 emissions. The effects on growth are more complex. If the weight of the CCS sector in the economy is high, the tax will generally be detrimental to output growth, while the subsidies can foster it in the long-term. Finally, the carbon tax has a negative impact on the output level in the short-term, contrary to the subsidies. |
| Keywords: | carbon capture and storage (CCS), endogenous growth, polluting non-resources, carbon tax, subsidy to CCS. |
| JEL: | O3 Q3 |
| Date: | 2012–10–28 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:26505&r=env |
| By: | Grimaud, André (TSE,IDEI,LERNA); Rougé, Luc (TBS) |
| Abstract: | The possibility of capturing and sequestering some fraction of the CO2 emissions arising from fossil fuel combustion, often labeled as carbon capture and storage (CCS), is drawing an increasing amount of attention in the business and academic communities. We present here a model of endogenous growth in which the use of a non-renewable resource in production yields flows of pollution whose accumulated stock negatively a¤ects welfare. A CCS technology allows, via some effort, for the partial reduction of CO2 emissions in the atmosphere. We characterize the social optimum and how the availability of the CCS technology affects it, and we study the decentralized economy's trajectories. We then analyze economic policies. We first characterize the first-best policy. We derive the expression of the Pigovian carbon tax, and we give a full interpretation of its level, which is unique. We then study the impacts of three different second-best policies: a carbon tax, a subsidy to sequestered carbon, and a subsidy to labor in CCS. The first two tools foster CCS activity; so does the third, but only if it is coupled with one of the other two. While the tax postpones resource extraction, the two subsidies accelerate it's possibly yielding a rise in short-term CO2 emissions. The effects on growth are more complex. If the weight of the CCS sector in the economy is high, the tax will generally be detrimental to output growth, while the subsidies can foster it in the long-term. Finally, the carbon tax has a negative impact on the output level in the short-term, contrary to the subsidies. |
| Keywords: | carbon capture and storage (CCS), endogenous growth, polluting non-resources, carbon tax, subsidy to CCS. |
| JEL: | O3 Q3 |
| Date: | 2012–10–28 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:26507&r=env |
| By: | Hertel, Thomas |
| Abstract: | This paper introduces a general framework for analyzing the impacts of regional and global technological change on long run agricultural output, prices, land rents, land use, and associated GHG emissions. In so doing, it facilitates a reconciliation of the apparently conflicting views of the impacts of agricultural productivity growth on global GHG emissions and environmental quality. As has been previously recognized, in the case of a global change in farm productivity, the critical condition for an innovation to lead to diminished land use is that the farm level demand for agricultural products is inelastic. However, in the more common case where the innovation is regional in nature, the necessary condition for a reduction in global land use and associated GHG emissions is more complex and depends on the relative yields, emissions efficiencies and supply conditions in the affected and unaffected regions. While innovations in agricultural are most common land-sparing at global scale, innovations in regions commanding a small share of global production, with relatively low yields, high land supply elasticities and low emissions efficiencies can lead to an increase in global land use change emissions. A numerical example illustrates these points and suggests that these conditions may hold for productivity shocks in Latin America and Sub-Saharan Africa. These insights are also relevant for the emerging literature on the effect of adverse climate change on global agriculture and associated emissions from land use change. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:gta:workpp:4020&r=env |
| By: | Mads Greaker and Tom-Reiel Heggedal (Statistics Norway) |
| Abstract: | The major claim in Acemoglu, Aghion, Bursztyn & Hemous (2012) (AABH) is that subsidies for research and development of clean technologies are more important than carbon taxes when dealing with climate change. However, they – unconventionally – assume that a patent only lasts for one period. In this note we introduce long-lived patents into the AABH model. This makes the role of a research subsidy for clean technologies in AABH far less crucial and reestablishes the role of the carbon tax. This is good news as it is far easier to tax emissions than to pick the right technologies to subsidize. |
| Keywords: | Environment; directed technological change; innovation policy |
| JEL: | O30 O31 O33 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:713&r=env |
| By: | Lionel Nesta (Ofce sciences-po); Francesco Vona (Observatoire Francais des Conjonctures Economiques Author-Workplace-Postal :69, quai d'Orsay, Paris 75007, France); Francesco Nicolli (University of Ferrara) |
| Abstract: | We investigate the effectiveness of policies in favor of innovation in renew- able energy under dierent levels of competition. Using information regarding renewable energy policies, product market regulation and high-quality green patents for OECD countries since the late 1970s, we develop a pre-sample mean count-data econometric specification that also accounts for the endogeneity of policies. We nd that renewable energy policies are significantly more effective in fostering green innovation in countries with deregulated energy markets. We also nd that public support for renewable energy is crucial only in the genera- tion of high-quality green patents, whereas competition enhances the generation of green patents irrespective of their quality. |
| Keywords: | renwable energy technology, patents,environmental policies, product market regulation,policy complementarity |
| JEL: | Q55 Q58 Q42 Q48 O34 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1225&r=env |
| By: | Coria, Jessica (Department of Economics, School of Business, Economics and Law, Göteborg University); Robinson, Elizabeth (School of Agriculture, Policy, and Development, Reading, and Department of Economics, Gothenburg, Sweden); Smith, Henrik G. (Department of Animal Ecology, Lund); Sterner, Thomas (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | Most research and funding in conservation has been oriented toward biodiversity per se. Until recently there has been little tangible effort in linking conservation to ecosystem service provision. Nevertheless, this trend seems to be changing due in part to the relative success of payment mechanisms that provide funding for the conservation of ecosystem services – defined as discrete and identifiable end-products. This paper describes the features of optimal policies to protect (i) biodiversity vs. (ii) ecosystem services and analyze to what extent the criteria in (i) and (ii) set against each other or create synergies. We also analyze how payments for ecosystem services affect the relationship between biodiversity and ecosystem services conservation. |
| Keywords: | Biodiversity conservation; ecosystem services; synergies and trade-offs; environmental policies |
| JEL: | Q23 Q24 Q28 Q29 |
| Date: | 2012–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0546&r=env |
| By: | Christopher Jeffords (University of Connecticut) |
| Abstract: | Based on the December 2011 version of the Constitution of India, this article examines 3 potential ways to “interpret” the legal strength of a broadly defined national constitutional environmental human right. Using text from Articles 43, 47, 48A, and 51A, and paying special attention to the negating statement preceding these articles, the 3 ways are summarized as follows: (1) having or not a constitutional environmental human right; (2) interpreting the constitutional environmental human right as enforceable law or directive principles; and (3) linking the language of the constitutional environmental human right to the underlying definition of an environmental human right. The article notes that although India’s constitution contains a constitutional environmental human right that is best described as a directive principle, its language does not correspond highly with that of current definitions of environmental human rights. Furthermore, its legal strength is severely limited by the presence of the negating statement which, at the very least, would need to be repealed or negated to give life to constitutional environmental human rights in India. |
| Keywords: | Constitutional Environmental Human Rights, Directive Principles, Enforceable Law |
| JEL: | K32 Q50 Q56 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:uct:ecriwp:22&r=env |
| By: | Mireille Chiroleu-Assouline (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne); Jean-Christophe Poudou (LAMETA - Laboratoire Montpelliérain d'Economie Théorique et Appliquée - Université Montpellier I); Sébastien Roussel (LAMETA - Laboratoire Montpelliérain d'Economie Théorique et Appliquée - Université Montpellier I) |
| Abstract: | In this paper we aim at theoretically grounding the Reducing Emissions from Deforestation and Forest Degradation + (REDD+) scheme as a contractual relationship between countries in the light of the theory of incentives. Considering incomplete information about reference levels of deforestation as well as exogenous implementation and transaction costs, we compare two types of contracts : a deforestation performance-based contract and a conditional avoided deforestation-based contract. Because of the implementation and transaction costs, each kind of REDD+ contract implies a dramatically different information rent / efficiency trade-off. If the contract is performance-based (resp. conditionality-based), information rents are awarded to countries with the ex ante lowest (resp. highest) deforestation. In a simple quadratic setting, there is a reference level threshold in terms of efficiency towards less deforestation. In terms of expected welfare, conditional avoided deforestation-based schemes are preferred. |
| Keywords: | Conditionality; contract; deforestation; hidden information; incentives; performance; Reducing Emissions from Deforestation and Forest Degradation + (REDD+). |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00747405&r=env |
| By: | Ben Jebli, Mehdi; Ben Youssef, Slim |
| Abstract: | We consider a symmetric model composed of two countries and a firm in each country. Firms produce the same good by means of a polluting technology that uses fossil energy. However, these firms can adopt a clean technology that uses a renewable energy and that has a lower unit cost. Surprisingly, opening markets to international competition increases the per-unit emission-tax and decreases the per-unit production subsidy. Interestingly, the socially-optimal adoption date under a common market better internalizes transboundary pollution than that under autarky, and than the optimal adoption date of regulated firms. However, the optimal adoption date of non-regulated firms completely don't internalize transboundary pollution. In autarky (resp. a common market), regulated firms adopt earlier (resp. later) than what is socially-optimal, whereas non-regulated firms adopt later than the socially-optimal adoption date and than the optimal adoption date of regulated firms. Therefore, in autarky (resp. a common market) regulators can induce firms to adopt at the socially-optimal adoption date by giving them postpone ( resp. speed up) adoption subsidies. Opening markets to international trade, speeds up the socially-optimal adoption date and delays optimal adoption dates of regulated and non-regulated firms. |
| Keywords: | Regulation; Adoption date; Renewable energy; Transboundary pollution; Common market |
| JEL: | O38 L51 D62 Q55 O13 O32 H23 F18 Q27 C72 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:42467&r=env |
| By: | Richard G. Newell; William A. Pizer; Daniel Raimi |
| Abstract: | Carbon markets are substantial and they are expanding. There are many lessons from experiences over the past eight years: fewer free allowances, better management of market-sensitive information, and a recognition that trading systems require adjustments that have consequences for market participants and market confidence. Moreover, the emerging international architecture features separate emissions trading systems serving distinct jurisdictions. These programs are complemented by a variety of other types of policies alongside the carbon markets. This sits in sharp contrast to the integrated global trading architecture envisioned 15 years ago by the designers of the Kyoto Protocol and raises a suite of new questions. In this new architecture, jurisdictions with emissions trading have to decide how, whether, and when to link with one another, and policymakers overseeing carbon markets must confront how to measure the comparability of efforts among markets as well as relative to a variety of other policy approaches. |
| JEL: | Q48 Q54 Q58 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18504&r=env |
| By: | Giuseppe De Feo (Department of Economics and Management, University of Pavia and University of Strathclyde); Joana Resende (University of Porto and Cef.up); Maria Eugenia Sanin (University of Montpellier) |
| Abstract: | In this paper we analyze environmental regulation based on tradable emission permits in the presence of strategic interaction in an output market with differentiated products. We characterize firms' equilibrium behavior in the permits and in the output market and we show that both firms adopt "rival's cost-rising strategies". Then, we study the problem of the regulator that aims to maximize social welfare, proposing an efficient criterion to allocate permits between firms. We find that the optimal allocation criterion requires a perfect balance between the difference on firms' price-cost margins in the permits and the difference on firms' mark ups in the output market. In light of the previous result, we use a simulation to obtain the optimal allocation of permits between firms as a function of output market characteristics, in particular as a function of goods substitutability. |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:pav:demwpp:013&r=env |
| By: | Christoph Heinzel |
| Abstract: | Qualitative change is widely recognized as a defining feature of evolution. Schumpeter and Georgescu-Roegen put it at the center of their methodological reasoning. I revisit important contributions of these two authors, paying attention to the immediate relationship of the major traits and treated issues between their works. With reference to qualitative change, their joint approach provides answers as to (i) why an evolutionary analysis has to necessarily apply a varied less formal set of methods as compared to modern static and dynamic analysis, (ii) why an evolutionary analysis is a necessary component of economic analysis, and (iii) how it can be seen as complementary to modern statics and dynamics. They argued for methodogical pluralism, where the choice of methods shall derive from close observation of the subject matter under scrutiny. Georgescu-Roegen's reasoning shows the necessity of interdisciplinary contributions and the interrelation of economic activity and environmental impact and constraints, putting environmental issues immediately on the evolutionary economics agenda. The paper provides a new ground for evaluating Georgescu-Roegen's own and their joint contribution to modern research. |
| Keywords: | Schumpeter, Georgescu-Roegen, qualitative change, evolution, evolutionary methodology |
| JEL: | B25 B31 B41 O10 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:rae:wpaper:201208&r=env |
| By: | Alfredo Marvão Pereira (Department of Economics, The College of William and Mary); Rui M. Pereira (Department of Economics, The College of William and Mary) |
| Abstract: | In this paper we describe the model structure, data, and implementation procedures for the Dynamic General Equilibrium model of the Portuguese Economy, DGEP for short. Previous versions of this model have been used to evaluate the impact of tax policy and social security reform in Portugal. More recent applications, which are the focus of this document, deal with energy and environmental policy issues. |
| Date: | 2012–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:cwm:wpaper:127&r=env |
| By: | Thomas Jobert (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)); Fatih Karanfil (EconomiX - CNRS : UMR7166 - Université Paris X - Paris Ouest Nanterre La Défense); Anna Tykhonenko (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)) |
| Abstract: | Much of the existing literature on the relationship between nuclear energy consumption and gross domestic product (GDP) deals only with the causal links between these two variables. However, very little attention has been paid to the structure and form of this relationship. This paper first uses panel cointegration techniques to illustrate the form of an inverted U-shaped curve that arise from pooled data, then, applies the iterative empirical Bayesian procedure to in order to account for the heterogeneity in the coefficients of the long-term relationship. The empirical results from a multivariate framework involving carbon dioxide (CO2) emissions reveal that for only 3 of the 21 nuclear countries studied a linear form of the relationship can be justified and that nuclear energy goes from being a normal good to being an inferior good for the majority of the sample countries. |
| Keywords: | Nuclear energy; Panel cointegration; Shrinkage estimators |
| Date: | 2012–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00749757&r=env |
| By: | INOUE Tatsuhiko; NAGAYAMA Susumu |
| Abstract: | This study shows empirical research regarding the value creation network as it relates to facilitating product innovation. What kind of influence does "network broadening" with new players or "network reinforcing" with existing players have on value creation and innovation generation? Furthermore, what kind of environmental change causes network reinforcing and network broadening? This paper attempts a network analysis of the Japanese music industry; a case considered to be at the forefront even in the contents industry, which has been receiving attention in recent years from movements such as the Cool Japan policy. We gave particular attention to the value creation network consisting of multiple players, each of whom possesses varying business models. Due to the differences in the method of revenue generation, it is predicted that, given the environmental uncertainty, relationship building would vary. The result shows that because of factors such as the differences in business models between music production related factors and the investment related factors in shared copyright, there are contrasting relationship building patterns in a context of environmental uncertainty. In addition, the study indicates that product innovation is stimulated through network broadening by the production related factors and that value creation is prompted by network reinforcing of investment related factors. |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:12035&r=env |
| By: | Nævdal, Erik (The Frisch Centre for EConomic Research); Vislie, Jon (Dept. of Economics, University of Oslo) |
| Abstract: | An intertemporal optimal strategy for accumulation of reversible capital and management of an exhaustible resource is analyzed for a global economy when resource depletion generates discharges that add to a stock pollutant that affects the likelihood for hitting a tipping point or threshold of unknown location, causing a random“disembodied technical regress”. We characterize the optimal strategy by imposing the notion “precautionary tax” on current extraction. Such a tax will internalize future expected damages or expected welfare loss should a threshold be hit. With reversible capital the presence of a stochastic threshold should speed up accumulation as long as no threshold is hit so as to build up a buffer or stock for future consumption should a threshold be hit. |
| Keywords: | Catastrophic risk and stochastic thresholds; capital accumulation; precautionary taxation; stock pollution; resource extraction |
| JEL: | C61 Q51 Q54 |
| Date: | 2012–09–07 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2012_024&r=env |
| By: | Bård Harstad; Matti Liski |
| Abstract: | This article presents a sequence of simple and related models to analyze the strategic use of natural resources. Game theory is the natural tool for such an analysis, whether the resource is private or publicly owned, whether it is renewable or exhaustible, whether the game is static or dynamic, and whether or not the users can strategically invest in technologies. Equilibrium extraction is too large and comes too early for public resources, but the opposite is true for private resources. The effects add up nicely when the resource has both private and public-good aspects. |
| JEL: | C7 H7 Q0 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18519&r=env |