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on Environmental Economics |
| By: | Emeline Bezin |
| Abstract: | We develop an overlapping generations model within which the evolution of pollution and the formation of environmental concern are endogenous. On the one hand, people heterogeneously concerned with environmental issues contribute to pollution which is a public bad. On the other hand, the transmission of environmental attitudes is the result of some economic choice which is affected by pollution. The model predicts that the long run proportion of environmentally concerned individuals will always be high. Though, depending on the pollution-generating technology, the transition from a low-environmentally concerned society to a high-environmentally concerned one is accompanied by two different outcomes regarding the long run level of pollution. If the technology is “clean”, there is a stable steady state level of pollution. However, if it is “dirty”, pollution experiences an unlimited growth which eventually causes an environmental disaster. This result captures some stylized facts regarding the joint evolution of environmental concern and pollution in developing nations. In the latter case, we show that intergenerational transfers from the older generation to the young working one restore the possibility to reach a stationary level of pollution. |
| Keywords: | Overlapping generations, pollution, environmental concern, cultural transmission,environmental policy |
| JEL: | Q50 D90 J11 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:rae:wpaper:201309&r=env |
| By: | Rick Van der Ploeg; Armon Rezai |
| Abstract: | Climate change must deal with two market failures, global warming and learning by doing in renewable use. The social optimum requires an aggressive renewables subsidy in the near term and a gradually rising carbon tax which falls in long run. As a result, more renewables are used relative to fossil fuel, there is an intermediate phase of simultaneous use, the carbonfree era is brought forward, more fossil fuel is locked up and global warming is lower. The optimal carbon tax is not a fixed proportion of world GDP. The climate externality is more severe than the learning by doing one. � |
| Keywords: | climate change, integrated assessment, Ramsey growth, carbon tax, renewables subsidy, learning by doing, directed technical change, multiplicative damages, additive damages |
| JEL: | H21 Q51 Q54 |
| Date: | 2013–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:oxcarre-research-paper-123&r=env |
| By: | Carla Valdivia de Richter |
| Abstract: | As Mexico seeks to boost economic growth, pressures on its natural resources and environmental outcomes may intensify, jeopardizing the sustainability of that growth and the well-being of the population. Costs of environmental degradation were estimated at approximately 5% of GDP in 2011, primarily from the health impact of air pollution, while overexploitation of natural resources – such as water – threatens their sustainability. Subsidies and prices do not reflect environmental externalities or cost of providing natural resources, including scarcity costs. They result in poor environmental outcomes, represent a heavy burden on the government budget and, contrary to their original objective, have not efficiently tackled poverty and inequality. Such subsidies should be gradually removed. In the energy sector, reforms are needed in order to allow the state-owned oil company PEMEX to become more efficient operationally and environmentally, and to better provide fiscal revenues. Les défis de la croissance verte et la nécessité d'une réforme de l'énergie au Mexique Comme le Mexique cherche à stimuler la croissance économique, les pressions sur les ressources naturelles et les effets sur l’environnement peuvent s'intensifier, ce qui compromet la durabilité de cette croissance et le bien-être de la population. Les coûts de la dégradation de l'environnement ont été estimés à environ 5% du PIB en 2011, essentiellement dus à l'impact sanitaire de la pollution de l'air, tandis que la surexploitation des ressources naturelles - comme l'eau - menace leur pérennité. Les subventions et les prix ne reflètent pas les externalités environnementales ou le coût de l’approvisionnement de ressources naturelles, y compris les coûts de rareté. Elles se traduisent par des résultats médiocres pour l'environnement, représentent un lourd fardeau pour le budget de l'État et, contrairement à leur objectif initial, n'ont pas été très efficace contre la pauvreté et l'inégalité. Ces subventions devraient être progressivement supprimées. Dans le secteur de l'énergie, des réformes sont nécessaires afin de permettre à la compagnie pétrolière publique PEMEX de devenir plus efficace sur le plan opérationnel et de l'environnement, et à améliorer la prestation des recettes fiscales. |
| Keywords: | Mexico, climate change, green growth, water sustainability, energy, énergie, durabilité de l’eau, changement climatique, croissance verte, Mexique |
| JEL: | H23 O44 Q4 Q5 |
| Date: | 2013–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1095-en&r=env |
| By: | Simon Dietz; Anca N. Matei |
| Abstract: | Economic evaluation of climate policy is notoriously dependent on assumptions about time and risk preferences, since reducing greenhouse gas emissions today has a highly uncertain pay-off, far into the future. These assumptions have always been much debated. Rather than occupy a position in this debate, we take a non-parametric approach here, based on the concept of Time-Stochastic Dominance. Using an integrated assessment model, we apply Time-Stochastic Dominance analysis to climate change, asking are there global emissions abatement targets that everyone who shares a broad class of time and risk preferences would agree to prefer? Overall we find that even tough emissions targets would be chosen by almost everyone, barring those with arguably `extreme' preferences. |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp136&r=env |
| By: | Stephen P. Holland; Jonathan E. Hughes; Christopher R. Knittel; Nathan C. Parker |
| Abstract: | Renewable fuel standards, low carbon fuel standards, and ethanol subsidies are popular policies to incentivize ethanol production and reduce emissions from transportation. Compared to carbon trading, these policies lead to large shifts in agricultural activity and unexpected social costs. We simulate the 2022 Federal Renewable Fuel Standard (RFS) and find that energy crop production increases by 39 million acres. Land- use costs from erosion and habitat loss are between $277 and $693 million. A low carbon fuel standard (LCFS) and ethanol subsidies have similar effects while costs under an equivalent cap and trade (CAT) system are essentially zero. In addition, the alternatives to CAT magnify errors in assigning emissions rates to fuels and can over or under-incentivize innovation. These results highlight the potential negative efficiency effects of the RFS, LCFS and subsidies, effects that would be less severe under a CAT policy. |
| JEL: | H4 Q2 Q4 Q5 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19636&r=env |
| By: | Blondiau, Thomas; Rousseau, Sandra |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:ner:leuven:urn:hdl:123456789/409329&r=env |
| By: | Misato Sato; Karsten Neuhoff; Verena Graichen; Katja Schumacher; Felix Matthes |
| Abstract: | One of the central debates surrounding the design of the EU Emissions Trading Scheme is the approach to addressing carbon leakage. Correctly identifying the conomic activities exposed to the risk of carbon leakage represents the first step in mitigating the risk effectively. Several metrics and methods have been proposed to separate sectors which are at risk from those which are not. This study sets out a simple analytical framework and several indicators to measure the relative potential exposure of manufacturing sectors to emissions leakage. These indicators are applied to detailed UK and German data. This illustrates that, when applied to high quality data, simple metrics can be used to identify carbon-intensive-trade-exposed sectors. We find that, of the 159 industrial sub-sectors examined, CO2 cost impacts are focused on a few industrial sub-sectors. The 25 highest ranking sub-sectors collectively account for around 13% of total UK CO2 emissions (from both direct and indirect energy use), 1% of total UK GDP, and 0.5% of total UK employment. For Germany, the equivalent figures are 22% of total CO2 emissions, 2% of GDP and 1% of employment. That the vulnerable sectors account for small shares of emission, value-added and employment does not mean that their potential emissions leakage can be ignored. Rather, the focus on specific sub-sectors provides possibilities for tailored and technical solutions where leakage is a valid concern, thus improving robust economic performance and the credibility of the EU ETS as an instrument for delivering emissions reductions. |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp113&r=env |
| By: | In Chang Hwang (Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands); Richard S.J. Tol (Department of Economics, University of Sussex, Falmer, United Kingdom; Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands; Department of Spatial Economics, Vrije Universiteit, Amsterdam, The Netherlands; Tinbergen Institute, Amsterdam, The Netherlands; CESifo, Munich, Germany); Marjan W. Hofkes (Department of Economics, Vrije Universiteit, Amsterdam, The Netherlands; Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands; Department of Spatial Economics, Vrije Universiteit, Amsterdam, The Netherlands) |
| Abstract: | We develop a climate-economy model with active learning. We consider three ways of active learning: improved observations, adding observations from the past and improved theory from climate research. From the model, we find that the decision maker invests a significant amount of money in climate research. Expenditures to increase the rate of learning are far greater than the current level of expenditure on climate research, as it helps in taking improved decisions. The optimal carbon tax for the active learning model is nontrivially lower than that for the uncertainty model and the passive learning model. |
| Keywords: | Climate policy; deep uncertainty; active learning; Bayesian statistical decision; integrated assessment; dynamic programming |
| JEL: | Q54 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:6513&r=env |
| By: | Phoebe Koundouri; Vassilis Babalos; Mavra Stithou; Marianna Mousoulidou; Aris Mousoulides; Ioannis Anastasiou; Katerina Vasiliou |
| Abstract: | The present study attempts to estimate the shadow price of unextracted groundwater in the Vozvozi aquifer. In the context of this study, we model the production function of vertically integrated agricultural firms in termsof an input-oriented distance function with multiple inputs. Duality theory is employed in order to extract information regarding the in situ shadow price of groundwater. This shadow price is of vital importance to the implementation of the EU Water Framework Directive and EU groundwater Directive, because it allows per farm estimation of the value of groundwater. It also allows the investigation of the level of cost recovery when resource’s environmental and resource costs are also considered. In this context, groundwater dependent ecosystems are of great relevance. In our case study, groundwater level decline induces recharge from Vosvozis River and Ismarida Lake, diminishing thus an important source for the life of the wetland ecosystem. Another threat due to groundwater level decline is the intrusion of seawater in the wetland area, causing thus a serious alteration in the initial character of this protected ecosystem. This study offers the opportunity to reveal individual farmer’s valuation of the marginal unit of groundwater in the aquifer and provide policy recommendations for water pricing that provides adequate incentives for users to use groundwater resource efficiently considering groundwater dependent ecosystems. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp128&r=env |
| By: | World Bank |
| Keywords: | Environment - Climate Change Mitigation and Green House Gases Environment - Environment and Energy Efficiency Private Sector Development - E-Business Energy - Energy Production and Transportation Energy - Energy and Environment |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:16263&r=env |
| By: | Sander Van Der Linden |
| Abstract: | Mass consumption of bottled water is contributing to a multitude of environmental problems, including; water wastage, pollution and climate change. The aim of this study is to advance a social-psychological understanding of how to effectively reduce bottled water consumption. An online survey experiment was conducted among students of a Dutch public university to examine outcome-beliefs about drinking less bottled water while subsequently testing three strategies for behavioural change. Respondents (n= 454) were randomly allocated to four different conditions (an information-only, social norm-only, a combination of both or a control group). It was hypothesized that the combination (i.e., norm-induced information provision) would be most persuasive and elicits the greatest change in intention. Results were consistent with this hypothesis. Findings also show that while beliefs about health, taste, water quality, lifestyle, the environment and perceived alternatives are all correlated with bottled water consumption, belief strength varies significantly based on rate of consumption. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp133&r=env |
| By: | Martin Weitzman |
| Abstract: | Thus far, most approaches to resolving the global warming externality have been quantity based. With n different national entities, a meaningful comprehensive treaty involves negotiating n different binding emissions quotas (whether tradeable or not). In post-Kyoto practice this n-dimensional coordination problem has proven intractable and has essentially devolved into sporadic regional volunteerism. By contrast, on the price side there is a natural one-dimensional focus on negotiating a single binding carbon price, the proceeds from which are domestically retained. Significantly (and unlike negotiated quantities) the negotiated uniform price on carbon emissions embodies an automatic "countervailing force" against free-riding self interest by incentivizing agents to internalize the externality. The model of this paper indicates an exact sense in which each agent's extra cost from a higher emissions price is counter-balanced by that agent's extra benefit from inducing (via the higher emissions price) all other agents to simultaneously lower their emissions. With some further restrictions, the theoretical model shows that population-weighted majority rule for a uniform price on carbon emissions can come as close to global efficiency as the median marginal benefit (per capita) is close to the mean marginal benefit (per capita). |
| JEL: | Q5 Q54 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19644&r=env |
| By: | Rick Van der Ploeg |
| Abstract: | Optimal climate policy should act in a precautionary fashion to deal with tipping points that occur at some future random moment. The optimal carbon tax should include an additional component on top of the conventional present discounted value of marginal global warming damages. This component increases with the sensitivity of the hazard to temperature or the stock of atmospheric carbon. If the hazard of a catastrophe is constant, no correction is needed of the usual Pigouvian tax. The results are applied to a tipping point resulting from an abrupt and irreversible release of greenhouse gases from the ocean floors and surface of the earth, which set in motion a positive feedback loop. Convex enough hazard functions cause overshooting of the carbon tax, but a linear hazard function gives rise to undershooting. A more convex hazard function and a high discount rate speed up adjustment. � |
| Keywords: | social cost of carbon, tipping point, positive feedback, climate |
| JEL: | D81 H20 Q31 Q38 |
| Date: | 2013–10–07 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:oxcarre-research-paper-122&r=env |
| By: | World Bank |
| Keywords: | Energy - Energy and Environment Environment - Climate Change Mitigation and Green House Gases Oil Refining and Gas Industry Environment - Environment and Energy Efficiency Energy - Energy Production and Transportation Industry |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:16264&r=env |
| By: | Phoebe Koundouri; Mavra Stithou; Eva Kougea; Pertti Ala-aho; Riku Eskelinen; Timo Karjalainen; Bjorn Klove; Manuel Pulido-Velazquez; Kalle Reinikainen; Pekka M.Rossi |
| Abstract: | Rokua in Northern Finland is a groundwater dependent ecosystem very sensitive to climate change and natural variability. As such, the water level of most of the lakes is a function of the level of the groundwater table of the esker which is naturally recharged. The management of an ecosystem like this is very challenging and complex because of the many associated use and non-use values. The scope of this study is to expose, apart from the use values, the nonmarket values attached to the ecosystems services of groundwater systems and reveal their importance. In particular, this chapter illustrates the contribution of stated preference methods to orient policy making and presents results from an application of a choice experiment and contingent valuation method regarding ground water quantity. General public’s elicited values highlight the importance of water management policy which contributes to the sustainability of groundwater dependent ecosystems. Importantly results highlight the need to broaden the policy options beyond the consideration of market and use values of groundwater systems. Instead these systems should be considered as part of the broader ecosystems and broader services considered in decision making. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp129&r=env |
| By: | Antoine CAZALS (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Alexandre Sauquet (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I) |
| Abstract: | Is there a strategically beneficial time for political leaders to make international environmental commitments? Based on the political cycles theory we argue that leaders have incentives to delay costly ratification of international environmental agreements to the post-electoral period. However, the cost of participating in these agreements are often lower for developing countries, and they may benefit from indirect gains, which may make them more prone to ratifying in the pre-electoral period. These hypotheses are empirically assessed by studying the ratification process of 48 global environmental agreements censused in the ENTRI database from 1976 to 1999. We use a duration model in which time is measured on a daily basis, enabling us to precisely identify pre- and post-electoral periods -- a significant challenge in political cycles studies. Our investigation reveals the existence of political ratification cycles that are of substantial magnitude and non-linear over the pre- and post-electoral years. |
| Keywords: | International Environmental Agreements;Political cycles;Ratification;duration model |
| Date: | 2013–11–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00903653&r=env |
| By: | Alexandre Marcellesi; Nancy Cartwright |
| Abstract: | N/A |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp120&r=env |
| By: | Johan Eyckmans; Sam Fankhauser; Snorre Kverndokk |
| Abstract: | This paper discusses the ethical underpinnings of climate finance. We ask what the optimal flow of financial assistance for mitigation (to reduce emissions), adaptation (to become climate resilient) and development (to increase income) would be if rich countries care about the inter- and intragenerational distribution of consumption in the world. The question is framed as a two-period game of transfers between two regions, North and South. We show that the level of financial assistance from the North will depend on the North’s concern about well-being in the South, which we model as a Fehr-Schmidt utility function. Our main conclusion is that in the absence of market failures (e.g., barriers to adaptation or a weak carbon constraint) the most effective instrument to promote adaptation and mitigation in the South is a development transfer. In pure equity terms, development aid is a more effective instrument for achieving both intergenerational- and intragenerational equity. |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp123&r=env |
| By: | Laure Latruffe; Jean Joseph Minviel; Julien Salanié |
| Abstract: | In this paper, we investigate how environmental and land transaction regulations influence the price of agricultural plots sold in France. We use data from individual transactions for the period 1994-2010 in the NUTS2 region Brittany. Estimations were performed both ignoring and accounting for spatial interactions (model SARAR). Regressions on three sub-samples of buyers were performed in order to assess whether different buyers have different attitudes or plans regarding the purchased farmland: a sub-sample including only farmer buyers; a sub-sample including non-farmer individual buyers and; a sub-sample including non-farmer non-individual buyers. Results indicate that the price of land is lower when buyers are farmers, that the nitrate surplus area zoning increases the price of land, even more so for farmer buyers. Regarding land transaction regulations, there is a negative effect, on land price, of the purchaser being the current tenant or being the land regulating public body SAFER. Estimating the model on different sub-samples depending on the buyers’ type sheds light on the factors which are more important for each type. |
| Keywords: | farmland price, individual transactions, environmental regulations, SAFER regulation, spatial econometrics, Brittany (France) |
| JEL: | Q24 Q15 Q28 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:rae:wpaper:201311&r=env |
| By: | Maystadt, Jean-Francois; Ecker, Olivier; Mabiso, Arthur |
| Abstract: | Climate change leads to more frequent and more intense droughts in Somalia. In a global context, weather shocks have been found to perpetuate poverty and fuel civil conflict. By relating regional and temporal variations in violent conflict outbreaks with drought incidence and severity, we show that this causality is valid also for Somalia at the local level. We find that livestock price shocks drive drought-induced conflicts through reducing the opportunity costs of conflict participation. Our estimation results indicate that a temperature rise of around 3.2 degrees Celsius—corresponding to the median Intergovernmental Panel on Climate Change scenario for eastern Africa by the end of the century—would lower cattle prices by about 4 percent and, in turn, increase the incidence of violent conflict by about 58 percent. Hence climate change will further aggravate Somalia’s security challenges and calls for decisive action to strengthen both drought and conflict resilience, especially in pastoralist and agropastoralist livelihoods. |
| Keywords: | drought; conflict; civil war; livestock; prices; Somalia; Horn of Africa; |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ner:leuven:urn:hdl:123456789/401898&r=env |
| By: | Alex Bowen; Emanuele Campiglio; Massimo Tavoni |
| Abstract: | Transitioning to a low-carbon economy will require significant investment to transform energy systems, alter the built environment and adapt infrastructure. A strategy to finance this investment is needed if the limit of a 2°C increase in global mean temperatures is to be respected. Also, high-income countries have pledged to pay the “agreed full incremental costs” of climate-change mitigation by developing countries, which are not necessarily the same as incremental investment costs. Building on simulations using Integrated Assessment Models and historical evidence, this paper explores some of the issues posed by this dual financing challenge. We discuss the fiscal self-reliance of the energy sector, finding that carbon pricing would generate sufficient fiscal revenues within each region to finance total energy investment. Even when allowing for trade in emission permits regional carbon fiscal revenues should still suffice to cover both their own energy sector investment and permit purchases from abroad. We show that incremental investment (and saving) needs are well within the range of past variation, and argue that the challenge is rather to ensure that the revenues are complemented by investment in the appropriate sectors. But fairness and equity are likely to warrant transfers from advanced industrial countries to developing nations. |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp122&r=env |
| By: | Samuel Fankhauser; Thomas K.J. McDermott |
| Abstract: | Poor countries are more heavily affected by extreme weather events and future climate change than rich countries. This discrepancy is sometimes known as an adaptation deficit. This paper analyses the link between income and adaptation to climate events theoretically and empirically. We postulate that the adaptation deficit is due to two factors: A demand effect, whereby the demand for the good “climate security” increases with income, and an efficiency effect, which works as a spill-over externality on the supply-side: Adaptation productivity in high-income countries is enhanced because of factors like better infrastructure and stronger institutions. Using panel data from the Munich Re natural catastrophe database we find evidence for both effects in two climate-related extreme events: tropical cyclones and floods. The demand effect is uniformly strong, but there is considerable variation in adaptation efficiency. We identify the countries where inefficiencies are largest. Lower adaptation efficiency is associated in particular with less government spending, an uneven income distribution and bad governance. The conclusion for policy is that international efforts to close the adaptation deficit have to include both inclusive growth policies (which boost adaptation demand) and dedicated adaptation support (which enhances spill-overs), the latter targeted at the countries with the highest adaptation inefficiencies. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp134&r=env |
| By: | Mintewab Bezabih; Abe Damte Beyene; Zenebe Gebreegziabher; Livousew Borga |
| Abstract: | The paper analyses the impact of climate change and local social networks on farmers’ soil conservation behaviour in the Central Highlands of Ethiopia. Farm household level panel data with multiple plots combined with climate data from the adjacent meteorological stations, interpolated at a household level, are employed in the analysis. The extent to which local social networks contribute to soil conservation investment in the presence of climate change is assessed using multivariate probit and poison estimation methods. In light of similar previous studies, the major contributions of the paper are: 1) the use of wide ranging social capital measures, and 2) the availability of different soil conservation structures in multiple plots within the same household. The results show that climate change is a significant determinant of soil conservation investment. In addition, the relationship between local social networks and soil conservation is context specific. |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp115&r=env |
| By: | Nicola Ranger; Alex Harvey; Su-Lin Garbett-Shiels |
| Abstract: | Official development assistance (ODA) currently totals around $130 billion USD per year, an order of magnitude greater than international climate finance. To safeguard development progress and secure the long-term effectiveness of these investments, projects must be designed to be resilient to current variability and future climate change. Previous studies have identified where ODA projects are sensitive to climate. This paper goes further, to identify where action now might be justified to ‘future-proof’ these projects, given balance of risks and additional costs. We review 250 recent (since 2007) projects for three countries from two development organisations. In agreement with previous studies we find that around 30% projects have a medium or high potential risk from climate change. Between 5% and 55% of these projects (or 2% to 30% of the whole country portfolio) could require futureproofing now, given that they have long-lived outcomes that are difficult to adjust over time. We find that in many cases (80% for the World Bank and 13% for DFID) the risks associated with climate change are not mentioned in the documentation of these projects, but there are signs of improvements in integration over the past few years. More in-depth, project-specific study is required to better assess the true level of integration and the barriers that development professionals confront in this area. Finally, we identify best practice examples of how ODA projects can be made more resilient to long-term climate change. |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp140&r=env |
| By: | Mr Derek Bond; Professor Elaine Ramsey; Mr Stuart Thompson |
| Abstract: | The paper has been prepared on behalf of the ERDF INTERREG IVB transnational NPP funded NEES (Natural - Energy Efficient - Sustainable) project. The NEES consortium is concerned with the issues relating to sustainable construction and energy efficiency in the northern periphery of Europe. This submission decribes a number of best practice examples and barriers identified by NEES partners within their own regions. The barriers include - • Geographical dispersion of the sustainable building industries hinders the sharing of knowledge, expertise and contacts; • Lack of maintenance of the physical, intellectual and educational sustainable building infrastructures; • Serious deficiency in traditional and sustainable building skills poses serious problems for maintenance, retro-fitting and new build; • Lack of conclusive data makes it difficult to accurately compare the whole life carbon costs of different materials; • High levels of both physical and human capital have been invested in energy intensive construction methods which has resulted in little interest in sustainable alternatives. This submission makes a number of suggestions to help alleviate the barriers identified - • Fund the development of regional knowledge exchange hubs to help manage support for the sustainable construction industries; • Encourage new education initiatives and awareness raising activities around both the benefits of using sustainable materials and the demand for skilled employees; • Update building regulations to place a higher emphasis on sustainability in conjunction with energy efficiency; • Develop the supply of locally-sourced sustainable materials and encourage consumers to select them so as to minimise the (potentially significant) carbon costs of transportation. |
| Keywords: | NEES, Natural Energy Efficient Sustainable, All Party Parliamentary Group for Excellence in the Built Environment, construction, Green Deal, INTERREG IVB, ERDF, Northern Periphery Programme, best practice, barriers |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:fsr:consul:2&r=env |
| By: | Jonathan Colmer |
| Abstract: | How does future income uncertainty affect child labour and human capital accumulation? Using a unique panel dataset, we examine the effect of changes in climate variability on the allocation of time among child labour activities(the intensive margin) as well as participation in education and labour activities (the extensive margin). We find robust evidence that increased climate variability increases the number of hours spent on farming activities while reducing the number of hours spent on domestic chores, indicating a substitution of time across child labour activities. In addition, we find no evidence of climate variability on enrolment decisions or educational outcomes, suggesting that households may spread the burden of labour across children to minimise its impact on formal education. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp132&r=env |
| By: | Karlygash Kuralbayeva |
| Abstract: | I build an equilibrium search and matching model of an economy with an informal sector and rural-urban migration to analyze the effects of budget-neutral green tax policy (raising pollution taxes, while cutting payroll taxes) on the labor market. The key results of the paper suggest that when general public spending varies endogenously in response to tax reform and higher energy taxes can reduce the income from self-employed work in the informal sector, green tax policy can produce a triple dividend: a cleaner environment, lower unemployment rate and higher after-tax income of the private sector. This is due to the ability of the government, by employing public spending as an additional policy instrument, to reduce the overall tax burden when an increase in energy tax rates does not exceed some threshold level. Thus governments should employ several instruments if they are concerned with labor market implications of green tax policies. |
| Date: | 2013–12 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp139&r=env |
| By: | Johane Dikgang and Edwin Muchapondwa |
| Abstract: | The economic importance of the dryland ecosystem services in the Kgalagadi area is generally unknown, as is the distribution of benefits from use of the ecosystem services. This study seeks to value ecosystem services in the Kgalagadi area by applying the Choice Experiment technique and thereafter assess the potential for ecosystem services to contribute to the Khomani San livelihoods through a payment for ecosystem services (PES) scheme. The values placed on dryland ecosystem services by tourists are estimated using a Conditional Logit model, Random Parameter Logit model and a Random Parameter Logit model with interactions. The park visitors prefer getting more pristine recreational opportunities, increased chances of seeing predators and show disapproval of granting more access inside the Kgalagadi Transfrontier Park to local communities. This scenario shows that there is a possibility to craft a PES scheme where park visitors could compensate the local communities to accept a restriction of resource use in the Kgalagadi area. |
| Keywords: | choice experiment, conditional logit, ecosystem services, Khomani San, random parameter logit |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:384&r=env |
| By: | Yonas Alem; Jonathan Colmer |
| Abstract: | Using a household panel data set in rural Ethiopia combined with a new data set containing daily atmospheric parameters, we are able to show that increased climate variability reduces the level of a farmer’s subjective assessment of their individual well-being. Resulting from the impact that climate variability has on uncertainty about future income, those living in riskier areas report lower life satisfaction than those living in more stable environments. The magnitude of our result indicates that a one standard deviation increase in climate variability has an equivalent e?ect on life satisfaction to a two standard deviation (1-2%) decrease in real consumption expenditure per capita. Out of all of the determinants examined, this e?ect is shown to be one of the largest determinants of life satisfaction in rural Ethiopia. Robustness tests demonstrate the resilience of our results and help to disentangle the e?ects of climate variability from weather e?ects. They also help to draw out the mechanism by which climate variability impacts life satisfaction. We also demonstrate, using a second panel data set in urban Ethiopia, that increased climate variability has no impact on subjective well-being for urban households. In light of the resilience and magnitude of our result, policies that reduce dependence on rain-fed agriculture, improve farmers’ ability to deal with climatic risk, and provide credible insurance are likely to be welfare-enhancing. |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp118&r=env |
| By: | Swenja Surminski; Delioma Oramas-Dorta |
| Abstract: | Risk transfer, including insurance, is widely recognized as a tool for increasing financial resilience to severe weather events such as floods. The application of this mechanism varies widely across countries, with a range of different types and schemes in operation. While most of the analytical focus has so far been on those markets that have a long tradition of insurance, there is still a clear gap in our understanding of how this mechanism works in a developing country context. This paper assesses 27 insurance schemes that transfer the risk of economic losses arising from floods in low and middle income countries, focusing on the linkages between financial risk transfer and risk reduction. This aspect is important to avoid the effect or moral hazard and has gained particular relevance in the context of the climate change adaptation discourse, where some scholars and practitioners view insurance as a potential tool not just for current risks, but also to address projected future impacts of a changing climate by incentivizing risk reduction. We therefore look beyond the pure financial risk transfer element of those 27 insurance schemes and investigate any prevention and risk reduction initiatives. Our analysis suggests that the potential for utilizing risk transfer for risk reduction is far from exhausted, with only very few schemes showing an operational link between risk transfer and risk reduction, while the effectiveness and implementation on the ground remains unclear. The dearth of linkages between risk reduction and insurance is a missed opportunity in the efforts to address rising risk levels, particularly in the context of climate change. Rising risk levels pose a threat to the insurability of floods, and insurance without risk reduction elements could lead to moral hazard. Therefore a closer linkage between risk transfer and risk reduction could make this a more sustainable and robust tool. |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp119&r=env |
| By: | Tanya O’Garra; Susanna Mourato |
| Abstract: | Focusing on the estimation of WTP for climate change adaptation projects in vulnerable areas around the world, this study explores the divergence between economic non-use values produced using a standard CV survey approach, and those produced using a persuasive’ CV survey in which most sources of informational bias are systematically exploited to maximise expressed WTP. We interact the persuasion analysis with a cross-cutting treatment involving optional information access. It is proposed that allowing respondents to voluntarily access added information emulates rather more closely consumer pre-purchase behaviour in the market. We examine information acquisition using two treatments: a pre-set default option (the default is “no added information wanted”) versus an “active decision” option (“would you like added information?”). The interactions produce an eight-cell experimental design. We find that, contrary to expectations, the persuasion treatment has a negative influence on WTP. We also find that persuasive information appears to dissuade respondents from accessing added information when this is offered as an opt-in default. Effort spent accessing added information has a strong influence on WTP but the sign on the coefficient varies depending on how the information was offered to respondents. |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp125&r=env |
| By: | Baran Doda |
| Abstract: | This empirical paper focuses on the relationship between changes in GDP and CO2 emissions as a country’s economy moves through periods of growth and decline. Using a comprehensive panel, I document substantial heterogeneity in the relationship across countries. Specifically, countries can be classi?ed into one of the following three groups. Group D (for decline) includes countries where the emissions growth rate is more strongly associated with the GDP growth rate in periods of GDP decline than in periods of GDP growth. Group G (for growth) includes countries where the degree of association is stronger in periods of GDPgrowth. Finally, in group S (for symmetrical) it is not possible to reject the hypothesis that the relationship is the same for growth and decline. According to a simple count criterion, approximately a third of the countries in the sample fall into each group. Notably, China and the US, currently the world’s largest emitters by a substantial margin, are in group D. These results have potentially important consequences for long-term emissions projections. They also suggest that macroeconomic stabilization policies may have adverse emissions consequences by limiting the cleansing e?ect of periods in which GDP declines. |
| Date: | 2013–06 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp116&r=env |
| By: | Johane Dikgang and Edwin Muchapondwa |
| Abstract: | This study seeks to value ecosystem services in the Kgalagadi area by applying the Choice Experiment technique. The values placed on dryland ecosystem services by indigenous communities are estimated using a Conditional Logit model, Random Parameter Logit model and a Random Parameter Logit model with interactions. The results show that local communities would prefer getting increased grazing firewood collection, hunting opportunities and harvesting of medicinal plants. |
| Keywords: | choice experiment, conditional logit, ecosystem services, local communities, random parameter logit |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:383&r=env |
| By: | Nicola Brandt; Paul Schreyer; Vera Zipperer |
| Abstract: | Traditional measures of multi-factor productivity (MFP) growth generally do not recognise natural capital as inputs into the production process. Since productivity growth is measured as the residual between output and input growth, it will pick up the growth in unmeasured inputs, which can lead to a bias. The purpose of this paper is to gain a better understanding of the role of natural capital for productivity measurement and as a source of economic growth. To this aim, aggregate economy productivity measures mostly from the OECD Productivity Database are extended by incorporating natural capital as an additional input factor into the production function. More specifically, this paper considers oil, gas and various minerals as natural capital inputs, drawing on data from the World Bank. Results suggest that failing to account for natural capital tends to lead to an underestimation of productivity growth in countries where the use of natural capital in production is declining because of a dwindling natural capital stock. In return, productivity growth is sometimes overestimated in times of natural resource booms, if natural capital is not taken into account as an input factor. The direction of the adjustment to productivity growth depends on the rate of change of natural capital extraction relative to the rate of change of other inputs. The extended framework also makes the contribution of natural capital to economic growth explicit. This can be useful for countries relying on nonrenewable resources to better understand the need to develop other sources of growth, for example by investing in human or productive capital, to prepare for times when resources endowments become scarce. While the measurement of natural capital remains very incomplete, leaving out natural forests, water and soil, the measurement framework can readily be applied to more encompassing data on the natural capital stock, once it becomes available. Productivité multi-factorielle avec capital naturel Des mesures traditionnelles de croissance de la productivité multifactorielle, en général, ne prennent pas en compte le capital naturel en tant que facteur de production. Comme la croissance de productivité est la différence entre la croissance de la production et des intrants, cette mesure sera biaisée dès qu’il y aura des intrants non-mesurés, comme par exemple le capital naturel. L’objectif de ce rapport est donc de mieux comprendre le rôle du capital naturel dans les mesures de productivité, et comme source de croissance économique. Ainsi, il enrichit des mesures de productivité à l’échelle de l’économie agrégée, pour la plupart extraites de la base de données de productivité de l’OCDE, en intégrant explicitement le capital naturel comme facteur de production. Plus spécifiquement, le rapport considère le pétrole, le gaz naturel et des minéraux variés comme des éléments du capital naturel, en se servant des données de la Banque Mondiale. Les résultats suggèrent qu’ignorer le capital naturel a tendance à mener à une sous-estimation de la croissance de productivité dans les pays où l’utilisation du capital naturel est en déclin à cause des réserves en voie de disparition. En revanche, la croissance de productivité est parfois surestimée pendant des périodes de hausse des prix des ressources naturelles. La direction de la correction de la mesure de croissance de productivité dépend du taux de croissance relatif de l’extraction du capital naturel par rapport au taux de croissance des autres intrants. La mesure de productivité ainsi enrichie permet aussi de mesurer explicitement la contribution du capital naturel à la croissance économique. Ceci peut s’avérer très utile pour des pays dépendant des ressources naturelles non-renouvelables pour mieux comprendre leur besoin d’investir dans le capital humain ou productif pour se préparer pour des périodes de pénurie de leurs ressources naturelles. Même si la mesure de capital naturel utilisée dans ce rapport reste très restreinte, ne prenant en compte ni les forêts vierges, ni l’eau ou le sol, le cadre proposé peut facilement être appliqué à des données plus complètes, dès qu’elles seront disponibles. |
| Keywords: | multifactor productivity, green productivity, natural capital stock, natural resource accounting, productivité multifactorielle, productivité verte, stock de capital naturel, comptabilité des ressources naturelles |
| JEL: | D24 O47 Q3 Q50 Q56 |
| Date: | 2013–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:1092-en&r=env |
| By: | Taheripour, Farzad; Thomas Hertel; Jing Liu |
| Abstract: | This paper introduces water into the GTAP modeling framework at a river basin level. The new model: 1) distinguishes between irrigated and rainfed agriculture using different production functions; 2) takes into account heterogeneity in land quality across agro-ecological zones; 3) traces supply of water at the river basin level within each country/region; 4) fully captures competition for land among crop, livestock and forestry industries; 5) and, most importantly, offers the potential to extend the competition for managed water among agricultural and non-agricultural activities. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:gta:workpp:4304&r=env |
| By: | Osiel González Dávila; Mavra Stithou; Gianluca Pescaroli; Luca Pietrantoni; Phoebe Koundouri; Pedro Díaz-Simal; Bénédicte Rulleau; Nabil Touli; François Hissel; Edmund Penning-Rowsell |
| Abstract: | Insurance against natural perils such as flooding can be considered a significant element in coastal management. It can offer not only much-needed support to accelerate economic and social recovery following a disaster (coastal resilience) but also contribute to impact limitation by using pricing or restrictions on availability of coverage to discourage new development in hazard-prone areas. Insurance can affect the redistribution of damage costs across the population and through time, both in the short and long term. Policies of damage reduction are linked to mitigation measures for the properties (old or new buildings) by changing the depth-damage relationship while the long-run risk impacts could affect the overall damage function by discouraging new buildings in high risk areas. This paper will provide an overview of the main theoretical perspectives on insurance in flood risk management. Four different European contexts will be analysed. Data are derived from surveys and interviews conducted in France, United Kingdom, Italy and Spain. |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp127&r=env |