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on Environmental Economics |
| By: | Xaquín Garcia-Muros; Mercedes Burguillo; Mikel Gonzalez-Eguino; Desiderio Romero-Jordán |
| Abstract: | Local air pollution and global climate change are two significant environmental problems which are interrelated. Some recent papers examine them together, but most of the relevant literature has focused either on climate change alone or on the ancillary benefits of mitigating it (in terms of air pollution). In regard to distribution, most publications have focused on the impacts of climate change-related taxes such as excise duties on CO2, energy or fuels. This paper explores the distributional implications of policies for taxing local air pollution and compares them with climate change taxes. The framework of taxation on air pollution is based on the estimated damage associated with the main local air pollutants, while the climate change framework is based on a CO2 tax. The case of Spain is examined, using an Input-Output model in combination with a micro-simulation model. The distributional implications of a revenue-neutral tax reform are also explored. We find that taxes on local pollutants are more regressive than those levied on climate change pollutants, because the goods implicitly taxed have a greater weight in the consumer basket of low income groups, even if the tax revenues are recycled. |
| Keywords: | Environmental Tax Reform; Distributional Impact; Local air pollution taxes; global climate change taxes |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:bcc:wpaper:2014-01&r=env |
| By: | Gilbert Kollenbach |
| Abstract: | Under which conditions unilateral tightening of climate policy causes a weak or strong green paradox or even decreases social welfare has recently been studied by Hoel (2011). Hoel assumes that the costs of extracting fossil fuel are linear in output. We extend his model by allowing for progressively increasing and stock dependent extraction costs. Increasing unit costs imply the simultaneous utilization of fossil fuel and a clean backstop. This has a signicant effect on the results, as the utilization of backstop by the country which tightens its climate policy always prevents a weak green paradox. As a consequence, the effect of a tighter climate policy on social welfare can be reversed. Due to the stock dependence of extraction costs the amount of fossil fuel left in situ may be increased by a tighter climate policy. This implies that social welfare may increase, even if a weak green paradox occurs. |
| Keywords: | Climate change, green paradox, exhaustible resources, renewable energy |
| JEL: | Q41 Q42 Q54 Q58 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:sie:siegen:164-14&r=env |
| By: | Georg Licht; Bettina Peters |
| Abstract: | This paper studies the impact of environmental innovation on employment growth in the period 2006-2008 using firm-level data for German manufacturing and services. It extends the model by Harrison et al (2008) in order to distinguish between employment effects of environmental and non-environmental product as well as process innovation. As a robustness check patent data on green technologies are employed. The results demonstrate that both environmental and non-environmental product innovations stimulate employment growth. We find a similar gross employment effect of both types of product innovations. That is, one-percent increases in sales stemming from new environmental and non-environmental products increase gross employment by one percent each. Thus, we do not find evidence that that new products with environmental benefits for consumers are produced with higher or lower efficiency than old products. Yet, the net employment contribution of non-green product innovations is 4 to 5 times larger than the net contribution of green product innovations. This is the result of differences in the average innovation engagement and innovation success of both types of new products. In contrast, environmental and non-environmental process innovation plays only a little role for employment growth. In particular, we do not identify a significant trade-off between more environmental-friendly production technologies and employment growth. This holds for both cleaner production technologies and end-of pipe technologies. |
| Keywords: | Employment growth, environmental innovation, green patents |
| JEL: | O33 J23 L80 C21 C23 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfewop:y:2014:m:2:d:0:i:53&r=env |
| By: | Gilbert Kollenbach |
| Abstract: | The consequences of the 2°C climate target and the implicitly imposed ceiling on CO2 have been analyzed in several studies. We use an endogenous growth model with a ceiling and a carbon capture and storage (CCS) technology to study the effect of the ceiling on the allocation of limited funds for R&D, CCS and capital accumulation. It turns out that the advantagenousness of CCS investments rise with the CO2 stock. If the gains of CCS, in terms of lower energy costs, outweigh the gains of R&D and capital accumulation, investments are reallocated towards CCS. On the one hand, this reduces the investments into R&D and/or capital. On the other hand, lower energy costs may increase research and/or capital investments. Positive CCS investments allow a higher extraction of fossil fuel, which implies lower backstop utilization. Consequently, CCS investments lower the advantageousness of R&D ceteris paribus. Furthermore, we show that the gains of CCS can be high enough to justify an investment reallocation even before the ceiling is binding, which contrast with existing literature. |
| Keywords: | Climate Change, Research and Development, Carbon Capture and Storage, Endogenous Growth, Fossil Fuel, Renewable Resource |
| JEL: | O13 O44 Q54 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:sie:siegen:163-14&r=env |
| By: | Matthew E. Kahn; Nils Kok |
| Abstract: | The commercial real estate sector is responsible for a large share of a city’s overall carbon footprint. An ongoing trend in this sector has been the entry of big-box stores such as Wal-Mart. Using a unique monthly panel data set for every Wal-Mart store in California from 2006 through 2011, we document three main findings about the environmental performance of big-box retailers. First, Wal-Mart’s stores exhibit very little store-to-store variation in electricity consumption relative to a control group of similar size and vintage retail stores. Second, Wal-Mart’s store’s electricity consumption is lower in higher priced utilities and is independent of the store’s ownership versus leased status. Third, unlike other commercial businesses, Wal-Mart’s newer buildings consume less electricity. Together, these results highlight the key roles that corporate size and centralization of management play in determining a key indicator of a firm’s overall environmental performance. |
| JEL: | Q41 Q54 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19912&r=env |
| By: | Rasi Kunapatarawong; Ester Martinez Ros |
| Abstract: | This paper reports research on the relationship between sourcing strategy of a firm and its environmental innovation propensity. The data is taken from the Spanish TechnologicalInnovation Panel (PITEC) survey during the period of 2007-2011. The uniqueness of the Spanish innovation structure and the increasing relevance of environmental issues for the Spanish economy make it a proper setting to investigate environmental innovation dynamics. The results from 5,352 firms indicate that large firms are more likely to undertake environmental innovation than small- and medium-sized firms (SMEs). These firms rely quite equally on all four sources of knowledge &- internal, market, institutional and freely-available sources &- when deciding to develop environmental innovation. The broad horizons with respect to knowledge sources are likely to increase firms' propensity to introduce environmental innovation. In addition, weprovide the evolutionary nature of firm's innovation search as firms grow in size. Small firmsrely on both internal and freely-available sources rather equally, while internal source is the most relevant for medium firms, and market is the most important source used by large firms indriving environmental innovation. Particularly important is how firms who are already innovators and who receive local funding from the Spanish government are more likely to introduce environmental innovation. |
| Keywords: | Environmental innovation , Knowledge sourcing , Discrete choice model |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:cte:wbrepe:wb140301&r=env |
| By: | Robert Costanza; Shuang Liu |
| Abstract: | The concept of ecosystem services (the benefits people derive from functioning ecosystems) is beginning to change the way we view the relationship between humans and the rest of nature. To the extent that we view humanity as embedded in and interdependent with the rest of nature, rather than viewing nature as separate from people or even as an adversary, our whole approach to environmental research, governance and management changes. These ongoing changes are discussed with reference to the evolving situations in China and the United States. The most significant effects on governance are the needs to shift to a more transparent and participatory approach and a broader recognition of the public goods/common property characteristics of ecosystems and their services. The main questions are: (i) to what extent do prevailing governance arrangements in China and the United States facilitate and/or hinder efforts to effectively manage ecosystem services?; and (ii) are there adjustments that are both politically feasible and likely to make a difference in these terms? We conclude that while China and the United States represent two almost polar opposite starting points, especially as concerns property rights, there is significant convergence, and the concept of ecosystem services can help accelerate this positive trend. |
| Keywords: | ecosystem services; governance; China |
| URL: | http://d.repec.org/n?u=RePEc:een:appswp:201416&r=env |
| By: | Kelly Wyett |
| Abstract: | The inundation of an entire nation due to anthropogenic climate change has never been seen. And the low-lying Pacific nation of Kiribati is likely to be among the first victims of such a disaster. As such, this article examines a number of strategies for the relocation of Kiribati, and finds that bilateral migration deals with Australia and New Zealand present the best policy option. First, bilateral agreements can be designed to allow for pre-emptive and planned migration. Second, as relatively large countries with low population densities, Australia and New Zealand are in the best place to absorb large numbers of migrants. Third, with a history of migration, and support for the Pacific islands combating climate change, there is scope for bilateral deals to be politically supportable. Fourth, as the wealthiest countries in the region, and with developed capacities in refugee resettlement, these governments are most able to implement a migration deal. Of course, the challenge of climate change migration is larger than Kiribati. Some estimates suggest that more than 200 million people may be displaced by climate change by 2050. When this is taken into account, getting policy right in Kiribati takes on added importance, as the way the international community handles this challenge is likely to set a global precedence. |
| Keywords: | Migration; climate change; Kiribati; Australia; the Pacific |
| URL: | http://d.repec.org/n?u=RePEc:een:appswp:201407&r=env |
| By: | Petros C. Mavroidis |
| Abstract: | Canada-Renewable Energy presented the WTO Panel and Appellate Body (AB) with a novel issue: at the heart of the dispute was a measure adopted by the province of Ontario whereby producers of renewable energy would be paid a premium relative to conventional power producers. Some WTO Members complained that the measure was a prohibited subsidy because payments were conditional upon using Canadian equipment for the production of renewable energy. The AB gave them right only in part: it found that a local content requirement had indeed been imposed, but also found that it lacked evidence to determine whether a subsidy had been bestowed. The report is, for the reasons explained below, incoherent and could hardly serve as precedent for resolution of similar conflicts in the future. The facts of the case though, do raise legitimate questions both with respect to the specifics of the case, as well as of more general nature regarding the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement), and the role of the judge when facing legislative failure. In this paper, we provide some responses to these questions in light of the theory and evidence regarding industrial policy in the name of environmental protection. |
| Keywords: | WTO |
| Date: | 2014–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euirsc:p0368&r=env |
| By: | Ngo Van LONG |
| Abstract: | N/A |
| Keywords: | N/A |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:mtl:montec:02-2014&r=env |
| By: | Pasquale Lucio Scandizzo (CEIS University of Rome "Tor Vergata") |
| Abstract: | This paper examines the controversial problem of the choice of the social discount rate in development projects, by focusing on the investment required to adapt to climate change, considering the threats to food security and the needs for human and natural capital, especially for developing countries. Because climate change introduces negative trends and time increasing volatilities both in production and in consumption, social rates of discount can only be estimated within a framework of dynamic uncertainty. For this purpose, climate change can be modeled as a twin stochastic process of the geometric Brownian motion variety, affecting both consumption and productive capacity. Unlike the case of deterministic neoclassical growth, and contrary to the usual estimates for project evaluation, the stochastic nature of climate changes links the social discount rate (SDR) to volatility in two distinct and important ways. On the side of consumption and growth, the SDR is reduced by the likely negative effects of climate change (CC) on growth and food security. It also becomes dependent on the fact that the volatility of growth favors the accumulation of precautionary savings and thus reduces the rate of fall of the value of consumption over time. On the side of production capacity, the SDR is also reduced by the negative effect of CC on the productivity of capital and by the fact that the opportunity cost of the displacement of private investment under dynamic uncertainty is lowered by the value of the options to invest when more information will be available. |
| Keywords: | social, discount, uncertainty, climate change |
| JEL: | H8 D1 Q5 |
| Date: | 2014–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:309&r=env |
| By: | Tian Tang; David Popp |
| Abstract: | The Clean Development Mechanism (CDM) is a project-based carbon trade mechanism that subsidizes the users of climate-friendly technologies and encourages technology transfer. The CDM has provided financial support for a large share of Chinese wind projects since 2002. Using pooled cross-sectional data of 486 registered CDM wind projects in China from 2002 to 2009, we examine the determinants of technological change in wind power from a learning perspective. We estimate the effects of different channels of learning—learning through R&D in wind turbine manufacturing, learning from previous experience of installation, and learning through the network interaction between project developer and turbine manufacturer—on technological change, measured as reductions in projected costs or as increased capacity factor across CDM wind projects. While we find that a manufacturer’s R&D and previous installation experience matter, interactions between wind turbine manufacturers and wind project developer lead to the largest cost reductions. Whereas existing literature suggests that wind power firms can learn from the experience of other wind farm developers, our results indicate that wind power firms mainly learn from their own experience and that knowledge spillovers mostly occur within certain partnerships between wind project developer and foreign turbine manufacturers in China’s wind power industry. |
| JEL: | O33 O38 Q42 Q48 Q54 Q55 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19921&r=env |
| By: | Dale Squires |
| Abstract: | Asian's remarkable economic growth brought many benefits but also fuelled threats to its ecosystems and biodiversity. Economic growth brings biodiversity threats but also conservation opportunities. Continued biodiversity loss is inevitable, but the types, areas and rates of biodiversity loss are not. Prioritising biodiversity conservation, tempered by what is tractable, remains a high priority. Policy and market distortions and failures significantly underprice biodiversity, undermine ecosystems and create perverse incentives, leading to over-consumption and under-conservation. Properly priced biodiversity creates price signals and incentives that account for all contributions from biodiversity and ecosystems. Habitat conservation remains the centrepiece of biodiversity conservation. The next steps forward include selected command-and-control measures and economic policies that eliminate perverse incentives and creating positive ones along with improved enforcement. |
| Keywords: | Asia; biodiversity conservation; policy; sustainable growth; economic incentives |
| URL: | http://d.repec.org/n?u=RePEc:een:appswp:201413&r=env |
| By: | Schlauch, Michael |
| Abstract: | This paper explores new ways of applying ecological knowledge to solve economic problems in a manner that suits the complexity of society and environmental challenges. This is done by developing the integrative analysis method. The integrative analysis uses systems ecology in order to characterize economic systems with their energetic properties and model them as ecosystems. This makes it possible to assess them with the design principles of permaculture, a resourceful discipline of ecological engineering. Through a process that adopts the main characteristics of the "Soft Systems Methodology" incremental changes can be found to make economies increasingly resemble the natural functioning of healthy and stable ecosystems. To show the capabilities of the integrative analysis, it is applied to three different perceptions of the labour market and its surrounding actors, starting with the viewpoint of the European Commission. In conclusion, many EU proposals to meet labour-related challenges can be refined and complemented with existing alternative proposals. This way the integrative analysis makes it possible to enhance economic strategies with integrated solutions for a widened problem scope. As a consequence, single problem interventions also address the far-reaching environmental and social challenges of declining resource and energy supply. |
| Keywords: | emergy, entropy, systems ecology, permaculture, labour, integrative science |
| JEL: | D85 J48 Q01 Q57 |
| Date: | 2014–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:53757&r=env |