New Economics Papers
on Agricultural Economics
Issue of 2013‒04‒06
24 papers chosen by

  1. 2012 Global Food Policy Report By International Food Policy Research Institute (IFPRI)
  2. Biofuels and Food Prices: Searching for the Causal Link By Andrea Bastianin; Marzio Galeotti; Matteo Manera
  3. Social activity and collective action for agricultural innovation: a case study of New Rural Reconstruction in China By Mary-Françoise Renard; Huanxiu GUO
  4. Effect of organic contract farming on labor demand. A study case in the Western Uganda By Céline Guimas
  5. Dynamics of indirect land-use change: empirical evidence from Brazil By Saraly Andrade de Sá; Charles Palmer; Salvatore Di Falco
  6. Information and Communication Technologies for Sustainable Natural Resource Management By Meena, M.S..; Singh, K.M.
  7. FDI Spillover Effects in the Food Industry in Asian Countries By Takuya Yamamoto; Takeshi Sakurai
  8. Food versus Fuel: Causality and Predictability in Distribution By Andrea Bastianin; Marzio Galeotti; Matteo Manera
  9. Cost-effective payments for reducing emissions from deforestation under uncertainty By Stefanie Engel; Charles Palmer; Luca Taschini; Simon Urech
  10. The roles of public and private actors in the governance of adaptation: the case of agricultural insurance in India By Susannah Fisher; Swenja Surminski
  11. Estimation of the Contribution of the Biosector to Ireland’s Net Foreign Earnings: Methodology and Results By Riordan, Brendan
  12. Financial Crisis in Asia: Its Genesis, Severity and Impact on Poverty and Hunger By Katsushi S. Imai; Raghav Gaiha; Ganesh Thapa; Samuel Kobina Annim
  13. Market power and double-dipping in nutrient trading markets By Gren, Ing-Marie; Elofsson, Katarina
  14. Cost Overruns and Demand Shortfalls in Urban Rail and Other Infrastructure By Bent Flyvbjerg
  15. The Price of Distance: Producer Heterogeneity, Pricing to Market, and Geographic Barriers By Kano, Kazuko; Kano, Takashi; Takechi, Kazutaka
  16. Does industry concentration matter for pollution haven effects? By Svetlana Batrakova
  17. Who should pay for climate? The effect of burden-sharing mechanisms on abatement policies and technological transfers By Emanuele Campiglio
  18. Thinking Outside the Bus By Iseki, Hiroyuki; Smart, Michael; Taylor, Brian D.; Yoh, Allison
  19. Knowledge versus technique in SO2-saving technological change: A comparative test using quantile regression with implications for greenhouse gas compliance By David Grover
  20. Valuation of Health Inputs and Convenience in New Products By Nordström, Jonas
  21. Trade, climate change and the political game theory of border carbon adjustments By Dieter Helm; Cameron Hepburn; Giovanni Ruta
  22. Climate Policies: a Burden or a Gain? By Thierry Bréchet; Henry Tulkens
  23. The Political Economy of Deforestation in the Tropics By Robin Burgess; Matthew Hansen; Benjamin Olken; Peter Potapov; Stefanie Sieber
  24. Cost effective nutrient abatement for the Baltic Sea under learning-by-doing induced technical change By Lindqvist, Martin; Gren, Ing-Marie

  1. By: International Food Policy Research Institute (IFPRI)
    Abstract: This 2012 Global Food Policy Report is the second in an annual series that provides an in-depth look at major food policy developments and events. Initiated in response to resurgent interest in food security, the series offers a yearly overview of the food policy developments that have contributed to or hindered progress in food and nutrition security. It reviews what happened in food policy and why, examines key challenges and opportunities, shares new evidence and knowledge, and highlights emerging issues.
    Keywords: Brazil; China; India; South Asia; East Asia; Latin America; South America; Africa South of Sahara; Africa; Asia; European Union; United States; North America; Food policy; food policies; Sustainability; Agricultural productivity; Gender; Women; Women in agriculture; Labor; Agricultural policies; Agricultural laborers; subsidies; Agricultural subsidies; Agricultural research.; Climate change; food security; Nutrition security; Food wastes; Postharvest losses; Agricultural development; employment; Food supply; green economy; Rural development; Sustainable development; Resilience; youth; Smallholder farmers; Rio20; Biofuels; Bioenergy; Doha Developmental Round of the World Trade Organization (WTO); Doha round; Property rights; Land rights; Land acquisitions; Food prices; Land degradation; International Model for Policy Analysis of Agricultural Commodities and Trade; IMPACT model; Developing countries; Developed countries
    Date: 2013
  2. By: Andrea Bastianin (University of Milan-Bicocca and FEEM); Marzio Galeotti (University of Milan and IEFE-Bocconi); Matteo Manera (University of Milan-Bicocca and FEEM)
    Abstract: We analyze the relationship between the prices of ethanol, agricultural commodities and livestock in Nebraska, the U.S. second largest ethanol producer. The paper focuses on long-run relations and Granger causality linkages between ethanol and the other commodities.The analysis takes possible structural breaks into account and uses a set of techniques that allow to draw inferences about the existence of long-run relations and of short-run in-sample Granger causality and out-of-sample predictive ability. Even after taking breaks into account, evidence that the price of ethanol drives the price dynamics of the other commodities is extremely weak. It is concluded that, on the basis of a formal, comprehensive and rigorous causality analysis we do not find evidence in favour of the Food versus Fuel debate.
    Keywords: Ethanol, Field Crops, Granger Causality, Forecasting, Structural Breaks
    JEL: C22 C53 Q13 Q42 Q47
    Date: 2013–03
  3. By: Mary-Françoise Renard (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Huanxiu GUO (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: Since 2003, a grass-roots movement of New Rural Reconstruction (NRR) has emerged in China to experience alternative model of rural development. The movement adopts a particular approach for rural development on basis of rural social and cultural reconstruction. In order to understand this social approach, we investigate an original NRR experiment in a poor village of south China, where organic farming is promoted by means of basketball game. An in-depth household survey is conducted to qualitatively analyze this social approach and derive intuitive hypothesis of extended social network for empirical test. With a panel structure dataset collected by the survey, we quantitatively identify the causal effect of social network by exploiting the endogeneity of social network formation. Our identification result provides micro evidence for a large social multiplier effect in the diffusion of organic farming, whereas it is negative for organic experts. Also, our results highlight the role of women, education and labor force for the development of organic farming. On basis of these results, we conclude that organic farming is suitable but challenging for small villages in China, while social activity is a good lever to achieve farmers' collective action for its large diffusion.
    Keywords: New rural reconstruction; Social network; Organic farming; China. D71;O33;Q55
    Date: 2013–03–19
  4. By: Céline Guimas (UP1 UFR02 - Université Paris 1, Panthéon-Sorbonne - UFR d'Économie - Université Paris I - Panthéon-Sorbonne)
    Abstract: For a better understanding of this study, I will explain why organic agriculture offers interesting potential for reducing poverty and why contract farming arrangement can be a successful tool for ful lling this potential. However, in order to fully evaluate the impacts of organic contract farming scheme, it is necessary to evaluate the spillovers on the local community, including people that do not directly participate in such scheme. One of these spillovers is the creation of employment opportunities and this is the focus of this study. An increase in labor demand may limit conversion to organic farming in country where labor supply is scarce. However, in a country like Uganda where rural poor are often underemployed and have no - or too little - land to meet their own needs, job creation is a positive and crucial contribution for poverty alleviation. Hence, if organic contract farming increases labor demand, this deserves to be emphasized. For now, existing literature has never studied this speci c consequence and thus, future research should rigorously quantify this effect on labor demand. My own study, though limited by data availability on farm labor input, is a rst step in this important investigation. I will use a simple farm-household model in order to illustrate how farmers determine their farm labor demand as well as their farm and off-farm labor supply. This model has really modest purposes and aims only to give the main intuition about how the participation in an organic contract farming scheme can modify these decisions. At last, the empirical analysis will provide support for the main hypothesis that is tested: organic contract farming scheme increases the farm labor demand. Yet, results suggest this does not come from more labor intensive organic farm practices but mainly comes from higher price and product quality that are associated with the participation in this organic contract farming arrangement. This study is structured as follows: Section 2 introduces potentials and challenges of organic agriculture and contract farming. Section 3 focuses on Uganda and on potential employment contribution. Section 4 presents the cocoa and vanilla organic contract farming scheme with the exporter Esco (U) Ltd. Section 5 is dedicated to a simple farm-household model. At last section 6 and 7, focus on the empirical investigation and its results.
    Keywords: marché du travail, agriculture biologique, Ouganda
    Date: 2012
  5. By: Saraly Andrade de Sá; Charles Palmer; Salvatore Di Falco
    Abstract: The expansion of a given land use may affect deforestation directly if forests are cleared to free land for this use, or indirectly, via the displacement of other land-use activities from non-forest areas towards the forest frontier. Unlike direct land conversion, indirect land-use changes affecting deforestation are not immediately observable. They require the linking of changes occurring in different regions. This paper empirically estimates these indirect effects for the case of Brazil. It presents evidence of a positive relationship between sugarcane expansion in the south of the country and cattle ranching in the Amazon, suggesting that the former is indeed displacing the latter towards the forest frontier. This displacement effect is shown to be a dynamic process materializing over 10 to 15 years.
    Date: 2012–03
  6. By: Meena, M.S..; Singh, K.M.
    Abstract: The natural resources of most developing countries are under increasing stress, and many nations are increasingly concerned about achieving environmental sustainability through efficient use of land and water resources. As population is escalating very fast and consumer demand for high value agricultural products (fruits and vegetables, animal or fish products, etc.) is also changing rapidly. Hence, there is need to take stronger step by national government to monitor their natural resources and take immediate steps to maintain these resources when being overused. Data generation by visiting the place physically is tedious and time consuming. Modern ICT techniques provide the solution helpful in collecting data without visiting the place from distance. With development of modern technologies, ICTs are of immense use in Sustainable Natural Resource Management. These technologies are time and money saving, accurate compared to conventional assessment. Products of these technologies help the scientists and policy makers for taking appropriate decision in agriculture production. It is thus important to recognize that the dissemination of these land and water-use management practices are largely knowledge-based; therefore, developing countries will be required to make substantial investment in public extension to train small and medium-scale farmers how to use Sustainable Natural Resource Management (SNRM) practices.
    Keywords: Information & Communication Technologies, Natural Resource Management, Sustainable NRM,
    JEL: Q0 Q01 Q16 Q59 Z0
    Date: 2012–10–05
  7. By: Takuya Yamamoto; Takeshi Sakurai
    Abstract: This paper analyzes the spillover effects of foreign companies' FDI on local companies, taking examples of public food companies in 4 Asian countries/areas namely Thailand, Malaysia, Hong Kong, and China. The analyses confirm spillover effects in food industry in Thailand, and reveal that the effects are stronger in the case of "domestic-market oriented FDI" than in the case of "export-oriented FDI." Moreover, it is found that domestic-market oriented FDI reduces the share of export in total sales in Thai food industry. Small domestic market may have caused the insignificant spillover effects in food industry in Malaysia and Hong Kong, where local companies have lost their market share due to foreign companies. As for beverage industry, insignificant spillover effects may be attributed to the fact that beverage industry is more capital intensive than food industry and the technological gap with developed countries is smaller.
    Date: 2013–03
  8. By: Andrea Bastianin (University of Milan-Bicocca and FEEM); Marzio Galeotti (University of Milan and IEFE-Bocconi); Matteo Manera (University of Milan-Bicocca and FEEM)
    Abstract: This paper examines the relationship between biofuels and commodity food prices in the U.S. from a new perspective. While a large body of literature has tried to explain the linkages between sample means and volatilities associated with ethanol and agricultural price returns, little is known about their whole distributions. We focus on predictability in distribution by asking whether ethanol returns can be used to forecast different parts of field crops returns distribution, or vice versa. Density forecasts are constructed using Conditional Autoregressive Expectile models estimated with Asymmetric Least Squares. Forecast evaluation relies on quantile-weighed scoring rules, which identify regions of the distribution of interest to the analyst. Results show that both the centre and the left tail of the ethanol returns distribution can be predicted by using field crops returns. On the contrary, there is no evidence that ethanol can be used to forecast any region of the field crops distribution.
    Keywords: Biofuels, Ethanol, Field Crops, Density Forecasting, Granger Causality, Quantiles
    JEL: C22 C53 Q13 Q42 Q47
    Date: 2013–03
  9. By: Stefanie Engel; Charles Palmer; Luca Taschini; Simon Urech
    Abstract: The paper analyses the implications of landowners’ option values in land allocation and derives policy recommendations for payments for Reducing Emissions from Deforestation and Forest Degradation (REDD). Given that REDD will not represent a permanent change in the cumulative flux of carbon dioxide to the atmosphere, payment scheme design is motivated by the need to secure forest carbon sinks over time (the ‘permanence criterion’) while remaining relatively cost-effective. Alternative payment schemes, combining fixed and variable components, are considered in a framework with two competing land uses, forest and agriculture. Cost-effectiveness depends on the dependency structure between the returns from the indexed component of the payment and the returns from the alternative land use, the relative volatility level of the underlying returns, and the relative combination of fixed and variable payments. After developing the general model, it is is applied to REDD policy scenarios in Parana State, Brazil.
    Date: 2012–02
  10. By: Susannah Fisher; Swenja Surminski
    Abstract: Climate change adaptation is an increasingly important field and will involve a range of actors from national governments to private companies, communities and households. There is a growing policy discourse supporting the involvement of the private sector in adaptation, however there is little empirical examination to show how the sector might be involved and how adaptation might be governed. This paper uses evidence from the field of risk governance and insurance and analytical frameworks from the wider governance literature to draw important findings for the governance of adaptation. We use the recently published Compendium of Disaster Risk Initiatives in the Developing World and a case study of agricultural insurance in India to argue that the role of the private sector is increasing but so far within a particular model of engagement. In the context of climate change, how the public-private relationships are constructed is key to how adaptation can be leveraged from such an arrangement. The evidence in this paper suggests that due to commercial viability and other concerns there will continue to be a role for the public sector alongside the private sector to ensure adaptation measures address vulnerability. In conclusion we argue that the type of relationship between the public and the private actors has a significant influence on the adaptation outcomes. The question is not purely about involving the private sector which is how this is currently framed within policy and academic work on adaptation, but how the private actors are engaged. Governments seeking to engage private actors need to build those relationships with the desired adaptation outcomes in mind.
    Date: 2012–09
  11. By: Riordan, Brendan
    Abstract: An estimate of the contribution of the biosector to Ireland’s net foreign earnings in 2008 was recently published by The Department of Agriculture, Food and the Marine (2012). This paper examines these results and their derivation from a wide range of data provided by the Central Statistics Office (CSO), particularly the Census of Industrial Production and the Supply and Use and Input-Output Tables for Ireland. The 'biosector' comprises the agriculture, forestry and fishing industries, along with the industries processing their products - the food and beverage industries. The main finding was that in 2008 the biosector accounted for 40 percent of net foreign earnings from merchandise exports. This was more than double the sector's percentage share of exports. The main reasons for the sector’s disproportionately large contribution to net foreign earnings were: lower import requirements per euro of exports, and higher receipts of EU payments. These results are analysed in terms of Balance of International Payments flows per €100 of merchandise exports. Put this way, in 2008 every €100 of exports from the biosector generated €52 in net foreign earnings. In contrast, exports from the non-biosector, contributed only €19 in net foreign earnings for every €100 of exports. The result is shown to be quite dependable in the light of its consistency with other statistics for the economy and with results for earlier years. For example, when previous results for 2005 were updated with revised data and reclassifications, the results were very similar to those for 2008. More generally, these results illustrate an approach to assessment of the value to the economy of exports from specific sectors. In particular, the contribution of one sector or industry relative to another, in terms of net inflows per €100 of exports, could be a valuable way to assess the case for the expansion of one export sector, or industry, relative to another. In this case the biosector’s contribution per €100 of exports in 2008 was provisionally estimated to be at least 2.7 times that of the non-biosector, and very likely to be far higher for Irish owner enterprises in the biosector sector.
    Keywords: Balance of payments; Agri-food sector; Export earnings; net Foreign earnings; Ireland; Merchandise trade.
    JEL: C13 F14 Q17
    Date: 2012–10–18
  12. By: Katsushi S. Imai (Economics, School of Social Sciences, University of Manchester (UK) and RIEB, Kobe University (Japan)); Raghav Gaiha (Department of Urban Studies and Regional Planning, MIT, Cambridge, USA); Ganesh Thapa (International Fund for Agricultural Development, Rome, Italy); Samuel Kobina Annim (University of Manchester, UK)
    Abstract: Building on the recent literature on finance, growth and hunger, we have examined the experience of Asian countries over the period 1960-2010 by dynamic and static panel data models. We have found evidence favouring a positive role of finance - defined as private credit by banks - on growth of GDP and agricultural value added. Private credit as well as loans from the World Bank significantly reduces undernourishment, while remittances and loans from microfinance institutions appear to have a negative impact on poverty. Our empirical evidence shows that growth performance was significantly lower during the recent global financial crisis than non-crisis periods, though the severity is much smaller during the recent financial crisis than Asian financial crisis.
    Keywords: Finance, Economic Development, Agriculture, Inequality, Poverty, Asia
    Date: 2013–03
  13. By: Gren, Ing-Marie (Department of Economics, Swedish University of Agricultural Sciences); Elofsson, Katarina (Department of Economics, Swedish University of Agricultural Sciences)
    Abstract: Heavy loads of nutrients, i.e. nitrogen and phosphorus, cause severe damages in many waters in the world. This paper develops a model for nutrient trading markets for a sea damaged by both nitrogen and phosphorus and faces a dominant polluter of one or both nutrients. The existence of abatement measures with simultaneous impacts on both nutrients raises the need for double-dipping in both markets. It is shown that double-dipping decreases overall abatement costs for reaching predetermined targets, and reduces efficiency losses of market power, in particular when the same agent exercises market power in both markets. An empirical application to the intergovernmental agreement on reducing nutrient loads to the eutrophied Baltic Sea in North-East Europe demonstrates cost savings of approximately 25% from introduction of double-dipping, and that efficiency losses from market power of one dominant country, Poland, can be reduced by 10%.
    Keywords: nutrient trading; market power; double-dipping; eutrophication; Baltic Sea
    JEL: L19 Q53 Q58
    Date: 2013–03–27
  14. By: Bent Flyvbjerg
    Abstract: Risk, including economic risk, is increasingly a concern for public policy and management. The possibility of dealing effectively with risk is hampered, however, by lack of a sound empirical basis for risk assessment and management. The paper demonstrates the general point for cost and demand risks in urban rail projects. The paper presents empirical evidence that allow valid economic risk assessment and management of urban rail projects, including benchmarking of individual or groups of projects. Benchmarking of the Copenhagen Metro is presented as a case in point. The approach developed is proposed as a model for other types of policies and projects in order to improve economic and financial risk assessment and management in policy and planning.
    Date: 2013–03
  15. By: Kano, Kazuko; Kano, Takashi; Takechi, Kazutaka
    Abstract: This study investigates the effect of distance on price differentials across regions. To identify the distance effect, we need to incorporate producer heterogeneity and pricing-to-market behavior. Because geographic barriers alter the threshold levels of productivity to set a positive price across markets, the effect of distance on price differentials can be underestimated if heterogeneity and pricing to market are not accounted for. By incorporating these factors, empirical analysis using micro-level data reveals that the distance effect is significantly large, suggesting that the price of geographic barriers is still high for regional transportation.
    Keywords: Law of one price, Transportation costs, Geographic barriers, Producer heterogeneity, Pricing to market
    JEL: F11 F14 F41
    Date: 2013–03
  16. By: Svetlana Batrakova
    Abstract: This paper focuses on the role of firm’s market power and industry concentration in a still debated issue of pollution haven effects or carbon ’leakage’ representedas increased trade fows in the most polluting sectors from the developing worldspurred by regulations in developed countries. A firm in a relatively competitiveindustry with less market power has no option to transfer costs of environmentalregulations to consumers and may be more likely to resort to ’importing pollution’from places with lax environmental standards that insure cheaper inputs as a resultof such regulations at home. This paper finds that a degree of industry’s concentration has an effect on firms’ margins of products that were affected by the EU ETSpolicy in 2005 and that are imported from the developing world. Firms in from the developing world post 2005 more than firms in a less competitive setting.
    Date: 2012–09
  17. By: Emanuele Campiglio
    Abstract: Recent international environmental negotiations have highlighted the importance of establishing a commonly agreed approach to attribute climate change responsabil- ities. In this paper I investigate how choices on allocation mechanisms are likely to affect optimal abatement effort paths and technological transfers. I derive a North- South optimal growth model from the 2007 version of the RICE model allowing for pollution-abating technological transfers and use it to test three different allocation approaches, based on sovereignty, egalitarian and polluter pays principles. Numerical simulations typical of integrated assessment models show that: a) the presence of technical transfers always improves intertemporal global welfare; b) the optimal abatement and technical transfers paths depend on the chosen burden-allocation rule; c) the costs associated with the introduction of a 2-degree limit to temperature increase are in all probability too high to be politically acceptable
    Date: 2012–11
  18. By: Iseki, Hiroyuki; Smart, Michael; Taylor, Brian D.; Yoh, Allison
    Keywords: Engineering, Natural Resources and Conservation, Social Sciences, tax revenues, public sector budgets, metropolitan areas
    Date: 2012–04–01
  19. By: David Grover
    Abstract: Greenhouse gas emission limits are a major source of technical and policy uncertainty for electric power industry professionals. This paper tries to reduce some of this uncertainty by investigating the main forces that were responsible for the productivity gains made by the electric power sector with respect to SO2 emissions under the US SO2 cap and trade program. The SO2 cap and trade experience has important parallels with the GHG pollution problem, in both policy design and technical response. Linear and quantile regression are used to compare the effect of new technical knowledge (R&D) on SO2 productivity, against the effect of pre-existing techniques that did not involve very much new knowledge creation. Compliance techniques that involved little new technical knowledge and which were incremental and pragmatic played the most important role in SO2-saving technological change. Implications of this finding for electric power plants’ technical response to GHG pollution limits are elaborated.
    Date: 2012–11
  20. By: Nordström, Jonas (Department of Economics, Lund University)
    Abstract: The prevalence of illnesses related to the modern diet and a more sedentary lifestyle has increased markedly over the last few decades. There is therefore a need for effective strategies to promote health and to reduce the prevalence of diet-related diseases. In this paper, we study the willingness to pay for a new concept, healthy canteen takeaways. In the analysis, we depart from a household production model. To control for the endogeneity of the health state, we use a control function approach. The result suggests that health inputs, such as low-fat meat and a larger amount of vegetables, increase respondents’ utility. Respondents’ valuations of the convenience attribute are very heterogenous, with both positive and negative values. From a policy perspective, the IV estimation turns out to be of importance, with a sign change in the valuation of low-fat meals for individuals with a poor health state (high MBI).
    Keywords: endogen; discrete choice; health; household production; instrumental variable
    JEL: C25 D12 D13 I10
    Date: 2013–03–26
  21. By: Dieter Helm; Cameron Hepburn; Giovanni Ruta
    Abstract: The lack of real progress at the Durban climate change conference in 2011—postponing effective action until at least 2020—has many causes, one of which is the failure to address trade issues and in particular carbon leakage. This paper advances two arguments. First, it argues that the conventional view of Border Carbon Adjustments (BCAs) as a “dirty” trade barrier should be turned on its head. Rather, the absence of a carbon price comprises an implicit subsidy to dirtier production in non-regulated markets. Second, BCAs could act as a gamechanger when climate policy negotiations move at a glacial pace, if at all. Materially stronger progress could be achieved indirectly from the threat of unilateral trade policies. The paper shows how this could come about, using a simple political game theory model. The appropriate game form is one in which parties move unilaterally and sequentially, given the failure to agree on a common course of action, and are fully aware of the impacts of their actions. The paper shows that properly crafted BCAs could help reduce trade distortions, limit the competiveness effects, and help build a broader coalition of interests for more global actions.
    Date: 2012–05
  22. By: Thierry Bréchet (CORE and Louvain School of Management (LSM), Université catholique de Louvain, Belgium); Henry Tulkens (CORE, Université catholique de Louvain, Belgium)
    Abstract: That climate policies are costly is evident and therefore often creates major fears. But the alternative (no action) also has a cost. Mitigation costs and damages incurred depend on what the climate policies are; moreover, they are substitutes. This brings climate policies naturally in the realm of benefit-cost analysis. In this paper we illustrate the “direct” cost components of various policies, and then confront them with the benefits generated, that is, the damage cost avoided. However, the sheer benefit-cost criterion is not a sufficient incentive to induce cooperation among countries, a necessary condition for an effective global climate policy. Thus, we also explore how to use this criterion in the context of international climate cooperation.
    Keywords: Climate Policy, Integrated Assessment, Cost-Benefit Analysis, Climate Cooperation
    JEL: Q54 H87 D61 D9 F42 Q2
    Date: 2013–03
  23. By: Robin Burgess; Matthew Hansen; Benjamin Olken; Peter Potapov; Stefanie Sieber
    Abstract: Tropical deforestation accounts for almost one-Öfth of greenhouse gas emissions worldwide and threatens the worldís most diverse ecosystems. The prevalence of illegal forest extraction in the tropics suggests that understanding the incentives of local bureaucrats and politicians who enforce forest policy may be critical to combating tropical deforestation. We Önd support for this thesis using a novel satellite-based dataset that tracks annual changes in forest cover across eight years of institutional change in post-Soeharto Indonesia. Increases in the numbers of political jurisdictions are associated with increased deforestation and with lower prices in local wood markets, consistent with a model of Cournot competition between jurisdictions. We also show that illegal logging and rents from unevenly distributed oil and gas revenues are short run substitutes, but this e§ect disappears over time as political turnover occurs. The results illustrate how incentives faced by local government o¢ cials a§ect deforestation, and provide an example of how standard economic theories can explain illegal behavior.
    Date: 2012–04
  24. By: Lindqvist, Martin (Department of Economics, Swedish University of Agricultural Sciences); Gren, Ing-Marie (Department of Economics, Swedish University of Agricultural Sciences)
    Abstract: Technical change is an important factor to take into consideration when analysing environmental issues that span over a long time horizon. One important source of technical change is learning-by-doing. The purpose of this paper is to analyse the impact of technical change through learning-by-doing on the cost effective implementation of the nutrient goals stipulated in the 2007 HELCOM Baltic Sea Action Plan. Effects of learning-by-doing on the cost and allocation of abatement are analysed using a dynamic discrete model of control costs for abatement in the riparian countries of the Baltic Sea. The results indicate that the impact of learning-by-doing on the cost of abatement can be substantial depending on the learning rate and that technical change could lead to substantial cost decreases for the largest polluter, which is Poland.
    Keywords: Cost effectiveness; learning-by-doing; eutrophication; nutrient abatement; technical change; Baltic Sea
    JEL: D99 Q52 Q55
    Date: 2013–03–27

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