nep-ene New Economics Papers
on Energy Economics
Issue of 2010‒12‒18
twenty-six papers chosen by
Roger Fouquet
Basque Climate Change Centre, Bilbao, Spain

  1. Insights into the Determinants of Innovation of Energy Efficiency By Marius Ley
  2. Stimulating Low-Carbon Vehicle Technologies: Summary and Conclusions By OECD
  3. Transport, health and climate change: Deciding on the optimal policy By Laure Cabantous; Olivier Chanel; Jean-Christophe Vergnaud
  4. The role of the terms of trade in the trade channel of transmission of oil price shoc. By Alessandro Maravalle
  5. OPEC and Political Considerations when Deciding on Oil Extraction By Kisswani, Khalid
  6. Cursed Resources? Political Conditions and Oil Market Outcomes. By Gilbert E. Metcalf; Catherine Wolfram
  7. The bases of a new organisation of the russian oil sector : between private and state ownership By Sadek Boussena; Catherine Locatelli
  8. Emergence of a biofuel economy in Tanzania: Local developments and global connections from an institutional perspective By Saurabh Arora; Marjolein C.J. Caniëls; Henny Romijn
  9. The Food-Feed-Fuel Triangle: Implications of Corn-based Ethanol for Grain-Use Competition By Arindam Banerjee
  10. Electricity Market Reform: Lessons for developing countries By Erdogdu, Erkan
  11. Evaluation of static hedging strategies for hydropower producers in the Nordic market By Fleten, Stein-Erik; Bråthen, Espen; Nissen-Meyer, Sigurd-Erik
  12. Why Higher Price Sensitivity of Consumers May Increase Average Prices: An Analysis of the European Electricity Market By Paulun, Tobias; Feess, Eberhard; Madlener, Reinhard
  13. Sustainability and the Measurement of Wealth By Kenneth J. Arrow; Partha Dasgupta; Lawrence H. Goulder; Kevin J. Mumford; Kirsten Oleson
  14. The Stochastic Convergence of CO2 Emissions: A Long Memory Approach By Marco R Barassi; Matthew A Cole; Robert J R Elliott
  15. Unintentional Climate Policy: Swedish experiences of carbon dioxide emissions and economic growth 1950-2005 By Lindmark, Magnus; Andersson, Lars Fredrik
  16. The Impact of Development on CO2 Emissions: A Case Study for Bangladesh until 2050 By Bernhard G. Gunter
  17. A full participation agreement on global emission reduction through strategic investments in R & D. By Kratzsch, Uwe; Sieg, Gernot; Stegemann, Ulrike
  18. Environmental Offset Programs: Survey and Synthesis By Hahn, Robert W.; Richards, Kenneth
  19. Optimal Tariff Calculations in Tariff Games with Climate Change Considerations By Yan Dong; John Whalley
  20. A method to finance a global climate fund with a harmonized carbon tax By Silverstein, David N.
  21. Climate engineering: cost benefit and beyond By Gramstad, Kjetil; Tjøtta, Sigve
  22. The wanted change against climate change: assessing the role of organic farming as an adaptation strategy By Aravindakshan, Sreejith; Sherief, Aliyaru Kunju
  23. Climate Change: A Threat to Human Health By Vipin Chandran, K.P; Sandhya, P
  24. Social Impacts of Climate Change in Mexico: A municipality level analysis of the effects of recent and future climate change on human development and inequality By Lykke E. Andersen; Dorte Verner
  25. Policy Agenda for Addressing Climate Change in Bangladesh: Copenhagen and Beyond By Fahmida Khatun; AKM Nazrul Islam
  26. Climate change: discount or not? future generations don't care that much. By Belgodere, Antoine

  1. By: Marius Ley (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: Given the increasing interest in understanding (and supporting by means of public policy) innovative activity related to energy efficient technology (EET), I attempt to identify firm-level determinants of innovation and research in this field. A novel dataset of Swiss firms has been assembled by means of a survey in 2009, resulting in more than 2300 observations featuring various indicators of innovative activity and success. Applying standard econometric methodology, I find sizeable differences of the explaining factors of energy efficiency related innovation as compared to overall innovation. In particular, market environment related variables important for overall innovative activity seem to have little explanatory power for EET related innovation, raising the question whether such innovation sufficiently responds to current and potential future demand.
    Keywords: Innovation, Energy, Energy Efficiency
    JEL: O31 Q49
    Date: 2010–09
  2. By: OECD
    Abstract: If the transport sector is to make deep cuts to its carbon emissions, it is necessary to reduce the carbon-intensity of travel. Reducing travel itself, at some times and places, is sometimes justified but it is extremely unlikely that under expected global economic development patterns overall demand will decline. This holds true even if there is saturation in some markets and demand management policies are widely adopted. Technological change is therefore crucial. The emerging view is that the focus for decarbonising transport should be first to improve the fuel efficiency of conventional engines and then gradually introduce alternative technologies…
    Date: 2010–11
  3. By: Laure Cabantous (Nottingham University - Nottingham University Business School); Olivier Chanel (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579); Jean-Christophe Vergnaud (CERSES - Centre de recherche sens, ethique, société - CNRS : UMR8137 - Université Paris Descartes, CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I)
    Abstract: Transport generates many externalities, some related to atmospheric pollution. In this paper, we focus on two: greenhouse gases, and local pollution. In the search for optimal transport policies, these two externalities have usually been analysed separately. Here, we study them jointly, in a sequential decision-making model. Our model allows for the irreversibility of the policies undertaken, as well as the possibility of a progressive reduction of uncertainties with the arrival of information. We find that when both sources of externalities are analysed jointly, structural measures enabling private transport requirements to be reduced are identified as being more advantageous economically than technological measures to reduce emissions of pollutants. We illustrate the usefulness of a joint analysis of externalities with two examples: tax measures on cars and housing policy.
    Keywords: climate change; model of decision-making under uncertainty; irreversibilities; transport policy
    Date: 2010–12–07
  4. By: Alessandro Maravalle (University of the Basque Country)
    Abstract: This paper highlights the role of the terms of trade in the trade channel of propagation of oil price shocks both empirically and theoretically. Empirically, I show that oil price shocks have a large, persistent and statistically significant impact on the US terms of trade. Theoretically, I add oil in the model by Corsetti and Pesenti (2005) and analyse under what conditions the terms of trade plays a relevant role in the international transmission of oil price shocks. With nominal price rigidities and full exchange rate pass-through positive oil price shocks depreciate the currency of the oil importing country. The subsequent negative wealth effect adds to the recessive effect of the supply channel and may trongly reduce the consumption in the oil importing country economy. Without exchange rate pass-through oil shocks transmit to the economy only through the supply channel. The model suggests that a change in the exchange rate pass-through might contribute to explain the evidence of a weaker impact of oil price shocks on the macroeconomic activity in recent times.
    Keywords: oil price shocks; macroeconomic interdependence; exchange rate pass-through...
    JEL: F31 F41 Q43
    Date: 2010–12–10
  5. By: Kisswani, Khalid
    Abstract: Two oil price shocks changed the pattern of cheap oil. The first was the Arab embargo on oil exports in 1973. Oil prices rose five fold. In 1978, the second was the fall of Shah Iran. Prices soared to $80-$100 a barrel in today‘s prices. In 1960, OPEC was established and since then it has been a considerable political and economical force in the oil market. Two thirds of the world‘s oil reserves belong to OPEC members. OPEC is accused of being responsible for most of the price increases due to their production cuts and market power. This paper provides a general framework to examine the role of OPEC in affecting oil prices through the extracted quantities. A mathematical model is developed to explore the objective function of OPEC, which includes economic and political considerations. The idea is that OPEC members consider both the political support of their citizens and profits when determining oil extraction rates. This support is represented by a ―harm function‖ which was added to the objective function of OPEC. The solution of the model lends some support for inclusion of this harm function, through which OPEC benefits from the cuts in production aimed at harming the western countries. For this harm function to be meaningful empirically, OPEC members should have a high harm indicator, αt. With high harm indicator values, OPEC harms itself financially. The results suggest that OPEC appears to be accepting considerable monetary setbacks to appease its citizens‘ taste for harming the West. At different discount rates, the monetary losses range from about 10-20%. Solving the mathematical model required estimation of the residual demand that OPEC faces plus the cost function that applies to OPEC production. This paper reports the results of these estimations.
    Keywords: OPEC; optimal control; cost estimation; demand estimation; resource economics
    JEL: Q32 C51 Q41 C20 Q31 C02
    Date: 2010–11–11
  6. By: Gilbert E. Metcalf; Catherine Wolfram
    Abstract: We analyze how a country's political institutions affect oil production within its borders. We find a pronounced negative relationship between political openness and volatility in oil production, with democratic regimes exhibiting less volatility than more autocratic regimes. This relationship holds across a number of robustness checks including using different measures of political conditions, instrumenting for political conditions and using several measures of production volatility. Political openness also affects other oil market outcomes, including total production as a share of reserves. Our findings have implications both for interpreting the role of institutions in explaining differences in macroeconomic development and for understanding world oil markets.
    Date: 2010
  7. By: Sadek Boussena (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : UMR5252 - Université Pierre Mendès-France - Grenoble II); Catherine Locatelli (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : UMR5252 - Université Pierre Mendès-France - Grenoble II)
    Abstract: The reforms and privatisation programmes of the 1990s structured the Russian oil industry around a few large national and private companies. This organisational structure poses some questions in respect of the Russian authorities will to take back the oil sector. Three factors may explain this evolution. First, the Russian authorities want to ensure the long-term future of the oil industry by encouraging new strategies in exploration. Second, the government can use the oil sector to support economic growth. This would involve sharing out the rent in a different manner. Third, and it is e new but important factor, the State intends to use Russia's oil power in this international relationships with the United States, Europe and Asia (China, Japan, South Korea, and India). The future of the Russian oil industry has some importance for the stability of the international oil market. Could Russia produce 12 Mb/d and challenging the dominant position of the Saudi Arabia?
    Keywords: Oil industry ; Russia ; Ownership rights ; Access to the natural resource ; State policy ; rule of law ; market reform ; Russian international policy
    Date: 2010
  8. By: Saurabh Arora; Marjolein C.J. Caniëls; Henny Romijn
    Abstract: Jatropha is emerging as an important biofuel crop throughout developing countries in the tropics. Initially lauded as an environmentally-benign ‘wonder crop’ suitable for arid wasteland cultivation that would avoid competition with scarce livelihood resources, it has recently begun to attract mounting criticisms related to competition with food production, biodiversity impacts, insecurity of land access by local populations, exploitative employment conditions, and disappointing effects on greenhouse gas emission reduction. In this paper we analyse the nature of the local developments that have given rise to these criticisms, and the underlying innovation processes and global forces that are driving the sector in the direction of these contested outcomes. We focus on Tanzania, an important forerunner in Jatropha biofuels production whose experiences have informed the international biofuel debate more broadly. Two surveys among biofuel actors in Tanzania held in 2005 and 2008/9 are the primary data sources. An extended innovation systems perspective is adopted, which is instrumental in studying patterns of global and local institutional embeddedness from a long-term perspective. These patterns are found to be key drivers behind the emergence and evolution of three distinct organizational models in the sector: local energy production and use for rural communities; decentralised subcontracting for centralised oil processors; and large centralised plantations. Socio-economic interactions in these models seem to be regulated by institutions put in place by colonial and early post-colonial governance of agri-commodity production and exchange. Each is also closely associated with different social (network) relations, organizational choices, economic viability, and environmental sustainability effects.
    Keywords: Sustainable development, Globalization, Institutions, Energy, Biofuels, Jatropha
    JEL: O30 R10
    Date: 2010–10
  9. By: Arindam Banerjee (Research and Information System for Developing Countries)
    Abstract: The contemporary world is witnessing certain critical changes in the domain of grain utilization. With the ongoing efforts to substitute fossil fuels with bio-fuels, there has been a rise in the importance of fuel-use of cereals. This adds a new dimension to the food-feed competition that emerged in the 20th century. Revisiting Yotopoulos’ food-feed competition model in the context of the large scale corn-ethanol production in the US, this paper attempts to draw out the new theoretical tenets of grain-use dynamics that have emerged with the new food-feed-fuel competition. The crude oil prices appear to play a more important role in the competition for grains between the various end-uses. Along with this, the equilibrating role that animal-feed has played in the grain-use dynamics in developed countries, with large middle-classes, is jeopardized with the advent of grain-based bio-fuels like corn-ethanol. The examination of the issue reveals that the US bio-fuels targets can have more serious implications for food security in the future that what meets the eye.
    Keywords: bio-fuels, grain-use dynamics, food security, US bio-fuel targets
    JEL: Q18 Q16
    Date: 2010
  10. By: Erdogdu, Erkan
    Abstract: One of the main targets of power market reforms in the world has been price-cost margins. This paper focuses on this issue by looking at the impact of the power market reforms on the convergence of residential and industrial electricity price-cost margins in diverse countries towards their average value and on cross-subsidy levels between consumer groups. Using panel data for 63 developed and developing countries covering the period 1982–2009, empirical models are developed and analyzed. The research findings suggest that, in most cases, reform process causes price-cost margins in different countries to move towards their average value. Besides, it is found that there is a negative relationship between absolute value of deviation from unit industrial/residential price ratio and the shift towards a competitive market model, meaning that as countries take more reform steps the size of cross subsidy between consumer groups tends to decline. Overall, based on empirical evidence, the study found that application of competitive market models in electricity industries makes electricity price-cost margins converge towards the average and prices more cost-reflective by reducing the size of cross subsidies between industrial and residential consumers, after controlling for industry and country-specific variables. Furthermore, the study suggests that power consumption, income level, electricity losses and country specific features constitute other important determinants of convergence towards average electricity price-cost margin and cross-subsidy levels between consumer groups.
    Keywords: Models with Panel Data; Power Market Reform; Price-cost margin
    JEL: C51 Y40 Q48 L94 C33
    Date: 2010–08
  11. By: Fleten, Stein-Erik; Bråthen, Espen; Nissen-Meyer, Sigurd-Erik
    Abstract: In this paper we develop an optimization model to derive static hedge positions for hydropower producers with different risk characteristics. Previous research has primarily considered dynamic hedging; however, static hedging is the common choice among hydropower producers because of its simplicity. Our contribution is to evaluate such hedging out of sample. The hedging strategies we analyze include a natural hedge, which means no hedging, and output from an optimization model that we develop ourselves. The results show that, although optimized positions vary over time, hedging with use of forward contracts significantly reduces the risk in terms of value-at-risk, conditional value-at-risk and standard deviation of the revenue. Furthermore, this improvement results in only a minor reduction in mean revenue.
    Keywords: Risk management; Static hedging; Hydropower producers; Nordic electricity market; Risk premium
    JEL: D81 G32 Q4
    Date: 2010–12
  12. By: Paulun, Tobias (Institute of Power Systems and Power Economics, RWTH Aachen University); Feess, Eberhard (Frankfurt School of Finance & Management); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: We develop a model of the European electricity market that allows analyzing the impact of consumers' price sensitivity, defined as the willingness to change energy providers, on equilibrium prices. The model is parameterized with publicly available data on total demand, marginal costs and capacity constraints of power generators. Comparably precise data on the price sensitivity is not available, so that we analyze its impact in a range of simulations. Contrary to apparently straightforward expectations, we find that a higher price sensitivity increases average prices under reasonable assumptions. The reason is that, when price sensitivity is high, the most efficient energy providers can attract sufficiently many consumers for operating at full capacity, even when price differences to their less efficient competitors are small. Hence, incentives to reduce prices are higher when the price sensitivity is low. We conclude that the widespread view that high electricity prices can (partially) be attributed to a low willingness of consumers to change their providers is flawed.
    Keywords: Electricity Market; Price Sensitivity; Heterogenous Oligopoly; Price Competition; Capacity Constraints
    Date: 2010–11
  13. By: Kenneth J. Arrow; Partha Dasgupta; Lawrence H. Goulder; Kevin J. Mumford; Kirsten Oleson
    Abstract: We develop a consistent and comprehensive theoretical framework for assessing whether economic growth is compatible with sustaining well-being over time. The framework focuses on whether a comprehensive measure of wealth – one that accounts for natural capital and human capital as well as reproducible capital – is maintained through time. Our framework also integrates population growth, technological change, and changes in health. We apply the framework to five countries that differ significantly in stages of development and resource bases: the United States, China, Brazil, India, and Venezuela. With the exception of Venezuela, significant increases in human capital enable comprehensive wealth to be maintained (and sustainability to be achieved) despite significant reductions in the natural resource base. We find that the value of “health capital” is very large relative to other forms of capital. As a result, its growth rate critically influences the growth rate of per-capita comprehensive wealth.
    JEL: D69 O10 O47 O50 Q32 Q39
    Date: 2010–12
  14. By: Marco R Barassi; Matthew A Cole; Robert J R Elliott
    Abstract: In response to equity concerns surrounding the spatial distribution of CO2 emissions and the assumptions of CO2 convergence within some climate models, this paper examines the convergence of CO2 emissions within the OECD over the period 1870-204. More specifically, using the Local Whittle estimator and its variants we examine whether relative per capita CO2 emissions are fractionally integrated, that is they are long memory processes which, although highly persistant, may revert to the mean/trend in the long run. Our results suggest that CO2 emissions within 13 out of 18 OECD countries are indeed fractionally integrated implying that they converge over time, albeit slowly. Interestingly though, the countries whose emissions are not found to be fractionally integrated are some of the highest polluters within the OECD, at least in per capita terms. Our results have implications both for future studies of CO2 convergence and for climate policy.
    Keywords: Fractional Integration, Local Whittle Estimation
    Date: 2010–11
  15. By: Lindmark, Magnus (CERE); Andersson, Lars Fredrik (CERE)
    Abstract: This paper examines the development of carbon dioxide emissions in Sweden, especiallyn with a focus on the absolute reductions during the post-war period, during the 1970s and 1980s. The paper shows that the largest reductions were achieved before the introduction of an active climate policy in 1991. This was in turn the result of significant improvements in energy efficiency and energy conversion, while structural changes were considerably less important. One reason behind this decoupling process may be that the active energy policy put pressure on households and industries to conserve energy and to substitute from oil to electricity and biofuels. The process was substantially reinforced by the development of world oil prices in combination with the development of domestic electricity prices, where nuclear power seems to have played an important role.
    Keywords: Sweden; climate policy; economic growth; carbon dioxide reduction; carbon tax
    JEL: N54
    Date: 2010–12–07
  16. By: Bernhard G. Gunter (American University and Bangladesh Development Research Center)
    Abstract: Bangladesh, a country with a population of 160 million, is currently contributing 0.14 percent to the world’s emission of carbon dioxide (CO2). However, mostly due to a growing population and economic growth (which both lead to an increase in energy consumption), Bangladesh’s share in CO2 emissions is—despite the increasing use of alternative energy—expected to rise sharply. This study uses the example of Bangladesh to illustrate the impact of low-income countries’ energy neutral development on global CO2 emissions in 2050 by using a set of alternative assumptions for population growth and GDP growth. It also shows how complex the determinants for (a) gains in energy efficiency and (b) changes in carbon intensity are in low-income countries.
    Keywords: climate change, carbon dioxide emission, Bangladesh, Copenhagen Accord
    Date: 2010–11
  17. By: Kratzsch, Uwe; Sieg, Gernot; Stegemann, Ulrike
    Abstract: If an emission reduction agreement with participation of all players is not enforceable because politicians are too myopic or not able to commit themselves to sustainable policies or costs of reducing emis- sions are too high, strategic investments in research and development (R&D) of green technology, for example sustainable drive-trains, can pave the way for a future treaty. Although no player will rationally reduce emissions on its own, investments in R&D by at least one player can change the strategic situation of negotiations to control emissions: Emission abatement costs will decrease so that a treaty with full par- ticipation can be achieved in future periods through time consistent sustainable policies.
    Keywords: emissions; discount factor; commitment; endogenous technical change; repeated prisoner’s dilemma
    JEL: O30 H41 F53 Q54
    Date: 2010
  18. By: Hahn, Robert W.; Richards, Kenneth
    Abstract: In the real world, taxes and cap-and-trade systems are rarely implemented in their pure form. In this paper, we examine a related approach that has been used widely in practice – which we refer to as an “offset.” The idea behind offsets is to encourage firms or entities that may not be a part of the main regulatory system to produce environmental improvements, which can then be used to offset pollution reduction requirements in the main regulatory system. This paper provides a survey and synthesis of the literature on the use of offsets. Examples include offsets for limiting greenhouse gas emissions, maintaining ecosystem services for wetlands, achieving local air pollution goals, protecting water quality, and promoting energy efficiency. The paper reviews how offsets are used in practice and examines what is known about their environmental and economic impacts. Combining insights from the political economy of using offsets with their intrinsic design challenges raises a potentially serious problem – namely, that offsets may often fail to take adequate account of environmental or ecosystem damages. Because this problem can be significant, alternatives should be considered.
    Date: 2010–11
  19. By: Yan Dong; John Whalley (Institute of World Economics and Politics)
    Abstract: We discuss whether or not the introduction of climate change considerations into Nash tariff games increases or reduces post retaliation tariffs. We briefly discuss how climate change considerations can be introduced into computational trade models. We then calculate optimal tariffs in comparable conventional (no climate change considerations present) and with climate change trade models. Results show that compared to conventional trade models, adding climate change considerations reduces the level of optimal tariffs, but this only occurs when the damage effects involved are large.
    Keywords: Climate change, Nash tariff games, climate change trade models, trade models
    JEL: F10 C70 Q54
    Date: 2010
  20. By: Silverstein, David N.
    Abstract: Funding a response to climate change after Kyoto will require another look at both burden sharing and funding mechanisms. After reviewing the risks of cap-and-trade with carbon offsets and the advantages of a harmonized carbon tax, a method is proposed to utilize a harmonized carbon tax to finance a global climate fund. A common carbon tax rate is assessed across all nations and collected internally for internal investments in climate change. Financing for the global climate fund is generated from transferring a percentage of the collected carbon tax based on historical responsibility for carbon emissions and national wealth. Collected revenue is disbursed for climate aid based on a set of national climate need factors for adaptation, preserving strategic carbon sinks, low-carbon infrastructures and population management. In the interest of distributive justice, nations themselves determine the need factors of each other. Unlike cap-and-trade, this method does not explicitly require emissions caps. Formulas are presented for collection and disbursement, which require parameters for a globally harmonized carbon tax rate, a climate fund contribution rate, a national wealth threshold for fund contributions and need factors for each nation. Published economic and emissions data are used with the formulas to demonstrate an example of how the financing can work. This presents an equitable way to address climate needs across all nations on both a global and regional level.
    Keywords: climate change; global warming; climate fund; carbon tax; cap-and-trade; climate finance; Kyoto protocol
    JEL: Q56 F53 Q54
    Date: 2010–11–30
  21. By: Gramstad, Kjetil; Tjøtta, Sigve
    Abstract: International efforts on abating climate change, focusing on reductions of greenhouse gas emissions, have thus far proved unsuccessful. This motivates exploration of other strategies such as climate engineering. We modify the Dynamic Integrated model of Climate and the Economy (DICE), and use it in a cost-benefit analysis of climate engineering specifically deposition of sulphur in the stratosphere. The model simulations show that climate engineering passes a cost-benefit test. The cost of postponing climate engineering by 20-30 years is relatively low. Going beyond these standard cost-benefit analyses, climate engineering may still fail; voters may dislike the idea of climate engineering; they do not like the idea of tampering with nature, and their dislike stands independent of outcomes of cost-benefit analyses.
    Keywords: Climate change; climate engineering; cost-benefit analyses; public choice.
    JEL: Q54 Q58
    Date: 2010–09–23
  22. By: Aravindakshan, Sreejith; Sherief, Aliyaru Kunju
    Abstract: Conventional input intensive agriculture practised over the last century has been a major contributor to climate change, second only to energy sector. The communities engaged in pesticide and synthetic input rich agriculture is most vulnerable to the impacts of climate change. Many emerging economies including India have had the opportunity to develop National Adaptation Plans of Action in the context of the United Nations Framework Convention on Climate Change but implementation of those programmes and strategic links to resourcing actions are often lacking. Adaptation in the agricultural sector can be seen in terms of both short-term and long-term actions. Changing to organic farming systems is the most efficient and long term adaptation strategy. Organic agriculture is believed to be the most sustainable approach against climate change ensuring food security; it employs low external input and high output strategies. This paper attempts to review the potent role of organic agriculture as an adaptation strategy to deliver a tangible and hopeful alternative towards sustainable livelihood in the backdrop of climate change. The methodology involves thorough review of scientific literature. The study discusses the carbon sequestration achieved as well as reduction in emission with respect to low pesticide use and fossil fuel based farm machinery use in organic farming. The analysis of results concludes that the organic system of farming is the most resilient adaptation strategy against climate change and offer greater potential as a sustainable livelihood mechanism in times of climate transition.
    Keywords: adaptation; climate change; organic agriculture; sustainable livelihoods; vulnerability
    JEL: Q16 Q19 O13 Q54 Q10
    Date: 2010–01
  23. By: Vipin Chandran, K.P; Sandhya, P
    Abstract: Climate change will have a wide range of implications to human health. These include thermal-related morbidity and mortality due to extreme temperatures, effects associated with air pollution, impacts of extreme weather events, malnutrition, water-borne (e.g. diarrhea, cholera, typhoid) and vector-borne diseases (e.g. malaria, dengue). Much of the health risk posed by climate change is preventable or curable through the scale-up of existing health programmes and interventions. Intensive action to strengthen public health systems and to promote sustainable and healthy development choices can enhance current health conditions as well as reduce vulnerability to future climate change.
    Keywords: Climate change; MDG; Health
    JEL: P36 I12 P3 I1
    Date: 2010–11–23
  24. By: Lykke E. Andersen (Institute for Advanced Development Studies); Dorte Verner (World Bank)
    Abstract: This paper uses municipality level data to estimate the general relationships between climate, income and child mortality in Mexico. Climate was found to play only a very minor role in explaining the large differences in income levels and child mortality rates observed in Mexico. This implies that Mexico is considerably less vulnerable to expected future climate change than other countries in Latin America.
    Keywords: Climate change, social impacts, Mexico
    JEL: Q51 Q54 O15 O19 O54
    Date: 2010–07
  25. By: Fahmida Khatun; AKM Nazrul Islam (Centre for Policy Dialogue)
    Date: 2010
  26. By: Belgodere, Antoine
    Abstract: This paper proposes a new way to model the cost of climate change, based on a vintage capital modeling. Climate change destroys capital, according to the difference between the current climate and the climate that prevailed when a given durable was built. This assumption is meant to account for the adaptation of economic agents to the changing climate. The main result is that the carbon tax is much less sensitive to the rate of time preference than in the Stern-Nordhaus controversy. Moreover, despite an estimate of the cost in line with Nordhaus' estimate for the 21st century, we find an optimal carbon tax much lower than his one.
    Keywords: global warming; stock pollution; carbon tax; discount rate
    JEL: H21 Q56 Q54
    Date: 2010–12–09

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