nep-ene New Economics Papers
on Energy Economics
Issue of 2011‒03‒05
48 papers chosen by
Roger Fouquet
Basque Climate Change Centre, Bilbao, Spain

  1. Nonlinearities in the oil price-output relationship By Lutz Kilian; Robert J. Vigfusson
  2. An Identification-Robust Test for Time-Varying Parameters in the Dynamics of Energy Prices By Marie-Claude Beaulieu; Jean-Marie Dufour; Lynda Khalaf; Maral Kichian
  3. Breaks and Trends in OECD Countriesâ Energy-GDP Ratios By Liddle, Brantley
  4. The effects of energy taxes on energy consumption in Finland between 1995 and 2004 - An historical analysis using the VATTAGE-model By Kimmo Marttila; Juha Honkatukia
  5. The Influence of Rebate Programs on the Demand for Water Heaters The Case of New South Wales By Wasi, Nadi; Carson, Richard
  6. An Economic Evaluation of the U.S. Department of Energy’s Investments in Vehicle Combustion Engine R&D By Link, Albert N
  7. A Techno-Economic Perspective of Green IT Implementation in Europe and the US By Alberto Onetti; Marco Talaia; Sam Gill; Lufutus Sayeed
  8. Energy use reduction and input productivity growth in Australian industries By Syed, Arif
  9. Electricity Generation in Fiji: Assessing the Impact of Renewable Technologies on Costs and Financial Risk By Dornan, Matthew; Jotzo, Frank
  10. Electricity Intensities of the OECD and South Africa: A Comparison By Roula Inglesi-Lotz; James Blignaut
  11. Efficiency, Productivity and Environmental Policy: A Case Study of Power Generation in the EU By Jaraite, Jurate; Di Maria, Corrado
  12. South Africa's Electricity Consumption: A Sectoral Decomposition Analysis By Roula Inglesi-Lotz; James Blignaut
  13. EU Gas Supplies Security: Russian and EU Perspectives, the Role of the Caspian, the Middle East and the Maghreb Countries By Gerhard Mangott
  14. Accounting for Depletion of Oil and Gas Resources in Malaysia By Othman, Jamal; Jafari, Yaghoob
  15. Accounting for Depletion of Oil and Gas Resources in Malaysia By Othman, Jamal; Jafari, Yaghoob
  16. Oil to Cash: Fighting the Resource Curse through Cash Transfers - Working Paper 237 By Todd Moss
  17. Long Term Consequences of Natural Resource Booms for Human Capital Accumulation By Emery, Herb; Ferrer, Ana; Green, David
  18. Sustainable Energy Crop Production: A Case Study for Sugarcane and Cassava Production in Yunnan, China By Zhang, Yu; Ni, Jianhong; Zhang, Sizhu
  19. Ökonomische Bewertung des Erneuerbare Energien Gesetzes zur Förderung von Biogas By Ruth Delzeit; Karin Holm-Müller; Wolfgang Britz
  20. An assessment of competition for biomass resources within the energy and transport sectors By Graham, PW; Brinsmead, TS; Reedman, LJ
  21. Learning Curve and Wind Power By Silvia Micheli
  22. Modelling cost-effective air pollution abatement: a multi-period linear programming approach By Hohnen, Laura; Godden, David; Balding, Jeremy; Adams, David
  23. Estimating the Carbon Footprint of Florida Orange Juice By Spreen, Thomas; Dwivedi, Puneet; Goodrich-Schneider, Renee
  24. Optimal Carbon Tax with a Dirty Backstop: Oil, coal or renewables? By Frederick van der Ploeg; Cees Withagen
  25. California Industry Impacts of a Statewide Carbon Pricing Policy with Output-Based Rebates By Morgenstern, Richard; Moore, Eric
  26. Options for Returning the Value of CO2 Emissions Allowances to Households By Burtraw, Dallas; Parry, Ian W.H.
  27. A Tax Mix Change to Reduce Greenhouse Gas Emissions By Freebairn, John
  28. Is Emission Trading Beneficial? By ISHIKAWA Jota; KIYONO Kazuharu; YOMOGIDA Morihiro
  29. Global emission ceiling versus international cap and trade: What is the most efficient system when countries act non-cooperatively? By Jacqueline Morgan; Fabien Prieur
  30. The Scale and Scope of Environmental Taxation By Agnar Sandmo
  31. Effect of a Carbon Price on Farm Profitability on Rainfed Dairy Farms in South West Victoria: A First-Look By Ãzkan, Åeyda; Farquharson, Bob; Hill, Julian; Malcolm, Bill
  32. Trading Carbon into Agriculture: making it happen By Acworth, William; Edwards, Astrid
  33. How CO2 Capture and Storage Can Mitigate Carbon Leakage By Philippe Quirion; Julie Rozenberg; Olivier Sassi; Adrien Vogt-Schilb
  34. Reducing Indonesiaâs Deforestation-based Greenhouse Gas Emissions By Warr, Peter; Yusuf, Arief Anshory
  35. Easy winnings? The economics of carbon sequestration in agricultural soils By Kragt, ME; Pannell, DJ; Robertson, MJ
  36. Contracting for Impure Public Goods: Carbon Offsets and Additionality By Charles F. Mason; Andrew J. Plantinga
  37. Climate Change and Food Security to 2050: A Global Economy-wide Perspective By Valenzuela, Ernesto; Anderson, Kym
  39. Coping with Climatic Variability by Rain-fed Farmers in Dry Zone, Sri Lanka: Towards Understanding Adaptation to Climate Change By Senaratne, Athula; Scarborough, Helen
  40. Außenhandel und Umwelt: Was bringt Cancún? By Stefan Schleicher; Karl Steininger; Andreas Türk
  41. Optimal Emission Policy under the Risk of Irreversible Pollution By Alain Ayong Le Kama; Aude Pommeret; Fabien Prieur
  42. Climate Policy as Expectation Management? By Daiju Narita
  43. Dynamic adjustments in the Dutch greenhouse sector due to environmental regulations By Verreth, Daphne M.I.; Emvalomatis, Grigorios; Bunte, Frank; Oude Lansink, Alfons G.J.M
  44. Common ground for effort sharing? Preferred principles for distributing climate mitigation efforts By Hjerpe, Mattias; Löfgren, Åsa; Linnér, Björn-Ola; Hennlock, Magnus; Sterner, Thomas; Jagers, Sverker C.
  45. Climate Change Mitigation Policy: The Effect of the New Zealand Emissions Trading Scheme on New Radiata Pine Forest Plantations in New Zealand By Tee, James; Scarpa, Ricardo; Marsh, Dan; Guthrie, Graeme
  46. Consumer Attitudes towards Sustainability Attributes on Food Labels By Tait, Peter; Miller, Sini; Abell, Walter; Kaye-Blake, Wiliam; Guenther, Meike; Saunders, Caroline
  47. Communicating Climate Change: A Literature Review By Parton, Kevin; Morrison, Mark
  48. Moving U.S. Climate Policy Forward: Are Carbon Taxes the Only Good Alternative? By Parry, Ian W.H.; Williams, Roberton C.

  1. By: Lutz Kilian; Robert J. Vigfusson
    Abstract: It is customary to suggest that the asymmetry in the transmission of oil price shocks to real output is well established. Much of the empirical work cited as being in support of asymmetries, however, has not directly tested the hypothesis of an asymmetric transmission of oil price innovations. Moreover, many of the papers quantifying these asymmetric responses are based on censored oil price VAR models which recently have been shown to be invalid. Other studies are based on dynamic correlations in the data that do not shed light on the central question of whether the structural responses of real output triggered by positive and negative oil price innovations are asymmetric. Recently, a number of new methodologies have been introduced and applied to the problem of testing and quantifying asymmetric responses of U.S. real economic activity to positive and negative oil price innovations. Our objective is to put this literature in perspective, to contrast it with more traditional approaches, to highlight directions for further research, and to reconcile some seemingly conflicting results reported in the literature.
    Date: 2011
  2. By: Marie-Claude Beaulieu; Jean-Marie Dufour; Lynda Khalaf; Maral Kichian
    Abstract: We test for the presence of time-varying parameters (TVP) in the long-run dynamics of energy prices for oil, natural gas and coal, within a standard class of mean-reverting models. We also propose residual-based diagnostic tests and examine out-of-sample forecasts. In-sample LR tests support the TVP model for coal and gas but not for oil, though companion diagnostics suggest that the model is too restrictive to conclusively fit the data. Out-of-sample analysis suggests a randomwalk specification for oil price, and TVP models for both real-time forecasting in the case of gas and long-run forecasting in the case of coal <P>
    Keywords: structural change, time-varying parameter, energy prices, coal, gas, crude oil, unidentified nuisance parameter, exact test, Monte Carlo test, Kalman filter, normality test,
    JEL: C22 C52 C53 Q40
    Date: 2011–02–01
  3. By: Liddle, Brantley
    Abstract: This paper uses the econometrics of endogenous structural breaks to examine changes in energy intensity for OECD countries over 1960-2009. Nearly all OECD countries currently have significant negatively trending energy-GDP ratios; but for several countries those negative trends are recent, and two countries have recent significant positive trends. For several countries, energy intensity had a significant positive trend followed by a break and then a significant negative trend. Those break-dates, however, appear to have little to do with level of development (GDP per capita). Instead, among the likely causes of break timing are the volatile energy prices of the 1970s and early 1980s and the increased concern for the environment in the late 1960s and early 1970s. These findings have implications for future modeling of energy consumption as well as for the role of energy price policy in developed and developing countries.
    Keywords: energy intensity, endogenous structural breaks, modeling environment and development, Resource /Energy Economics and Policy, Q43, O13,
    Date: 2011
  4. By: Kimmo Marttila; Juha Honkatukia
    Abstract: Abstract This study evaluates the effects of changes in energy taxes on energy consumption between the years 1995 and 2004 using an applied, general equilibrium model for a historical simulation. During this period, Finnish energy taxation was fundamentally changed, going from an up-stream, emission and energy content-based approach to one with a mixed fuel and electricity tax. The change put the burden more closely on the users of electricity and fuels. We find that while the sharp increases in energy prices since 1995 have significantly restricted the growth of energy demand, energy taxes have also been effective in curbing the growth of energy and especially electricity consumption. For transport fuels, the effective tax rate actually fell as the price net of tax increased over time. Nevertheless, for petrol and light fuel oil we do find the taxes to have slowed down overall demand growth.
    Keywords: Energy taxes, emission, economic growth
    Date: 2011–01–31
  5. By: Wasi, Nadi; Carson, Richard
    Abstract: In the past decade the Australian Federal government and state governments have established a wide range of programs to cut greenhouse gas emissions from all sectors. This paper examines the role of hot water system rebate programs in shifting the existing stock of electric water heaters toward more climate friendly versions using two unique data sets from New South Wales homeowners. The first data set is based on a survey of households who recently purchased a water heater and exploits a natural experiment created by the rebate program to quantify its effects. The other data set is based on a set of stated preference questions asked of households who own an older water heater and will in the reasonably near future face a replacement decision. We find that recent rebate programs significantly increased the share of solar/heat pump systems. For households without access to natural gas, this increased share comes directly from inefficient electric water heaters. For households with access to natural gas, older existing electric water heaters would likely have been replaced with gas water heaters in the absence of the rebate programs. The rebate program appears to be much less effective when water heaters are replaced on an emergency basis. Data from discrete choice experiments was analysed using several flexible choice models. A newly proposed model that combines a latent class approach with a random coefficients approach clearly dominates the other models in terms of statistical fit. Predictions based on this model estimate are reasonably consistent with actual purchase data. Results from it point to considerable heterogeneity with respect to household preferences toward different types of water heaters and with respect to the discount rates they hold.
    Keywords: Climate change mitigation, Energy conservation programs, Natural experiments, Discrete choice experiments, Environmental Economics and Policy, Resource /Energy Economics and Policy,
    Date: 2011
  6. By: Link, Albert N (University of North Carolina at Greensboro, Department of Economics)
    Abstract: The Government Performance and Results Act (GPRA) of 1993 was legislated in the United States to, among other things, hold Federal agencies accountable for achieving program results, and through systematic program evaluations to improve Congressional decision making. Two technologies funded by the U.S. Department of Energy (DOE) that are related to improved fuel efficiency in new heavy-duty diesel trucks are studied in this paper—laser diagnostics and optical engine technologies, and combustion modeling. Based on DOE cost data, and benefit data derived from field-based interviews, economic evaluation metrics are calculated. They suggest that DOE’s investments in these two technologies have been socially valuable.
    Keywords: innovation; program evaluation; social rate of return
    JEL: H42 O31 O33 O38
    Date: 2011–02–23
  7. By: Alberto Onetti; Marco Talaia; Sam Gill; Lufutus Sayeed (Department of Economics, University of Insubria, Italy)
    Abstract: The present paper investigated the implementation of environmentally responsible IT measures in ten American and nine European organizations. The environmentally responsible IT measures include the implementation of existing hardware and software technologies as well as organizational and managerial actions that aim to reduce environmental impacts of IT use. As a result, adoption of Green IT measures requires adjustments that may modify the physical IT infrastructure and various organizational processes. These adjustments to organizational processes in addition to the infrastructure are ‘techno-economic’ in nature. The term techno-economic denotes concurrent consideration of technological, social, and economic issues surrounding an innovation. We interviewed at least two executives in each of the organizations in our study to assess the extent of Green IT implementation. Based on the analysis of these interviews, we conclude that the techno-economic adjustments were necessary for widespread implementation of environmentally responsible IT measures
    Keywords: Green IT, Data Center Management, Energy Efficiency, Environmental Responsibility, Organizational Development, Corporate Strategy.
    Date: 2011–02
  8. By: Syed, Arif
    Abstract: A report by the Prime Ministerâs Task Group on Energy Efficiency (July 2010) emphasised the need for improved energy efficiency as a response to climate change to ensure a reduction in greenhouse gas emissions from energy consumption in Australia. However, empirical evidence on energy efficiency and its effect on energy use in Australia is scarce. Given this, estimates of the magnitude of the autonomous energy efficiency improvement parameter and the bias in technological change in Australiaâs agricultural and industrial sectors have been made, using statistical and econometric techniques. The strong interaction prevailing between capital use and energy productivity in many industries indicates that energy use efficiency may be augmented by optimising capital use. This can be achieved by removing impediments to the use of new capitalâthat is, by making capital markets more flexible. This should ease the burden on energy efficiency policies or energy conservation measures by providing alternative ways to increase energy efficiency that do not focus on energy use as such.Results of the estimates for overall productivity, input use productivity, the influence of capital on energy productivity, and energy-saving and energy-using bias revealed widely different energy productivity growth rates in different industries studied. Such results suggest a need to revise the 0.5 per cent a year autonomous energy efficiency improvement parameter assumed in most economic projection models used in Australia.
    Keywords: energy efficiency, energy demand, energy policy, climate change., Resource /Energy Economics and Policy,
    Date: 2011
  9. By: Dornan, Matthew; Jotzo, Frank
    Abstract: In recent years, renewable energy technologies have been advocated in Fiji on the basis that they improve energy security and serve as a risk-mitigation measure against oil price volatility. Despite this, there have been few attempts to measure the impact of renewable technologies on energy security. That analysis is important if the benefits of renewable energy technologies in Fiji are to be adequately evaluated. This paper develops and applies a method for assessing the potential contribution of renewable technologies to the security of electricity supply in Fiji. The method is based on an application of portfolio theory, traditionally used in financial markets, to the electricity generation mix in Fiji. The results demonstrate the impact of different renewable technologies on both portfolio generation cost and risk for Fijian electricity grids.
    Keywords: renewable energy technologies, energy policy, electricity sector, Fiji, oil prices, portfolio analysis, Pacific islands, Resource /Energy Economics and Policy,
    Date: 2011
  10. By: Roula Inglesi-Lotz (Department of Economics, University of Pretoria); James Blignaut (Department of Economics, University of Pretoria)
    Abstract: Improving a country’s electricity efficiency is considered one of the important ways to reduce its greenhouse gas emissions and to meet its commitments concerning climate change mitigation. In this paper, we conduct a comparative analysis between South Africa and OECD members’ total and sectoral electricity intensities. This is done to establish a sense of South Africa’s relative performance in this regard, to ascertain the possible scope for improvement and, if such scope exists, to determine in which of the industrial sectors.
    Date: 2011–02
  11. By: Jaraite, Jurate (CERE, Centre for Environmental and Resource Economics); Di Maria, Corrado (Economics and Finance Research Group)
    Abstract: This study uses the EU public power generating sector as a case study to investigate the environmental efficiency and productivity enhancing performance of the EU ETS in its pilot phase. Using Data Envelopment Analysis methods, we measures the environmental efficiency and the productivity growth registered in public power generation across the EU over the 1996-2007 period. In the second stage of our analysis we attempt to explain changes in productivity and efficiency over time using state-of-the-art econometric techniques. Our analysis suggests two conclusions: on the one hand carbon pricing led to an increase in environmental efficiency and to a shift outwards of the technological frontier; on the other hand, the overly generous allocation of emission permits had a negative impact on both measures. These results are shown to be quite robust to changes in controls and specifications.
    Keywords: Emissions Trading; EU ETS; Environmental Efficiency; Productivity GrowthM; Data Envelopment Analysis
    JEL: O38 Q48 Q58
    Date: 2011–02–22
  12. By: Roula Inglesi-Lotz (Department of Economics, University of Pretoria); James Blignaut (Department of Economics, University of Pretoria)
    Abstract: South Africa's electricity consumption has increased sharply since the early 1990s. Here we conduct a sectoral decomposition analysis of the electricity consumption for the period 1993 to 2006, to determine the main drivers of this increase. The results show that the increase was due mainly to output- or production-related factors, with structural changes playing a secondary role. While there is some evidence of efficiency improvements, indicated here as a slowdown in the rate of increase in electricity intensity, it was not nearly sufficient to onset the combined production and structural effects that propelled electricity consumption higher.
    Date: 2011–02
  13. By: Gerhard Mangott
    Abstract: This report tracks the major geo-economic and geo-strategic ruptures between the EU and Russia on the future patterns of gas supplies and shipping routes to the EU and the Western Balkans. It identifies the objectives and interests of the actors involved in this struggle: Russia, the EU, various EU members, the countries of the Caspian Basin (Kazakhstan, Uzbekistan, Turkmenistan, Azerbaijan) and the Middle East (Iran, Iraq, Qatar, Egypt) as well as the Maghreb countries (Algeria, Libya). It analyses in great detail the colliding interests of all actors at the intersection of business and (geo-) politics.
    Keywords: energy security, EU, Russia, gas, Southern Gas Corridor, South Stream, Nabucco
    JEL: F14 F59 L71 L78 L95 Q41
    Date: 2010–12
  14. By: Othman, Jamal; Jafari, Yaghoob
    Abstract: This paper provides an assessment of the changes in the availability of oil and gas resources in Malaysia. The physical and monetary balance sheets for crude oil and natural gas for the period 2000- 2007 was constructed. The net present value of expected future incomes to reflect the value of resource change was calculated based on a physical extraction and a resource rent scenario. Resource rent is gross operating surplus less the estimated user cost of produced capital in the crude oil and natural gas extraction industry. We obtained the gross operating surplus by subtracting the value of consumption of employees and net taxes on production cost from the value added of petroleum domestic products. Our findings noted serious reduction of oil reserves from 2001 â 2005, due to changes in crude oil prices, and thereafter the depletion rate decreased. Malaysia has depleted her natural gas reserves mainly in 2004 and 2005. Changes in reserves values were attributable more to price changes and new discoveries. Further, our study shows that the royalty rate paid by the state oil company, Petronas was far less than the estimated resource rent.
    Keywords: Sustainability, Environmental Accounts, Accounting, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q56,
    Date: 2011
  15. By: Othman, Jamal; Jafari, Yaghoob
    Abstract: This paper provides an assessment of the changes in the availability of oil and gas resources in Malaysia. The physical and monetary balance sheets for crude oil and natural gas for the period 2000- 2007 was constructed. The net present value of expected future incomes to reflect the value of resource change was calculated based on a physical extraction and a resource rent scenario. Resource rent is gross operating surplus less the estimated user cost of produced capital in the crude oil and natural gas extraction industry. We obtained the gross operating surplus by subtracting the value of consumption of employees and net taxes on production cost from the value added of petroleum domestic products. Our findings noted serious reduction of oil reserves from 2001 – 2005, due to changes in crude oil prices, and thereafter the depletion rate decreased. Malaysia has depleted her natural gas reserves mainly in 2004 and 2005. Changes in reserves values were attributable more to price changes and new discoveries. Further, our study shows the royalty rate paid by the state oil company was far less than the estimated resource rent.
    Keywords: Sustainability; Environmental Accounts and Accounting; Malaysian Oil and Gas Depletion
    JEL: Q5 Q56
    Date: 2011–02–08
  16. By: Todd Moss
    Abstract: Many of the world’s poorest and most fragile states are joining the ranks of oil and gas producers. These countries face critical policy questions about managing and spending new revenue in a way that is beneficial to their people. At the same time, a growing number of developing countries have initiated cash transfers as a response to poverty, and these programs are showing some impressive results. In this paper, Todd Moss proposes putting these two trends together: countries seeking to manage new resource wealth should consider distributing income directly to citizens as cash transfers. Beyond serving as a powerful and proven policy intervention, cash transfers may also mitigate the corrosive effect natural resources revenue often has on governance.
    Keywords: cash transfers, resource curse, direct cash payments
    Date: 2010–12
  17. By: Emery, Herb; Ferrer, Ana; Green, David
    Abstract: Tight labour markets driven by resource booms could increase the opportunity cost of schooling and crowd out human capital formation. For oil producing economies like the Province of Alberta, the OPEC oil shocks of 1973 to 1981 may have had an adverse long term effect on the productivity of the labor force if the oil boom resulted in workers reducing their ultimate investment in human capital rather than merely altering the timing of schooling. We analyze the effect of this decade long oil-boom on the long-term human capital investments and productivity for Alberta birth cohorts that were of normal schooling ages before, during and after the oil boom. Our findings suggest that resource booms may change the timing of schooling but they do not reduce the total accumulation of human capital.
    Keywords: Resource booms, long term human capital accumulation, OPEC oil crisis
    JEL: J24 I21 I22
    Date: 2011–02–22
  18. By: Zhang, Yu; Ni, Jianhong; Zhang, Sizhu
    Abstract: The possibility of using biomass as a source of energy in reducing the greenhouse-effect imposed by carbon dioxide emission and relieving energy crisis is a matter of great interest, such as bioethanol production. Nevertheless, the cultivation of dedicated energy crops dose meet with some criticisms (conflict with food security and environmental degradation, for example). Nowadays sugarcane and cassava are regarded as the potential energy crops for bioethanol production. Endowed with natural resources and favorable weather condition, Yunnan province, China, is the major sugarcane and cassava production area in China. This paper presents production structures of these two crops in Yunnan and compares the sustainable production between the usages of sugarcane and cassava as bioethanol feedstock. Firstly, we estimated the technical efficiency for sugarcane and cassava production by adopting the production function and stochastic frontier production function. Field surveys from 61 sugarcane farmers and 50 cassava farmers were collected in June and September, 2008. Secondly, the sustainability of each crop production was evaluated. Since there is no generally accepted definition of sustainable production, a set of criteria was defined including 2 concerns (employment and food supply) from socio-economic area and 3 concerns (conversion rate to ethanol, water requirement, and fertilizer pollution) from environmental area. Empirical results demonstrated that the average production function was located below the frontier production function, 5% for sugarcane production and 7% for cassava production. These findings reflect the existence of technical inefficiency not only in the sugarcane production but also in the cassava production as well. But after considering sustainable production, cassava, which requires low agro-chemical, should be recommended as a prior energy crop in Yunnan with higher rates in ethanol conversion and dry matter.
    Keywords: International Development, Production Economics, Energy crop, stochastic frontier production, Sustainable production, Yunnan province, Bioethanol,
    Date: 2011
  19. By: Ruth Delzeit; Karin Holm-Müller; Wolfgang Britz
    Abstract: The Renewable-Energy-Source-Act (EEG) promotes German biogas production in order to substitute fossil fuels, protect the environment and prevent climate change. In this paper we quantitatively analyse the EEG-reform in 2008. Results imply that the reform contributes to an expansion of biogas electricity generation and thus to substitution of fossil fuels. However, subsidies, land and transport emissions per unit of electricity produced increase. An alternative analysis shows that an EEG with tariffs independent from plant-types would provide the highest subsidy-efficiency, lower land requirements and higher transport emissions compared to EEG before its reformation. Zusammenfassung: Biogasproduktion wird in Deutschland mit dem Ziel des Klima- und Umweltschutzes sowie der Substitution fossiler Energieträger durch das Erneuerbare-Energien-Gesetz (EEG) gefördert. Dieser Beitrag analysiert quantitativ durch Kopplung eines Agrarsektor- und eines Standortmodells die Novellierung des EEGs in 2008. Die Ergebnisse zeigen, dass die Novellierung durch einen verstärkten Ausbau der Energieerzeugung durch Biogas zur weiteren Substitution fossiler Energieträger beiträgt, allerdings auch zu höheren Kosten pro erzeugter Einheit Strom. Die Flächeneffizienz sinkt, während Transportemissionen ansteigen. Eine alternativ untersuchte Ausgestaltung einer anlageunabhängigen Vergütung im EEG zeigt die höchste Subventionseffizienz, bei allerdings niedrigerer Flächeneffizienz und höheren Transportemissionen im Vergleich zum EEG vor der Novellierung
    Keywords: Biogas, land use, renewable energy policy, coupled models, EEG
    JEL: C02 C61 Q15 Q42 Q48
    Date: 2011–02
  20. By: Graham, PW; Brinsmead, TS; Reedman, LJ
    Abstract: Bio-energy is expected to become increasingly attractive in the future owing to its potential to contribute to lowering greenhouse gas emissions, increasing rural and regional employment and improving energy security through substituting for oil imports. The volume of sustainable biomass resources that are economically competitive but do not significantly impact on food production is expected to slowly expand as new feedstock varieties and refining pathways are developed. However, these volumes will remain limited relative to total energy and transport sector fuel demand. Limited biomass resources will be allocated to the sector that is most able to afford them. This will depend on the price of existing fossil fuel products and the relative cost of converting biomass into substitute final fuels such as bio-derived electricity, ethanol blends, biodiesel and bio-derived jet fuel. It will also depend on factors such as the availability and cost of alternative fuel and energy sources, government policies including excise rates, and the emission intensity of each sector. This paper presents a number of alternative cost curves for bio-energy resource to final energy costs and applies a partial equilibrium model of the electricity and transport sectors, called the Energy Sector Model (ESM), to determine where the limited biomass resources are likely to be allocated under various scenarios. Preliminary projections are presented for biomass uptake in each of the electricity, road and aviation sectors to 2050.
    Keywords: Resource /Energy Economics and Policy,
    Date: 2011
  21. By: Silvia Micheli
    Abstract: This study explores the reasons why countries have chosen subsidies to green electricity instead of implementing the more common Pigouvian tax on polluting emissions. I focus on the learning by doing effects from the production of wind power on the cost of future production as a justification for the observed policies. In doing so, I present two models that differ in the way I introduce learning. Under reasonable parameter values, the price paid to a firm for the energy produced from wind power is heterogeneous, and varies among the firms that produce energy from wind power according to the index of productivity of the firm itself. The suggested strategies of this research differ from the main price-driven schemes adopted by EU members; by comparing such results with European Union policy, the paper show that EU policy is not optimal.
    Keywords: learning by doing, environmental policy, Pigouvian taxes, subsidies.
    JEL: H23 Q48
    Date: 2010–12–01
  22. By: Hohnen, Laura; Godden, David; Balding, Jeremy; Adams, David
    Abstract: Improvements in air quality for some criteria pollutants in Sydney, Wollongong and the Lower Hunter have been achieved, whilst further improvements are required for others.
    Keywords: Environmental Economics and Policy,
    Date: 2011
  23. By: Spreen, Thomas; Dwivedi, Puneet; Goodrich-Schneider, Renee
    Abstract: This study is a part of a comprehensive study which attempts to create a baseline of global warming impact (expressed in total greenhouse gas emission and measured in terms of carbon equivalent) associated with the production and consumption of a gallon of orange juice available in the form of NFC (Not from Concentrate) and FCOJ (Frozen Concentrated Orange Juice) in Florida. A detailed lifeâcycle approach is adopted and greenhouse gas emissions of all the steps in the supply chain starting from citrus nursery management to the point where customer purchases juice from a food store are considered. This study reports total greenhouse gas emission related with the management of an acre orange grove under the two scenarios of with and without resetting of trees lost due to normal attrition. It was found that total emission of greenhouse gas (carbon equivalent) for one gallon of orange juice produced under the scenarios of without and with resetting was 1.92 and 1.60 pounds, respectively. Carbon sequestered in orange trees was not considered in the present study.
    Keywords: Greenhouse Gas Emission, Orange Juice, LifeâCycle Analysis, Florida, Agribusiness, Agricultural and Food Policy, Farm Management, Food Consumption/Nutrition/Food Safety, Production Economics, Research Methods/ Statistical Methods,
    Date: 2010–10
  24. By: Frederick van der Ploeg; Cees Withagen
    Abstract: Optimal climate policy is studied. Coal, the abundant resource, contributes more CO2 per unit of energy than the exhaustible resource, oil. We characterize the optimal sequencing oil and coal and departures from the Herfindahl rule. "Preference reversal" can take place. If coal is very dirty compared to oil, there is no simultaneous use. Else, the optimal outcome starts with oil, before using oil and coal together, and finally coal on its own, The "laissez-faire" outcome uses coal forever or starts with oil until it is no longer profitable to do so and then switches to coal. The optimum requires a steeply rising CO2 tax during the oil-only phase and a less steeply rising CO2 tax during the subsequent oil-coal and coal-only phases to avoid the abrupt switch from oil to coal thus leaving a lot of oil in situ. Finally, we analyze the effects on the opitamal transition times and carbon tax of a carbon-free, albeit expensive backstop (solar or wind). Without a carbon tax, a prohibitive coal tax leads to less oil in situ, substantially delays introduction of renewable, and thus curbs global warming substantially. Subsidizing renewables to just below the cost of coal does not affect the oil-only phase. The gain in green welfare dominates the welfare cost of the subsidy if the subsidy gap is small and the global warming challenge is acute.
    Keywords: Herfindahl rule, Hotelling rule, non-renewable resource, dirty backstop, coal, global warming, carbon tax, renewables, tax on coal, subsidy on renewables
    JEL: Q30 Q42 Q54
    Date: 2011
  25. By: Morgenstern, Richard (Resources for the Future); Moore, Eric (Resources for the Future)
    Abstract: This study estimates the impacts on a disaggregated set of California industries of introducing a carbon pricing policy within the state.. Two time horizons are considered, the “very short run” and the “short run”. To limit adverse impacts on the state’s energy-intensive and trade-exposed (EITE) industries, we develop illustrative policy options involving free allowance allocations of emissions permits to particular industries and limited border adjustments on coal, natural gas, crude oil, and refined petroleum product imports, as well as on electricity. Overall, we find relatively small impacts on energy-intensive industries with the rebates in place. The average reduction in EITE output is 0.4 percent. There is, however, considerable variation in impacts among the EITE industries. We also find that the ability to pass on costs, as assumed in the short run case, dramatically reduces adverse profit impacts to less than 1.5 percent in most cases, regardless of the rebate scenario. Based on national-level modeling done outside of this study, we estimate that over the long term, the average EITE output losses with the rebates in place would be expected to be somewhat smaller than the results reported here.
    Keywords: carbon price, competitiveness, input-output analysis, output-based allocation
    JEL: D57 H23
    Date: 2011–02–24
  26. By: Burtraw, Dallas (Resources for the Future); Parry, Ian W.H. (Resources for the Future)
    Abstract: This paper examines alternative ways that the value of CO2 emissions allowances created under cap-and-trade policy could be returned to households. One approach (based on principles of economic efficiency) is effectively a “tax shift” that would use revenues from an auction of CO2 emissions allowances to reduce preexisting distortionary taxes. A second approach (based on principles of property rights for common-pool resources), known as cap-and-dividend, would refund allowance value as equal lump-sum cash transfers to households. Economic theory suggests (with some caveats) that a tax shift would be considerably less costly to the overall economy. In contrast, cap-and-dividend provides ample compensation for low-income households, though it appears to be more costly than other approaches, including perhaps well-designed regulatory policies. A dividend approach might be combined with other policies to provide incentives for households to invest in energy-efficient technologies and thereby lower the costs of the carbon policy.
    Keywords: cap-and-trade, auction tax shift, revenue recycling, tax interaction, dividends
    JEL: H23 Q54 Q58
    Date: 2011–02–22
  27. By: Freebairn, John
    Abstract: Placing a price on greenhouse gas emissions using an emissions tax or auctioning tradable permits provide the least cost government intervention to reduce pollution. Initial effects of the charge on pollution include an increase in the relative prices of greenhouse gas intensive products and production processes to reduce pollution, and a net increase in indirect taxes with a windfall boost to government revenue. There are at least three overlapping sets of economic efficiency, equity and political acceptance reasons for returning most of the windfall revenue gains to households as compensating income tax reductions and increases in social security payments as a tax mix change package. Most of the indirect tax increases will be passed onto consumers as a higher cost of living, albeit with changes in relative prices. With a likely regressive incidence, some compensation in a close to lump sum form has both equity and political acceptability claims. With no changes in market wages and nominal interest rates, the higher cost of living will further distort the effects of existing income taxes on labour and capital market decisions and their associated efficiency costs. Or, the cost of living increase will provide a catalyst for compensating increases in market wages and nominal interest rates, with the added risk of initiating an inflationary cycle. A tax mix change package has the potential to neutralise the negative effects of the associated increase in indirect taxation. Given the expected time path of increases in the pollution charge on greenhouse gas emissions, and of the windfall increase in indirect tax revenue, the details of new tax mix change package will need to be renegotiated every few years.
    Keywords: Resource /Energy Economics and Policy,
    Date: 2011
  28. By: ISHIKAWA Jota; KIYONO Kazuharu; YOMOGIDA Morihiro
    Abstract: We develop a two-country (North and South), two-good, general equilibrium model of international trade in goods and explore the effects of domestic and international emission trading under free trade in goods. Whereas domestic emission trading in North may result in carbon leakage by expanding Southfs production of the emission-intensive good, international emission trading may induce North to expand the production of the emission-intensive good by importing emission permits. Emission trading may deteriorate global environment. North's (South's) emission trading may not benefit South (North). International emission trading improves global efficiency but may not benefit both countries.
    Date: 2011–02
  29. By: Jacqueline Morgan (Università di Napoli Federico II and CSEf); Fabien Prieur (LAMETA, Université Montpellier I and INRA)
    Abstract: We model climate change negotiations as a two-stage game. In the first stage, players have to agree on a global emission cap (GEC). In the second stage, they non cooperatively choose either their emission level or their emission quota, depending on whether emission trading is allowed, under the cap that potentially binds them together. When the cap is non binding, there exists a unique Nash equilibrium. When the emission cap is binding, among all the coupled constraints Nash equilibria (solutions of an equivalent quasi-variational inequality), we select a normalized equilibrium by solving a variational inequality which has a unique solution. In both cases (with or without emission trading), we can show that there exists a non-empty range of values for which setting a binding cap improves all players’ payoff. We can also identify a non empty set of values, for the global cap, such that the GEC system alone allows the world economy to reach a level of aggregate payoff (respectively of aggregate emissions) higher than (respectively lower than) the level resulting from the international cap and trade (ITC) system alone. In other words, from a global perspective, the GEC outperforms the ITC system.
    Keywords: climate change, international cap and trade system, national emission quotas, global emission cap, normalized equilibria, variational and quasi-variational inequalities.
    JEL: Q28 C72
    Date: 2011–02–21
  30. By: Agnar Sandmo (Norwegian Schol of Economics and Business Administration (NH))
    Abstract: This paper provides a discussion of the principles of environmental taxation. It considers the empirical identification of environmental taxes and the problems associated with the choice of the right tax base from the point of view of the correction of market incentives. It then presents a model of optimal second best environmental taxation when taxes must fulfil the double role of modifying market incentives and generating tax revenue. It also considers the issues of the double dividend, the interaction between intrinsic and extrinsic incentives and the problem of designing a tax policy for the alleviation of global environmental problems.
    Date: 2010–05–01
  31. By: Ãzkan, Åeyda; Farquharson, Bob; Hill, Julian; Malcolm, Bill
    Abstract: In this study, the possible impacts of different prices of carbon on farm profitability in two dairy farm businesses with different feeding systems operated over five years were analysed. The feeding systems were a ryegrass pasture-based system (RM) and a complementary forage-based system (CF). Data were obtained from a five year farmlet trial which was applied to a scaled up representative farm model. As a first look, a carbon charge was imposed on the systems as they currently operate to gauge the order of magnitude of a carbon charge on dairy systems if they were to continue to operate essentially the same system following the impost of a cost of carbon. The main finding of this study was that overall net present value (NPV) of five years of annual operating profit for each system, at five per cent discount rate, decreased when a price on carbon, as a direct cost, was included. Compared with the status quo situation where there was no effect of a price on carbon on farm operating profit, a price of $15/t CO2-eq on carbon reduced the net present value of five years of operating profit by about 6 per cent for the RM farm system and 5 per cent for the CF farm system (equivalent to $70 000/farm and $66 000/farm). A carbon price of $25/t CO2-eq reduced the overall net present value by about 10 per cent and 9 per cent in the RM and the CF systems respectively (equivalent to $114 000/farm and $110 000/farm).
    Keywords: dairy cow, pasture-based feeding system, carbon cost, operating profit, Environmental Economics and Policy, Farm Management,
    Date: 2011
  32. By: Acworth, William; Edwards, Astrid
    Abstract: With agriculture occupying approximately sixty per cent of Australiaâs land surface, policy makers, scientists and land managers are becoming increasingly interested in opportunities to sequester greenhouse emissions through land use change. The announcement of the Labor Governmentâs Carbon Farming Initiative brings Australian agriculture a step closer to participating in recognised domestic and international climate change mitigation action. In this paper, the costs and opportunities for carbon sequestration options under the Carbon Farming Initiative are assessed. The following section discusses the substantial hidden costs that may be associated with an offset trading scheme and potential for these costs to substantially shrink the size of the market. The paper concludes by presenting some potential solutions to the challenges raised and identifies some critical questions for policy makers.
    Keywords: carbon trading, Resource /Energy Economics and Policy,
    Date: 2011
  33. By: Philippe Quirion (Centre international de recherche sur l’environnement et le développement (CIRED)); Julie Rozenberg (Centre international de recherche sur l’environnement et le développement (CIRED)); Olivier Sassi (Centre international de recherche sur l’environnement et le développement (CIRED)); Adrien Vogt-Schilb (Centre international de recherche sur l’environnement et le développement (CIRED))
    Abstract: Most CO2 abatement policies reduce the demand for fossil fuels and therefore their price in international markets. If these policies are not global, this price decrease raises emissions in countries without CO2 abatement policies, generating “carbon leakage”. On the other hand, if the countries which abate CO2 emissions are net fossil fuel importers, they benefit from this price decrease, which reduces the abatement cost. In contrast, CO2 capture and storage (CCS) does not reduce fossil fuel demand, therefore it generates neither this type of leakage nor this negative feedback on abatement costs. We quantify these effects with the global hybrid general equilibrium model Imaclim-R and show that they are quantitatively important. Indeed, for a given unilateral abatement in OECD countries, leakage is more than halved in a scenario with CCS included among the abatement options, compared to a scenario prohibiting CCS. We show that the main reason for this difference in leakage is the above-mentioned international fossil fuel price feedback. This article does not intend to assess the desirability of CCS, which has many other pros and cons. It just identifies a consequence of CCS that should be taken into account, together with many others, when deciding to what extent CCS should be developed.
    Keywords: CO2 Capture and Storage, Carbon Leakage
    JEL: Q5 Q58
    Date: 2011–02
  34. By: Warr, Peter; Yusuf, Arief Anshory
    Abstract: Indonesia has set the target that by the year 2020 its emissions of greenhouse gases will be reduced by 26 per cent relative to business-as-usual conditions. This paper analyzes the effectiveness of a subsidy to the use of land in forestry as a means of achieving this goal. The analysis uses a general equilibrium model of the Indonesian economy characterized by explicit treatment of land use, disaggregated by industry and by region. The results of the analysis indicate that the subsidy cost of permanently reducing carbon emissions by 26% is a little over US$1 per metric tonne of carbon emissions abated. This cost needs to be compared with that of alternative instruments and with the price of carbon that might be agreed under the proposed REDD scheme (Reducing Emissions through Deforestation and Land Degradation), to be administered through the World Bank and the UN.
    Keywords: Environmental Economics and Policy, Land Economics/Use,
    Date: 2011
  35. By: Kragt, ME; Pannell, DJ; Robertson, MJ
    Abstract: The Australian government has identified soil carbon sequestration on agricultural lands as a potential strategy to offset greenhouse gas emissions. Industry and government claim providing positive incentives for farmers to change their land management will be cost can result in significant carbon sequestration in agricultural soils. There is, however, little information about the costs or benefits of agricultural soil carbon sequestration to test these claims. The objective of this study is to assess the costs of alternative land-use and land practises that will increase soil carbon sequestration, for a case study of the WA Wheat belt. The analysis integrates biophysical modelling of carbon sequestration with whole-farm economic modelling, to evaluate the cost-effectiveness of alternative carbon storage practices. Preliminary results suggest that, even under low commodity price scenarios, the opportunit sequestering carbon are considerable. We discuss the implications of our findings for policy development.
    Keywords: Agriculture, Bio-economic modelling, Greenhouse gases, Soil carbon, Agribusiness,
    Date: 2011
  36. By: Charles F. Mason (Department of Economics & Finance, University of Wyoming); Andrew J. Plantinga (Department of Agricultural and Resource Economics, Oregon State University)
    Abstract: Governments contracting with private agents for the provision of an impure public good must contend with agents who would potentially supply the good absent any payments. This additionality problem is centrally important in the use of carbon offsets as part of climate change mitigation. Analyzing optimal contracts for forest carbon sequestration, an important offset category, we conduct a national-scale simulation using results from an econometric model of land-use change. The results indicate that for an increase in forest area of 50 million acres, annual government expenditures with optimal contracts are about $4 billion lower compared than under a uniform subsidy.
    Keywords: Carbon Sequestration, Incentive Contracting, Offsets, Additionality
    JEL: Q2 D8 L15
    Date: 2011–02
  37. By: Valenzuela, Ernesto; Anderson, Kym
    Abstract: Recent analyses of the possible adverse effects of climate change on agriculture in developing countries have raised food security concerns, especially for farm households whose crop productivity is expected to fall. The present study uses the GTAP global economy-wide model to capture at the same time the expected positive effects on temperate zone crop productivity, which will more or less offset the upward pressure on farm product prices from yield falls in developing countries. Also modelled is an expected adverse effect of higher temperatures and humidity on the productivity of unskilled workers in the tropics, but since they work in nonfarm as well as farm activities the net effect of that shock on agricultureâs competitiveness is an empirical matter. The results suggest there may be less cause for concern over food security than some earlier studies indicated, but the degrees of uncertainty involved in such modelling are sufficient to warrant a precautionary approach.
    Keywords: Climate change, crop and labour productivity growth, global computable general equilibrium model projections, Productivity Analysis, D58, F17, Q17, Q24, Q54,
    Date: 2011
  38. By: Constant, Labintan
    Abstract: Nowadays climate change event and poor population vulnerability become more severe and natural resources scarcity intensity increased. In order to mitigate climate change negative effects adaptive policies such as poverty reduction Strategy and National Adaptation Plan of Action (NAPA) as effectiveâs responsive strategies. There are also farmers traditional adaptation methods which are consider as local mainstreaming climate change adaptation framework. This paper has explore subjective qualitative evaluation of climate change risk management framework strategic and link its with poverty reduction strategy in the Sahel .Sahel is one of the most vulnerable areas in the world with lower HDI(0.2%) and have the highest poverty rate (over 45% of the people live below the poverty line). The study was focused on 9 Sahel countries (Senegal, Mauritania, Mali, Niger, Burkina-Faso, Nigeria, Chad, Soudan and Eritrea) and their Poverty Reduction Strategy Papers (PRSP) and National Adaptation Programmes of Action (NAPA) by assessing criteria such as: a) the consideration of climate change scenarios and the vulnerabilities of the country; b) the analysis of poverty-climate links; and c) the climate change institutional framework of the country. However Soudan and Eritrea donât have PRSP and Nigeria donât have NAPA. The results show that most Sahel countries does not included Climate change 2 effect in their PRSP (except Burkina-Faso) but have a better performance with NAPA framework elaboration. Burkina-Faso is Climate risk management model country in the region but policies have failed because of farmerâs difficult conditions to get access to credit and lack of good technical supports. NAPA and PRSP objectives did not achieved because majority of poor were excluded, inefficiency in domestic accounting systems and inefficient monitoring. Furthermore, donors funding problems, natural disasters such as floods or droughts; biophysical modeling and simulation insufficient data, lack of skilled labor are others reason. To conclude, it is illustrates that mainstreaming natural hazards into PRSP and the development of NAPA are a step forward into establishment of institutional process to incorporate climate change into national policies. The World Bank and the UNFCCC should coordinate efforts to support developing countries in their efforts to incorporate adaptation to climate change in PRSP. Country need to strength the coordination, networks and information flows between ministries, at different levels of government and civil society to have more efficient integration of climate change variables into poverty reduction and development strategies. Country's should also have sustainable funding and should not rely only on donor. Policies should target more vulnerable peoples, need good policies implementation and good monitoring.
    Keywords: Sahel, Climate Change, Poverty Reduction, Adaptation Strategy., Resource /Energy Economics and Policy,
    Date: 2011
  39. By: Senaratne, Athula; Scarborough, Helen
    Abstract: Coping with Climatic Variability by Rain-fed Farmers in Dry Zone, Sri Lanka: Towards Understanding Adaptation to Climate Change
    Keywords: Environmental Economics and Policy,
    Date: 2011
  40. By: Stefan Schleicher; Karl Steininger; Andreas Türk
    Abstract: Im Rahmen der Klimarahmenkonvention der UNO treffen die Vertragsstaaten zu ihren Verhandlungen (Conference of Parties, COP 16) von 29. November bis 10. Dezember 2010 in Cancun, Mexiko zusam-men. Die naturwissenschaftlichen Grundlagen für die Szenarien des Klimawandels haben sich über die letzten Jahre weiter erhärtet und weisen auf die Notwendigkeit einer umfassenden Reduktion der Treibhausgasemissionen hin – einer Reduktion um ein Vielfaches der im Kyoto-Vertrag vereinbarten Ziele und unter Einbeziehung von wesentlich mehr als der damaligen Vertragsstaaten. Die Vorgänger-Vertragsstaaten-Konferenz in Kopenhagen 2009 markierte eine fundamentale Änderung in der inter-nationalen Klimapolitik-Architektur, statt völkerrechtlich verbindlichen gemeinsamen Zielen dürfte es nun den einzelnen Staaten überlassen bleiben welche Handlungen sie setzen. Einzelstaatliche Klimapolitik läuft ohne gemeinsame Ziele aber Gefahr mit wesentlichen Wettbewerbseffekten im internatio-nalen Handel verbunden zu sein. Für einige Wirtschaftssektoren zeichnen sich technologische Quan-tensprünge für „Low Carbon“ Strukturen ab. Für andere Sektoren werden globale sektorale Treibhaus-gas-Abkommen diskutiert. Vorschläge liegen insbesondere aber auch für Border Tax Adjustments vor, um potenziell nachteiligen Wettbewerbseffekten vorzubeugen. Die Interessenlage der Verhandlungs-staaten ist dabei durchaus komplex.
    Date: 2010–11
  41. By: Alain Ayong Le Kama (EQUIPPE, Université de Lille); Aude Pommeret (Université de Lausanne and IREGE, Université de Savoie); Fabien Prieur (INRA-LAMETA, Université Montpellier I)
    Abstract: We consider an optimal consumption and pollution problem that has two important features. Environmental damages due to economic activities may be irreversible and the level at which the degradation becomes irreversible is unknown. Particular attention is paid to the situation where agents are relatively impatient and/or do not care a lot about the environment and/or Nature regenerates at low rate. We show that the optimal policy of the uncertain problem drives the economy in the long run toward a steady state while, when ignoring irreversibility, the economy follows a balanced growth path accompanied by a perpetual decrease in environmental quality and consumption, both asymptotically converging toward zero. Therefore, accounting for the risk of irreversibility induces more conservative decisions regarding consumption and polluting emissions. In general, however, we cannot rule out situations where the economy will optimally follow an irreversible path and consequently, will also be left, in the long run, with an irreversibly degraded environment.
    Keywords: Optimal Control, Irreversibility Threshold, Uncertainty, Optimal Reversible, Irreversible Policy
    JEL: D81 Q54 Q58
    Date: 2011–02
  42. By: Daiju Narita
    Abstract: It is often emphasized that the primary economic solution to climate change is the introduction of a carbon pricing system (tax or tradable permits) anchored to the social cost of carbon. This standard argument, however, misses the fact that if emission reduction is sought through the use of technologies with network externalities, the level of emission reduction can become expectation-driven rather than uniquely determined by the level of carbon price. Using a simple model, the paper discusses the possibility that the effectiveness of carbon policy is influenced by firms’ belief on carbon policy and technology penetration in the future – in extreme cases, expectations prevail over policy. This feature highlights the danger of overemphasis on finding the “right” carbon price in policy making and the role of climate policy as expectation management
    Keywords: climate policy, technology choice, expectations, multiple equilibria
    JEL: Q54 O33
    Date: 2011–02
  43. By: Verreth, Daphne M.I.; Emvalomatis, Grigorios; Bunte, Frank; Oude Lansink, Alfons G.J.M
    Abstract: Horticultural firms are dependent on energy to produce, while policy makers focus on reducing the use of energy and investment in energy-saving technologies. The paper aimed to asses Dutch greenhouse farmersâ responses to policies that would affect prices of different energy inputs. The farmerâs behaviour is modelled in two steps: firms are assumed to maximize profit at given energy use level, and firms are assumed to minimize the discounted sum of energy costs. The model is estimated using farm survey data spanning the period 2001-2008. Short-run and long-run elasticities with respect to prices and investments in energy-using technology are estimated. The greenhouse sector shows a fast adjustment of energy capital towards its long-run equilibrium. This model provides a framework for assessing policy simulations. Policies will not have much more impact in the long-run compared to the short-run, and incentives to invest would result in an increase of the use of energy-saving technologies
    Keywords: Greenhouse horticulture, Energy, Dynamic duality, Adjustment costs, Agricultural and Food Policy, C51, C61, D92, Q12, Q18, Q48.,
    Date: 2011–02–10
  44. By: Hjerpe, Mattias (Centre for Climate Science and Policy Research, Nya kåkenhus, Linköping University); Löfgren, Åsa (Department of Economics, School of Business, Economics and Law, Göteborg University); Linnér, Björn-Ola (Centre for Climate Science and Policy Research, Nya kåkenhus, Linköping University); Hennlock, Magnus (Department of Economics, School of Business, Economics and Law, Göteborg University); Sterner, Thomas (Department of Economics, School of Business, Economics and Law, Göteborg University); Jagers, Sverker C. (Social Science Division, Luleå University of Technology and Department of Political Science, University of Gothenburg)
    Abstract: This paper fills a gap in the current academic and policy literature concerning how parties to the United Nations Framework Convention on Climate Change find common ground when distributing commitments and responsibilities to curb climate change. Preferred principles for sharing the effort to mitigate greenhouse gas emissions are compared among 170 delegates and more than 300 observers attending the UN Climate Conference in Copenhagen in December 2009. Respondents were asked to indicate their degree of support for eight effort-sharing principles for mitigation action. The survey results are analysed according to geographical region and party coalition affiliation. The results indicate that voluntary contribution, indicated as willingness to contribute, was the least preferred principle among both negotiators and observers. This could be seen as ironic, given that voluntary contribution is the guiding principle of the Copenhagen Accord. Across regions and party coalitions, agreement was strongest for basing a country’s mitigation level on its capacity to pay in terms of GDP per capita and on its historic greenhouse gas emissions since 1990.<p>
    Keywords: burden sharing; equity; climate change mitigation; Copenhagen; negotiating capacity/process; post-2012 negotiations
    JEL: Q54 R50
    Date: 2011–02–25
  45. By: Tee, James; Scarpa, Ricardo; Marsh, Dan; Guthrie, Graeme
    Abstract: Climate change is one of the toughest challenges facing the world today. Putting a price on carbon emissions is an important step towards climate change mitigation. A cap and trade system is one of the ways to create a carbon price. The New Zealand Emissions Trading Scheme (NZETS) is the worldâs first economy-wide cap and trade system that covers all sectors and all 6 greenhouse gases. Forestry is a major part of the NZETS, allowing foresters to earn carbon credits for new forests planted on and after 1st January 1990 (afforestation and reforestation). At the same time, the NZETS also makes foresters liable for harvesting new forests planted on and after 1st January 1990, and deforesting forests existing on and before 31st December 1989. In this paper, we perform an economic analysis of how a carbon price will likely affect the returns and forestry management behaviour in new forests in New Zealand. Previous works have used the NPV/LEV (fixed harvesting) analysis where the forest is assumed to be harvested (in future) at the estimated optimal rotation age regardless of timber prices at that time. Other works have employed the Real Options approaches (flexible harvesting) where sophisticated models such as Partial Differential Equations and simulations analyse the effects of bringing forward the harvest decision if timber prices are favourable, and deferring the harvest decision if timber prices are unfavourable. Often, these methods tend to have higher data requirements, employ different assumptions and are much more complex to estimate. Because of these differences, it may be difficult to compare the results of NPV/LEV analysis with Real Options. Our work here applies the binomial tree method, which is a relatively simple method that can generate both LEV (fixed harvesting) and Real Options (flexible harvesting) results on a common model with the same data requirements and assumptions. This allows for better comparability of forestry management behaviour and effects of carbon price. The forestry valuations are analysed under a stochastic timber price and a constant carbon price. This paper concludes with some implications on policy in New Zealand.
    Keywords: Environmental Economics and Policy,
    Date: 2011
  46. By: Tait, Peter; Miller, Sini; Abell, Walter; Kaye-Blake, Wiliam; Guenther, Meike; Saunders, Caroline
    Abstract: Concerns about climate change and the general status of the environment have increased expectation that food products have sustainability credentials, and that these can be verified. There are significant and increasing pressures in key export markets for information on Greenhouse gas (GHG) intensity of products throughout its life-cycle. How this information is conveyed to consumers is a key issue. Labelling is a common method of communicating certain product attributes to consumers that may influence their choices. In a choice experiment concerning fruit purchase decisions, this study estimates willingness to pay for sustainability attributes by consumers in Japan and the UK. The role of label presentation format is investigated: text only, text and graphical, and graphical only. Results indicate that sustainability attributes influence consumersâ fruit purchase decisions. Reduction of carbon in fruit production is shown to be the least valued out of sustainability attributes considered. Differences are evident between presentation formats and between countries, with increased nutrient content being the most sensitive to format and country while carbon reduction is the most insensitive and almost always valued the least.
    Keywords: Willingness to pay, Choice experiment, Food labelling, Sustainability, Cross-country comparison, Agricultural and Food Policy, Consumer/Household Economics, Environmental Economics and Policy, Food Consumption/Nutrition/Food Safety, Q18, Q51, Q56,
    Date: 2011
  47. By: Parton, Kevin; Morrison, Mark
    Abstract: For climate scientists, climate change is a problem that has a significant chance of having catastrophic environmental, social and economic consequences during the course of this century. In contrast, public opinion seems to regard with scepticism the pronouncements on climate change that emanate from the scientific community. Why the difference? This is what our research project was designed to examine. Or to put it another way: Assuming that the scientific information is correct, and that without a dramatic change in technology (and policy to promote such a change) there would be a significant risk of man-made, global catastrophe, what must be done to communicate this urgent issue to the public? We have approached the analysis of this problem by reviewing the literature on communicating climate change. By organising the literature according to the role of the major groups of participants in the information transfer process, useful insights can be gleaned. These groups include scientists, business, the government, the media and the general public. This analysis leads to an overall model of the information transfer process that highlights various issues including the role that the media plays as a lens through which the public observes scientific results.
    Keywords: Climate change, media, scientists, business, government, the general public, literature review, Environmental Economics and Policy, Marketing, Resource /Energy Economics and Policy, 1402,
    Date: 2011
  48. By: Parry, Ian W.H. (Resources for the Future); Williams, Roberton C. (Resources for the Future)
    Abstract: This paper estimates the welfare costs of the main medium-term options for significantly reducing U.S. energy-related carbon dioxide (CO2) emissions, including carbon taxes and cap-and-trade systems applied economy-wide and to the power sector only, and an emissions rate standard for power generation. The key theme is that welfare costs depend importantly on how policies interact with distortions in the economy created by the broader fiscal system. If allowance rent is not used to increase economic efficiency, economy-wide cap-and-trade systems perform the worst on cost-effectiveness grounds. In contrast, if revenues are used to substitute for distortionary income taxes (either directly, or indirectly through deficit reduction), economy-wide carbon taxes (or auctioned allowance systems) may have (slightly) negative costs. The bottom line is that revenues or rents created under economy-wide, market-based carbon policies must be used to increase economic efficiency to ensure that these instruments are more cost-effective than regulatory or sectoral approaches.
    Keywords: carbon tax, cap-and-trade, cost-effectiveness, distortionary taxes, revenue recycling
    JEL: Q48 Q58 H21 R48
    Date: 2011–02–22

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