nep-ene New Economics Papers
on Energy Economics
Issue of 2011‒04‒16
twenty-six papers chosen by
Roger Fouquet
Basque Climate Change Centre, Bilbao, Spain

  1. Applied Theory of Energy Substitution in the Southeast: An SUR Approach By Yeboah, Osei Agyeman; Thompson, Henry; Shaik, Saleem; Quaicoe, Obed
  2. Les scénarios sur l'énergie et le climat. L'avant et l'après-Copenhague By Patrick Criqui; Constantin Ilasca
  3. The Law NOME: Some Implications for the French Electricity Markets By Creti, Anna; Pouyet, Jérôme; Sanin, Maria-Eugenia
  4. SEE Regional Wholesale Market Design: Recommendations, Available Options and Implementation By Sakellaris, Kostis
  5. An economic analysis of the production of hydrogen from wind-generated electricity for use in transport applications By Philippe Menanteau; Marie-Marguerite Quéméré; Alain Le Duigou; Sandra Le Bastard
  6. Measuring Fiscal Effects Based on Changes in Deepwater Off-Shore Drilling Activities By Boen, Caroline; Adhikari, Arun; Fannin, J. Matthew; Keithly, Walter R., Jr.
  7. Choice of development concept - platform or subsea solution? Implications for the recovery factor. By Osmundsen, Petter
  8. Gas Prices Variations and Urban Sprawl: an Empirical Analysis of the 12 Largest Canadian Metropolitan Areas By Georges A. Tanguay; Ian Gingras
  9. Using the global dimension to identify shocks with sign restrictions By Alexander Chudik; Michael Fidora
  10. Producer Willingness to Supply Biomass: the Effects of Price and Producer Characteristics By Altman, Ira; Bergtold, Jason; Sanders, Dwight; Johnson, Thomas G.
  11. Impact of Ethanol Policies on Livestock Production in the United States By Miljkovic, Dragan; Shaik, Saleem; Braun, Dane
  12. Potential Biomass Yields in the South Central US By Basnet, Arjun; Depona, Theo; Hedges, Wesley; Dicks, Michael R.
  13. The Impact of Biofuel Mandates and Switchgrass Production on Hay Markets By Acheampong, Kwame; Dicks, Michael R.; Adam, Brian D.
  14. Impact of United States Corn-based Ethanol Production on Land Use By Sobowale, Folakemi; Dicks, Mike; Campiche, Jody
  15. Analysis of Factors Affecting Farmersâ Willingness to Adopt Switchgrass Production By Qualls, D. Joshua; Jensen, Kimberly L.; English, Burton C.; Larson, James A.; Clark, Christopher D.
  16. An Ethanol Blend Wall Shift is Prone to Increase Petroleum Gasoline Demand By Qiu, Cheng; Colson, Gregory; Zhang, Zibin; Wetzstein, Michael
  17. Economic Feasibility of Commercial Algae Oil Production in the United States By Fischer, Bart L.; Richardson, James W.; Outlaw, Joe L.; Allison, Marc S.
  18. It Pays to Be Green: A Hedonic Stock Price Model for Environmentally Friendly Large U.S. Firms By Ahmadin, Muhammad
  19. Agriculture and the clean development mechanism By Larson, Donald F.; Dinar, Ariel; Frisbie, J. Aapris
  20. Modeling Pine as a Carbon Sequestering Crop in Arkansas By Smith, S. Aaron; Popp, Michael P.; Nalley, Lawton Lanier
  21. Adaptation to Climate Change: Land Use and Livestock Management Change in the U.S. By Mu, Jianhong H.; McCarl, Bruce A.
  22. The Impact Of Climate Change On Agriculture By K, Sudarkodi; K, Sathyabama
  23. The poverty impacts of climate change : a review of the evidence By Skoufias, Emmanuel; Rabassa, Mariano; Olivieri, Sergio
  24. Distributional implications of climate change in India By Jacoby, Hanan; Rabassa, Mariano; Skouas, Emmanuel
  25. Climate Variability and Agricultural Productivity: Evidence from Southeastern US By Solis, Daniel; Letson, David
  26. Environmental Performance and Climate Policy By Brännlund, Runar; Lundgren, Tommy; Marklund, Per-Olov

  1. By: Yeboah, Osei Agyeman; Thompson, Henry; Shaik, Saleem; Quaicoe, Obed
    Abstract: Issues on energy have recently dominated the economic decisions of several states across the U.S. economy and states in the southeastern region of U.S. are no exception. Almost all the states in the southeast import virtually all of their fuel resources from the Gulf Coast representing an annual financial diversion of several billions of dollars some of which could be used to develop domestic, alternative energy resources. The focus of this study was to determine the potential substitution between renewable energy and conventional energy forms in the southeast of U.S. We developed a system of factor share equations using translog cost function. The system of equations was estimated using a pooled iterative Non-linear Seemingly Unrelated Regression (SUR) procedure with homogeneity and symmetry restrictions imposed. Findings indicate that factor demands in the southeast energy sector are price inelastic and there is limited substitution potential when energy prices rise in fuel production. The substitution potential of renewable energy for the conventional energy forms is found to be higher than that of other conventional energy forms for renewable except renewable energy for natural gas. The substitution of renewable energy for natural gas is technically infeasible since the elasticity is negative. Since renewable energy has the potential to substitute for other forms of energy besides natural gas, federal and state governments might want to reverse the $10 billion petroleum subsidy versus the current $5 billion for renewable if the target (36 billion gallons of renewable fuel by 2022) set by 2007 Energy Independence Act is to be realized.
    Keywords: Energy Substitution, Translog Cost Function, Resource /Energy Economics and Policy,
    Date: 2011
  2. By: Patrick Criqui (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : FRE3389 - Université Pierre Mendès-France - Grenoble II); Constantin Ilasca (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : FRE3389 - Université Pierre Mendès-France - Grenoble II)
    Abstract: Les scénarios pour le développement énergétique à long terme et les émissions de gaz à effet de serre associées ont acquis un rôle particulier par rapport aux autres familles de scénarios. Dans le cas de l'énergie et du climat il s'agit de fournir une information essentielle pour la négociation internationale, dans l'identification des objectifs globaux communs comme dans celle de la déclinaison nationale de ces objectifs. Les scénarios sont donc un enjeu dans une négociation essentielle sur l'agenda des politiques internationales. Le papier décrit les développements des scénarios depuis la préparation du Quatrième rapport d'évaluation du GIEC. Il examine d'abord une série d'études développées par de grandes organisations internationales depuis 2007, puis présente un exercice de scénarisation avec des " scénarios bas carbone non mimétiques " c'est-à-dire incluant des changements dans les styles de développement. Dans cette revue des travaux il faut aussi prendre en compte le changement de perspective survenu depuis la conférence de Copenhague. Celle-ci marque à la fois l'arrivée au premier plan de la négociation des pays émergents et donc, pour un temps du moins, le passage d'une vision top-down de la construction des scénarios à partir des objectifs globaux, à une vision bottom-up, à partir des politiques nationales.
    Date: 2011–04
  3. By: Creti, Anna; Pouyet, Jérôme; Sanin, Maria-Eugenia
    Abstract: The French law “Nouvelle Organisation du Marché de l’Électricité” makes available, at a regulated price, withdrawal rights to source low-cost electricity production from nuclear plants owned by the incumbent. Downstream market retailers benefit from such a measure, up to a given amount fixed by the law, to compete on a level playing field with the historical supplier. Our analysis assesses whether this production release programme is likely to result in a lower retail price. We show that whether pro-competitive effects arise depends not only on the amount of the preassigned capacity but also on the rules used to allocate it to retailers.
    Date: 2011–03
  4. By: Sakellaris, Kostis
    Abstract: In 2005 the countries of South East Europe (SEE) committed themselves to develop a regional energy market in SEE. The World Bank offered to provide technical assistance and recommendations for the most effective implementation of the electricity wholesale market opening. This paper presents and discusses the main proposals of the Study for the SEE Regional Market Design. It then proceeds to the provision of recommendations on how the Study’s proposals can be enhanced and fit better to the current status of the SEE markets.
    Keywords: South East Europe; Regional Electricity Market; Market Design.
    JEL: Q48 Q40 L94 P31
    Date: 2011–01–25
  5. By: Philippe Menanteau (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : FRE3389 - Université Pierre Mendès-France - Grenoble II); Marie-Marguerite Quéméré (EDF - EDF Recherche et Développement); Alain Le Duigou (CEA - CEA); Sandra Le Bastard (EDF - EDF)
    Abstract: Wind-generated electricity is often considered a particularly promising option for producing hydrogen from renewable energy sources. However, the economic performances of such systems generally remain unclear because of unspecified or favorable assumptions and operating conditions. The aim of this paper is to clarify these conditions by examining how the hydrogen produced is used. The analysis that has been conducted in the framework of the HyFrance 3 project concerns hydrogen for transport applications. Different technical systems are considered such as motorway hydrogen filling stations, Hythane®-fueled buses or second-generation biofuels production, which present contrasted hydrogen use characteristics. This analysis reveals considerable variations in hydrogen production costs depending on the demand profiles concerned, with the most favorable configurations being those in which storage systems are kept to a minimum.
    Keywords: wind power ; hydrogen production
    Date: 2011–05
  6. By: Boen, Caroline; Adhikari, Arun; Fannin, J. Matthew; Keithly, Walter R., Jr.
    Abstract: This paper accomplishes two objectives. First, this paper estimates a model for oil wells drilled in the Gulf of Mexico using specific time series models. In the second objective, the number of wells drilled are applied to the COMPAS model for Louisiana. Wells drilled are treated as final demand in an input-output model framework to estimate exogenous changes in employment demand. This demand is then applied to a block recursive labor force module that measures changes in key labor market variables. These variables then serve as exogenous variables in revenue capacity equations. These revenue capacity variables are finally applied to local government expenditure demand equations. Per capita demand changes for key local government variables are then estimated.
    Keywords: oil and gas drilling, fiscal effects, public expenditure demands, COMPAS models, time series models, Public Economics, Resource /Energy Economics and Policy, Q43,
    Date: 2011
  7. By: Osmundsen, Petter (University of Stavanger)
    Abstract: .
    Keywords: Oil; extraction
    JEL: A10
    Date: 2011–03–30
  8. By: Georges A. Tanguay; Ian Gingras
    Abstract: We conduct a multivariate analysis of the potential impact of higher gas prices on urban sprawl in the 12 largest Canadian Metropolitan Areas for the period 1986-2006. Controlling for variables such as income and population, we show that higher prices of gas have contributed significantly to reduce urban sprawl. On average, a 1% increase in gas prices has caused: i) a 0.32% increase in the population living in the inner city and ii) a 1.28% decrease in low-density housing units. Our results also show that higher incomes have played a significant role in increasing urban sprawl. <P>Nous procédons à une analyse multivariée afin de déterminer les effets d’une hausse du prix de l’essence sur l’étalement urbain dans les 12 plus grandes régions métropolitaines canadiennes pour la période 1986-2006. En tenant compte de variables de contrôle comme le revenu et la population, nous démontrons que des prix de l’essence plus élevés ont contribué significativement à réduire l’étalement urbain. En moyenne, une hausse de 1 % du prix de l’essence a mené à: i) une augmentation de 0,32 % de la population vivant au centre des villes et ii) une baisse de 1,28 % des logements à faible densité. Nos résultats démontent aussi que les hausses des revenus des ménages ont été un facteur significatif ayant contribué à l’étalement urbain.
    Keywords: Urban Sprawl, Gas Prices, Canadian Metropolitan Areas., Étalement urbain, prix de l’essence, régions métropolitaines canadiennes.
    Date: 2011–04–01
  9. By: Alexander Chudik (European Central Bank, Kaiserstraße 29, D-60311 Frankfurt am Main, Germany.); Michael Fidora (European Central Bank, Kaiserstraße 29, D-60311 Frankfurt am Main, Germany.)
    Abstract: Identification of structural VARs using sign restrictions has become increasingly popular in the academic literature. This paper (i) argues that identification of shocks can benefit from introducing a global dimension, and (ii) shows that summarising information by the median of the available impulse responses—as commonly done in the literature—has some undesired features that can be avoided by using an alternatively proposed summary measure based on a “scaled median” estimate of the structural impulse response. The paper implements this approach in both a small scale model as originally presented in Uhlig (2005) and a large scale model, introducing the sign restrictions approach to the global VAR (GVAR) literature, that allows to explore the global dimension by adding a large number of sign restrictions. We find that the patterns of impulse responses are qualitatively similar though point estimates tend to be quantitatively much larger in the alternatively proposed approach. In addition, our GVAR application in the context of global oil supply shocks documents that oil supply shocks have a stronger impact on emerging economies’ real output as compared to mature economies, a negative impact on real growth in oil-exporting economies as well, and tend to cause an appreciation (depreciation) of oil-exporters’ (oil-importers’) real exchange rates but also lead to an appreciation of the US dollar. One possible explanation would be the recycling of oil-exporters’ increased revenues in US financial markets. JEL Classification: C32, E17, F37, F41, F47.
    Keywords: Identification of shocks, sign restrictions, VAR, global VAR, oil shocks.
    Date: 2011–04
  10. By: Altman, Ira; Bergtold, Jason; Sanders, Dwight; Johnson, Thomas G.
    Abstract: This paper presents research results based on data from two biomass producer surveys collected from mid Missouri and southern Illinois. Specific topics of interest include the effect of price and producer characteristics on willingness to supply, assets producers currently own and services they may be willing to provide if bioenergy industries develop. A series of censored tobit regressions are utilized to analyze willingness to supply results under three price scenarios. Marginal effects of a one dollar change in the biomass price are shown to increase the willingness to supply by 0.5 to 2 percent.
    Keywords: biomass, willingness to supply, Agribusiness,
    Date: 2011
  11. By: Miljkovic, Dragan; Shaik, Saleem; Braun, Dane
    Abstract: This study was conducted to analyze the direct and indirect effects of ethanol policy on livestock production. Results of the theoretical model indicate the possibility of ethanol policy indirectly affecting livestock production. Econometric results show a possibility of ethanol policy indirectly impacting cattle production through the RFSâs influence on corn quantity. Policy makersâ intentions with ethanol policy likely were to increase ethanol consumption rather than to directly affect cattle production. However, results of the reduced form equation indicate that the RFS increased the cattle quantity, which represents a direct outcome of ethanol policy on cattle production. Policy makers can utilize the information provided in this study to understand the effects of ethanol policy on multiple agricultural markets. Understanding the existence of indirect and direct effects of newly designed policies on non-targeted markets adds credibility to the policy making process.
    Keywords: Livestock Production, Ethanol Policies, Agricultural and Food Policy, Demand and Price Analysis, Livestock Production/Industries, Production Economics, Q17,
    Date: 2011
  12. By: Basnet, Arjun; Depona, Theo; Hedges, Wesley; Dicks, Michael R.
    Abstract: This paper describes research to create a national database of switchgrass supply as part of the biomass program launched by the Department of Energy. The paper provides an estimate of county level switchgrass yield data for the state of Oklahoma. The estimates are made for the top five most productive and abundant soils for each county in Oklahoma. A simple approach of ratio calculation and estimation is used to predict the switchgrass yield of one soil type by comparing it with the yield of several other crops in another soil type. The data for switchgrass yield for a particular soil type are obtained from the state research experiment stations. The yields for other crops for the top five soils are obtained from the NASS data sources. Switchgrass supply for Oklahoma was estimated to be 49.5 million tons from the top soils with the Northeast crop reporting district to be the dominant supplier.
    Keywords: Biofuel, Switchgrass, Ratio Estimation, South Central, Oklahoma, Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, Production Economics, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, Resource /Energy Economics and Policy,
    Date: 2011
  13. By: Acheampong, Kwame; Dicks, Michael R.; Adam, Brian D.
    Abstract: The Renewable Fuel Standard mandate in the Energy Independence and Security Act of 2007 requires 16 billion gallons out of 36 billion gallons of ethanol be produced from cellulosic feedstocks in 2022, but the mandate was apparently enacted without critical assessments of the agricultural impacts of attempting to achieve energy independence. The feedstock production will likely compete with lands currently used for producing other traditional crops of which hay is likely to be affected the most since it has comparatively lower net returns. Thus ruminant production will consequently be affected greatly. This study uses ordinary least squares (OLS) to estimate and predict Oklahoma hay price which is used as objective value in linear programming (LP) model that determines the profitability options between hay and switchgrass production. The OLS results show that Oklahoma hay price is fairly stable, and hay is shipped across adjoining states. The LP results show that switchgrass production would be more profitable than hay and that switchgrass for biofuel production likely will bid land away from hay if biofuel production becomes fully operational.
    Keywords: biofuel mandates, switchgrass production, hay production, hay markets., Agricultural and Food Policy, Environmental Economics and Policy, Production Economics, Research and Development/Tech Change/Emerging Technologies, Resource /Energy Economics and Policy,
    Date: 2011–02
  14. By: Sobowale, Folakemi; Dicks, Mike; Campiche, Jody
    Abstract: The purpose of this research was to determine whether indirect land use occurs and if so to what extent. Indirect land use is a change from non-cropland to cropland (e.g. deforestation) that may occur in response to increasing scarcity of cropland. As farmers worldwide respond to higher crop prices in order to maintain the global food supply and demand balance, pristine lands are cleared and converted to new cropland to replace the crops for feed and food that were diverted elsewhere to biofuels production. We examine the impact of corn-based ethanol production in the United States on land use in other countries.
    Keywords: ethanol, energy, biofuel, pristine lands., Agricultural and Food Policy, Environmental Economics and Policy, Land Economics/Use, Production Economics, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy,
    Date: 2011
  15. By: Qualls, D. Joshua; Jensen, Kimberly L.; English, Burton C.; Larson, James A.; Clark, Christopher D.
    Abstract: In the United States, biomass is the largest source of renewable energy accounting for over 3 percent of the energy consumed domestically and is currently the only source for liquid, renewable, transportation fuels. Continued development of biomass as a renewable energy source is being driven in large part by the Energy Independence and Security Act of 2007, which mandates that by 2022 at least 36 billion gallons of fuel ethanol be produced, with at least 16 billion gallons being derived from cellulose, hemi-cellulose, or lignin. However, the market for cellulosic biofuels is still under development. As such, little is known about producer response to feedstock prices paid for dedicated energy crops. While there have been some studies done on factors that determine farmersâ willingness to produce switchgrass, these have been very regional in nature. This study will provide information regarding potential switchgrass adoption by agricultural producers in twelve southeastern states. The objectives of this research are 1) to determine the likelihood of farmers growing switchgrass as a biomass feedstock and the acres they would be willing to devote to switchgrass production and 2) to evaluate some of the factors that are likely to influence these decisions, including the price of switchgrass. â
    Keywords: Switchgrass, Farmer Adoption, Crop Production/Industries, Research and Development/Tech Change/Emerging Technologies, Resource /Energy Economics and Policy, Q12, Q16,
    Date: 2011
  16. By: Qiu, Cheng; Colson, Gregory; Zhang, Zibin; Wetzstein, Michael
    Abstract: The US Environmental Protection Agency announced a waiver allowing an increase in the Fuel-Ethanol blend limit (the âblend wallâ ) from 10% (E10) to 15% (E15) on October,2010.Justifications for the waiver are reduced vehicle fuel prices and less consumption of petroleum gasoline, leading to energy security. In this paper, employing Monte Carlo simulations and Savitzky-Golay smoothing filter, an empirical study examines this waiver revealing an anomaly where a relaxation of this blend wall elicits a demand response. Under a wide range of elasticities, this demand response can actually increase the consumption of petroleum gasoline and thus lead to greater energy insecurity. The economics supporting this result and associated policy implications are developed and discussed.
    Keywords: Blend wall, Energy security, Ethanol, Resource /Energy Economics and Policy,
    Date: 2011–02
  17. By: Fischer, Bart L.; Richardson, James W.; Outlaw, Joe L.; Allison, Marc S.
    Abstract: A Monte Carlo simulation model was constructed to analyze the economic feasibility of growing algae as a renewable fuel source. Increasing growth rates, pond water depth, oil content, and facility size are important for ensuring the economic viability of a commercial algae facility.
    Keywords: algae, renewable, fuel, feedstock, microalgae, Agribusiness, Agricultural and Food Policy, Crop Production/Industries, Production Economics, Resource /Energy Economics and Policy, Risk and Uncertainty,
    Date: 2011
  18. By: Ahmadin, Muhammad
    Abstract: This study attempts to estimate the non-market value of the environmental performance of a firm using a stock price model derived from Rosenâs hedonic price theory. Two different stock market models are developed to estimate the model, a basic firmâs stock market model and a modified Capital Assets Pricing Model (CAPM). The explanatory variables include risk factors, non risk stock characteristics, and corporate environmental policy, conduct and performance. This study uses Newsweekâs 2009 Green Ranking scores. The results show that risk factors, non-risk stock characteristics, and environmental scores variables are statistically significant in affecting stock price and equity return. The willingness to pay (WTP) are 3¢, 5¢, and 18¢, respectively for the green policy and performance score (GPPS), the reputation survey score (RSS), and the green score (GS). The four scores increase return on equity as much as 0.06%, 0.38%, 0.40%, and 2.06% respectively. A one point improvement in the three environmental scores is associated with an increase in an average firmâs value (market capitalization) of $17,840,820, $29,043,195, and $99,576,670 respectively.
    Keywords: hedonics model, stock price, CAPM, Newsweekâs 2009 green ranking, Environmental Economics and Policy,
    Date: 2011–02
  19. By: Larson, Donald F.; Dinar, Ariel; Frisbie, J. Aapris
    Abstract: Many experts believe that low-cost mitigation opportunities in agriculture are abundant and comparable in scale to those found in the energy sector. They are mostly located in developing countries and have to do with how land is used. By investing in projects under the Clean Development Mechanism (CDM), countries can tap these opportunities to meet their own Kyoto Protocol obligations. The CDM has been successful in financing some types of agricultural projects, including projects that capture methane or use agricultural by-products as an energy source. But agricultural land-use projects are scarce under the CDM. This represents a missed opportunity to promote sustainable rural development since land-use projects that sequester carbon in soils can help reverse declining soil fertility, a root cause of stagnant agricultural productivity. This paper reviews the process leading to current CDM implementation rules and describes how the rules, in combination with challenging features of land-use projects, raise transaction costs and lower demand for land-use credits. Procedures by which developed countries assess their own mitigation performance are discussed as a way of redressing current constraints on CDM investments. Nevertheless, even with improvements to the CDM, an under-investment in agricultural land-use projects is likely, since there are hurdles to capturing associated ancillary benefits privately. Alternative approaches outside the CDM are discussed, including those that build on recent decisions taken by governments in Copenhagen and Cancun.
    Keywords: Climate Change Mitigation and Green House Gases,Environmental Economics&Policies,Energy and Environment,Environment and Energy Efficiency,Banks&Banking Reform
    Date: 2011–04–01
  20. By: Smith, S. Aaron; Popp, Michael P.; Nalley, Lawton Lanier
    Keywords: Carbon Sequestration, Loblolly Pine, Carbon Offset, Carbon Policy, Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy,
    Date: 2011
  21. By: Mu, Jianhong H.; McCarl, Bruce A.
    Abstract: Replaced with revised version of paper 01/26/11
    Keywords: Climate Change, Stocking Rate, Land Use, Livestock Management, Environmental Economics and Policy, Land Economics/Use, Livestock Production/Industries,
    Date: 2011
  22. By: K, Sudarkodi; K, Sathyabama
    Abstract: The unimpeded growth of greenhouse gas emissions is raising the earth’s temperature. The consequences include melting glaciers, more precipitation, more and more extreme weather events, and shifting seasons. The accelerating pace of climate change, combined with global population and income growth, threatens food security everywhere. Agriculture is extremely vulnerable to climate change. Higher temperatures eventually reduce yields of desirable crops while encouraging weed and pest proliferation. Changes in precipitation patterns increase the likelihood of short-run crop failures and long-run production declines. Although there will be gains in some crops in some regions of the world, the overall impacts of climate change on agriculture are expected to be negative, threatening global food security. This paper provides an insight into the different climate change-related challenges that the agricultural sector will face and explores opportunities for emission reductions and adaptation. Agriculture has not figured very prominently in the climate discussion so far. This paper clearly indicates that the sector deserves more attention when it comes to both climate change threats and opportunities. Understanding interrelations and interactions in the agricultural sector and considering its implications for development cooperation is crucial for adequate development responses.
    Keywords: The Impact of Climate Change on Agriculture
    JEL: Q50 Q5 N50 N5 Q0 Q01 Q54 Q18
    Date: 2011–03–15
  23. By: Skoufias, Emmanuel; Rabassa, Mariano; Olivieri, Sergio
    Abstract: Climate change is believed to represent a serious challenge to poverty reduction efforts around the globe. This paper conducts an up-to-date review of three main strands of the literature analyzing the poverty impacts of climate change : (i) economy-wide growth models incorporating climate change impacts to work out consistent scenarios for how climate change might affect the path of poverty over the next decades; (ii) studies focusing on the poverty impacts of climate change in the agricultural sector; and (iii) studies exploring how past climate variability impacts poverty. The analysis finds that the majority of the estimates of the poverty impacts tend to ignore the effect of aggregate economic growth on poverty and household welfare. The empirical evidence available to date suggests that climate change will slow the pace of global poverty reduction, but the expected poverty impact will be relatively modest and far from reversing the major decline in poverty that is expected to occur over the next 40 years as a result of continued economic growth. The studies focusing on the sector-specific channels of impacts of climate change suggest that the estimated impacts of climate change on agricultural yields are generally a poor predictor of the poverty impacts of climate change at the national level due to heterogeneity in the ability of households to adapt. It also appears that the impacts of climate change are generally regressive, that is, they fall more heavily on the poor than the rich.
    Keywords: Rural Poverty Reduction,Climate Change Economics,Science of Climate Change,Climate Change Mitigation and Green House Gases,Regional Economic Development
    Date: 2011–04–01
  24. By: Jacoby, Hanan; Rabassa, Mariano; Skouas, Emmanuel
    Abstract: Global warming is expected to heavily impact agriculture, the dominant source of livelihood for the world's poor. Yet, little is known about the distributional implications of climate change at the sub-national level. Using a simple comparative statics framework, this paper analyzes how changes in the prices of land, labor, and food induced by modest temperature increases over the next three decades will affect household-level welfare in India. The authors predict a substantial fall in agricultural productivity, even allowing for farmer adaptation. Yet, this decline will not translate into a sharp drop in consumption for the majority of rural households, who derive their income largely from wage employment. Overall, the welfare costs of climate change fall disproportionately on the poor. This is true in urban as well as in rural areas, but, in the latter sector only after accounting for the effects of rising world cereal prices. Adaptation appears to primarily benefit the non-poor, since they own the lion's share of agricultural land. The results suggest that poverty in India will be roughly 3-4 percentage points higher after thirty years of rising temperatures than it would have been had this warming not occurred.
    Keywords: Climate Change Economics,Climate Change Mitigation and Green House Gases,Science of Climate Change,Rural Poverty Reduction,Regional Economic Development
    Date: 2011–04–01
  25. By: Solis, Daniel; Letson, David
    Abstract: The goal of this study is to empirically evaluate the extent to which agricultural productivity estimates are affected by variation on climate. To do so, we explore the case of the agricultural sector in the Southeast US. This geographical region is influenced seasonally by the El Niño Southern Oscillation (ENSO) phenomena making it ideal for studying the interaction of climate variability and agricultural productivity. Although, different methodologies have been developed to study TE the stochastic production frontier (SPF) approach offers several advantages over other available alternatives (Kumbhakar and Lovell 2003). Thus, to assess the impact of climatic on TE we estimate alternative SPF models with and without climatic variables. We also test alternative variables to measure the influence of climate on TE; namely, seasonal rain fall and the ENSO phase.
    Keywords: Climate Variability, Productivity, US, Production Economics,
    Date: 2011
  26. By: Brännlund, Runar (CERE); Lundgren, Tommy (CERE); Marklund, Per-Olov (CERE)
    Abstract: This study’s ultimate goal is to analyze environmental performance (EP) at firm level and the effectiveness of environmental policy along with other possible determinants. Especially, the empirical analysis aims at exploring the relationship between the actual EP of firms in terms of CO2 emissions per output unit, and one aspect of Swedish environmental policy, the CO2-tax. Since Sweden was the first country to introduce a specific CO2-tax in 1991 we believe that the Swedish case may serve as an appropriate “test bench” for analyzing EP and the effectiveness of environmental policy in general. To achieve our objective we use a panel data of Swedish manufacturing spanning over the period 1990-2004. The results suggest that EP has improved in all sectors of manufacturing. We also see that production increases while emissions decrease in many sectors, indicating a decoupling of economic growth and environmental degradation. Furthermore, firms’ EP responds to changes in the CO2-tax and fossil fuel price, but is more sensitive to the tax, indicating different EP behavior among firms depending on why the cost of fossil fuels change. Several sectors also display a positive tendency over time in EP, which may suggest that EP is to some extent stimulated by an overall boost in environmental awareness in society and firms.
    Keywords: CO2 emissions; CO2-tax; environmental performance
    JEL: D24 Q56 Q58
    Date: 2011–04–06

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