nep-ene New Economics Papers
on Energy Economics
Issue of 2011‒05‒14
43 papers chosen by
Roger Fouquet
Basque Climate Change Centre, Bilbao, Spain

  1. Energy content in manufacturing exports: a cross-country analysis By João Amador
  2. Residential Consumption of Gas and Electricity in the U.S.: The Role of Prices and Income By Anna Alberini; Will Gans; Daniel Velez-Lopez
  3. Energy Efficiency, Rebound Effects and the Environmental Kuznets Curve By Hanley, Nick; Turner, Karen
  4. Cost-Effectiveness of Electricity Energy Efficiency Programs By Arimura, Toshi H.; Li, Shanjun; Newell, Richard G.; Palmer, Karen
  5. Efficiency, Productivity and Environmental Policy: A Case Study of Power Generation in the EU By Jurate Jaraite; Corrado Di Maria
  6. Technological Advance in Cooling Systems at U.S. Power Plants By Bellas, Allen S.; Finney, Duane; Lange, Ian
  7. Civil Liability, Safety and Nuclear Parks: Is Concentrated Management Better? By Gérard Mondello
  8. Health Impacts of Power-Exporting Plants in Northern Mexico By Blackman, Allen; Chandru, Santosh; Mendoza-Domínguez, Alberto; Russell, A.G.
  9. Feed-in-Tariffs Financed by Energy Taxes: When do They Lower Consumer Prices? By Georg von Wangenheim; Tom Müller
  10. Environmental Regulations, Market Structure and Technological Progress in Renewable Energy Technology — A Panel Data Study on Wind Turbines By Dirk Rübbelke; Pia Weiss
  11. Optimal Wind Portfolios in Illinois By B. Andrew Chupp; Emily Hickey; David Loomis
  12. Choice Experiments in Enviromental Impact Assessment: The Toro 3 Hydroelectric Project and the Recreo Verde Tourist Center in Costa Rica By Carías Vega , Dora; Alpízar, Francisco
  13. Impact on Ethanol, Corn, and Livestock from Imminent U.S. Ethanol Policy Decisions By Bruce A. Babcock
  14. Biofuel Subsidies and International Trade By Bandyopadhyay, Subhayu; Bhaumik, Sumon; Wall, Howard
  15. Economic and Distributional Impacts of Biofuels in Mali By Dorothée Boccanfuso; Massa Coulibaly; Govinda R. Timilsina; Luc Savard
  16. Mandates, Tax Credits, and Tariffs: Does the U.S. Biofuels Industry Need Them All? By Bruce A. Babcock
  17. A Trend Deduction Model of Fluctuating Oil Prices By Haiyan Xu; ZhongXiang Zhang
  18. Inflationary Effect of Oil-Price Shocks in an Imperfect Market: A Partial Transmission Input-output Analysis By Libo Wu; Jing Li; ZhongXiang Zhang
  19. Oil Spill(over)s: Linkages in Petroleum Product Pricing Policies in West African Countries By Marshall Mills; Mohamed El Harrak; Antonio David; Lorraine Ocampos
  20. Rare earth - no case for government intervention By Georg Zachmann
  21. How to Measure Carbon Equity: Carbon Gini Index Based on Historical Cumulative Emission Per Capita By Teng Fei; He Jiankun; Pan Xunzhang
  22. Global Warming and the Population Externality By Stuart, Charles
  23. How responsible is a region for its carbon emissions? An integrated input-output and CGE analysis By McGregor, P. G. (Peter Gregor); Munday, Max; Swales, J. Kim; Turner, Karen
  24. Structural decomposition analysis of greenhouse gas emissions: Application to the Aquitaine region (In French) By Jean-Christophe MARTIN (GREThA); Stéphane BECUWE (GREThA)
  25. Input-output analyses of the pollution content of intra- and inter-national trade flows By Cui, Cathy Xin; Ha, Soo Jung; Hewings, Geoffrey; Turner, Karen
  26. A Green Venture Fund to Finance Clean Technology for Developing Countries By Darius Nassiry; David Wheeler
  27. Leading by Example to Protect the Environment; Do the Costs of Leading Matter? By Heijden, E.C.M. van der; Moxnes, E.
  28. Atmospheric Externalities and Environmental Taxation. By Sandmo, Agnar
  29. Emissions Targets and the Real Business Cycle: Intensity Targets versus Caps or Taxes By Fischer, Carolyn; Springborn, Michael R.
  30. Bad Deal for the Planet: Why Carbon Offsets Aren't Working and how to Create a Fair Global climate Accord By International Rivers Network IRN
  31. Is There an Optimal Entry Time for Carbon Capture and Storage? A Case Study for Australia's National Electricity Market By Liam Wagner; John Foster
  32. Financial Contracts and the Management of Carbon Emissions in Small Scale Plantation Forests By Andrew Coleman
  33. Poverty and climate change in urban Bangladesh (CLIMURB): an analytical framework By Manoj Roy; Simon Guy; David Hulme; Ferdous Jahan
  34. International Environmental Agreements in the Presence of Adaptation By Walid Marrouch; Amrita Ray Chaudhuri
  35. Five feet high and rising : cities and flooding in the 21st century By Jha, Abhas; Lamond, Jessica; Bloch, Robin; Bhattacharya, Namrata; Lopez, Ana; Papachristodoulou, Nikolaos; Bird, Alan; Proverbs, David; Davies, John; Barker, Robert
  36. Climate Change and Food Security to 2030: A Global Economy-wide Perspective By Ernesto Valenzuela; Kym Anderson
  37. Green Jobs Strategy and the Transition to the Low-Carbon Economy in Northern Virginia By Peter Garforth; Dale Medearis
  38. Climate Change, Employment and Local Development in Extremadura, Spain By Gabriela Miranda; Hyoung-Woo Chung; David Gibbs; Richard Howard; Lisa Rustico
  39. Climate Change, Employment and Local Development in London, UK By Gabriela Miranda; Mads Greaker; Kris Krasnowski; Bettina Schaefer; Andy Westwood
  40. Is European climate policy the new CAP? By Georg Zachmann
  41. Environmental Security and its Implications for China’s Foreign Relations By Junko Mochizuki; ZhongXiang Zhang
  42. A Tale of Two Countries: Emissions Scenarios for China and India By Emanuele Massetti
  43. Energy and Climate Change in China By Carlo Carraro; Emanuele Massetti

  1. By: João Amador
    Abstract: This paper compares the energy content in manufacturing exports in a set of 30 advanced and emerging economies and examines its evolution from 1995 to 2005. The paper combines information from the OECD input-output matrices and international trade data in 18 manufacturing sectors. Energy inputs are defined as those from sectors “coke, refined petroleum products and nuclear fuel” and “electricity, gas and water supply”. In addition, the value of energy inputs that is required for the production of one unit of output in a given manufacturing sector is defined as the corresponding sector's coefficient in the inverse Leontief matrix. Finally, these coefficients are weighted according to sectors' shares in countries' total manufacturing exports. The resulting indicator for the energy content of manufacturing exports is compared across countries in periods where comparable input-output matrices exist. The paper also suggests a methodology to disentangle the effects attributable to the structure of manufacturing exports and sectoral energy efficiency, presenting results according to technological categories. The paper concludes that Brazil, India and, mostly, China, present a high energy content in manufacturing exports, which has increased from 1995 to 2005. Conversely, many advanced economies, notably in Europe and North America, which showed energy contents below the world average in 1995, reinforced their position as relatively low energy intensive economies. The contribution of trade specialization and energy efficiency effects to explain differences in the energy content of exports draws attention to the situation of China. This country increased its relative energy usage in the exports of all technological categories of goods. Nevertheless, this effect was reinforced by the stronger export specialization in high-tech products and a comparatively lower specialization in medium-high-tech products.
    JEL: F10 F14 Q40
    Date: 2011
  2. By: Anna Alberini (AREC, University of Maryland and CEPE, ETH Zürich); Will Gans (AREC, University of Maryland); Daniel Velez-Lopez (AREC, University of Maryland)
    Abstract: We study residential demand for electricity and gas, working with nationwide household-level data that cover recent years, namely 1997-2007. Our dataset is a mixed panel/multi-year cross-sections of dwellings/households in the 50 largest metropolitan areas in the United States as of 2008. To our knowledge, this is the most comprehensive set of data for examining household residential energy usage at the national level, containing the broadest geographical coverage, and with the longest longitudinal component (up to 6 observations per dwelling). We estimate static and dynamic models of electricity and gas demand. We find strong household response to energy prices, both in the short and long term. From the static models, we get estimates of the own price elasticity of electricity demand in the -0.860 to -0.667 range, while the own price elasticity of gas demand is -0.693 to -0.566. These results are robust to a variety of checks. Contrary to earlier literature (Metcalf and Hassett, 1999; Reiss and White, 2005), we find no evidence of significantly different elasticities across households with electric and gas heat. The price elasticity of electricity demand declines with income, but the magnitude of this effect is small. These results are in sharp contrast to much of the literature on residential energy consumption in the United States, and with the figures used in current government agency practice. Our results suggest that there might be greater potential for policies which affect energy price than may have been previously appreciated.
    Keywords: Residential Electricity and Gas Demand, Price Elasticity Of Energy Demand, Static Model, Dynamic Panel Data Model, Partial Adjustment Model
    JEL: Q4 Q41 Q48 Q54 Q58
    Date: 2011–01
  3. By: Hanley, Nick; Turner, Karen
    Abstract: Technological change is one factor used to justify the existence of an Environmental Kuznets Curve, and technological improvements have been argued to be a key factor in mitigating the impacts of economic growth on environmental quality. In this paper we use a CGE model of the Scottish economy to consider the factors influencing the impacts of one form of technological change - improvements in energy efficiency - on absolute levels of CO2 emissions, on the carbon intensity of the economy (CO2 emissions relative to real GDP), and the per capita EKC relationship. These factors include the elasticity of substitution between energy and non-energy inputs, responses in the labour market and the structure of the economy. Our results demonstrate the key role played by the general equilibrium price elasticity of demand for energy, and the relative influence of different factors on this parameter.
    Keywords: Environmental Kuznets Curve; rebound effects; energy efficiency; technical progress; computable general equilibrium models
    Date: 2010–12
  4. By: Arimura, Toshi H.; Li, Shanjun; Newell, Richard G.; Palmer, Karen (Resources for the Future)
    Abstract: We analyze the cost-effectiveness of electric utility ratepayer-funded programs to promote demand-side management (DSM) and energy efficiency (EE) investments. We specify a model that relates electricity demand to previous EE DSM spending, energy prices, income, weather, and other demand factors. In contrast to previous studies, we allow EE DSM spending to have a potential long-term demand effect and explicitly address possible endogeneity in spending. We find that current period EE DSM expenditures reduce electricity demand and that this effect persists for a number of years. Our findings suggest that ratepayer-funded DSM expenditures between 1992 and 2006 produced a central estimate of 0.9 percent savings in electricity consumption over that time period and 1.8 percent savings over all years. These energy savings came at an expected average cost to utilities of roughly 5 cents per kWh saved when future savings are discounted at a 5 percent rate.
    Keywords: energy efficiency, demand-side management, electricity demand
    JEL: Q38 Q41
    Date: 2011–04–27
  5. By: Jurate Jaraite (CERE, Umeå University); Corrado Di Maria (Queen’s University Belfast)
    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 European Union’s CO2 Emissions Trading Scheme (EU ETS) in its pilot phase. Using Data Envelopment Analysis methods, we measure 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 robust to changes in controls and specifications.
    Keywords: Emissions Trading, EU ETS, Environmental Efficiency, Productivity Growth, Data Envelopment Analysis
    JEL: O38 Q48 Q58
    Date: 2011–02
  6. By: Bellas, Allen S.; Finney, Duane; Lange, Ian
    Abstract: Prior to adoption of the 1972 Clean Water Act (CWA) most U.S. power plants used once-through cooling water systems that discharged large quantities of warm water and resulted in significant amounts of thermal pollution in neighboring bodies of water. The CWA essentially mandated recirculating systems for most new facilities. This paper investigates whether there was either cost-saving or performance enhancing technological advance in cooling systems and how these advances are related to imposition of the CWA.
    Keywords: Environmental Policy; Water Cooling: Innovation; Electricity Generatio n
    Date: 2011–03
  7. By: Gérard Mondello (University of Nice Sophia Antipolis, CREDECO, GREDEG, UMR 6727, CNRS)
    Abstract: Ultra-hazardous risky activities as nuclear industry cannot be considered as “normal industries” i.e. industries without abnormal environmental and health risks. Consequently, the industrial organization of these specific sectors is of the utmost importance. This paper aims at studying this question. We focus on the associated costs of prevention and civil liability. We analyze how civil liability rules may contribute to extend or to discourage the expansion of nuclear parks to new operators. The paper compares the consequences of extending the management of nuclear stations to several independent operators. This question can apply to the unification process of the European electricity market in which several public and private nuclear power operators are running. The paper shows that the choice between either a monopolistic scheme (one operator managing several plants) or a decentralized one (one operator by station) depends on the condition of application of the legal civil liability regime and on the strength of the safety control exerted by the Nuclear Regulatory Authorities. It is shown that when the control is high, then the safety costs generated by the monopolistic organization are less than the same costs of a decentralized one. However, conditions on the insurance policy can mitigate this result.
    Keywords: Strict Liability, Electric Energy, Nuclear Plants
    JEL: Q5 Q58 Q53 K23 L13 L52 L94
    Date: 2011–04
  8. By: Blackman, Allen (Resources for the Future); Chandru, Santosh; Mendoza-Domínguez, Alberto; Russell, A.G.
    Abstract: In the past two decades, rapid population and economic growth on the U.S.–Mexico border has spurred a dramatic increase in electricity demand. In response, American energy multinationals have built power plants just south of the border that sell most of their electricity to the United States. This development has heightened concern about border area’s already-poor air quality because these plants effectively skirt U.S. environmental regulations. Yet to our knowledge, this concern has not been subjected to rigorous scrutiny. This paper uses a suite of air dispersion, health impacts, and valuation models to assess the benefits of offsetting polluting emissions from two power-exporting plants in Mexicali, Baja California. We find that these plants have extensive health impacts, including more than 1.9 short-term mortalities and hundreds of respiratory hospital admissions per year, which we value at almost US$8 million. The vast majority of these health impacts are associated with ozone pollution in the United States caused by one of the two plants’ emissions. These findings bolster the case for changing U.S. law either to require power-exporting plants to reduce or offset their emissions or to provide incentives for them to do so.
    Keywords: electricity, air pollution, Mexico
    JEL: Q48 Q51 Q53
    Date: 2011–04–12
  9. By: Georg von Wangenheim (University of Kassel); Tom Müller
    Date: 2011
  10. By: Dirk Rübbelke (Basque Centre for Climate Change (BC3) and IKERBASQUE, Basque Foundation for Science); Pia Weiss (Nottingham University Business School)
    Abstract: We study the impact of environmental regulations on the patent activities for wind turbines between 1980 and 2008. We explicitly control for energy market liberalisation and take a potential interaction between liberalisation and policy instruments into account. We find a strong and highly significant effect of environmental tax revenues, which we regard as a proxy for the extent to which energy prices changed in favour of renewable energies, as well as foreign demand for wind turbines on innovation activities. In addition, we find that price-based policy instruments are more effective in fostering innovations in the wind turbine technology when energy markets are fully open to competition. In contrast, non-price-based policy instruments such as grants or low interest rate loans are largely independent from whether or not energy markets are liberalised.
    Keywords: Environmental Policy, Renewable Energy, Market Structure, Wind Turbines, Innovation, Patents, Technological Change
    JEL: Q55 Q58 O34 O38
    Date: 2011–04
  11. By: B. Andrew Chupp (Department of Economics, Illinois State University); Emily Hickey; David Loomis (Department of Economics, Illinois State University)
    Abstract: Current renewable portfolio standards in Illinois call for 25% of the state’s energy to be met through renewable means by 2025, with 75% of this requirement to come from wind. The problematic intermittency of wind might be overcome by a geographically disperse portfolio of wind farms. Using wind speeds and projected power measurements for 79 potential Illinois wind farms from 2004-2006, we use mean variance portfolio theory to calculate the optimal distribution of new wind installations.
    Keywords: Wind Power, Optimal Portfolios
    JEL: Q42 G11
    Date: 2011–04
  12. By: Carías Vega , Dora; Alpízar, Francisco
    Abstract: Choice experiments, a stated preference valuation method, are proposed as a tool to assign monetary values to environmental externalities during the ex-ante stages of environmental impact assessment. This case study looks at the impacts of the Costa Rican Institute of Electricity’s Toro 3 hydroelectric project and its affects on the Recreo Verde tourism center in San Carlos, Costa Rica. Compared to other valuation methods (e.g., travel cost and contingent valuation), choice experiments can create hypothetical but realistic scenarios for consumers and generate restoration alternatives for the affected good. Although they have limitations that must be taken into account in environmental impact assessments, incorporating economic parameters—especially resource constraints and tradeoffs—can substantially enrich the assessment process.
    Keywords: stated-preference, economic valuation, choice experiments, hydropower, tourism, Costa Rica
    JEL: Q26 Q4
    Date: 2011–05–05
  13. By: Bruce A. Babcock (Center for Agricultural and Rural Development (CARD))
    Abstract: The next few weeks should bring some clarity to the future of the 45-cent-per-gallon ethanol tax credit and the 54-cent-per-gallon import tariff because both are scheduled to expire on December 31. Although the arguments in support of and against their extension have changed little since the summer, the economic situation in the corn, livestock, and ethanol industries has changed dramatically.
    Date: 2010–11
  14. By: Bandyopadhyay, Subhayu; Bhaumik, Sumon; Wall, Howard
    Abstract: This paper explores optimal biofuel subsidization in the context of a general equilibrium trade model. The focus is on biofuels such as corn-based ethanol, which diverts corn from use as food to use as an intermediate input in energy production. In the small-country case, when a Pigouvian tax on conventional fuels such as crude is in place, the optimal biofuel subsidy is zero. When the tax on crude is not available as a policy option, however, a second-best biofuel subsidy (or tax) is optimal. In the large-country case, a biofuel subsidy spurs global demand for food and confers a terms-of-trade benefit to the food-exporting nation. In the absence of beggar-thy-neighbor trade policy tools due to WTO rules, the twin objectives of pollution reduction and term-of-trade improvement justify a combination of crude tax and biofuel subsidy for the food exporter. If the food importer also uses a biofuel subsidy (or tax), we have a Johnson (1953) type Nash equilibrium augmented by pollution considerations. If biofuel subsidies reduce global crude use, then in a Nash equilibrium, the food-exporting nation must use a subsidy, while a food-importing nation will impose a subsidy if and only if the pollution-reduction effect dominates the terms-of-trade effect.
    Keywords: Optimal Biofuel Subsidy; Pigouvian Tax; Terms-of-Trade; Pollution Externality
    JEL: O1 H2 F1
    Date: 2010–10
  15. By: Dorothée Boccanfuso (Département d’économique and GRÉDI, Université de Sherbrooke); Massa Coulibaly (GREAT -- Groupe de recherche en économie appliquée et théorique); Govinda R. Timilsina (The World Bank); Luc Savard (Département d’économique and GRÉDI, Université de Sherbrooke)
    Abstract: A biofuels race has been observed around the world with rising cost of oil and the increasing concerns over climate change. Unfortunately, this growth is associated with rising food prices, which is a major concern in developing countries like Mali. The development of biofuels in Mali should contribute to reducing dependency on imported fossil fuels and avoiding competing for land used for food production. This study carries out an economic and distributional impact analysis with a microsimulation and CGE model of the prospects of large-scale expansion jatropha to produce biofuels in Mali. We also investigate the impacts of promoting biofuels through a tax-subsidy scheme. Our results reveal that macro effects are slightly negative or weakly positive but generate reductions in poverty at the national level and for rural households. The pro-poor analysis does not reveal a clear trend with proportional, progressive and regressive outcomes.
    Keywords: Biofuels, agriculture, computable general equilibrium model, micro-simulation, distributional analysis.
    JEL: D58 D31 I32 Q17
    Date: 2011–05
  16. By: Bruce A. Babcock (Center for Agricultural and Rural Development (CARD))
    Abstract: Expanded mandates under the Renewable Fuel Standard provide ethanol and biodiesel producers a guaranteed future market at volumes that exceed what they have produced in the past. Despite having these mandates in place, biofuel producers continue to support tax credits and ethanol import tariffs. An examination of how the new mandates will be implemented shows that biofuel producers will receive little or no additional benefit from tax credits. Ethanol import tariffs will continue to provide U.S. corn ethanol producers a cost advantage over imported Brazilian sugarcane ethanol until at least 2013 when the demand for sugarcane ethanol to meet the noncellulosic advanced biofuel mandate starts to increase.
    Keywords: biodiesel, biofuel tax credit, biofuels mandates, corn ethanol, ethanol import tariffs, fuel subsidies, sugarcane ethanol, Renewable Identification Numbers.
    Date: 2010–03
  17. By: Haiyan Xu (Institute of International Studies, Fudan University and Center for Energy Economics and Strategy Studies, Fudan University); ZhongXiang Zhang (East-West Center)
    Abstract: Crude oil prices have been fluctuating over time and by a large range. It is the disorganization of oil price series that makes it difficult to deduce the changing trends of oil prices in the middle- and long-terms and predict their price levels in the short-term. Following a price-state classification and state transition analysis of changing oil prices from January 2004 to April 2010, this paper first verifies that the observed crude oil price series during the soaring period follow a Markov Chain. Next, the paper deduces the changing trends of oil prices by the limit probability of a Markov Chain. We then undertake a probability distribution analysis and find that the oil price series have a log-normality distribution. On this basis, we integrate the two models to deduce the changing trends of oil prices from the short-term to the middle- and long-terms, thus making our deduction academically sound. Our results match the actual changing trends of oil prices, and show the possibility of re-emerging soaring oil prices.
    Keywords: Oil Price, Log-normality Distribution, Limit Probability of a Markov Chain, Trend Deduction Model, OPEC
    JEL: Q41 C12 C49 F01 O13
    Date: 2011–02
  18. By: Libo Wu (Center for Energy Economics and Strategy Studies, Fudan University and Institute of World Economy, Fudan University); Jing Li (Department of World Economy, School of Economics, Fudan University); ZhongXiang Zhang (East-West Center)
    Abstract: This paper aims to examine the impacts of oil-price shocks on China’s price levels. To that end, we develop a partial transmission input-output model that captures the uniqueness of the Chinese market. We hypothesize and simulate price control, market factors and technology substitution - the three main factors that restrict the functioning of a price pass-through mechanism during oil-price shocks. Using the models of both China and the U.S., we separate the impact of price control from those of other factors leading to China’s price stickiness under oil-price shocks. The results show a sharp contrast between China and the U.S., with price control in China significantly preventing oil-price shocks from spreading into its domestic inflation, especially in the short term. However, in order to strengthen the economy’s resilience to oil-price shocks, the paper suggests a gradual relaxing of price control in China.
    Keywords: Oil-price Shocks, Price Transmission, Price Control, Input-output Analysis, Inflation, Industrial Structure, China, the United States
    JEL: Q43 Q41 Q48 O13 O53 P22 E31
    Date: 2011–03
  19. By: Marshall Mills; Mohamed El Harrak; Antonio David; Lorraine Ocampos
    Abstract: This paper addresses a number of issues regarding petroleum product pricing in Western Africaemphasizing international spillovers. We use panel unit root rests and long-run modeling based on vector error correction models to assess links and convergence in petroleum product prices across countries. Our results indicate that in general over the long-run there is convergence in prices across the countries. The estimation results for gasoline and diesel prices suggest the presence of long-run links between retail prices among the different country groupings with long-run multipliers ranging from 11 to -6.66. The speed of Adjustment to equilibrium varies significantly according to the countrygroupings considered. In contrast, the econometric results for kerosene prices not only indicate a weaker link between prices across countries, but also a much slower adjustment to equilibrium. Inlight of these important spillovers, the need to better coordinate pricing s and tax policies towards petroleum products at the regional level becomes apparent.
    Date: 2011–05–03
  20. By: Georg Zachmann
    Abstract: China has officially restricted exports of rare earth for several years and announced this year it will further tighten exports. Rare earth is a group of 17 different metals, usually found clustered together. These metals have hundreds of different industry applications. For example, they are used in certain high capacity magnets, batteries and lasers. As the rare earth elements are used in sectors that are assumed to have an over-proportionate growth potential (eg. green-technology), policy makers are paying particular attention to them. In the policy debate, the different elements are considered jointly, as they are typically clustered together. But each element has its own supply and demand characteristics. Consequently, prices for the individual elements might differ by factor 20 (in mid 2010, Samarium was quoted at $32 per kilogram while Terbium was quoted at $600). As China is currently the predominant producer of rare earth (>95% of total production), the reduction of Chinese rare earth exports will have effects on global supplies. Thus, rare earth elements have been very actively covered in the media and various G20 policy makers (secretary of state Clinton, chancellor Merkel, etc.) have expressed their concern. Business interest groups want to put rare earth on the official G20 agenda â?? regardless, the issue will be unofficially discussed in Seoul. But should policy makers really care? This depends on what China wants to achieve by restricting rare earth exports. Chinese export restrictions for rare earth could be interpreted in five different ways: (1) China wants to save rare earth resources for future generations. As rare earth elements are abundant in both China and the rest of the world, this is a rather unlikely explanation. But even if easily produced sources are rare, a slow exploration for fear of overexploitation should not merit political concern, as the Chinese interest of a stable, long-term supply would be aligned with the global interest. (2) China uses rare earth to exercise political influence. The current case-in-point is a supposed freeze in exports to Japan, allegedly due to political disputes. In Foreign Policy, Tim Worstall argues convincingly that rare earth elements are an unlikely tool for exercising political pressure as they cannot be effectively monopolised by China. The reason is, that rare earth can be produced in many different countries (China only holds about one third of the known resources), admittedly at higher cost. (3) China is trying to reduce the ecological impact of rare earth production. The production of rare earth in China is very environmental unfriendly and hazardous for the corresponding workforce. Consequently, Chinese export reductions might be a move to reduce the price paid by workers and the environment for growth going elsewhere. In this context, export reductions might be an important tool to gain control of production in illegal mines. Even though paying higher prices for rare earth would not be appreciated by the Western industrial consumer, correctly pricing pollution and labour are well-accepted principles in Western countries. (4) China tries to maximize the profits from exporting rare earth. As in the short-run Chinese rare earth could only be replaced by producers with significantly higher costs, China is currently able to increase its profits by restricting exports of rare earth as the decreased export volumes are offset by the increased prices. Numbers quoted in the press, arguing that in 2010 a 30% decrease in exports occurred while prices increased threefold, would be consistent with a profit maximisation strategy. Extracting monopoly rents on natural resources is common around the globe. Most oil producers for example employ duties on oil exports to ensure that the fuel is exported at prices above the production cost. Such a profit maximisation is constrained by the entry of new suppliers. If China raised the price above a certain level, profit seeking mining companies would start producing non-Chinese rare earth resources (eg. in the US or Australia). Consequently, either China keeps the price slightly below the entry threshold or a limited number of producers would secure stable supplies of rare earth at prices supposedly somewhat above the production cost of the most expensive supplier. (5) China is using export restrictions for domestic industrial policy reasons. Restricting exports lead to a de facto double pricing. Domestic prices of rare earth would drop, while foreign prices would rise. This would give domestic high-tech producers a cost advantage over their foreign competitors. This last point has been the most discussed in recent months, as it seems to be in line with Chinaâ??s mercantilist economic policy. This raises the question: Could such a strategy be successful? And would this harm Western economic interest? Subsidizing Chinese high-tech companiesâ?? by double-pricing rare earth could of course be effective in increasing these companiesâ?? world market share or profit in the short run. This does not mean, however, that such an intervention is efficient. First, higher world market prices will make other rare earth sources available. Consequently, the current cost spread between China, which is producing on a large scale, and the rest of the world that currently is not, will not persist. High prices will thereby not only drive the exploitation of new non-Chinese resources, but also encourage the development of new technologies for exploring, producing and processing rare earth (the separation of the different rare earth elements is one of the most costly parts of the production process). Consequently, market forces are likely to drive down Western production costs in the mid-term. Second, due to the export restriction, the demand for Chinese rare earth would be artificially low. This would lead to the intended lower price for rare earth. Chinese investors would make their decisions with respect to the internal price, as Chinese companies would need two commodities for exporting: the rare earth valued at the domestic price and the export rights valued at the price differential between internal and external market. Therefore, it should play no role, whether the export rights are allocated for free to some companies or auctioned off. The low Chinese rare earth price, however, would distort the incentives to invest in new resources and technologies in China. Third, in many applications, rare earth elements might be replaced. If, for example, the cost of certain rare earth magnets became too high, companies might decide to use lesser quality magnets. Thus, wind turbines will continue to be built in Western countries, even though replacing the rare earth magnets might imply some efficiency losses. This is reflected by the rather small share of the rare earth cost in the value of most total products. The total market value of separated rare earth is several billion dollars (USD), while the value of iron ore is a few dozen billions and crude oil several trillion. Thus, the price of rare earth is unlikely to be a key driver for the location of most downstream value chains. Fourth, a subsidisation of rare earth would be intended to allow lower prices at the next stage of the value chain (eg. rare earth magnets). To achieve the industry policy goal, it would be necessary, however, to also ensure that these intermediate products (magnets) are not exported in order to allow cheaper products at the subsequent stage (eg. generators) and so forth. Thus, an entire sector would be created on incorrect relative prices. In other words, it is more profitable to use a cheap machine that wastes some of the rare earth than to install a more expensive machine. The corresponding overuse of rare earth and rare earth products would make the entire value chain uncompetitive as soon as rare earth cost inside and outside China converge. Double pricing will lead to opposing effects in China and the West. In China, the underinvestment in mining and the wasteful use of rare earth will increase demand and decrease supply. In the West, the overinvestment in supply and the substitution of rare earth in some areas will decrease demand and increase supply. Consequently, markets alone will force rare earth prices in the West and China to converge. [Furthermore, double pricing is difficult to sustain as it implies internal redistribution. When double pricing is effective, the right to export becomes very valuable. In this case, the worse-off companies would oppose the scheme and might find ways to circumvent it.] Therefore, restricting the export of rare earth is unlikely to prove an efficient tool for attracting highly-skilled and capital-intensive, high-tech industries. So what do Western companies have to fear? Companies in all sectors know that depending on only one supplier of a crucial input can be very painful. Thus, companies can chose between vertical integration, contracts that reduce the risk of hold-up or diversification. The first two options are not very viable, as Western companies are unlikely to either strike renegotiation-proof deals with Chinese companies or even integrate Chinese suppliers. Thus, diversifying supplies by either contracting some volumes with alternative suppliers, building up stocks, financially hedging against increasing prices or even buying into rare earth production projects should be the answer for industrial users of rare earth. The optimal degree of diversification can only be delivered by the market. The reason is that the willingness to pay for diversification largely depends on private information about the individual companiesâ?? cost of decreasing rare earth consumption. Furthermore, the large number of consumers from different countries should assure the development of a sufficiently liquid market for rare earth. Thus, the market will provide a close-to- optimal level of production capacity and stocks. [As for most natural resource markets, there will be some concentration on the supply side due to the high optimal size of the mines leading to prices above production cost.] Therefore, government support to rare earth consumer, administrative stocks to smooth market prices or government support to increase non-Chinese production would make things worse by punishing companies that invested in risk mitigation. As double pricing will be an inefficient industrial policy and markets will deliver sufficient rare earth supplies outside China, Western governments should restrain from protectionist countermeasures or unjustified counteroffers. That being said, trading the opening of the Chinese rare earth sector against the opening of another G20 or WTO market (eg. agriculture) would be a win-win situation.
    Date: 2010–11
  21. By: Teng Fei (Institute of Energy, Environment and Economy, Tsinghua University); He Jiankun (Institute of Energy, Environment and Economy, Tsinghua University); Pan Xunzhang (Institute of Energy, Environment and Economy, Tsinghua University)
    Abstract: This paper uses Lorenz Curve and Gini Index with adjustment to per capita historical cumulative emission and constructs Carbon Gini Index to measure inequality in climate change area. The analysis using Carbon Gini Index shows that 70% of carbon space in the atmosphere has been used for unequal distribution, which is almost the same as that of income in the country with the biggest gap between rich and poor in the world. The carbon equity should be an urgency and priority in the climate agenda. Carbon Gini Index established in this paper can be used to measure inequality in the distribution of carbon space and provide a quantified indicator for measurement of carbon equity among different proposals.
    Keywords: Climate Change, Carbon Equity, Long-term Mitigation Goal, Cumulative Emission Per Capita, Carbon Gini Index
    JEL: Q56 D63
    Date: 2011–04
  22. By: Stuart, Charles
    Abstract: We calculate the harm a birth imposes on others when greenhouse gas emissions are a problem and a cap limits emissions damage. This negative population externality, which equals the corrective Pigovian tax on having a child, is substantial in calibrations. In our base case, the Pigovian tax is 21 percent of a parent's lifetime income in steady state and 5 percent of lifetime income immediately after imposition of a cap, per child. The optimal population in steady state, which maximizes utility taking account of the externality, is about one quarter of the population households would choose voluntarily
    Keywords: population externality, Pigovian tax, emissions cap, endogenous fertility, population growth, economic growth, optimal population, calibrated optimal child tax, greenhouse gas emissions, global warming, Economic Theory, Growth and Development, Public Economics
    Date: 2011–04–22
  23. By: McGregor, P. G. (Peter Gregor); Munday, Max; Swales, J. Kim; Turner, Karen
    Abstract: Targets for CO2 reduction tend to be set in terms of the amount of pollution generated within the borders of a given region or nation. That is, under a "production accounting principle". However, in recent years there has been increased public and policy interest in the notion of a carbon footprint, or the amount of pollution generated globally to serve final consumption demand within a region or nation. That is, switching focus to a "consumption accounting principle". However, this paper argues that a potential issue arising from the increasing focus on consumption-based "carbon footprint" type measures is that while regional CO2 generation embodied in export production is attributed outside of the region (i.e. to the carbon footprints of other regions/nations), regional consumers are likely to benefit from such production. Moreover, where there is a geographical and supply chain gap between producers and final consumers, it may be difficult to identify precisely "whose" carbon footprint emissions should be allocated to. We demonstrate our argument by using a regional computable general equilibrium (CGE) model of the Welsh economy to simulate the impacts of an increase in export demand for the output of an industry (metal manufacturing) that is both carbon and export intensive and generally produces to meet intermediate rather than final demands. In doing so, we demonstrate how the CGE model results may be used to create „post-shock‟ input-output accounts to examine changes in the structure of economic activity and the resulting impact on CO2 generation under both production and consumption accounting measures. In this respect, to our knowledge, the current paper makes a novel contribution in using CGE techniques to model "carbon footprint" impacts of a change in economic activity.
    Date: 2011–04
  24. By: Jean-Christophe MARTIN (GREThA); Stéphane BECUWE (GREThA)
    Abstract: In order to reach greenhouse gas (GHG) emissions reduction target becoming more and more restrictive, regions have to be invited to implement, in consultation with their nation, a climate plan, henceforth regionalized. The effectiveness of its implementation requires dynamic studies which necessitates a range of statistical data. However, most countries have a poor regional accounting. This is particularly the case for France. To enable us to regionalize the national climate plan, we applied for the Aquitaine region, situated in southwest of France, the structural decomposition analysis. The results from this analysis compared to data from the national statistical institute (INSEE) shows the interest of this analysis.\r\nThe interest of structural decomposition analysis is extended by the possibility to carry out, from the obtained results, two types of studies: the first one is retrospective and the other one is prospective. The retrospective study aims to quantify between 1999 and 2005 the evolution of greenhouse gas (GHG) emissions for 47 sectors and to select the main factors responsible of the evolution of these emissions for the Aquitaine region. Regarding the prospective analysis, a baseline scenario was constructed by using the Bootstrap method in order to estimate the impacts of the regional climate plan target on its GHG emissions for the year 2013.
    Keywords: structural decomposition analysis, regional economy, greenhouse gas emissions, input-output modeling
    JEL: C14 C67 Q4 Q54 R15
    Date: 2011
  25. By: Cui, Cathy Xin; Ha, Soo Jung; Hewings, Geoffrey; Turner, Karen
    Abstract: This paper considers the application of input-output accounting methods to consider the pollution implications of different production and consumption activities, with specific focus on pollution embodied in intra-and inter-national trade flows. We consider the illustrative case studies of interregional trade flows between two regions of the UK and between five Mid-West regions/states within the US. We focus on different types of air pollutant of current policy concern in each case and demonstrate how use of the environmental input-output framework allows us to analyse the nature and significance of interregional pollution spillovers. Our results raise questions in terms of the extent to which authorities at regional level can control local emissions where they are limited in the way some emissions can be controlled, particularly with respect to changes in demand elsewhere within the national economy. This implies a need for policy co-ordination between national and regional level authorities to meet emissions reductions targets. Moreover, the existence of pollution trade balances between regions also raises issues in terms of net losses/gains in terms of pollutants as a result of interregional trade. In conducting analyses for different types of air pollutant (here CO2 as a global warming gas, GHG, in the UK case and ammonia, NH3, as a pollutant of more local concern in the US case) we also consider how pollution embodied in international trade flows may be accounted for and attributed.
    Keywords: air pollution; pollution attribution; pollution trade balance; Interregional input-output models
    Date: 2011–05
  26. By: Darius Nassiry; David Wheeler
    Abstract: A structure for the green venture fund (GVF) and explain the design rationale, operating principles and key parameters for two funds of funds for technology innovation and deployment is proposed. Some key issues to be considered, including differential treatment of public and private investors and possible approaches to setting technology priorities are highlighted. [Working Paper No.245]. URL:[ ations/detail/1424899].
    Keywords: green venture fund, GVF, technology, public, private, investors, priorites, venture capital, financing, development, commercialization, risk capital, deployment, developing countries, energy, africa
    Date: 2011
  27. By: Heijden, E.C.M. van der; Moxnes, E. (Tilburg University, Center for Economic Research)
    Abstract: Environmentalists often urge their home countries to take a leading role in reducing global environmental problems like climate change. A pertinent question is: will examples set by leading nations influence others to follow suit, and if so, do the costs of leading matter? For instance, will costly domestic reductions have a stronger effect on followers than purchases of cheap emission permits abroad? To investigate these questions we have conducted two treatments in a public bad experiment in which leaders have different costs of leading. Our findings suggest that higher costs of leading lead to stronger effects of a given leader example. Randomly chosen leaders lead by example and set better examples if it is less costly to do so. Finally, there seems to be a limit to the leader effect and it may decrease over time.
    Keywords: experiment;leadership;public bad;climate change.
    JEL: C92 H41 Q50
    Date: 2011
  28. By: Sandmo, Agnar (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: The paper reviews the theory of environmental taxation under first best and second best conditions. It argues that negative environmental externalities lead to reductions of the provision of public goods, while investment in abatement increases the supply of public goods. Together with optimal tax rules, the paper therefore also derives conditions for the optimal use of resources on abatement. After brief discussions of the dimensions of time and uncertainty, tax reform and the double dividend, and taxes versus quotas, the optimal tax model is applied to the problem of global warming with a discussion of the particular incentive problems that arise in designing and implementing global climate policy.
    Keywords: Environmental taxation; Public goods
    JEL: D60 H41 H87
    Date: 2010–09–10
  29. By: Fischer, Carolyn (Resources for the Future); Springborn, Michael R.
    Abstract: For reducing greenhouse gas emissions, intensity targets are attracting interest as a flexible mechanism that would better allow for economic growth than emissions caps. For the same expected emissions, however, the economic responses to unexpected productivity shocks differ. Using a real business cycle model, we find that a cap dampens the effects of productivity shocks in the economy on all variables except for the shadow value of the emissions constraint. An emissions tax leads to the same expected outcomes as a cap but with greater volatility. Certainty-equivalent intensity targets maintain higher levels of labor, capital, and output than other policies, with lower expected costs and no more volatility than with no policy.
    Keywords: emissions tax, cap-and-trade, intensity target, business cycle
    JEL: Q2 Q43 Q52 H2 E32
    Date: 2011–04–29
  30. By: International Rivers Network IRN
    Abstract: The world’s biggest carbon offset market, the Clean Development Mechanism, is a global shell game that is increasing greenhouse gas emissions behind the guise of promoting sustainable development. It is handing out billions of dollars to chemical companies and the developers of destructive dams and fossil fuel projects. A rapidly growing industry of carbon brokers and consultants is lobbying for the CDM to be expanded and its rules weakened further. If we want to sustain public support for effective global action on climate change, we cannot risk one of its central planks being a program that is so fundamentally flawed. In the short term the CDM must be radically reformed; in the longer term it must be replaced. URL:[ files/DRP2English2008-521_0.pdf].
    Keywords: climate change, fossil fuel, global action, carbon brokers, dams, CDM, clean development mechanism,
    Date: 2011
  31. By: Liam Wagner (School of Economics, The University of Queensland); John Foster (School of Economics, The University of Queensland)
    Abstract: This paper examines the economic competitiveness of implementing Carbon Capture and Storage (CCS) for deployment on the Australia’s National Electricity Market (NEM) against conventional base load electricity generation. By examining the Levelised Cost of Energy (LCOE) for sent out generation as a suitable hurdle for judging the future prospects of different technology types, we examine the likely mix of generation assets that could be invested in. After examining the LCOE it is shown that CCS enabled technologies will not be competitive in Australia until 2025, which is well beyond the first emissions reduction target for 2020.
    Keywords: Levelised Cost of Energy; Electricity Generation; Emissions Reduction; Carbon Capture and Storage
    JEL: Q40 G12 C61
    Date: 2011–05
  32. By: Andrew Coleman (Motu Economic and Public Policy Research and the University of Waikato)
    Abstract: Under the New Zealand Emissions Trading Scheme, foresters can obtain carbon units as their forests sequester carbon. If they sell these units as they are earned, the units must be repurchased when the forest is harvested, exposing foresters to price risk. This paper examines the way forward markets, futures markets, and carbon lending markets could be used to manage this risk. It argues that carbon lending markets are likely to be the most convenient form for foresters, as they allow the total returns from forestry investments to be increased with minimal risk. The carbon units can be lent to industrial firms or developers of new forests to minimise the carbon risk they face if they make carbon reducing investments.
    Keywords: carbon banking, carbon forward markets, forest sequestation
    JEL: Q23 Q55
    Date: 2011–05
  33. By: Manoj Roy; Simon Guy; David Hulme; Ferdous Jahan
    Abstract: Around 40 percent of Bangladesh’s population are poor people for whom a variable and unpredictable climate can critically restrict livelihood options. This is true in rural and urban areas alike, but this study focuses on the latter. Urban poverty continues to be neglected in research, policy and action for climate change adaptation in the country. The study builds on three propositions: (i) poor urban communities are places where physical and socioeconomic vulnerability coincide; (ii) urban areas are exposed to three forms of climate change impact: rapid-onset events, gradual-onset processes, and cascade effects; and (iii) poor urban people are already adapting to emergent climate change impacts by actively developing various practices. The analytical framework places a strong emphasis on poor people’s adaptation practices in order to understand their agency, cultural resources and economic strategies and the structural factors that both support and constrain their agency. The practices are examined in terms of three key elements: the socio-economic resources of poor urban households and communities; institutions and political economy; and external actors and resources. Six low-income settlements have been chosen for case studies from three cities – Dhaka, Chittagong and Khulna. Data collection involves: mini-surveys; qualitative methods; dialogues with local academics, policymakers and civil society groups; and action research. Key analytical findings include the identification and analysis of existing practices under five broad themes (e.g. livelihoods, built environment, networks, institutions, and external supports).
    Date: 2011
  34. By: Walid Marrouch (Lebanese American University, School of Business, Department of Economics and Finance, CIRANO (Center for Interuniversity Research and Analysis on Organizations)); Amrita Ray Chaudhuri (Department of Economics, CentER, TILEC, Tilburg University, Department of Economics, The University of Winnipeg)
    Abstract: We show that adaptive measures undertaken by countries in the face of climate change, apart from directly reducing the damage caused by climate change, may also indirectly mitigate greenhouse gas emissions by increasing the stable size of international agreements on emission reductions. Moreover, we show that the more effective the adaptive measure in terms of reducing the marginal damage from emissions, the larger the stable size of the international environmental agreement. In addition, we show that larger coalitions, in the presence of adaptation, may lead to lower global emission levels and higher welfare.
    Keywords: International Environmental Agreements, Adaptation, Coalition Formation, Climate Change
    JEL: Q54 Q59
    Date: 2011–04
  35. By: Jha, Abhas; Lamond, Jessica; Bloch, Robin; Bhattacharya, Namrata; Lopez, Ana; Papachristodoulou, Nikolaos; Bird, Alan; Proverbs, David; Davies, John; Barker, Robert
    Abstract: Urban flooding is an increasingly important issue. Disaster statistics appear to show flood events are becoming more frequent, with medium-scale events increasing fastest. The impact of flooding is driven by a combination of natural and human-induced factors. As recent flood events in Pakistan, Brazil, Sri Lanka and Australia show, floods can occur in widespread locations and can sometimes overwhelm even the best prepared countries and cities. There are known and tested measures for urban flood risk management, typically classified as structural or engineered measures, and non-structural, management techniques. A combination of measures to form an integrated management approach is most likely to be successful in reducing flood risk. In the short term and for developing countries in particular, the factors affecting exposure and vulnerability are increasing at the fastest rate as urbanization puts more people and more assets at risk. In the longer term, however, climate scenarios are likely to be one of the most important drivers of future changes in flood risk. Due to the large uncertainties in projections of climate change, adaptation to the changing risk needs to be flexible to a wide range of future scenarios and to be able to cope with potentially large changes in sea level, rainfall intensity and snowmelt. Climate uncertainty and budgetary, institutional and practical constraints are likely to lead to a combining of structural and non-structural measures for urban flood risk management, and arguably, to a move away from what is sometimes an over-reliance on hard-engineered defenses and toward more adaptable and incremental non-structural solutions.
    Keywords: Hazard Risk Management,Wetlands,Natural Disasters,Adaptation to Climate Change,Climate Change Impacts
    Date: 2011–05–01
  36. By: Ernesto Valenzuela (Centre for International Economic Studies, School of Economics, University of Adelaide); Kym Anderson (Centre for International Economic Studies, School of Economics, University of Adelaide)
    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 who comprise most of the worldÂ’s poor and whose crop productivity is expected to fall. The present study uses a global economy-wide model to assess the expected (in some cases positive) effects on temperate zone crop productivity and 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 in the tropics on the productivity of unskilled workers in developing countries. The net effect of those combined shocks on the agricultural sectorÂ’s competitiveness in any developing country is an economy-wide empirical matter, since unskilled workers are employed in nonfarm as well as farm activities. Given the degrees of uncertainty about plausible effects of climate change, our modelling accounts for a range of yield productivity and labor shocks. The results provide a range of consequences for international agricultural prices and for national food consumption, net farm income and economic welfare.
    Keywords: Climate change, crop and labour productivity growth, global economy-wide model projections
    JEL: D58 F17 Q17 Q24 Q54
    Date: 2011–04
  37. By: Peter Garforth; Dale Medearis
    Abstract: This paper looks at Arlington County Virginia’s efforts to become more economically competitive, energy efficient, sustainable and emit fewer greenhouse gases. It reviews the county’s experiences in the creation of green jobs to accelerate deployment of energy efficient and low-carbon technologies, practices and policies. The paper also looks at the impacts on the overall attractiveness of the community as a place to live and work, including ways in which innovative energy systems create attractive investment opportunities for business. A major focus will be to review the importance of initiatives scaled to the community-level and the degree to which the examples are demonstrating the value of “scale” in implementation. This working paper feeds into the wider OECD project on Climate Change, Employment and Local Development being developed by the LEED Programme.
    Date: 2011–04
  38. By: Gabriela Miranda; Hyoung-Woo Chung; David Gibbs; Richard Howard; Lisa Rustico
    Abstract: Extremadura is the fifth largest region in Spain, with certainly one of the most diverse eco-systems and abundant natural resources. Extremadura launched a series of initiatives to facilitate the transition to a green economy which means a model that takes into consideration economic, social and environmental aspects with one core objective: create jobs. <p> How can Extremadura exploit its capacities to broaden the employment basis while moving to a green economy? What actions and priorities should the regional government take into account to move an economic development and employment agenda forward in this new context? How can Extremadura pursue its efforts to remain one of the least polluting regions in Spain while supporting job creation? Which are the economic sectors with potential for job creation in Extremadura? This study sought to provide guidance and policy recommendation to Extremadura on these and other issues related to the transition of the labour market to the green economy.<p> The study on "Climate Change, Employment and Local Development in Extremadura", was undertaken by the Local Economic and Employment Development (LEED) Programme of the Organisation for Economic Co-operation and Development (OECD) in collaboration with the Regional Ministry of Equality and Employment of Extremadura
    Date: 2011–04
  39. By: Gabriela Miranda; Mads Greaker; Kris Krasnowski; Bettina Schaefer; Andy Westwood
    Abstract: London and the UK are far from immune from the impacts of climate change. The UK is already experiencing the effects of climate change in the form of increased sea-surface temperature and rising sea levels. If global GHG emissions continue unabated, London in particular, will be vulnerable to floods, droughts and heat waves. <p> To achieve ambitious emission-cutting targets, the Mayor of London has developed a range of programmes that will stimulate demand for the low-carbon economy in London. However, some challenges still need to be addressed in order to ensure that enough jobs will be created and that those jobs created in the low-carbon economy will be accessible for Londoners. <p> This report examines the impacts of climate change (including through its effect on policy and regulations) on the London labour markets, with a focus on the creation of jobs and the development of a skilled workforce to meet the needs of the greener economy. The report also contains a set of policy recommendations for London to meet its ambitious low-carbon agenda while creating jobs.
    Date: 2011–04
  40. By: Georg Zachmann
    Abstract: In its third phase (2013-20) the European Union's emissions trading system (ETS) will issue allowances for around two billion tonnes of CO2 equivalent each year. The emission rights are valued at around Â?30-35 billion at current prices, between one-half and two-thirds of the amount the EU spends on the Common Agricultural Policy. The redistributive effects of the allocation of emission allowances are therefore potentially significant. Quantitative indicators for the relative degree to which individual countries will be affected by the ETS suggest that economic consequences for the member states will be quite different. In this policy brief, Georg Zachmann finds that countries with less favourable initial conditions are eventually largely compensated. Click here to download the ETS indicators by country
    Date: 2011–01
  41. By: Junko Mochizuki (Department of Natural Resources and Environmental Management, University of Hawaii at Manoa); ZhongXiang Zhang (East-West Center)
    Abstract: China’s emerging standing in the world demands a major rethinking of its diplomatic strategies. Given its population size, geographical scale, economic power and military presence, China is poised to play a larger political role in the twenty-first century, and is thus perceived by the international community to have greater capacities, capabilities and responsibilities. At the same time, environmental stresses caused by China’s energy and resources demands have become increasingly evident in recent years, urging China to cultivate delicate diplomatic relations with its neighbors and strategic partners. Tensions have been seen in areas such as transboundary air pollution, cross-border water resources management and resources exploitation, and more recently in global issues such as climate change. As the Chinese leadership begins to embrace the identity of a responsible developing country, it is becoming apparent that while unabated resources demands and environmental deterioration may pose a great threat to environmental security, a shared sense of urgency could foster enhanced cooperation. For China to move beyond existing and probable diplomatic tensions, a greater attention to domestic and regional environmental security will no doubt be necessary. This article explores such interrelations among domestic, regional and global environmental securities and China’s diplomacy, and suggests possible means by which China could contribute to strengthening global environmental security.
    Keywords: Acid Rain, Climate Change, Energy, Environmental Security, Transboundary Air Pollution, Water Resource Management, Asia
    JEL: Q25 Q34 Q48 Q42 Q53 Q54 Q56 Q58 O13 P28
    Date: 2011–03
  42. By: Emanuele Massetti (Fondazione Eni Enrico Mattei and Euromediterranean Center for Climate Change)
    Abstract: The aim of the paper is to present evidence that China and India are, and will remain, two very different actors in international negotiations to control global warming. We base our conclusions on historical data and on scenarios until 2050. The Business-as-Usual scenario (BaU) is compared to four Emissions Tax scenarios to draw insights on major transformations in energy use and in energy supply and to assess the possible contribution of China and India to a future international climate architecture. We study whether or not the Copenhagen intensity targets require more action than the BaU scenario and we assess whether the emissions reductions induced by the four tax scenarios are compatible with the G8 and MEF pledge to reduce global emissions by 50% in 2050.
    Keywords: Climate Change, China, India, Energy Efficiency, Energy and Development
    JEL: Q32 Q43 Q54 Q43 O53 P52
    Date: 2011–02
  43. By: Carlo Carraro (University of Venice and Fondazione Eni Enrico Mattei); Emanuele Massetti (Fondazione Eni Enrico Mattei and Euro-Mediterranean Centre for Climate Change)
    Abstract: The paper examines future energy and emissions scenarios in China, presenting historical data and scenarios generated using the Integrated Assessment Model WITCH. A Business-as-Usual scenario is compared with four scenarios in which Greenhouse Gases emissions are taxed, at different levels. Key insights are provided to evaluate the Chinese pledge to reduce the emissions intensity of Gross Domestic Product by 40/45 percent in 2020 contained in the Copenhagen Accord. Marginal and total abatement costs are discussed using the OECD economies as a term of comparison. Cost estimates for different emissions reduction targets are used to assess the political feasibility of the 50 percent global reduction target set by the G8 and Major Economies Forum in July 2009.
    Keywords: Climate Change, China, Energy Efficiency, Energy and Development
    JEL: Q4
    Date: 2011–02

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