nep-ene New Economics Papers
on Energy Economics
Issue of 2011‒07‒27
twenty-six papers chosen by
Roger Fouquet
Basque Climate Change Centre, Bilbao, Spain

  1. Competitiveness of renewable energies. Comparison of major European countries By Julien, François; Lamla, Michael
  2. Understanding Cross-National Trends in High-Tech Renewable Power Equipment Exports to the United States By Aparna Sawhney; Matthew E. Kahn
  3. Externalities in the games over electrical power transmission networks By David Csercsik; Laszlo A. Koczy
  4. Using Forward Contracts to Reduce Regulatory Capture By Felix Höffler; Sebastian Kranz
  5. Population Density and Efficiency in Energy Consumption: An empirical analysis of service establishments By MORIKAWA Masayuki
  6. Combating Deforestation? - Impacts of Improved Stove Dissemination on Charcoal Consumption in Urban Senegal By Bensch, Gunther; Peters, Jörg
  7. What Does Improved Fuel Economy Cost Consumers and What Does it Cost Taxpayers?: Some illustrations By Kurt van Dender; Philippe Crist
  8. Should subsidies to urban passenger transport be increased? A spatial CGE analysis for a German metropolitan area By Tscharaktschiew, Stefan; Hirte, Georg
  9. Income tax deduction of commuting expenses and tax funding in an urban CGE study: the case of German cities By Hirte, Georg; Tscharaktschiew, Stefan
  10. Implementing Sustainable Urban Travel Policies in China By Haixiao Pan
  11. Implementing Sustainable Urban Travel Policies in Mexico By Víctor Islas Rivera; Salvador Hernández G.; José A. Arroyo Osorno; Martha Lelis Zaragoza; J. Ignacio Ruvalcaba
  12. Environmental Kuznets Curve in Romania and the Role of Energy Consumption By Muhammad, Shahbaz; Mihai , Mutascu; Parvez , Azim
  13. Growth on a Finite Planet: Resources, Technology and Population in the Long Run By Pietro Peretto; Simone Valente
  14. Greening Growth in Japan By Ivana Capozza
  15. The Theory of By-Production of Emissions and Capital-Constrained Non-Cooperative Nash Outcomes of a Global Economy By Sushama Murty
  16. Caution, Drivers! Children Present: Traffic, Pollution, and Infant Health By Christopher R. Knittel; Douglas L. Miller; Nicholas J. Sanders
  17. Democratic Institutions and Environmental Quality: Effects and Transmission Channels By Kinda, Somlanare Romuald
  18. Carbon emission and production technology: evidence from the US By Dinda, Soumyananda
  19. An Optimal Tax System By Louis Kaplow
  20. Assessing the impact of the EU ETS using firm level data. By Jan Abrell; Anta Ndoye Faye; Georg Zachmann
  21. Checking the Price Tag on Catastrophe: The Social Cost of Carbon Under Non-linear Climate Response By Ceronsky, Megan; Anthoff, David; Hepburn, Cameron; Tol, Richard S. J.
  22. Schelling's Conjecture on Climate and Development: A Test By Anthoff, David; Tol, Richard S. J.
  23. Climate risk perception and ex-ante mitigation strategies of rural households in Thailand and Vietnam By Völker, Marc; Tongruksawattana, Songporne; Hardeweg, Bernd; Waibel, Hermann
  24. The Willingness to Pay for Environmental Protection: Are Developing Economies Different? By Dorsch, Michael
  25. Economic Costs of Ocean Acidification: A Look into the Impacts on Shellfish Production By Narita, Daiju; Rehdanz, Katrin; Tol, Richard S. J.
  26. Environmental Enforcement in Decentralised Governance Systems: Toward a Nationwide Level Playing Field By Eugene Mazur

  1. By: Julien, François; Lamla, Michael
    Abstract: This paper aims at presenting the support schemes promoting the development of renewable energies in five major European countries, namely Germany, France, Italy, Spain and the United Kingdom. At first the reader will find brief country profiles, followed by a comparison of their competitiveness with regard to the type of public support available for project developers, the current level of feed-in tariffs, the stability of the regulatory framework, the quality of the wind or solar resource available, etc. Finally, a mapping will give a quick overview of the competitiveness of the five countries for each renewable energy reviewed in this study. The paper focuses on four technologies generating electricity from renewable sources: Onshore wind, Offshore wind, Photovoltaic solar energy and Concentrating solar power ('CSP', also known as solar thermoelectric power). --
    Date: 2011
  2. By: Aparna Sawhney; Matthew E. Kahn
    Abstract: We track US imports of advanced technology wind and solar power-generation equipment from a panel of countries during 1989-2010, and examine the determining factors including sector-specific US FDI outflow, country size, and domestic wind and solar power generation. Differentiating between the core high-tech and the balance of system equipment, we find US imports of the both categories have grown at significantly higher rate from the relatively poorer countries, particularly China and India. US FDI is found to play a significant positive role in the exports of high-tech equipment from both rich and poor countries, especially for the balance of system equipment. For the core wind and solar equipment, we find domestic renewable power generation played a significant positive role, and the effect is more pronounced for the rich countries as well as China compared to other poor countries.
    JEL: F14 Q55 Q56
    Date: 2011–07
  3. By: David Csercsik (Process Control Research Group - Computer and Automation Institute, Hungarian Academy of Sciences); Laszlo A. Koczy (Institute of Economics - Hungarian Academy of Sciences)
    Abstract: An electrical transmission network consists of producers, consumers and the power lines connecting them. We build an ideal (lossless) DC load flow model as a cooperative game over a graph with the producers and consumers located at the nodes, each described by a maximum supply or desired demand and the power lines represented by the edges, each with a given power transmission capacity and admittance value describing its ability to transmit electricity. Today's transmission networks are highly interconnected, but organisationally partitioned into several subnetworks, the so-called balancing groups with balanced production and consumption. We study the game of balancing group formation and show that the game contains widespread externalities that can be both negative and positive. We study the stability of the transportation network using the recursive core. While the game is clearly cohesive, we demonstrate that it is not necessarily superadditive. We argue that subadditivity may be a barrier to achieve full cooperation. Finally the model is extended to allow for the extension of the underlying transmission network.
    Keywords: Energy transmission networks, Cooperative game theory, Partition function form games, Externalities
    JEL: C71 L14 L94
    Date: 2011–05
  4. By: Felix Höffler (Max Planck Institute for Research on Collective Goods, Bonn); Sebastian Kranz (University of Bonn, Department of Economics)
    Abstract: A fully unbundled, regulated network fi?rm of unknown efficiency level can undertake unobservable effort to increase the likelihood of low downstream prices, e.g., by facilitating downstream competition. To incentivize such effort, the regulator can use an incentive scheme paying transfers to the ?firm contingent on realized downstream prices. Alternatively, the regulator can propose to the ?firm to sell the following forward contracts: the fi?rm pays the downstream price to the owners of a contract, but receives the expected value of the contracts when selling them to a competitive fi?nancial market. We compare the two regulatory tools with respect to regulatory capture: if the regulator can be bribed to suppress information on the underlying state of the world (the basic probability of high downstream prices, or the type of the firm), optimal regulation uses forward contracts only.
    Keywords: Incentive regulation, regulatory capture, virtual power plants
    JEL: K23 L94 L43 L51
    Date: 2011–05
  5. By: MORIKAWA Masayuki
    Abstract: The achievement of both sustainable economic growth and reductions in CO2 emissions has been an important policy agenda in recent years. This study, using novel establishment-level microdata from the Energy Consumption Statistics, empirically analyzes the effect of urban density on energy intensity in the service sector. According to the analysis, the efficiency of energy consumption in service establishments is higher for densely populated cities. Quantitatively, after controlling for differences among industries, energy efficiency increases by approximately 12% when the density in a municipality population doubles. This result suggests that, given a structural transformation toward the service economy, deregulation of excessive restrictions hindering urban agglomeration, and investment in infrastructure in city centers would contribute to environmentally friendly economic growth.
    Date: 2011–07
  6. By: Bensch, Gunther; Peters, Jörg
    Abstract: The dissemination of improved cooking stoves (ICS) is frequently considered an effective instrument to combat deforestation. This paper evaluates the impacts of an ICS dissemination project in urban Senegal implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit (German Agency for International Cooperation, or GIZ). Based on a survey among 624 households, we examine the effects of the intervention on charcoal consumption. Given a complex cooking behavior in urban Africa with simultaneous usage of different fuel and stove types, the virtue of our data set is that it provides for detailed information on individual stoves and meals. This allows for estimating charcoal savings by accounting for both household characteristics and meal specific cooking patterns. On average, households using an ICS save around 25 percent of charcoal per stove utilization. In total, around 6.1 to 6.9 percent of the Dakar charcoal consumption is saved due to the ICS dissemination project. --
    Keywords: Impact evaluation,deforestation,energy access,Africa,Senegal
    JEL: O13 O22 Q41 Q56
    Date: 2011
  7. By: Kurt van Dender; Philippe Crist
    Abstract: “Green growth” is an emerging paradigm that integrates several policy aspirations, including the durability of economic activity, reduced environmental impacts, and sustained growth in high-quality employment in such a way as to foster coherent, cross-sectoral policy design. Focusing on “green growth” highlights the need for governments to assess policies on their long-term economic, environmental and social impacts, recognizing that there can be synergies but also tradeoffs among the broad policy aims. As we hope to show in this paper, an examination of “green growth” policies in the transport sector provides an interesting case in point. Reducing emissions comes at a cost to consumers and taxpayers and if fuel tax revenues decline strongly it may be necessary to review the way the transport sector is taxed and contributes to aggregate tax revenue.
    Date: 2011–05
  8. By: Tscharaktschiew, Stefan; Hirte, Georg
    Abstract: The objective of this paper is to examine efficiency, distributional, environmental (CO2 emissions) and spatial effects of increasing different kinds of transport subsidies discriminating between household types, travel purposes and travel modes. The effects are calculated by applying a numerical spatial general equilibrium approach calibrated to an average German metropolitan area. In extension to most studies focusing on only one kind of subsidy, we compare the effects of different transport subsidies within the same unified framework that allows to account for two features not yet considered simultaneously in studies on transport subsidies: endogenous labor supply and location decisions. Furthermore, congestion, travel mode choice, travel related CO2 emissions and institutional details regarding the tax system in Germany are taken into account. The results suggest that optimal subsidy levels are either small or even zero. While subsidizing public transport is welfare enhancing, subsidies to urban road traffic reduce aggregate urban welfare. Concerning the latter it is shown that making investments in urban road infrastructure capacity or reducing gasoline taxes may even be harmful to residents using predominantly automobile. In contrast, pure commuting subsidies hardly affect aggregate urban welfare, but distributional effects are substantial. All policies contribute to urban sprawl by raising the spatial imbalance of residences and jobs but the effect is relatively small. In addition, the policies induce a very differentiated pattern regarding distributional effects, environmental effects and benefits of landowners. --
    Keywords: urban general equilibrium model,transport policy,transport subsidy,commuting
    JEL: H24 R13 R14 R20 R48 R51
    Date: 2011
  9. By: Hirte, Georg; Tscharaktschiew, Stefan
    Abstract: Germany like many other European countries subsidize commuting by granting the right to deduct commuting expenses from the income tax base. This regulation has often been changed and has regularly been under debate during the last decades. The pros (e.g. causing efficiency gains with respect to the spatial allocation of labor) and cons (e.g. causing urban sprawl) are well documented. Nonetheless, there is need for further research. For reasons of tractability the few models applied in the tax deduction related literature are based on restrictive assumptions particularly concerning the design of the income taxation scheme and the structure of households (neglecting household heterogeneity) and, most importantly, they do not integrate labor supply and location decision problems simultaneously. Here, for the first time, those and more features are taken into account in a full spatial general equilibrium simulation approach calibrated to an average German city. This model is applied to calculate the impacts of tax deductions on an urban economy thereby considering different funding schemes. Our results suggest that the tax deduction level currently chosen is below the optimal level in the case of income tax funding. If a change in the tax base occurs, e.g. toward consumption tax or energy tax funding, the optimal size of the subsidy should be even higher. Furthermore, the different policy packages cause a very differentiated pattern regarding welfare distribution, environmental (CO2 emissions) and congestion effects. We also find surprisingly small effects on urban sprawl characterized by suburbanization of residences and jobs, increasing commuting distances and spatial city growth. --
    Keywords: urban general equilibrium model,commuting subsidies,income tax deduction
    JEL: C68 R12 R13 R14 R20 R51
    Date: 2011
  10. By: Haixiao Pan
    Abstract: Urban transport will have a great impact on sustainable development. China is now the leading producer of motorized vehicles, and people have gradually realized that we cannot sustain endless motorization. China has adopted a sustainable development policy for many years, promoting public transport in successive five-year plans.
    Date: 2011–05
  11. By: Víctor Islas Rivera; Salvador Hernández G.; José A. Arroyo Osorno; Martha Lelis Zaragoza; J. Ignacio Ruvalcaba
    Abstract: This report describes the main challenges to urban travel in Mexico. We focus on some of the basic causes of urban transport problems, and we analyze some urban travel policies that could be considered good practices towards sustainable urban development. Mexico City is the emblematic case.
    Date: 2011–05
  12. By: Muhammad, Shahbaz; Mihai , Mutascu; Parvez , Azim
    Abstract: The aim of present study is to probe the dynamic relationship between economic growth, energy consumption and CO2 emissions for period of 1980-2010 in case of Romania. In doing so, ARDL bounds testing approach is applied to investigate the long run cointegration between these variables. Our results confirm long run relationship between economic growth, energy consumption and energy pollutants. The empirical evidence reveals that Environmental Kuznets curve (EKC) is found both in long-and-short runs in Romania. Further, energy consumption is major contributor to energy pollutants. Democratic regime shows her significant contribution to decline CO2 emissions through effective implementation of economic policies and financial development improves environment i.e. reduces CO2 emissions by redirecting the resources to environment friendly projects.
    Keywords: Economic Growth; Energy Consumption; Environment
    JEL: C32
    Date: 2011–07–05
  13. By: Pietro Peretto; Simone Valente
    Abstract: We study the interactions between technological change, resource scarcity and population dynamics in a Schumpeterian model with endogenous fertility. There exists a pseudo-Malthusian equilibrium in which population is constant and income grows exponentially: the equilibrium population level is determined by resource scarcity but is independent of technology. The stability properties are driven by (i) the income reaction to increased resource scarcity and (ii) the fertility response to income dynamics. If labor and resources are substitutes in production, income and fertility dynamics are self-balancing and the pseudo-Malthusian equilibrium is the global attractor of the system. If labor and resources are complements, income and fertility dynamics are self-reinforcing and drive the economy towards either demographic explosion or human extinction. Introducing a minimum resource requirement, we obtain a second steady state implying constant population even under complementarity. The standard result of exponential population growth appears as a rather special case of our model.
    Keywords: Endogenous Innovation, Resource Scarcity, Population Growth, Fertility Choices
    JEL: E10 L16 O31 O40
    Date: 2011
  14. By: Ivana Capozza
    Abstract: A decade of sluggish economic growth, concluding with the sharpest recession since the Second World War, has underlined the need for Japan to develop a new growth model. Such a model should restore public finances and long-term growth while preserving environmental quality and ensuring a sustainable use of natural resources. This paper assesses Japan’s progress in moving towards such an environmentally friendly growth pattern. It summarises Japan’s achievements and challenges in decoupling environmental pressures from economic performance. It analyses the use of market-based instruments, such as environmentally related taxes and charges and emissions trading schemes, to meet environmental and economic objectives, as well as steps taken to remove environmentally harmful subsidies. The level of integration of environmental concerns in Japan’s response to the economic crisis and in its long-term growth strategy is also analysed, particularly the policy mix used to take advantage of the growth and jobs opportunities arising from eco-innovation and the environmental goods and services sector. This Working Paper relates to the 2010 OECD Environmental Performance Review of Japan (<BR>Après une décennie marquée par une croissance économique très faible, s’achevant en outre par la récession la plus brutale qui se soit produite depuis la Seconde Guerre mondiale, il apparaît nécessaire que le Japon mette en oeuvre un nouveau modèle de croissance propre à restaurer les finances publiques et à revigorer la croissance à long terme, tout en préservant la qualité de l’environnement et en veillant à utiliser les ressources naturelles de manière durable. Ce rapport évalue les progrès accomplis par le Japon vers une croissance respectueuse de l’environnement de cet ordre. Il récapitule les réalisations du Japon et les défis que le pays doit relever afin de découpler les pressions exercées sur l’environnement des performances économiques. De plus, il analyse comment sont utilisés les instruments économiques, notamment les taxes ou redevances liées à l’environnement et les systèmes d’échange de permis d’émission, pour atteindre des objectifs environnementaux et économiques, ainsi que les mesures prises en vue d’éliminer les subventions dommageables pour l’environnement. Par ailleurs, le rapport examine dans quelle mesure la riposte du Japon à la crise économique et sa stratégie de croissance à long terme tiennent compte des préoccupations environnementales, en s’attachant tout particulièrement à l’étude de la panoplie de politiques et mesures appliquées pour tirer parti des possibilités de croissance et d’emploi dont l’écoinnovation et le secteur des biens et services environnementaux sont porteurs. Ce document de travail se rapporte à l’Examen environnemental de l'OCDE du Japon, 2010 (
    Keywords: Japan, climate change, environmentally-related taxes, eco-innovation, green growth strategy, economic instruments for environmental policy, environmentally harmful subsidies, performance targets, voluntary agreements, pollution abatement and control expenditure, Japon, changement climatique, taxes liées à l'environnement, éco-innovation, stratégie pour une croissance verte, instruments économiques au service de la politique d’environnement, objectifs de performance, accords volontaires, subventions dommageables pour l’environnement, dépenses de lutte contre la pollution
    JEL: H23 O33 O38 Q52 Q54 Q55 Q58
    Date: 2011–03–18
  15. By: Sushama Murty (Department of Economics, University of Exeter)
    Abstract: The reduced form approaches that are commonly adopted in the literature to model emission-generating technologies (EGTs) do not distinguish between emission-causing and non-emission causing goods in production. We provide a new set of axioms to describe EGTs. Technologies that satisfy these axioms are called by-production technologies (BPTs). A distance function representation of BPTs is derived and it is shown that a BPT can be decomposed into a standard neo-classical intended-production technology and nature's emission-generation set (the relationship in nature between emissions and emission-causing goods). As an illustrative application of the BP approach, we study cross-country differences in emission levels due to cross-country dierences in capital endowments at a noncooperative Nash equilibrium, where emissions impose both local and global externalities. The change in emission levels as we move from capital-poor to capital-rich countries is decomposed into income and substitution eects. The latter are a result of changes in the trade-off between intended-production and emission-generation, which is attributed to diminishing returns to emission-causing inputs or cleaning-up activities, while the nature of the former is governed by the assumption that emission is an inferior good. The implications of increasing returns to capital, substitutability or complementarity between capital and emission-causing inputs such as fuels, extraction costs of fuels, and inter-fuel substitution in production are studied and a set of conditions that result in an environmental Kuznets curve is derived.
    Keywords: distance function representation of multi-output technology, emission-generating technologies, free and costly disposability, environmental Kuznets curve, environmental externalities, non-cooperative Nash equilibrium, income and substitution effects, inferior good, returns to scale, inter-fuel substitution.
    JEL: Q50 Q56 Q51 O10 O12 D20 D62 D11
    Date: 2011
  16. By: Christopher R. Knittel; Douglas L. Miller; Nicholas J. Sanders
    Abstract: Since the Clean Air Act Amendments of 1990 (CAAA), atmospheric concentration of local pollutants has fallen drastically. A natural question is whether further reductions will yield additional health benefits. We further this research by addressing two related research questions: (1) what is the impact of automobile driving (and especially congestion) on ambient air pollution levels, and (2) what is the impact of modern air pollution levels on infant health? Our setting is California (with a focus on the Central Valley and Southern California) in the years 2002-2007. Using an instrumental variables approach that exploits the relationship between traffic, ambient weather conditions, and various pollutants, our findings suggest that ambient pollution levels, specifically particulate matter, still have large impacts on weekly infant mortality rates. Our results also illustrate the importance of weather controls in measuring pollution’s impact on infant mortality.
    JEL: I18 Q51 Q53
    Date: 2011–07
  17. By: Kinda, Somlanare Romuald
    Abstract: This paper aims at analysing the effect of democratic institutions on environmental quality (carbon dioxide per capita, sulfure dioxide per capita) and at identifying potential channel transmissions. We use panel data from 1960 to 2008 in 122 developing and developed countries and modern econometric methods. The results are as follows: Firstly, we show that democratic institutions have opposite effects on environment quality: a positive direct effect on environment quality and a negative indirect effect through investments and income inequality. Indeed, democratic institutions attract investments that hurt environment quality. Moreover, as democratic institutions reduce income inequality, they also damage environment. Secondly, we find that the direct negative effect of democratic institutions is higher for local pollutant (SO2) than for global pollutant (CO2). Thirdly, the nature of democratic institutions (presidential, parliamentary) is not conducive to environmental quality. Fourtly, results suggest that the direct positive effect of democratic institutions on environment quality is higher in developed countries than in developing countries. Thus, the democratic process in the first group of countries has increased their awareness for the environment protection. --
    Keywords: Democratic institutions,Air pollution,Panel data,Income inequality,Investments
    JEL: O43 Q53 C23 D31 E22
    Date: 2011
  18. By: Dinda, Soumyananda
    Abstract: Production technology is the main driving force of economic growth while upgraded technology reduces carbon emission. This paper investigates the long run relation with short run dynamics using the USA data for the period of 1963 -2007. This paper observes that production technology is the cause of reduction of CO2 emission only in short run. The impulse response of production technology suggests shortening the patent protection right that might encourage redesigning low carbon production processes to curve down carbon emission with raising income. Continuous change and adaption of production technology is the main driving force for sustainable development.
    Keywords: Production Technology; Innovation; Design Patent; Patent Right; Technological Progress; Co-integration; Causality; Carbon Emission; Income; CO2 Emission; Impulse Response; R&D
    JEL: O11 C32 O51 Q53 O33 O14
    Date: 2011–02–26
  19. By: Louis Kaplow
    Abstract: A notable feature and principal virtue of Tax by Design is its system-wide perspective on different elements of the tax system. This review essay builds on this trait and offers a more explicit foundation for the report’s general approach, drawing on a distribution-neutral methodology that is developed in other work. This technique is then employed to illuminate and extend Tax by Design’s analysis regarding the VAT, environmental taxation, wealth transfer taxation, and income transfers.
    JEL: H20 H21 H23 H24 H53
    Date: 2011–07
  20. By: Jan Abrell; Anta Ndoye Faye; Georg Zachmann
    Abstract: · This paper investigates the impact of the European Union’s Emission Trading System (EU ETS) at a firm level. Using panel data on the emissions and performance of more than 2000 European firms from 2005 to 2008, we are able to analyse the effectiveness of the scheme. · The results suggest that the shift from the first phase (2005-2007) to the second phase (2008-2012) had an impact on the emission reductions carried out by firms. The initial allocation also had a significant impact on emission reduction. This challenges the relevance for the ETS of Coase’s theorem (Coase, 1969), according to which the initial allocation of permits is irrelevant for the post-trading allocation of marketable pollution permits. · Finally, we found that the EU ETS had a modest impact on the participating companies’ performance. We conclude that a full auctioning system could help to reduce emissions but could also have a negative impact on the profits of participating companies.
    Keywords: panel data, energy, climate change, evaluation econometrics, firm behaviour.
    JEL: D21 C23 Q49
    Date: 2011
  21. By: Ceronsky, Megan; Anthoff, David; Hepburn, Cameron; Tol, Richard S. J.
    Abstract: Research into the social cost of carbon emissions ? the marginal social damage from a tonne of emitted carbon ? has tended to focus on "best guess" scenarios. Such scenarios generally ignore the potential for low-probability, high-damage events, which are critically important to determining optimal climate policy. This paper uses the FUND integrated assessment model to investigate the influence of three types of low-probability, high-impact climate responses on the social cost of carbon: the collapse of the Atlantic Ocean Meridional Overturning Circulation; large scale dissociation of oceanic methane hydrates; and climate sensitivities above "best guess" levels. We find that incorporating these events can increase the social cost of carbon by a factor of over 3.
    Keywords: Social cost of carbon/cost/scenarios/Climate policy/Policy
    Date: 2011–06
  22. By: Anthoff, David; Tol, Richard S. J.
    Abstract: We use the integrated assessment model FUND to compute the income elasticities of climate change impacts for different world regions over time. We find limited support for Schelling's Conjecture that development might be the best defense against climate change impacts, and for the idea that the impacts from climate change might be akin to a "luxury good". For very poor regions, an increase in income in the short run is an effective tool to reduce impacts from climate change by making those societies less vulnerable, in particular to infectious diseases. While net climate impacts appear to be akin to a luxury good for some countries at specific times, that effect disappears in the long run as impacts from agriculture make up a large share of total impacts.
    Keywords: income elasticity/Climate change/impacts
    Date: 2011–06
  23. By: Völker, Marc; Tongruksawattana, Songporne; Hardeweg, Bernd; Waibel, Hermann
    Abstract: A major risk factor for rural areas in emerging market economies, such as Thailand and Vietnam, can be attributed to climate change. Adoption of effective ex-ante mitigation strategies is a function of socio-economic household and location characteristics including, among others, the decision makers' perceptions of risk. This study aims to analyze both the determinants of climate-related risk perception and its influence on the choice of ex-ante mitigation strategies. In the context of the DFG research project Impact of Shocks on the Vulnerability to Poverty: Consequences for Development of Emerging Southeast Asian Economies, data were collected in a panel survey among some 4,400 rural households in 2007 and 2008 in six peripheral provinces in Thailand and Vietnam. Methodologically a three-step regression approach is applied. In the first step households' risk perception is explained. The second step is to assess general adoption of risk mitigation actions. In the third step the likelihood of households taking up particular ex-ante risk management strategies is established. Initial results show that rural households are particularly concerned about climate risk. However, the majority of households do not undertake any activity to mitigate risks ex-ante. The experience of climate shocks increases risk perception while other factors are also identified as significant determinants. For those who adopt preventive measures households in Vietnam particularly pre-adjust for storms while Thai households accommodate especially for drought. Findings are expected to be useful for the development of risk management strategies for rural households when differences in risk perception are taken into account. --
    Date: 2011
  24. By: Dorsch, Michael
    Abstract: This paper explores the micro-foundations of public policy over environmental protection in developing economies by examining individual-level preferences for economically costly pollution abatement. The paper empirically investigates individuals' marginal willingness to pay (MWTP) for stronger environmental protection, analyzing nearly 24,000 survey responses, from 24 developing economies, to environmental questions from the 2005-2008 wave of the World Values Survey. I analyze the probability that an individual states she is WTP for further environmental protection depending on her individual-level characteristics and her country's characteristics. The main results to emerge from the analysis include: (i) perceived environmental problems that are local do not determine MWTP, where as perceived problems that are global do, (ii) self-identification as a world citizen is the strongest determinant of demand for greater environmental protection, indicating that motivation to contribute to a global public good is not a strictly post-material notion, and (iii) the primary determinants of MWTP are not qualitatively different from those among respondents in advanced economies. The results pose a challenge to the objective problems, subjective values response to the critique of the post-materialism hypothesis. It appears that the WTP for environmental protection in developing economies follows from subjective values that are universal, rather than from objective problems. --
    Keywords: Environmental protection policy,Political preferences,Global public goods,World Values Survey,Developing economies
    JEL: Q52 Q56 Q58
    Date: 2011
  25. By: Narita, Daiju; Rehdanz, Katrin; Tol, Richard S. J.
    Abstract: Ocean acidification is increasingly recognized as a major global problem. Yet economic assessments of its effects are currently almost absent. Unlike most other marine organisms, mollusks, which have significant commercial value worldwide, have relatively solid scientific evidence of biological impact of acidification and allow us to make such an economic evaluation. By performing a partial-equilibrium analysis, we estimate global and regional economic costs of production loss of mollusks due to ocean acidification. Our results show that the costs for the world as a whole could be over 100 billion USD with an assumption of increasing demand of mollusks with expected income growths. The major determinants of cost levels are the impacts on the Chinese production, which is dominant in the world, and the expected demand increase of mollusks in today's low-income countries, which include China, in accordance with their future income rise.
    Keywords: Climate change/Economic Impact/Molluscs/Ocean Acidification/US/cost/growth/impacts
    Date: 2011–06
  26. By: Eugene Mazur
    Abstract: This report analyses approaches to managing environmental compliance monitoring and enforcement in several OECD countries with decentralised systems of environmental governance. It focuses principally on strategies and instruments for promoting consistency in the implementation of national environmental law. The report reviews in detail the experience of Spain, Sweden, Switzerland and the United States and draws on examples from several other countries. Three programmatic elements of environmental enforcement are key to ensuring its consistency: the targeting of compliance monitoring; the selection of an enforcement instrument and the timeliness of noncompliance response; and the size of monetary penalties for non-compliance. Accurate and complete information on the performance of sub-national and local competent authorities is an important prerequisite for the evaluation of nationwide consistency of enforcement. To address these issues, OECD countries employ a range of mechanisms of institutional interaction: “vertical” (between different administrative levels) as well as “horizontal” (between competent authorities at the same level). The report presents multiple examples of the application of each mechanism in different decentralised systems. It analyses these good practices and suggests several ways to use them to ensure consistency in the implementation of the main elements of enforcement programmes.
    Keywords: compliance assurance, environmental authorities, environmental enforcement, decentralised governance
    JEL: K32 K42 O57 Q58
    Date: 2011–05–31

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