nep-ene New Economics Papers
on Energy Economics
Issue of 2011‒09‒05
25 papers chosen by
Roger Fouquet
Basque Climate Change Centre, Bilbao, Spain

  1. Lessons from the History of Independent System Operators in the Energy Sector, with applications to the Water Sector By Pollitt, M. J.
  2. Separating Environmental Efficiency into Production and Abatement Efficiency – A Nonparametric Model with Application to U.S. Power Plants By Hampf, Benjamin
  3. Is Market-Oriented Reform Producing a “Two-Track” Europe? Evidence from Electricity and Telecommunications By Clifton, Judith; Díaz-Fuentes, Daniel; Fernández Gutiérrez, Marcos; Revuelta, Julio
  4. Efficient storage capacity in power systems with thermal and renewable generation By Bjarne Steffen; Christoph Weber
  5. Regional spillover effects of renewable energy generation in Italy By Natalia Magnani; Andrea Vaona
  6. Will Electric Cars Transform the U.S. Market? By Lee, Henry; Lovellette, Grant
  7. Land Use Change Impacts of Biofuels: Near-VAR Evidence from the US By Giuseppe Piroli; Pavel Ciaian; d'Artis Kancs
  8. Recalculating Default Values for Palm Oil By Gernot Pehnelt; Christoph Vietze
  9. Iraqi Politics and Implications for Oil and Energy By O'Sullivan, Meghan
  10. Oil rents, governance quality, and the allocation of talents in developing countries By Christian EBEKE; Luc Désiré OMGBA
  11. What is driving oil futures prices? Fundamentals versus speculation By Isabel Vansteenkiste
  12. Dynamic relationships between the price of oil, gold and financial variables in Japan: a bounds testing approach By Le, Thai-Ha; Chang, Youngho
  13. The Trade Effects of Phasing Out Fossil-Fuel Consumption Subsidies By Jean-Marc Burniaux; Jean Chateau; Jehan Sauvage
  14. Optimal Taxes on Fossil Fuel in General Equilibrium By Mikhail Golosov; John Hassler; Per Krusell; Aleh Tsyvinski
  15. Vietnam's New Environmental Tax Law: What Will It Cost? Who Will Pay? By Coxhead, Ian; Chan, Nguyen Van
  16. Embodied Carbon Tariffs By Christoph Böhringer; Jared C. Carbone; Thomas F. Rutherford
  17. Environmental Management Policy under International Carbon Leakage By Kiyono, Kazuharu; Ishikawa, Jota
  18. Trade in Services Related to Climate Change: An Exploratory Analysis By Ronald Steenblik; Massimo Geloso Grosso
  19. Why Europe has become environmentally cleaner: Decomposing the roles of fiscal, trade and environmental policies By Lopez, Ramón; Palacios, Amparo
  20. Climate change, rural livelihoods and agriculture (focus on food security) in Asia-Pacific region By S. Mahendra Dev
  21. Climate Change, Natural Disasters and Migration: An Empirical Analysis in Developing Countries By Drabo, Alassane; Mbaye, Linguère Mously
  22. Political influence on non-cooperative international climate policy By Wolfgang Habla; Ralph Winkler
  23. Environmental performance and climate policy By Brännlund, Runar; Lundgren, Tommy; Marklund, Per-Olov
  24. Law, Sustainability, and the Pursuit of Happiness By Farber, Daniel A.
  25. International Affairs and the Public Sphere By Walt, Stephen M.

  1. By: Pollitt, M. J.
    Abstract: This paper examines the lessons from independent transmission system operators in energy in the context of the potential introduction of an independent system operator in the water sector. A key lesson from the energy sector is that there is a basic choice between having an independent system operator (ISO) and an independent transmission system operator (ITSO) covering two or more existing company areas. ISOs do not own any wires or pipes, ITSOs do own wires or pipes. We begin by examining the nature of system operation arrangements in different countries, focussing on different ways that non-discriminatory access to monopoly transmission assets can be facilitated. We go on to discuss the particular functions of the ISO, focussing on the US, with regard to controlling the system and operating the power markets. We also detail the costs of system operation. Next, we focus on incentive issues and the governance of ISOs around the world. We outline an ideal model for an electricity system operator and examine the extent to which systems in the US and UK conform to the ideal. We also explore the issue of pricing access to the system and how system operation costs are paid for. Then, we look at the evolving role of system operators and how they might be evaluated. Finally we apply the learning from system operation in energy across to the UK water sector and offer some interim conclusions.
    JEL: L23 L51 L94
    Date: 2011–08–24
  2. By: Hampf, Benjamin
    Abstract: In this paper we present a new approach to evaluate the environmental efficiency of decision making units. We propose a model that describes a two-stage process consisting of a production and an end-of-pipe abatement stage with the environmental efficiency being determined by the efficiency of both stages. Taking the dependencies between the two stages into account, we show how nonparametric methods can be used to measure environmental efficiency and to decompose it into production and abatement efficiency. For an empirical illustration we apply our model to an analysis of U.S. power plants.
    Keywords: nonparametric efficiency analysis, pollution abatement, network DEA, materials balance condition, fosil-fueled power plants
    Date: 2011–08
  3. By: Clifton, Judith; Díaz-Fuentes, Daniel; Fernández Gutiérrez, Marcos; Revuelta, Julio
    Abstract: The European Commission has formally recognised that adequate provision of basic household services, including energy, communications, water and transport, is key to ensuring equity, social cohesion and solidarity. Yet little research has been done on the impact of the reform of these services in this regard. This article offers an innovative way to explore such questions by analysing and contrasting stated and revealed preferences on citizen satisfaction with and expenditure on two services, electricity and telecommunications, in two large countries, Spain and the United Kingdom. In telecommunications, but to a much lesser extent in electricity, we find evidence that reform has led to a “two-track” Europe, where citizens who are elderly, not working or the less-educated behave differently in the market, with the result that they are less satisfied with these services than their younger, working, better-educated, counterparts.
    Keywords: Public Service; Electricity; Telecommunications; Revealed preferences; Consumer Behaviour; Vulnerable Consumers. European Union. Regulation
    JEL: L96 D18 L51 D12 L94 L98
    Date: 2011
  4. By: Bjarne Steffen; Christoph Weber (Chair for Management Sciences and Energy Economics, University of Duisburg-Essen)
    Abstract: Power systems with high shares of wind and solar power have to balance their intermittent nature. Pumpedâ€hydro storage plants can provide the required flexibility, while thermal backup plants offer an alternative. This paper proposes a model based on peakâ€loadâ€pricing theory to describe the efficient technology portfolio. Drawing on a load duration curve, we derive the efficient storage capacity and discuss its dependence on cost parameters. It is shown that renewable generation affects the efficient storage capacity by changing the shape of the residual load duration curve, while limited time periods with renewable generation in excess of load do not necessarily affect the level of storage. A case study for Germany applies the model and highlights the impact of CO2 prices on storage efficiency.
    Keywords: electricity storage, peakâ€loadâ€pricing, renewable energy
    JEL: C61 D24 L94 Q41 Q42
    Date: 2011–08
  5. By: Natalia Magnani (University of Trento, Dipartimento di Sociologia e Ricerca Sociale); Andrea Vaona (Department of Economics (University of Verona))
    Abstract: In a multivariate setting, we document that renewable energy generation has a positive impact on economic growth at the regional level in Italy. We do so by adopting panel data unit-root and cointegration tests as well as Granger non-causality tests relying on the system GMM estimator. Our results are interpreted in three ways. Renewable energy generation alleviates balance-of-payments constraints and reduces the exposure of a regional economy to the volatility of the price of fossil fuels and to negative environmental and health externalities deriving from non-renewable energy generation. Therefore, our evidence supports policies promoting renewable energy generation.
    Keywords: renewable energy generation, economic growth, panel unit root and cointegration tests, Granger causality, Italy, panel error correction model, regions.
    JEL: O13 O18 R11 N70 Q42 Q43
    Date: 2011–08
  6. By: Lee, Henry (Harvard University); Lovellette, Grant (Harvard University)
    Abstract: For the past forty years, United States Presidents have repeatedly called for a reduction in the country's dependence on fossil fuels in general and foreign oil specifically. Stronger efficiency standards and higher taxes on motor fuels are a step in this direction, but achieving even greater reductions in oil consumption will require changing the way Americans power their transportation system. Some officials advocate the electrification of the passenger vehicle fleet as a path to meeting this goal. The Obama administration has, for example, embraced a goal of having one million electric-powered vehicles on U.S. roads by 2015, while others proposed a medium-term goal where electric vehicles would consist of 20% of the passenger vehicle fleet by 2030--approximately 30 million electric vehicles. The technology itself is not in question--many of the global automobile companies are planning to sell plug-in hybrid electric vehicles (PHEVs) and/or battery electric vehicles (BEVs) by 2012. The key question is, will Americans buy them? The answer depends on four additional questions: 1. Is the cost of purchasing and operating an electric vehicle more or less expensive than the cost of a comparable conventional gasoline-powered vehicle? 2. Are the comparative costs likely to change over the next twenty years? 3. Do electric vehicles provide the same attributes as conventional cars, and if not, do the differences matter? 4. Will electric car owners be able to access the electricity needed to power their vehicles? This paper attempts to answer these four questions.
    Date: 2011–08
  7. By: Giuseppe Piroli; Pavel Ciaian; d'Artis Kancs
    Abstract: The present paper studies the land use change impacts of biofuels. We test the theoretical hypothesis, which say that biofuels cause changes in land use both directly and indirectly, by applying time-series analytical mechanisms to five major traded agricultural commodities, the cultivated area of agricultural land, and the crude oil price. Our data consists of yearly observations extending from 1950 to 2007 for the US. The empirical findings confirm that prices for crude oil and cultivated agricultural land are interdependent: an increase in oil price by 1 dollar/barrel increases land use between 45 and 56 thousand hectares.
    Keywords: Near-VAR, energy, bioenergy, prices, land use, biofuel support policies.
    JEL: C14 C22 C51 D58 Q11 Q13 Q42
    Date: 2011–08–11
  8. By: Gernot Pehnelt (GlobEcon); Christoph Vietze (Friedrich-Schiller-University Jena, Germany)
    Abstract: On 05 December 2010, the Renewable Energy Directive (RED) came into force in the EU. Member States are still working to fully transpose the Directive into national law and establish a framework for achieving their legally binding greenhouse gas (GHG) emission reductions. However, governments got off to a slow start as debate continues on the validity of the directives foundations including the default values used to measure the sustainability of biofuels. Only sustainable biofuels can be counted towards Member State targets. This, as a matter of principle, makes sense with respect to the very aim of renewable energy policies. On the other hand, the vague and distortive formulation and values regarding what is to be classified as "sustainable" have negatively impacted the perception of the underlying scientific base and methodologies as well as the reliability in the European biofuels sector. This uncertainty and the ongoing controversial debates are affecting investment and progress in the biofuel sector not just in Europe but all over the world. Producers of soybeans in the US, sugarcane in Brazil and palm oil in Malaysia and Indonesia as well as European importers and end-users of these products have all been sharply critical of the default values, citing significant variations in calculations that undermine the credibility of the values contained in the Directive. Given the remarkable difference between the calculation of carbon reduction performance of palm oil based biofuel by the EU and a range of scientific studies which we documented in an earlier paper (Pehnelt and Vietze 2009), we are re-calculating GHG emissions saving potentials for palm oil biodiesel in order to further assess the carbon footprint of palm oil to overcome the lack of transparency in existing publications on the issue and EU regulations governing the biofuel feed-stocks. The aim of this paper is to calculate realistic and transparent scenario based CO2-emission values for the GHG emission savings of palm oil fuel compared with fossil fuel. Using the calculation scheme proposed by the Renewable Energy Directive (RED), we derive a more realistic overall default value for palm oil diesel by using current input and output data of biofuel production (e.g. in South-East Asia) and documenting every single step in detail. We calculate different scenarios in which reliable data on the production conditions (and the regarding emission values during the production chain) of palm oil diesel are used. Our conservative calculations based on the Joint Research Centre's (JEC 2011) background data and current publications on palm oil production result in GHG emissions saving potentials of palm oil based biodiesel fairly above the 35% threshold. We cannot reproduce the EU's GHG saving values for palm oil. Rather, our results confirm the higher values obtained by other studies mentioned in our last paper (Pehnelt and Vietze 2009) and elsewhere in this study. Our results indicate default values for the GHG emission savings potential of palm oil biodiesel not only way beyond the 19 percent default value published in RED but also beyond the 35 percent threshold. Our findings conclude that the more accurate default value for palm oil feedstock for electricity generation to be 52%, and for transportation biodiesel between 38.5% and 41%, depending on the fossil fuel comparator. Our results confirm the findings by other studies and challenge the official default values published in RED. As indicated by lawsuits filed by environmental NGOs against the Commission for greater transparency related to the assessment of biofuels, the process has been severely lacking in full disclosure of metrics used to achieve the values contained in the Renewable Energy Directive. As a result, the reliability of the Directive to support the EU's low-carbon ambitions is being undermined, exposing the EU and Commission to charges of trade discrimination and limiting the ability of Member States to achieve their legally binding GHG emission reductions. This analysis demonstrates that a full review of the values contained in the Directive should be undertaken and the values revised to ensure their accuracy, and raises questions as to the method that the values were originally established. Were outside parties consulted, including the industries directly affected by the assessments in the Directive? Were these values peer reviewed? In light of grievances expressed by producers throughout the world, including US soybean growers, Brazilian sugarcane farmers, and Malaysian and Indonesian palm growers, ensuring the Directive does not discriminate against imports is critical to the long-term efforts in the EU to reduce GHG emissions.
    Keywords: Biofuel, Palm Oil, Biodiesel, RED, Renewable Energy Directive, Default Values, GHG-emissions
    JEL: F14 F18 O13 Q01 Q15 Q27 Q56 Q57
    Date: 2011–09–01
  9. By: O'Sullivan, Meghan (Harvard University)
    Abstract: Iraq's ability to reach its energy potential should be of broad regional and international concern. Iraq could be poised for a dramatic transformation, one in which it finally escapes the political and technical constraints that have kept it producing less than 4 percent of the world's oil, despite having the third-largest conventional oil reserves in the world. Should Iraq meet its ambitions to bring nearly 10 million more barrels of oil on line by 2017, it would constitute the largest ever capacity increase in the history of the oil industry. Should Iraq, more probably, bring only half this capacity to market, it would still represent a massive achievement. Translating Iraq's energy promise into reality is in the shared interest of Iraq, the United States, Japan, and the international community more broadly. At the highest level, the health of Iraq's energy sector--currently the source of more than 90 percent of revenues accrued by the state--is a major determinant in setting Iraq's overall trajectory. A booming energy economy is not a guarantee of a prosperous, democratic, and stable Iraq; it could also be the hallmark of an Iraq that has returned to authoritarianism or even tyranny. But it is difficult to imagine a prosperous, democratic, and stable Iraq that does not claim a thriving energy industry among its assets.
    Date: 2011–08
  10. By: Christian EBEKE; Luc Désiré OMGBA
    Abstract: Evidence shows that the allocation of talented people is not neutral for growth. Thus, a country with a large population of law concentrators tends to develop rent-seeking activities that reduce growth. A country with a large population of engineers tends to foster innovation and strengthen growth. But what determines the allocation of talents? This question has not yet been empirically examined. This paper contributes to fill this gap. Based on a sample of 69 developing countries the paper highlights that oil rents determine the allocation of talents but this effect is not linear. It largely depends on the quality of governance. While, oil rents in well governed countries tend to orient talents towards productive activities, oil rents in badly governed countries tend to orient talents towards rent-seeking activities. These results are robust to different specifications, datasets on governance quality and estimation methods.
    Keywords: Rent-seeking; occupational choice; oil rents
    JEL: Q32 J24 D72
    Date: 2011
  11. By: Isabel Vansteenkiste (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.)
    Abstract: In this paper we analyse the relative importance of fundamental and speculative demand on oil futures price levels and volatility. In a first step, we present a theoretical heterogeneous agent model of the oil futures market based on noise trading. We use the model to study the interaction between the oil futures price, volatility, developments in underlying fundamentals and the presence of different types of agents. We distinguish between commercial traders (who are physically involved in oil) and non-commercial traders (who are not involved physically with oil). Based on the theoretical model we find that a multiplicity of equilibria can exist. More specifically, on the one hand, if we have high fundamental volatility, high uncertainty about future oil demand, and the oil price deviation from fundamentals or the price trend is small, we will only have commercial traders entering the market. On the other hand, if a large unexpected shock to the oil spot price occurs then all traders will enter the market. In a next step, we empirically test the model by estimating a markov-switching model with time-varying transition probabilities. We estimate the model over the period January 1992 - April 2011. We find that up to 2004, movements in oil futures prices are best explained by underlying fundamentals. However, since 2004 regime switching has become more frequent and the chartist regime has been the most prominent. JEL Classification: D84, Q33, Q41, G15.
    Keywords: Markov switching models, oil prices, speculation.
    Date: 2011–08
  12. By: Le, Thai-Ha; Chang, Youngho
    Abstract: This study employs the bounds testing approach to cointegration to investigate the relationships between the prices of two strategic commodities: gold and oil and the financial variables (interest rate, exchange rate and stock price) of Japan – a major oil-consuming and gold-holding country. Our results suggest that the price of gold and stock, among others, can help form expectations of higher inflation over time. In the short run, only gold price impacts the interest rate in Japan. Overall the findings of this study could benefit both the Japanese monetary authority and investors who hold the Japanese yen in their portfolios. For instance, our findings imply that the optimal choice in a long term for those investors who buy the Japanese yen would be to include either gold or oil or both in their portfolios.
    Keywords: oil price; gold price; interest rate; exchange rate; stock price; bounds test to cointegration
    JEL: C32 G11 F31 E4
    Date: 2011–08–19
  13. By: Jean-Marc Burniaux; Jean Chateau; Jehan Sauvage
    Abstract: Quoting a joint analysis undertaken by the OECD and the IEA, G-20 leaders committed in September 2009 to “rationalize and phase out over the medium term inefficient fossil-fuel subsidies that encourage wasteful consumption.” This report draws on previous OECD work to assess the impact on international trade of phasing out fossil-fuel consumption subsidies provided mainly by developing and emerging economies. The analysis employed the OECD’s ENV-Linkages General-Equilibrium model and used the IEA’s estimates of consumer subsidies, which measure the gap existing between the domestic prices of fossil fuels and an international reference benchmark. It shows that a co-ordinated multilateral removal of fossil-fuel consumption subsidies over the 2013-2020 period would increase global trade volumes by a very small amount (0.1%) by 2020. While seemingly negligible, this increase hides the large disparities that are observed across countries (or regions) and products. Under the central scenario, which assumes a multilateral subsidy removal over the 2013-2020 period, trade in natural gas would be most affected, with a 6% decrease by 2020. A reduction in the volume of both imports and exports from oil-exporting countries would be partly compensated by an expansion of trade flows (both imports and exports) involving OECD countries. This reallocation of trade flows would be most prevalent in products of energy-intensive industries. Looking beyond 2020, the contribution of oil-exporting countries to total world trade volumes would continue to be lower in 2050 than under the reference scenario.
    Keywords: climate change, trade and environment, greenhouse gas emissions, general equilibrium models, fossil-fuel subsidies
    JEL: F17 F18 H23 O41 Q43 Q56
    Date: 2011–08–26
  14. By: Mikhail Golosov; John Hassler; Per Krusell; Aleh Tsyvinski
    Abstract: We analyze a dynamic stochastic general-equilibrium (DSGE) model with an externality through climate change from using fossil energy. A central result of our paper is an analytical derivation of a simple formula for the marginal externality damage of emissions. This formula, which holds under quite plausible assumptions, reveals that the damage is proportional to current GDP, with the proportion depending only on three factors: (i) discounting, (ii) the expected damage elasticity (how many percent of the output flow is lost from an extra unit of carbon in the atmosphere), and (iii) the structure of carbon depreciation in the atmosphere. Very importantly, future values of output, consumption, and the atmospheric CO2 concentration, as well as the paths of technology and population, and so on, all disappear from the formula. The optimal tax, using a standard Pigou argument, is then equal to this marginal externality. The simplicity of the formula allows the optimal tax to be easily parameterized and computed. Based on parameter estimates that rely on updated natural-science studies, we find that the optimal tax should be a bit higher than the median, or most well-known, estimates in the literature. We also show how the optimal taxes depend on the expectations and the possible resolution of the uncertainty regarding future damages. Finally, we compute the optimal and market paths for the use of energy and the corresponding climate change.
    JEL: E13 E17 E6 H23 Q28 Q4 Q5
    Date: 2011–08
  15. By: Coxhead, Ian (University of WI); Chan, Nguyen Van (National Economics University, Hanoi)
    Abstract: We examine the effects of a proposed environmental tax in a small open developing economy, using an applied general equilibrium model linked to a household survey database. The burden of the tax, applied primarily to fossil fuels, is passed forward by non-traded industries and backward by industries selling into the world market. It causes efficiency and competitiveness losses equivalent to those of a real exchange rate appreciation, and since export industries are in general highly labor-intensive, is regressive and thus poverty-increasing. The budget-neutral use of increased tax revenues to raise spending on anti-poverty programs can offset most of the losses of poor households, but does not create new jobs. The extent of overall losses and their distribution is sensitive to some parameters, such as labor supply response, about which little is currently known in a developing-country context.
    JEL: D58 H23 O53 Q52
    Date: 2011–08
  16. By: Christoph Böhringer; Jared C. Carbone; Thomas F. Rutherford
    Abstract: In a world where the prospects of a global agreement to control greenhouse gas emissions are bleak, the idea of using trade policy as an implicit regulation of foreign emission sources has gained many supporters in countries contemplating unilateral climate policies. Embodied carbon tariffs tax the direct and indirect carbon emissions embodied in imported goods. The appeal seems obvious: as OECD countries are, on average, large net importers of embodied emissions from non-OECD countries, carbon tariffs could substantially extend the reach of OECD climate policies. We investigate this claim by simulating the effects of embodied carbon tariffs with a computable general equilibrium model of global trade and energy use. We find that embodied carbon tariffs do effectively reduce carbon leakage. However, the scope for improvements in the global cost-effectiveness of unilateral climate policy is limited. The main welfare effect of the tariffs is to shift the burden of OECD climate policy to the developing world.
    JEL: F18 H23 Q54 Q56
    Date: 2011–08
  17. By: Kiyono, Kazuharu; Ishikawa, Jota
    Abstract: This paper studies environmental management policy when two fossil-fuel-consuming countries non-cooperatively regulate greenhouse- gas emissions through emission taxes or quotas. The presence of carbon leakage caused by fuel-price changes a.ects the tax-quota equivalence. We explore each country.s incentive to choose an environment regula- tion instrument within a framework of a two-stage policy choice game and .nd subgame-perfect Nash equilibria. This sheds a new light on the question of why adopted policy instruments could be di.erent among countries. We also analyze the welfare e.ect of creating an interna- tional market for emission permits. International trade in emission permits may not bene.t the fuel-consuming countries.
    Keywords: global warming, carbon leakage, emission tax, emission quota, tax-quota equivalence, emission trading
    JEL: F18
    Date: 2011–08
  18. By: Ronald Steenblik; Massimo Geloso Grosso
    Abstract: The deployment of technologies for the mitigation of greenhouse-gases (GHGs) is dependent on a wide range of services, including those that are imported. Business services, telecommunications services, and construction and related engineering services figure prominently. This paper aims to develop a better understanding of the specific roles that these services play in helping to mitigate GHG emissions, and to identify the major suppliers and consumers. It presents examples and mini-case studies that explore how particular services complement the deployment of GHG mitigating technologies. With respect to the four modes of services trade, instances of mode 1 (cross-border trade) trade taking place over the Internet appear to be more commonplace, often complementing movement of personnel. Examples of mode 2 trade (consumption abroad) typically involve training of a client’s personnel. Mode 3 trade (commercial presence) is critical for the provision of services that entail construction and operation of production facilities. The temporary movement of natural persons (mode 4) is also common, especially where expert judgement or supervision is required for a short period of time.
    Keywords: trade policy, environmental goods, environmental services, climate change, Business service, trade and environment
    JEL: F18 L84 L86 N50 Q42 Q56
    Date: 2011–05–26
  19. By: Lopez, Ramón; Palacios, Amparo
    Abstract: This paper systematically examines the role of fiscal policy, trade and energy taxes on environmental quality in Europe using disaggregated data for 12 European countries over the 1995-2008 period. It uses a methodology that obtains estimates mostly free of time-varying omitted variable biases. Controlling for the scale effect, our estimations show that fiscal policies and energy taxes are effective in reducing the concentration of certain pollutants through different mechanisms. We also find that trade has a direct effect on production pollutants, which is most likely due to an output composition effect, but not on consumption pollutants. Increasing the share of fiscal spending and shifting the emphasis of fiscal spending towards public goods and against non-social subsidies has a surprising and unintended beneficial effect on the concentrations of ozone, perhaps the most difficult to control pollutant. Finally, energy taxes appear to have an important effect in reducing nitrogen dioxide pollution but it has no effect on ozone and sulfur dioxide.
    Keywords: government spending; pollutions; public goods; taxes
    JEL: H40 H50 O13
    Date: 2011–08
  20. By: S. Mahendra Dev (Indira Gandhi Institute of Development Research)
    Abstract: Climate change is a major challenge for agriculture, food security and rural livelihoods for billions of people including the poor in the Asia-Pacific region. Agriculture is the sector most vulnerable to climate change due to its high dependence on climate and weather and because people involved in agriculture tend to be poorer compared with urban residents. More than 60 per cent of the population is directly or indirectly relying on agriculture as a source of livelihood in this region. Agriculture is part of the problem and part of the solution. Asian agriculture sector is already facing many problems relating to sustainability. To those already daunting challenges, climate change adds further pressure on agriculture adversely affecting the poor. The climate change is already making adversely impact on the lives of the population particularly the poor. It is already evident in a number of ways. Consistent warming trends and more frequent and intense extreme weather events such as droughts, cyclones, floods, and hailstorms have been observed across Asia and the Pacific in recent decades. The objective of this paper is to identify climate change related threats and vulnerabilities associated with agriculture as a sector and agriculture as people's livelihoods (exposure, sensitivity, adaptive capacity). The paper analyses the connections between the nature of human action as drivers of threats as well as opportunities for sustainable agriculture and better human development outcomes. Broadly, it examines the impact of climate change on rural livelihoods, agriculture, food security. It discusses the options for adaptation and mitigation and requirements for implementation at local, national and international level of these measures.
    Keywords: climate change, adaptation, mitigation, Asia-Pacific region, agriculture
    JEL: Q10 Q54 R11
    Date: 2011–08
  21. By: Drabo, Alassane (CERDI, University of Auvergne); Mbaye, Linguère Mously (CERDI, University of Auvergne)
    Abstract: The aim of this paper is to assess the relationship between natural disasters caused by climate change and migration by interesting in the migration rates and the education level in developing countries. Many studies such as the Stern review (2007) or the Intergovernmental Panel on Climate Change (IPCC, 2007) predict an intensification of climate change for the following years. Thus, climate change has taken an essential place in the world governance. The relationship between climate change, natural disasters and migration is crucial because the management of supplementary migratory flows due to environmental degradation make the migration issues coming from developing countries more complicated for developed countries. We investigate this relationship by using panel data from developing countries in order to see the effect of the natural disasters on migration rates and according to the educational level. Estimations are made with country fixed effects estimator through an accurate econometric model. The results confirm previous studies, namely natural disasters are positively associated with emigration rates. But beyond this result, the main contribution of this paper is to show that natural disasters due to climate change exacerbate brain drain in developing countries by involving the migration of high skilled people when countries are the most vulnerable and need an important support from the skilled workers to deal with natural disasters damages. The paper also shows that this effect is different according to the geographical position.
    Keywords: climate change, natural disasters, migration
    JEL: O15 Q54
    Date: 2011–08
  22. By: Wolfgang Habla; Ralph Winkler
    Abstract: We analyze non-cooperative international climate policy in a setting of political competition by national interest groups. In the first stage, countries decide whether to set up an international emission permits market, which only forms if it is supported by all countries. In the second stage, countries non-cooperatively decide on the number of tradable or non-tradable emission allowances, depending on the type of regime. In both stages, special interest groups try to sway the government in their favor. We find that (i) both the choice of regime and the level of aggregate emissions only depend on the aggregate levels of organized stakes in all countries and not on their distribution among individual interest groups, and (ii) an increase in lobbying influence by a particular lobby group may backfire by inducing a change towards the less preferred regime.
    Keywords: non-cooperative climate policy; political economy; emissions trading; organization
    JEL: D72 H23 H41 Q58
    Date: 2011–08
  23. By: Brännlund, Runar (Centre for Environmental and Resource Economics, Department of Economics, Umeå University, Sweden); Lundgren, Tommy (Centre of Environmental and Resource Economics, Umeå School of Business, Umeå University, Sweden); Marklund, Per-Olov (Centre for Environmental and Resource Economics, Centre for Regional Science, Umeå University, Sweden)
    Abstract: This study’s ultimate goal is to analyze environmental performance (EP) at firm level and the effectiveness of environmental policy along with other possible determinants. Especially, the empirical analysis aims at exploring the relationship between the actual EP of firms in terms of CO2 emissions per output unit, and one aspect of Swedish environmental policy, the CO2- tax. Since Sweden was the first country to introduce a specific CO2-tax in 1991 we believe that the Swedish case may serve as an appropriate “test bench” for analyzing EP and the effectiveness of environmental policy in general. To achieve our objective we use a panel data of Swedish manufacturing spanning over the period 1990-2004. The results suggest that EP has improved in all sectors of manufacturing. We also see that production increases while emissions decrease in many sectors, indicating a decoupling of economic growth and environmental degradation. Furthermore, firms’ EP responds to changes in the CO2-tax and fossil fuel price, but is more sensitive to the tax, indicating different EP behavior among firms depending on why the cost of fossil fuels change. Several sectors also display a positive tendency over time in EP, which may suggest that EP is to some extent stimulated by an overall boost in environmental awareness in society and firms.
    Keywords: CO2 emissions; CO2-tax; environmental performance
    Date: 2011–08–25
  24. By: Farber, Daniel A.
    Abstract: Environmental law focuses on regulating the production of energy and goods. Less attention has been given to reducing the environmental footprint of consumption. This Article brings together several strands of research, including psychological and economic research on subjective wellbeing; research on energy efficiency; writings by urban planners on sustainable communities; and recent work on individual behavior and sustainability. The conclusion, in a nutshell, is that changes in consumption of goods and energy, assisted by improvements in urban design and transportation infrastructure, can significantly reduce energy use and environmental harm. A variety of legal tools are available to promote these changes. Remarkably, many of the steps needed for sustainability can actually improve quality of life, adding to individual satisfaction. Thus, sustainability for society and the pursuit of individual happiness need not be at odds.
    Keywords: Administrative Law; Economics; Energy and Utilities Law; Environmental Law; Land Use Planning; Law and Economics; Natural Resources Law; Oil, Gas, and Mineral Law; Public Law and Legal Theory; Water Law, Environmental Law
    Date: 2011–08–30
  25. By: Walt, Stephen M. (Harvard University)
    Abstract: Most social scientists would like to believe that their profession contributes to solving pressing global problems. There is today no shortage of global problems that social scientists should study in depth: ethnic and religious conflict within and between states, the challenge of economic development, terrorism, the management of a fragile world economy, climate change and other forms of environmental degradation, the origins and impact of great power rivalries, the spread of weapons of mass destruction, just to mention a few. In this complex and contentious world, one might think that academic expertise about global affairs would be a highly valued commodity. One might also expect scholars of international relations to play a prominent role in public debates about foreign policy, along with government officials, business interests, representatives of special interest groups, and other concerned citizens. Yet the precise role that academic scholars of international affairs should play is not easy to specify. Indeed, there appear to be two conflicting ways of thinking about this matter. On the one hand, there is a widespread sense that academic research on global affairs is of declining practical value, either as a guide to policymakers or as part of broader public discourse about world affairs. On the other hand, closer engagement with the policy world and more explicit efforts at public outreach are not without their own pitfalls. Scholars who enter government service or participate in policy debates may believe that they are "speaking truth to power," but they run the risk of being corrupted or co-opted in subtle and not-so-subtle ways by the same individuals and institutions that they initially hoped to sway. The remainder of this essay explores these themes in greater detail.
    Date: 2011–08

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