nep-env New Economics Papers
on Environmental Economics
Issue of 2005‒05‒07
ten papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. Revenue Sharing, Natural Resources and Fiscal Equalization By Bob Searle
  2. A Tale of Two Communities: Explaining Deforestation in Mexico By Jennifer Alix-Garcia; Alain de Janvry; Elisabeth Sadoulet
  3. The Effect of Pollution Permit Allocations on Firm-Level Emissions By Meredith Fowlie; Jeffrey Perloff
  4. Incorporating project uncertainty in novel environmental biotechnologies By Linacre, Nicholas A.; Whiting, Steven N.; Angle, J. Scott
  5. Strategies for sustainable land management and poverty reduction in Uganda By Nkoya, Ephraim; Pender, John; Jagger, Pamela; Sserunkuuma, Dick; Kaizzi, Crammer; Ssali, Henry
  6. Measurement of environmental efficiency and productivity: A cross country analysis By Surender Kumar; Madhu Khanna
  7. Environmental Regulation and Technological Innovation with Spillovers By Samiran Banerjee; João E. Gata
  10. Assessing the Determinants of Willingness to Pay for Urban Flood Control: The Role of Locational, Demographic and attitudinal Factors By David E. Clark; Robert Griffin; Vladimir Novoty

  1. By: Bob Searle
    Abstract: A nation’s fiscal transfer system has many facets. Usually, the central government has several objectives in transferring funds to local government . Individual local governments often have objectives that conflict with the central government and with other one another. This paper looks at the relationships between policies associated with reducing vertical fiscal imbalance and the achievement of horizontal fiscal equalization, often a major national (as opposed to a central government) objective. In considering possible ways of reducing VFI, the paper discusses public sector revenue sharing and, in particular, the revenues raised from natural resources, looking at the policy issues that arise and what the considerations are when deciding how these elements of a fiscal transfer system can be combined to meet governments’ overall objectives.
    Keywords: Revenue Sharing, Natural Resources and Fiscal Equalization
    Date: 2004–11–01
  2. By: Jennifer Alix-Garcia (University of California, Berkeley); Alain de Janvry (University of California, Berkeley); Elisabeth Sadoulet (University of California, Berkeley)
    Abstract: Explaining land use change in Mexico requires understanding the behavior of the local institutions involved. We develop two theories to explain deforestation in communities with and without forestry projects, where the former involves a process of side payments to non-members of the community and the latter of partial cooperation among community members. Data collected in 2002 combined with satellite imagery are used to test these theories. For the forestry villages, we establish a positive relationship between the distribution of profits as dividends instead of public goods and forest loss. For communities not engaged in forestry projects, deforestation is largely related to the ability of the community to induce the formation of a coalition of members that cooperates in not encroaching. This happens more easily in smaller communities with experienced leaders. A disturbing result of the analysis is that deforestation is higher when a community engages in forestry projects, even after properly accounting for self-selection into this activity. This suggests that forestry projects as they now exist in Mexico are not sustainable and contribute to the deforestation problem.
    Keywords: deforestation, common property, partial cooperation,
    Date: 2003–11–07
  3. By: Meredith Fowlie (University of California, Berkeley); Jeffrey Perloff (University of California, Berkeley, and Giannini Foundation)
    Abstract: According to the Coase theorem, if property rights to pollute are clearly established and emissions markets nearly eliminate transaction costs, the market equilibrium will be independent of how the permits are initially allocated across firms. Using panel data from Southern California's RECLAIM program, we find that initial allocations are a statistically significant determinant of firm-level emissions. This relationship between allocation and emissions is stronger among firms with relatively high transaction costs. Thus, care must be exercised in the initial allocation of permits to ensure efficiency.
    Keywords: emissions trading, transaction costs,
    Date: 2004–02–01
  4. By: Linacre, Nicholas A.; Whiting, Steven N.; Angle, J. Scott
    Abstract: "Pollution of the environment by metals and organic contaminants is an intractable global problem, with cleanup costs running into billions of dollars using current engineering technologies. The availability of alternative, cheap and effective technologies would significantly improve the prospects of cleaning-up metal contaminated sites. Phytoremediation has been proposed as an economical and ‘green' method of exploiting plants to extract or degrade the contaminants in the soil. To date, the majority of phytoremediation efforts have been directed at leaping the biological, biochemical and agronomic hurdles to deliver a working technology, with scant attention to the economic outlook other than simple estimates of the cost advantages of phytoremediation over other techniques. In this paper we use a deterministic actuarial model to show that uncertainty in project success (the possibility that full clean up may not be realized) may significantly increase the perceived costs of remediation works for decision-makers." Authors' Abstract
    Keywords: biotechnology ,Soil contaminants ,Environmental remediation Economic aspects ,Industrial crop technologies ,
    Date: 2005
  5. By: Nkoya, Ephraim; Pender, John; Jagger, Pamela; Sserunkuuma, Dick; Kaizzi, Crammer; Ssali, Henry
    Abstract: "The government of Uganda, with help from its development partners, is designing and implementing policies and strategies to address poverty, land degradation, and declining agricultural productivity. Land degradation, especially soil erosion and depletion of soil nutrients, is widespread in Uganda and contributes to declining productivity, which in turn increases poverty. The report has four major objectives: (1) to examine the causes of land degradation in Uganda; (2) to identify the determinants of income strategies and land management decisions and their impacts on agricultural productivity, soil erosion, and household income; (3) to assess the trade-offs and complementarities among these different objectives; and (4) to analyze the soil nutrient depletion in eastern Uganda to determine the factors that influence it." from Abstract
    Date: 2004
  6. By: Surender Kumar (National Institute of Public Finance and Policy); Madhu Khanna (University of Illinois)
    Abstract: This paper measures environmental efficiency (EE) and environmental productivity (EP) and analyses differences in these across countries. It explores the macroeconomic factors that could explain these differences and whether these differences can be explained by income levels and by the degree of openness in these countries. The EE index is found to be almost steady over the period 1971-92 for the annex-I countries, while its value is declining for non-annex-I countries over this period. The EP index increased over this period in both groups of countries. In the annex-I countries, EE exhibits an inverted `U' shape with respect to per capita income while it is `U' shaped for the non-annex-I countries. This study also finds that while the EP index increases with income in annex-I countries it is decreasing in the non-annex-I countries. The degree of openness has a significant negative impact on EE and EP in both groups of countries.
    Keywords: Environmental efficiency, Environmental productivity, Distance function, Per capita income, Openness
    Date: 2005–03
  7. By: Samiran Banerjee; João E. Gata
    Abstract: We present a two-period dynamic model of standard setting under asymmetric information to model the attempts by the Califormia Air Resources Board (CARB) in getting car manufacturers to comply with its phase-in of stringent emissions standards. After CARB chooses an initial emissions standard that ?rms are required to comply with, automakers respond by choosing R&D investment and production levels which provide CARB an imperfect signal whether they are more or less capable of complying with the standard. CARB resets the environmental standard and the ?rms once again choose research and production levels. Firms are Cournot duopolists in the product market and can choose to do research noncooperatively or cooperatively in the presence of spillovers. We show that ?rms will behave strategically and underinvest in research both under competitive and cooperative R&D, though the level of underinvestment — the ratchet effect — is greater under cooperative R&D when spillovers are large. We uncover a fundamental con?ict between the incentives of ?rms to do cooperative research and social welfare: that ?rms will want to engage in cooperative (resp. noncooperative) R&D only when spillovers are low (resp. high) while social welfare is greater under noncooperative (resp. cooperative) research.
    Keywords: Car emissions; dynamic technology-forcing regulation; selfregulation; pre-commitment; cooperative R&D; ratchet effect.
    JEL: L5 O3
  8. By: Vicent Alcantara Escolano (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Emilio Padilla Rosa (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona)
    Abstract: En el presente artículo se analiza la evolución de las emisiones de CO2 –el principal gas de efecto invernadero– en las diferentes áreas del mundo, prestando mayor atención a lo ocurrido en la Unión Europea y España. El análisis se centra especialmente en lo sucedido desde 1990, año de referencia en el protocolo de Kioto para la gran mayoría de países. Se investigan también los principales factores determinantes de las emisiones y su evolución utilizando el análisis de los factores de la identidad de Kaya. El análisis permite explicar las grandes diferencias que se dan entre unas zonas y otras y las distintas variaciones que se ha
    Keywords: diferencias entre regiones, evolución de emisiones, identidad de Kaya, protocolo de Kioto.
    Date: 2005–04
  9. By: Riccardo SCARPA (Alma Mater Studiorum-Università di Bologna); Fiorenza SPALATRO (Alma Mater Studiorum-Università di Bologna); Maurizio CANAVARI (Alma Mater Studiorum-Università di Bologna)
    Abstract: This paper reports some preliminary results on a mixed logit random utility analysis of conjoint data from costumers' preferences over agricultural products. The data are collected via a telematic sample representative of Italian households. The survey instrument was implemented via a computer supported system. A multivariate normal full correlation structure is imposed in the mixed logit estimation and the implications of such a taste structure are examined.
    JEL: P Q Z
    Date: 2005–05–03
  10. By: David E. Clark (Department of Economics, Marquette University); Robert Griffin (Department of Communications, Marquette University); Vladimir Novoty (Department of Civil and Enviornmental Engineering, Northeastern University)
    Abstract: The urbanization of urban watersheds can influence flooding risks. Traditional Federal Emergency Management Agency (FEMA) flood risk maps identify 100 year floodplains. These maps are updated infrequently. However, as a community urbanizes, flood risks can change, especially for downstream residents. Thus, one would expect that the willingness to pay (WTP) to prevent the worsening of flooding risk would depend in part on the location of the household in the community and their associated flooding risk. Economists and regional scientists have evaluated the role played by traditional demographic factors. However, attitudinal factors measuring community norms, political philosophy, and other psychological factors that may be unique to the individual have not received the same level of scrutiny. Milwaukee, WI has experienced major flooding events, classified as floods with an expected frequency of once every 100 years or less, in 1986 and most recently in 1997 and 1998. In this study, 1000 residents of the Menomonee watershed in Milwaukee were interviewed in a two-wave panel survey (i.e., telephone interviews took place in 2000 and 2001) to determine their willingness to pay for a referendum which would prevent flood risks from worsening. The interviews queried respondents about their attitudes concerning flooding and ecological risks, political beliefs, information seeking behavior, and other psychological factors unique to the respondent. Information was also gathered on demographic characteristics of the respondent, and also that individuals address. The address was geocoded and hydrologic modeling was used to determine the unique flood risk associated with the residence. A willingness to pay function was estimated using Tobit analysis. Preliminary findings indicated that all three categories of factors influence willingness to pay, with psychological factors and flood risk factors having a relatively strong impact on willingness to pay. Paper prepared for the 2005 Annual Meetings of the Midcontinent Regional Science Association and the Southern Regional Science Association in Arlington VA, April 8-10, 2005. PLEASE DO NOT QUOTE WITHOUT PERMISSION.
    Date: 2005–04

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