nep-env New Economics Papers
on Environmental Economics
Issue of 2005‒10‒04
six papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. Nonlinear Production, Abatement, Pollution and Materials Balance Reconsidered By Rüdiger Pethig
  2. Policy design and the optimal location of forests in Flanders By Ellen Moons; Sandra Rousseau
  3. Market and welfare implications of the reservation price strategy for forest harvest decisions By Gong, Peichen; Löfgren, Karl-Gustaf

  1. By: Rüdiger Pethig
    Abstract: In the environmental economics literature the standard approach of modeling nonlinear production and abatement processes is to treat waste emissions "simply as another factor of production" (Cropper and Oates 1992). That approach doesn't map the materials flow involved completely and hides, moreover, the exact links between production, residuals generation and abatement. This paper shows that production functions with emissions treated as inputs can be reconstructed as a subsystem of a comprehensive production-cum-abatement technology that is in line with the materials-balance principle. In a simple economy with full regard of the materials flow it also explores the consequences for allocative efficiency and efficiency-restoring taxation of multiple and interdependent residuals generated in the transformation processes of production, abatement and consumption. Finally, the paper demonstrates that efficiency may require setting the emissions tax rate above or below conventionally defined marginal abatement cost if the residual subject to abatement is not the only residual causing pollution.
    Keywords: residuals, abatement, pollution, materials balance
    JEL: Q50 Q52
    Date: 2005
  2. By: Ellen Moons (K.U.Leuven-Center for Economic Studies); Sandra Rousseau (K.U.Leuven-Center for Economic Studies)
    Abstract: This paper analyses the current Flemish afforestation policy and shows that this policy is likely to be non-optimal and can be improved. An important step in improving the afforestation policy in Flanders is the selection of the optimal location of a cluster of new forests as a whole. The analysis of the optimal location can provide the regulator with objective criteria, which can be used to develop optimal regulations. It is also worthwhile to consider alternative policies, such as auctions for afforestations projects. To this effect, we investigate several policy options and test these in a real-life example for the creation of new forests in East Flanders.
    Keywords: Afforestation / policy instruments / optimal location
    Date: 2005–08
  3. By: Gong, Peichen (Department of Forest Economics, Swedish University of Agricultural Sciences, SE 901 83 Umeå, Sweden); Löfgren, Karl-Gustaf (Department of Economics, Umeå University)
    Abstract: Previous studies have reported significant gains from adaptive harvest strategies when future timber prices are uncertain. For the final harvest decision in even-aged stand management, the adaptive strategy typically means that a stand is harvested only when the timber price is high, whereas low prices are avoided by postponing the harvest. Such a harvest behavior may have significant impacts on the future timber price process, which in turn affects the landowner’s profits. Moreover, it would certainly affect the timber-based industry and consumers. This paper assesses these impacts in a hypothetical timber market, using the Faustmann rule as a benchmark. The results show that changing from the Faustmann rule to the reservation price strategy (RPS) reduces the harvest and thereby pushes up the price level. The RPS significantly reduces the short-run price variations. In the long-run, both the mean and the variance of the timber price tend to stabilize: Depending on the anticipated price variations underlying the RPS, the expected timber price may be close to, or much higher than, the benchmark level, and the variance of price can be very large or very small. The welfare effect of RPS is small. While the RSP increases the landowners’ profits, it reduces the consumer surplus by approximately the same amount.
    Keywords: Rotation age; reservation price; price uncertainty; timber supply; timber market.
    JEL: D21 Q11 Q12
    Date: 2005–09–29
  4. By: Prof. Purusottam Nayak (North-Eastern Hill University); Prof. S.K. Mishra (North-Eastern Hill University)
    Abstract: The present paper is an attempt to investigate gender issues in the mining sector in India with a view to understand how these issues impact on Sustainable Development imperatives in the mining industry as part of a broader study of the Mining and Minerals for Sustainable Development initiative. Because of the male-dominated nature of the industry, in trying to better understand the gender issues at play, the study focuses not only on women’s experiences but also analyses how they are utterly neglected within the industry. It considers how mining industry contributes to sustainable development by promoting women’s economic advancement and reducing women’s poverty, by ensuring greater involvement of women in the mining sector.
    Keywords: Gender and Suistainable Development in Mining
    JEL: A
    Date: 2005–09–23
  5. By: Prof. Purusottam Nayak (North-Eastern Hill University)
    Abstract: Inspired by the worldwide debate on the issue, the present paper is a humble attempt to test the nexus between poverty and environmental degradation in rural India based on secondary sources of data. Though the study does not reveal any definite pattern of linkage in the context of rural India it examines the probable causes of failure in the link, highlights the status of poverty and environmental degradation across States and over time and concludes by highlighting the urgent need for undertaking micro level studies in the North Eastern States based on primary survey for policy intervention.
    Keywords: Poverty and Environmental Degradation
    JEL: A
    Date: 2005–09–26
  6. By: Prof. Purusottam Nayak (North-Eastern Hill University)
    Abstract: Water is one of the most vital natural resources used not only for direct consumption purposes but also as an input in the process of production in different sectors of the economy of which agriculture is the most important. One of the salient characteristics of water is that in addition to the fact of its being an indispensable input it works as an augmenting input in agriculture when it is combined with other inputs of production such as improved seeds (HYV) and fertilizer. Thus it has a tremendous role to play in agriculture in increasing both production and productivity. It helps in bringing wasteland under crops, in adopting multiple cropping practices and in raising greater quantities of the same crop on the same plot. Most importantly, irrigation generates an element of stability in agriculture by partly freeing it from the vagaries of monsoon. The present work in this regard is an attempt to study the role and use of water in the agricultural sector in the North Eastern States.
    Keywords: Water Resource and Agricultural Production
    JEL: A
    Date: 2005–09–26

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