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on Environmental Economics |
| By: | Martin Gassebner; Michael Lamla; Jan-Egbert Sturm |
| Abstract: | Recent literature proposes many variables as significant determinants of pollution. This paper gives an overview of this literature and asks which of these factors have an empirically robust impact on water and air pollution, i.e. do not depend upon the conditioning information set. For this, we apply Extreme Bound Analysis (EBA) on a panel of 208 countries covering the period 1960–2001. We find supportive evidence on the existence of the environmental Kuznets curve. Furthermore, mainly demographic variables and variables capturing the economic structure of a country contribute in explaining air and water pollution. |
| Keywords: | pollution, environment, sensitivity analysis, environmental Kuznets curve |
| JEL: | C52 F18 L60 O13 Q53 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1699&r=env |
| By: | Kristin Bartenstein; Sophie Lavallée |
| Abstract: | The Rio Earth Summit, held in Rio de Janeiro in 1992, certainly stands out as an unprecedented turnabout in planetary awareness of environmental concerns and the need for reconciliating the three axes of sustainable development, namely economic, social and environmental issues. The Rio Declaration sets forth 27 principles intended to orient the achievement of this vast project for humanity. Among these principles, the eighth one encourages States to“[…] reduce and eliminate unsustainable patterns of production and consumption[…]." By informing consumers of the net environmental impact of a product, the ecolabel may become a tool for sustainable development. Might it also be, however, a tool for green protectionism? This issue is inevitable owing to the multiplication of ecolabel programs worldwide since the phenomenal expansion of ecolables, applauded by some yet raising doubts among others who are questioning the conformity of these ecological labels with the international business rules set forth by the World Trade Organization (WTO). Not only is this issue a current one, it has also remained the subject of intense discussions within WTO for several years now. Our paper attempts to analyze the conformity of the ecolabel programs with the relevant provisions of WTO accords. As our analysis demonstrates, the very nature of the ecolabels, as they are currently designed, is such that they should not violate the rules of law governing these accords. Yet, the existence of a debate on the conformity of ecolables with international business rules is symptomatic of a non-so-negligible political and economic conflict concerning this issue. In the final analysis, we conclude that discussions should continue, but at another level, namely within the harmonization of the rules governing ecolabel programs in order to minimize the political and economic problems that ecolabels may likely cause. <P>Le Sommet de la Terre, tenu à Rio de Janeiro, en 1992, a certainement marqué un tournant sans précédent dans la prise de conscience des enjeux environnementaux de la planète et de la nécessité de concilier les trois pôles du développement durable que sont l’économique, le social et l’environnement. La Déclaration de Rio énonce 27 principes devant guider la réalisation de ce grand dessein pour l’humanité. Parmi ces derniers, le principe 8 encourage les États à « […] réduire et éliminer les modes de production et de consommation non viables ». En informant le consommateur de l’impact environnemental net d’un produit, l’écolabel peut devenir un outil du développement durable. Cependant, peut-il aussi être un outil du protectionnisme vert? Cette question s’impose devant la multiplication des programmes d’écolabels à l’échelle mondiale puisque l’expansion du phénomène des écolabels, applaudie par les uns, suscite néanmoins des doutes chez les autres qui remettent en question la conformité de ces labels écologiques avec les règles du commerce international édictées sous l’égide de l’Organisation mondiale du commerce (OMC). Cette question toujours actuelle suscite de vives discussions dans l’enceinte de l’OMC depuis quelques années déjà. Notre article se propose d’analyser la conformité des programmes d’écolabel avec les dispositions pertinentes des accords de l’OMC. Comme notre étude le montrera, la nature même des écolabels, tels qu’ils sont conçus actuellement, fait en sorte qu’ils ne devraient pas violer les règles de droit qui président à ces accords. Toutefois, l’existence d’un débat sur la conformité des écolabels avec les règles du commerce international est le signe d’un conflit politique et économique potentiel, et non négligeable, sur cette question. En dernière analyse, nous concluons que la discussion devrait être poursuivie, mais à un autre niveau, à savoir celui de l’harmonisation des règles régissant les programmes d’écolabels en vue de minimiser les problèmes politiques et économiques que les écolabels sont susceptibles d’engendrer. |
| Keywords: | ecolabel, environmental labeling, international trade, protectionism, World Trade Organization (WTO), WTO accords, écolabel, étiquetage écologique, commerce international, protectionnisme, organisation mondiale du commerce (OMC), accord sur les obstacles techniques au commerce (OTC) |
| Date: | 2004–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2004s-39&r=env |
| By: | Sophie Lavallée; Kristin Bartenstein |
| Abstract: | Considering both trade globalization and the growing media coverage of the deterioration of natural resources and the ozone layer, the average citizen has become more demanding as a consumer when it comes to the environmental quality of the products he purchases. In this context, the implementation of adequate labeling may become both a major competitive issue in the marketplace as well as a means of promoting sustainable development that will allow the inclusion of environmental considerations in production procedures and in individuals behavior and choices. Designed to inform both private and public consumers of a product’s environmental performance as compared to other products in the same category, the ecolabel is an excellent tool for the implementation of this new development paradigm. The ecolabel is a tool whose goal is to use markets in order to meet environmental goals. Presently, the ecolabel is the result of a “voluntary” step taken by manufacturer who takes it upon himself to declare that his products are ecological through the use of different seals or phrases (“nitrate free”, “ozone layer friendly”, “biodegrable”). Alternatively, the manufacturers may ask an independent organization for the right to use an ecolabel, by following a preset procedure and respecting pre-established criteria. Since the end of the 1980s, many countries have set up ecological certification and ecolabeling programs: the “European ecolabel”, the “Blue Angel” in Germany, the “Green Seal” in the United States, “NF” in France, “Eco-mark” in Japan, and the “Eco-logo” in Canada. For the last ten years, the ecolabel has drawn the interest of public authorities in Western countries. Over this same decade, Europeans have gained a level of expertise that today allows them to assume an international leadership role in the field of ecolabeling. In this context, several European jurists and economists have naturally become interested in the conditions linked to the development of this new tool for regulating production. Their studies show that the creation of a national policy of ecological labeling must be based on recognized standards – private or prescribed – so that the awarding of an ecolabel can be based on objective criteria. In the framework of trade liberalization, the development of the such ecolabel programs must be carried out while, ath the same time, an effort is made to avoid creating obstacles to international trade. Very little study has been devoted to the rules of international law that apply to this subject. This question is, however, central to the sustainable development tool. Our paper sets out to answer this question and to study the impact that the International Standards Organization’s (ISO) 14000 series of standards has had on the harmonization of national ecolabeling policies. Considering the impact of international law standards on the ecolabel’s development as a sustainable tool, it is logical to make an in-depth analysis of the conditions of national ecolabeling policy harmonization at the international level. <P>Destiné à informer le consommateur, privé ou public, sur la performance d’un produit ou d’un service, l’écolabel peut conférer un avantage concurrentiel indéniable à l’entreprise qui cherche à rejoindre une clientèle intéressée par les impacts environnementaux des produits qu’elle consomme. De fait, l’écolabel suscite de plus en plus l’intérêt des grandes entreprises qui le voient progressivement comme un facteur essentiel à prendre en considération dans leurs stratégies industrielles et commerciales. Cet intérêt des entreprises pour la certification écologique volontaire de leurs produits et services revêt une portée encore plus grande dans un contexte de globalisation des marchés puisqu’elle est susceptible d’être « (…) à la fois un mode de protection très efficace des marchés intérieurs et un instrument de conquête de plus en plus incontournable des marchés extérieurs ». Outil commercial véhiculant une information environnementale afin de conférer un avantage concurrentiel aux produits nationaux, l’écolabel pourrait être taxé d’outil du « protectionnisme vert ». Cette possibilité n’a pas encore donné lieu à de réelles contestations mais elle est néanmoins assez sérieuse pour figurer à l’ordre du jour des prochaines études de la Commission du commerce et de l’environnement (CCE) de l’Organisation mondiale du commerce (OMC). Cette commission a d’ailleurs exprimé l’opinion qu’il existe une panoplie de programmes de certifications alimentaires ou environnementales qui reposent sur différents critères et procédures qui sont susceptibles d’avoir des effets sur le commerce. Stigmatisé comme un nouvel obstacle technique au commerce international, l’écolabel pourrait être discrédité et son évolution compromise, malgré les possibilités qu’il représente pour la concrétisation des impératifs du développement durable. Cette éventualité nécessite que nous le soumettions à une analyse au regard des règles de droit du commerce international afin de déterminer s’il est ou non l’outil d’une politique protectionniste. Que la réponse à cette question soit ou non positive, nous verrons, en dernière analyse, que l’harmonisation des différents écolabels s’impose pour assurer l’essor de l’écolabellisation des produits et services. Afin de mener à bien cette réflexion, il convient de répondre aux trois questions suivantes : Qu’est-ce qu’un écolabel? L’écolabel est-il une barrière non tarifaire de protection des marchés intérieurs? Quelles sont les possibilités d’harmonisation internationale des différents écolabels ? |
| Keywords: | ecolabel, environmental labeling, regulation, protectionism, World Trade Organization (WTO), WTO accords, harmonization, International Standards Organization's (ISO) 14000 series, écolabels, étiquetage écologique, régulation, protectionnisme, Organisation Mondiale du Commerce (OMC), harmonisation, série de normes ISO 14020 et 14040 |
| Date: | 2004–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2004s-40&r=env |
| By: | Peter J. Stauvermann (University of Twente, Enschede, The Netherlands) |
| Abstract: | As a guide to economic policy many countries nowadays have a system of national accounts. The basic system was developed in the post World War II period, and was the outcome of a truly international effort. Involving the United Nations and other international organizations, it has been very successful in developing an international bookkeeping system, nowadays accepted and introduced by all developed and many developing countries. National accounts basically are compiled because policy-makers wish to have an overview of the economic performance of their country. The most well-known indicator for this is Gross Domestic Product. Other important indicators are those for industrial production, investments, consumption and the trade figures. Basically we are dealing with a system where the quantity of goods is measured in physical units valued at market prices. The rise in public sector administration has complicated matters, because of missing market prices. However, here good approximations have been developed. A fundamental problem arose when the wish originated to include nature into this accounting system. The idea was quite clear, i.e. to lend support to policy making when natural functions are included and/or affected. However, a problem that did not go away was which properties to attribute to nature or its functions. The present paper aims to show, first, that environmental accounts are a necessary prerequisite for environmental policy, and second, to explain what kind of environmental accounting system is the most preferable one. In principle, economists have developed two different approaches to account for the environment. One approach is based on the vision that the environment should be valued in monetary terms. The other one is to relate the environment, measured in physical units, to economic variables. The question then is what kind of environmental system should the preferred one. In a certain sense the discussions in the Netherlands concerning environmental accounting are the mirror image of the discussions which have taken place in the rest internationally. In the Netherlands, however, the discussion got a particular twist. In fact, two systems have been discussed and developed in statistical bureaus. In essence, the Dutch discussion reflects the discussion between the two main strands of thought. The decisive difference between both goes back to the question: "Is it possible to value natural functions in monetary units?" If yes, it is possible to calculate something like a Green National Income (GNI), which was proposed by the Dutch national accountant Roefie Hueting (1969, 1974) atfirst. His operationalization of the basic idea was to value all environmental damages in monetary units and then to subtract these numbers from the net national income (NNI). He called this figure the Sustainable National Income (SNI). Only if the difference between NNI and SNI would be zero, the economy would be environmental sustainable. If it is not possible to value the nature in monetary terms, it is impossible to calculate a Green National Income. During the 1990s, the Dutch national accountant Steven Keuning developed an alternative system (the National Accounting Matrix including Environmental Accounts - the so-called NAMEA system), where he related quantities of emissions measured in physical units to figures of the conventional accounting system, e.g. CO2 emissions to GDP. The question then is which system should be preferred to inform policy-makers and the public about the state of the economy concerning the environment. The paper will go into these issues, and come to a conclusion |
| JEL: | Q56 Q57 E01 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:rpi:rpiwpe:0606&r=env |
| By: | Joakim Johansson (Inregia AB); Sirje Pädam (Departament of Public Economy at Tallinn University of Technology, and Inregia AB) |
| Abstract: | From the perspective of economic efficiency there are obvious advantages of regional differentiation of regulatory measures instead of relying on nationally uniform regulation, which is due to the fact that adverse health impacts, as well as other negative externalities, such as environmental damage and congestion, vary between locations. One conclusion of the analysis is that ranking of economic instruments depends on whether regulation is imposed nationally or regionally. Another implication is that if road pricing is not possible to implement locally, then command and control need to be considered. |
| Keywords: | air quality standards, road pricing, vehicle taxes, scrapping subsidy, economic efficiency |
| JEL: | D62 R48 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ttu:wpaper:121&r=env |
| By: | Mike Duijn; Marc Rijnveld; Peter Van Rooy |
| Abstract: | Global warming causes heavy rainfall and rising sea levels. These climate effects prove to be a strong motivation for looking differently at issues of water management and safety in estuaries. For decades, the only answer to hazardous situations (e.g. flooding by increased river discharges or by incoming storm water) was to strengthens dikes and dams. This led to damage in the natural water system, a declining biodiversity and destruction of the unique estuary and river landscapes. Nowadays, different approaches are more frequently implemented, with creating more space for the rivers as a guiding principle. Instead of stemming and rapid discharge, water is contained in estuary and catchment areas. The alternative approach to water management contributes to a more sustainable development of the estuary, protecting the natural and ecological values. However, estuaries are often densely populated areas, accommodating several (conflicting) spatial and economical functions, such as residential areas, ports and harbors, industrial zones, farming and recreational facilities. Creating more space for water management (i.e. retention areas, flood planes and wash lands) leaves less space available for other spatial developments. As a consequence, stakeholders will be affected in their interests; e.g. cities cannot grow unrestrained and farming will have to be downsized. Concepts as ‘multiple land use’ and ‘societal cost – benefit evaluation’ come to mind to characterize the challenge for transforming the designated areas into more sustainable, multi-functional retention basins. Governmental agencies are often acting as project executives in these transformations. They are faced with various stakeholders who are all trying to defend or strengthen their specific interests. A vital question is how to communicate with these stakeholders in the different stages of the transformation process. What communication strategy applies to what situation? And equally important, if a communication strategy is developed, how should it be instrumented? What will the message be, how are the target groups identified and addresses, which mediums should be applied? And, more important, what kind of public participation is required to enable cooperation and avoid opposition to the transformation process? In general, four basic communication strategies can be identified: co-knowing, co-thinking, co-working and co-deciding. Each of these strategies apply to different situations, following the cultural and historic context in the area, the established relationship between the ‘governor and the governed’, and of course, the preferred style of governance. In a research assignment from four governmental agencies in The Netherlands, the UK and Belgium we have evaluated the applied communication strategies in six flood control areas in the EU. For this assignment, an evaluative framework was developed. The evaluation shows the suitability of the applied communication strategy in each of the reviewed areas. Moreover, lessons are drawn on the question in what situation, which type of communication strategy is most suitable. Also, the review gives examples of good practice and inspiration for ‘sustainable’ communication efforts in future transformation processes. |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa05p157&r=env |
| By: | Arzu Basaran |
| Abstract: | Rapid growth of urban areas and their development problems in industrializing countries has had major impacts on the environment. Water, the main source of life on earth is under the threat of various types of pollution. These threats have been forceful in demonstrating the necessity of the management and planning of drainage basins. The importance of the evaluation of the total economic value of the water resources and aquatic ecosystems of drainage basins has not yet been accepted in the current planning system of Turkey. In Turkey a total number of 36 public agencies take part in the decision making process within a drainage basin. Decisions taken by these agencies with respect to the use of land and water affect the quality and sustainability of water as a natural resource. These agencies act under a legal structure comprising 105 different laws and regulations related to the environment and this creates additional confusion in planning practice. The situation calls for the organization of special drainage management institutions for drainage basins. The aim of this study is to explore the use of game theory to analyze the roles and actions of different interest groups (players) and develop a better understanding of the decision making process and its consequences on a drainage basin. In this study, we use the case of a river sub-basin from the north-western region of Turkey: the Nilüfer Watershed that contains fertile agricultural lands and the third biggest industrial city in Turkey. The Nilüfer Stream is deeply polluted by industrial, agricultural and domestic wastewater. There are 1 metropolitan municipality, 20 district municipalities and 8 provincial authorities of central government within the watershed. All players have strategies about environment and planning such as land use decision, waste water standard and discharge permitting etc. Some strategies conflict the other players’ strategies. Game theory, which aims to explain the interactive decision making process with more than one decision maker, has developed as a theory of human strategic behavior based on an idealized picture of rational decision making (Binmore, 1996; Eichberger, 1992). The game theory has been applied to social sciences especially to economy, international relations, politics, which are in the state of making decisions in non-cooperative conditions. Although there is limited in number the game theory applications in planning, they are very important studies on location problem in spatial planning such as Stevens, (1961), Isard and Reiner, (1962), Isard, (1967). There are also new studies that use the game theory in planning. Sharing problem of river as a natural resource is the main study area in planning (Dinar and Wolf, 1994; Kilot, 1994; Kucukmekmetoglu and Guldman, 2002; Rogers, 1993). Game theory applications on environmental problems started in 1990s. Environmental problems such as transfrontier pollution (air or water) are often multilateral, and they affect all the agents in the economies of countries. There are studies in which air pollution problem is analyzed by the game theory with the cooperation of neighbor countries such as Ray (2000), Maler and Zeeuw (1998), Barret (1998). In this research an in depth analysis is made to understand the preferences and attitudes of different players taking part within the Nilüfer watershed. Players generally make independent decisions without any form of cooperation situation. Therefore, non-cooperative game is used in this analyze. The decision making process of the players are analyzed through a scenario in two-player games. The scenario is about strategies of environmental protection and industrial development in the watershed. We explore Nash equilibrium in game which represents present condition. Nash (1950) proved the existence of a strategic equilibrium for non-cooperative games. The main outcome of the paper will be to point to new directions in the planning process and to open to discussion the use of game theory in planning. Game theoretic approach will make it easier for the agents to cooperate if the conflicts in the planned area are clearly defined. It is possible to achieve cooperative bargaining solutions where all agents are winners. Actually, this is the target of planning because sustainable development of the river basin depends on bargaining where all agents are winners. |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa05p197&r=env |
| By: | Stefano Pagiola (World Bank); Konrad von Ritter (The Nature Conservancy); Josh Bishop (IUCN-World Conservation Union) |
| Abstract: | Valuation studies have considerably increased our knowledge of the value of ecosystems. Their usefulness has often been undermined, however, by a failure to properly frame them so as to address the specific question of interest. Valuation is not a single activity, and the seemingly simple question ‘how valuable is an ecosystem?’ can be interpreted in many different ways. This paper seeks to clarify how valuation should be conducted to answer specific policy questions. In particular, it looks at how valuation should be used to examine four distinct aspects of the value of ecosystems: (1) Determining the value of the total flow of benefits from ecosystems. This question typically arises in a ‘national accounts’ context: How much are ecosystems contributing to economic activity? It is most often asked at the national level, but can also be asked at the global, regional, or local level. (2) Determining the net benefits of interventions that alter ecosystem conditions. This question typically arises in a project or policy context: Would the benefits of a given conservation investment, regulation, or incentive justify its costs? It differs fundamentally from the previous question in that it asks about changes in flows of costs and benefits, rather than the sum total value of flows. (3) Examining how the costs and benefits of ecosystems are distributed. Different stakeholder groups often perceive very different costs and benefits from ecosystems. Understanding the magnitude and mix of net benefits received by particular groups is important for two reasons. From a practical perspective, groups that stand to ‘lose’ from conservation may seek to undermine it. Understanding which groups are motivated to conserve or destroy an ecosystem, and why, can help to design more effective conservation approaches. From an equity perspective, the impact of conservation on particular groups such as the poor, or indigenous peoples, is also often of significant concern in and of itself. (4) Identifying potential financing sources for conservation. Knowing that ecosystem services are valuable is of little use if it does not lead to real investments in conserving the natural ecosystems that provide them. Simply knowing that a protected area provides valuable watershed protection benefits, for example, does not pay the salaries of park rangers. Yet experience has shown that relying solely on government budget allocations or external donors for the necessary funding is risky. Valuation can help identify the beneficiaries of conservation and the magnitude of the benefits they receive, and thus help design mechanisms to capture some of these benefits and make them available for conservation. These four approaches are closely linked and build on each othe, often using similar data. They use that data in very different ways, however, sometimes looking at all of it, sometimes at a subset, sometimes looking at a snapshot, and sometimes looking at changes over time. Each approach has its uses and its limitations. Understanding under what conditions one approach should be used rather than another is critical: the answer obtained under one approach, no matter how well conducted, is generally meaningless when applied to problems that are better treated using another approach. In particular, using estimates of total flows to justify specific conservation decisions—although commonly done—is almost always wrong. Properly used, however, valuation can provide invaluable insights into conservation issues. |
| Keywords: | ecosystem, valuation |
| JEL: | P Q Z |
| Date: | 2005–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpot:0502006&r=env |
| By: | Burtraw, Dallas (Resources for the Future); Palmer, Karen (Resources for the Future); Kahn, Daniel (Resources for the Future) |
| Abstract: | Cap-and-trade programs for air emissions have become the widely accepted, preferred approach to cost-effective pollution reduction. One of the important design questions in a trading program is how to initially distribute the emissions allowances. Under the Acid Rain program created by Title IV of the Clean Air Act, most emissions allowances were distributed to current emitters on the basis of a historic measure of electricity generation in an approach known as grandfathering. Recent proposals have suggested two alternative approaches: allocation according to a formula that is updated over time according to some performance metric in a recent year (the share of electricity generation or something else) and auctioning allowances to the highest bidders. Prior research has shown that the manner in which allowances for carbon dioxide (CO2) are initially distributed can have substantial effects on the social cost of the policy as well as on who wins and who loses as a result of the policy. Another concern with a regional cap-and-trade program like the Regional Greenhouse Gas Initiative (RGGI) is the effect that different approaches to allocating emissions allowances will have on the level of CO2 emissions outside the region, commonly called emissions leakage. In this research we model historic, auction, and updating approaches to allowance allocation that we call bookends, then model various variations on these approaches. We consider changes in measures such as electricity price, the mix of generation technologies, and the emissions of conventional pollutants inside and outside the RGGI region. We examine the social cost of the program, measured as the change in economic surplus, which is the type of measure used in benefit–cost analysis. We also examine the effects of different approaches to distributing allowances on the net present value of generation assets inside and outside the RGGI region. We find that how allowances are allocated has an effect on electricity price, consumption, and the mix of technologies used to generate electricity. Electricity price increases the most with a historic or auction approach. Coal-fired generation in the RGGI region decreases under all approaches but decreases the most under updating. Gas-fired generation decreases under historic and auction approaches but increases substantially under updating. Renewable generation increases under historic and auction approaches but decreases slightly under updating as a consequence of the expanded generation from gas. Consistent with the changes in the composition of generation, the decline in emissions of conventional pollutants including sulfur dioxide (SO2), nitrogen oxides (NOx), and mercury that was expected as a result of the Clean Air Interstate Rule is accelerated substantially as a result of the RGGI policy, particularly under updating. The cost of complying with SO2, NOx, and mercury rules declines similarly. We find that the social costs of the bookend auction and historic approaches are comparable and that the social cost of updating is roughly three times that of the other approaches. At the same time, updating yields greater emissions reductions on a national basis (because it produces less emissions leakage) and greater cumulative reductions in emissions at the national level than historic allocation. Varying the design of the updating approach can reduce its social costs but generally would increase leakage at the same time. An updating approach with allocation to all generators, including all nuclear and renewables has the lowest social cost within the RGGI region of any policy analyzed, although this result comes at the expense of costs imposed outside the region. When the approaches to allocation are mixed, we find the changes in electricity price, generation, and emissions are roughly a combination of the performance of each individual approach. In particular, social costs typically are lower under the scenarios that combine an auction with updating than when updating is the exclusive approach to distributing allowances. Who wins and who loses from the policy varies with the approach to allocation. Under a historic approach, producers in the RGGI region gain substantially and generally are better off than without the program; such is not true under an auction or updating. Producers also gain overall from the policy when a historic allocation is combined with an auction, but the gains are substantially less than in the 100% historic case. Producers outside the region tend to benefit considerably from the higher electricity price in the RGGI region but benefit the least under updating because the effect on electricity price is lowest. Consumers both inside and outside the RGGI region are adversely affected under all allocation approaches but much less so under updating because the change in electricity price is lowest. One exception is when eligibility for allowances under an updating allocation is limited to nonemitters only, in which case the electricity price increases substantially. Different types of generators fare differently under the various allocation approaches. Asset values for all types of generators are highest under a historic approach, although the difference between historic and auction approaches is small for nuclear generators. Compared with the baseline, both nuclear and existing gas-fired generators in the RGGI region gain under an auction. Only gas-fired generators gain under the bookend approach to updating, although nuclear generators benefit as well under updating designs that include them among those eligible for allowances. Coal-fired generators lose the most under updating. Moving from 100% updating to auctioning an increasingly larger share of allowances generally has a positive effect on asset values for all fuel types including coal. The one exception is that moving from 50% auction and 50% updating to 100% auction has a negative effect on the asset values for coal. Finally, we conduct sensitivity analyses with higher natural gas prices and constraints on electricity transmission capability. The social cost of the RGGI program does not appear to be sensitive to these constraints. Higher gas prices or transmission constraints alone impose significant costs that are larger than the effect of adding the RGGI policy. For example, their substantial effect on electricity price is greater than the added effect imposed by the RGGI program. The constraints that are modeled do not appear to have a strong impact on RGGI implementation. We also conduct a sensitivity analysis with renewables portfolio standard policies in place throughout the region. The resulting prices of electricity and CO2 emissions allowances are slightly lower than without the renewables policy. |
| Keywords: | emissions trading, allowance allocations, electricity, air pollution, auction, grandfathering, generation performance standard, output-based allocation, cost-effectiveness, greenhouse gases, climate change, global warming, carbon dioxide, sulfur dioxide, nitrogen oxides, mercury |
| JEL: | Q2 Q25 Q4 L94 |
| Date: | 2005–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-05-25&r=env |
| By: | David Zilberman (University of California at Berkeley); Leslie Lipper (Agricultural and Development Economics Division, Food and Agriculture Organization); Nancy McCarthy (International Food Policy Research Institute, IFPRI) |
| Abstract: | The impact of payment for environmental services (PES) on poverty varies. Generally, PES is good for landowners and may negatively affect consumers if food demand is inelastic. Impacts also depend on the correlation between poverty and environmental amenities. If the richer farmers also provide the best environmental services (ES), then the poor farmers may lose. If there is negative correlation between ES and productivity, then the poorer landowners may gain from ES. The distribution of land matters. If smallholders depend on earnings from work on larger farms, then PES may affect them negatively. Program specifications also matter. Working land programs may have better distributional effects then PES for land diversion. |
| Keywords: | Payments for environmental services, poverty, conservation, land use change, market-based mechanisms. |
| JEL: | Q0 Q15 Q24 O13 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:fao:wpaper:0604&r=env |
| By: | Ronald Shadbegian; Randy Becker |
| Abstract: | Since 1973, the Pollution Abatement Costs and Expenditures (PACE) survey has been the principle source of information on U.S. industries’ capital expenditure and operating costs associated with pollution abatement efforts. The PACE survey was discontinued after 1994 and then revived in 1999 for one year – in a substantially different form than the preceding surveys however, making longitudinal analysis quite difficult. Conceptual differences include matters as fundamental as the scope and meaning of pollution abatement as well as the definition of operating costs. A number of other critical changes also exist, including ones of industrial coverage and sample selection. This paper is the first comprehensive effort to document the many changes in the PACE survey across these years and to provide a detailed guide for researchers and policymakers who wish to compare the 1994 and 1999 data. Overall, we find a 27% decline in environmental spending by the manufacturing sector between these two years, though there appears to be significant heterogeneity across industries. We discuss potential reasons for this dramatic decline, focusing mainly on issues of survey methodology and design. This paper should help inform current efforts to redevelop the PACE survey and re-establish it as a regular, annual survey. |
| Keywords: | pollution abatement, survey data, environmental costs, manufacturing |
| JEL: | Q52 C81 L6 |
| Date: | 2004–07 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:04-09&r=env |
| By: | Ronald Shadbegian; Wayne Gray |
| Abstract: | This study examines the determinants of environmental and economic performance for plants in three traditional smoke-stack industries: pulp and paper, oil, and steel. We combine data from Census Bureau and EPA databases and Compustat on the economic performance, regulatory activity and environmental performance on air and water pollution emissions and toxic releases. We find that plants with higher labor productivity tend to have lower emissions. Regulatory enforcement actions (but not inspections) are associated with lower emissions, and state-level political support for environmental issues is associated with lower water pollution and toxic releases. There is little evidence that plants owned by larger firms perform better, nor do older plants perform worse. |
| Keywords: | Environmental Performance, Labor Productivity, Emissions, Enforcement Activity, Technology |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:05-03&r=env |
| By: | Linda Bui |
| Abstract: | I investigate whether, as is commonly believed -- and if so how -- firm disclosure of so-called "toxic" releases, required since 1987 by the federal "Toxics Release Inventory ("TRI"), has brought about the reductions in toxic releases that have occurred since that time. Existing literature, consisting principally of event studies of stock market returns, suggest that dirty firms experience abnormal negative returns. Using a micro-level data set that links TRI releases to plant level Census data for petroleum refineries, I study plant-level behavior, exploiting state variation in toxics regulations, and exploring the relationship between TRI releases and concomitant regulation of non-toxic pollutants. I find that, although TRI induced public disclosure may have contributed to the decline in reported toxic releases, that alone has not been the cause of those reductions: the evidence is strong that changes in toxic emission intensity are a byproduct of more traditional command and control regulation of emissions of non-toxic pollutants. I find that (1) since 1987, refineries have become substantially cleaner in terms of over-all toxic releases; (2) the clean-up has not occurred through substitution away from TRI listed substances as inputs or alteration in the mix of outputs; and (3) refineries in states with more stringent supplemental regulation of toxics (e.g. with specific state-wide goals for toxic reductions) have significantly lower toxic emission intensity levels than refineries in other states. I find also that (4) TRI air releases are highly correlated with levels of criteria air pollution; (5) both toxic pollution levels and intensity fall with increases in pollution abatement (operating and maintenance) expenditures for non-toxic air pollution; and (6) TRI air releases are affected by being in more stringent regulatory regions for the criteria air pollutants. Finally, I link my data-set with CRSP data to re-evaluate the effect of TRI reporting on company stock market valuation, correcting for a methodological shortcoming (stemming from the fact that all reporting firms face a common event window) of prior event studies of the impact of the TRI. Correcting for that shortcoming, I find that (7) the evidence of negative abnormal returns around TRI reporting dates for petroleum companies is not significant. My findings suggest that the most probable mechanism through which TRI reporting may induce firms to clean up is local and state governmental use of TRI disclosures. They suggest also not only that the perceived effectiveness of TRI regulation has been overstated, but perhaps more importantly that the benefits of command and control regulation of non-toxic pollutants have been underestimated. |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:05-13&r=env |