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on Environmental Economics |
| By: | Richard S.J. Tol (Economic and Social Research Institute, Dublin) |
| Abstract: | I compare and contrast five climate scenarios: (1) no climate policy; (2) non-cooperative cost-benefit analysis (NC CBA); (3) NC CBA with international permit trade; (4) NC CBA with joint and several liability for climate change damages; and (5) NC CBA with liability proportional to a country’s share in cumulative emissions. As estimates of the marginal damage costs are low, standard NC CBA implies only limited emission abatement. With international permit trade, emission abatement is even less, as the carbon tax is reduced in countries with fast-growing emissions, and because a permit market ignores the positive, dynamic externalities of abatement. Proportional liability shifts abatement effort towards the richer countries, but away from the fast-growing economies; again, long-term, global emission abatement is reduced. Joint and several liability would lead to more stringent climate policy. These findings are qualitatively robust to the size and accounting of climate change impacts, to the definition of liability, and to the baseline scenario. |
| Keywords: | Climate change, cost-benefit analysis, liability, permit trade |
| JEL: | Q54 |
| Date: | 2006–02 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:98&r=env |
| By: | Zhou Yuan; Richard S.J. Tol (Economic and Social Research Institute, Dublin) |
| Abstract: | Although China has made dramatic economic progress in recent years, air pollution continues to be the most visible environmental problem and imposes significant health and economic costs on society. Using data on pollutant concentration and population for 2003, this paper estimates the economic costs of health related effects due to particulate air pollution in urban areas of Tianjin, China. Exposure-response functions are used to quantify the impact on human health. Value of a statistical life and benefit transfer are used to obtain the unit value of some health effects. Our results show significant health costs associated with air pollution in Tianjin. The total economic cost is estimated to be US$1.1 billion, about 3.7% of Tianjin’s GDP in 2003. The findings underscore the importance of urban air pollution control. Finally, the policy implications for alternative energy options and climate policies are given. |
| Keywords: | particulate air pollution, PM10, economic valuation, Tianjin |
| JEL: | Q51 Q53 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:89&r=env |
| By: | Christine Roeckmann; Uwe A. Schneider; Michael A. St.John; Richard S.J. Tol (Economic and Social Research Institute, Dublin) |
| Abstract: | The population dynamics of the Eastern Baltic cod (Gadus morhua callarias L.), unlike many other stocks, shows a strong dependency on environmental conditions. To test the implications of different management policies on the stock and the fishery in a system of global environmental change, we apply a spatially disaggregated, discrete time, age-structured model of the Eastern Baltic cod stock in 50 year simulation analyses. The simulation provides an analysis of stock, yield, and revenue development under various management policies and environmental scenarios. The policy analysis, focusing on different regulations of fishing mortality, is embedded into three environmental scenarios, assuming low, medium, or high climate and environmental change. The environmental assumptions are based on simulation results from a coupled atmosphere-ocean regional climate model, which project salinity in the Baltic Sea to decrease by 7-47% in the period 2071-2100 relative to the reference period 1961-1990. Our simulation results show that a significant reduction in fishing mortality is necessary for achieving high long-term economic yields. Moreover, under the presented environmental scenarios, a stock collapse cannot be prevented. It can, however, be postponed by the establishment of a marine reserve in ICES subdivision 25. |
| Keywords: | Baltic cod, climate change, environmental variability, reproductive volume, population dynamics, management, policy, age-structured model, temporal marine reserve |
| JEL: | Q22 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:84&r=env |
| By: | Richard S.J. Tol (Economic and Social Research Institute, Dublin) |
| Abstract: | The avoided damages of climate change are estimated for a range of emission reduction policies from a range of business as usual scenarios. In the emission abatement scenarios, concentrations of greenhouse gases overshoot before falling to a stable level. The peak concentrations are used to characterise the stabilisation scenario. Similarly, the peak impacts are used to evaluate the scenarios. This is in line with avoiding “dangerous interference with the climate system”. Results are shown for both cost-effective and “realistic” emission reduction policies. Avoided climate change impacts increase with emission abatement, but the additionally avoided impacts fall as abatement gets more stringent. The most serious climate change impacts can be avoided with only modest emission reduction. Very stringent emission reduction may even increase climate change impacts, because of the removal of the sulphur veil and because emission abatement costs may slow economic growth and increase vulnerability. A comparison of the net present value of the costs of emission reduction with the net present value of the avoided damage also point towards more modest emission abatement. These findings are robust to variations in scenarios and parameters. |
| Keywords: | Avoided impacts of climate change, emission reduction, climate policy |
| JEL: | Q54 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:64&r=env |
| By: | Jie He (GREDI, Département d'économique, Université de Sherbrooke) |
| Abstract: | This paper surveys the existing Environmental Kuznets Curve studies and discusses to what extent they may be valid and applicable for developing countries. We found that, given the shortcomings in both the theoretical and empirical aspects of the analyses applied to this hypothesis, no one-fit-for-all inverted-U-shaped curve can describe adequately the relationship between growth and pollution –which does not only imply challenges but also opportunities for developing countries: indeed, they are the ones in charge for the choice of their own sustainable development trajectory in the future. If they manage to coordinate adequately their structural, institutional and technical policies, all the while making good use of the already-existing techniques in pollution abatement, they will be able to tunnel or leap-frog the EKC trajectory derived from developed countries’ experience, thus making a win-win situation happen for both economy and the environment as soon as possible. |
| Keywords: | Environmental Kuznets Curve, Pollution, Economic growth, Methodology, Theory |
| JEL: | Q56 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:shr:wpaper:07-03&r=env |
| By: | Katrin Rehdanz; Richard S.J. Tol (Economic and Social Research Institute, Dublin) |
| Abstract: | One problem in international climate policy is the refusal of large developing countries to accept emission reduction targets. Brazil, China and India together account for about 20% of today’s CO2 emissions. We analyse the case in which there is no international agreement on emission reduction targets, but countries do have domestic targets, and trade permits across borders. We contrast two scenarios. In one scenario, Brazil, China and India adopt their business as usual emissions as their target. In this scenario, there are substantial exports of emission permits from developing to developed countries, and substantial economic gains for all. In the second scenario, Brazil, China and India reduce their emissions target so that they have no net economic gain from permit trade. Here, developing countries do not accept responsibility for climate change (as they bear no net costs), but they do contribute to emission reduction policy by refusing to make money out of it. Adopting such break-even targets can be done at minor cost to developed and developing countries (roughly $2 bln/year each in extra costs and foregone benefits), while developing countries are still slightly better off than in the case without international emissions trade. This result is robust to variations in scenarios and parameters. It contrasts with Stewart and Wiener (2003) who propose granting “hot air” to developing countries to seduce them to accept targets. In 2020, China and India could reduce their emissions by some 10% from the baseline without net economic costs. |
| Keywords: | climate policy, developing countries, emission permits, emission reduction targets |
| JEL: | Q54 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:68&r=env |
| By: | Gary W. Yohe; Richard S.J. Tol (Economic and Social Research Institute, Dublin) |
| Abstract: | Tol (2003) found evidence that the uncertainty that surrounds estimates of the marginal damage of climate change may be infinite even if total damages are finite and questioned the applicability of expected cost-benefit analysis to global mitigation policy. Yohe (2003) suggested that this problem could be alleviated if international development aid were directed at eliminating the source of the problem – climate induced negative growth rates in a few regions along a handful of troublesome scenarios. The hypothesis about adding a second policy lever to the climate policy calculus is shown to hold, but not as robustly as perhaps expected. Infinite uncertainty and its implications for global mitigation policy can be avoided for a reasonable price in the relatively unlikely event that climate change can cause negative economic growth in a region or two when the portfolio of international policies includes at least two tools. |
| Keywords: | climate policy, development aid, equity weighting, expected cost-benefit analysis |
| JEL: | Q54 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:83&r=env |
| By: | Megan Ceronsky; David Anthoff; Cameron Hepburn; Richard S.J. Tol (Economic and Social Research Institute, Dublin) |
| Abstract: | Research into the social cost of carbon emissions — the marginal social damage from a ton of emitted carbon — has tended to focus on “best guess” scenarios. Such scenarios generally ignore the potential for low-probability, high-damage events, which are critically important to determining optimal climate policy. This paper uses the FUND integrated assessment model to investigate the influence of three types of non-linear climate responses on the social cost of carbon: the collapse of the thermohaline circulation; the dissociation of oceanic methane hydrates; and climate sensitivities above “best guess” levels. We find that incorporating these impacts can increase the social cost of carbon by a factor of 20. Furthermore, our results suggest that the exclusive focus on thermohaline circulation collapse in the non-linear climate response literature is unwarranted, because other potential non-linear climate responses appear to be significantly more costly. |
| Keywords: | climate change, catastrophe, non-linearity, impacts |
| JEL: | Q54 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:87&r=env |
| By: | Carlo Carraro (Department of Economics, University Of Venice Ca’ Foscari); Barbara Buchner (Fondazione Eni Enrico Mattei); Denny Ellerman (Senior Lecturer at MIT) |
| Abstract: | This paper is the concluding chapter of Rights, Rents and Fairness: Allocation in the European Emissions Trading Scheme, edited by the co-authors and forthcoming from Cambridge University Press. The main objective of this paper is to distill the lessons and general principles to be learnt from the allocation of allowances in the European Union Emission Trading Scheme (EU ETS), i.e. in the world’s first experience with allocating carbon allowances to sub-national entities. We discuss the lessons that emerge from this experience and make some comments on what seem to be more general principles informing the allocation process and on what are the global implications of the EU ETS. As has become obvious during the first allocation phase, the diversity of experience among the Member States is considerable, so that it must be understood that these lessons and unifying themes are drawn from the experience of most of the Member States, not necessarily from all. Lessons and unifying observations are grouped in three categories: those concerning the conditions encountered, the processes employed, and the actual choices. |
| Keywords: | Climate Change, Emission Trading, Allocation, Fairness, EU Policy |
| JEL: | C72 H23 Q25 Q28 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:47_06&r=env |
| By: | Gary W. Yohe; Richard S.J. Tol (Economic and Social Research Institute, Dublin); Dean Murphy |
| Abstract: | We review the explosion of commentary that has followed the release of the Stern Review: The Economics of Climate Change, and agree with most of what has been written. The Review is right when it argues on economic grounds for immediate intervention to reduce emissions of greenhouse gases, but we feel that it is right for the wrong reasons. A persuasive case can be made that climate risks are real and increasingly threatening. If follows that some sort of policy will be required, and the least cost approach necessarily involves starting now. Since policy implemented in 2007 will not “solve” the climate problem, near term interventions can be designed to begin the process by working to avoid locking in high carbon investments and providing adequate incentives for carbon sequestration. We argue that both objectives can be achieved without undue economic harm in the near term by pricing carbon at something on the order of $15 per ton as long as it is understood that the price will increase persistently and predictably at something like the rate of interest; and we express support for a tax alternative to the usual cap-and-trade approach. |
| Keywords: | Stern Review, climate change, climate policy, social discount rate; risk and equity aversion |
| JEL: | Q54 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:129&r=env |
| By: | Christine Roeckmann |
| Abstract: | The complexity of the political and ecological situation in the Baltic Sea area calls for strong international cooperation in order to achieve economically and socially sustainable, environmentally safe fisheries. Management needs to be flexible to allow for direct reactions and adjustments in case of any natural or anthropogenic adverse impacts. At the same time, a minimum of income stability from the transboundary, hence internationally shared, fish resources in the Baltic Sea should be guaranteed to local fishing communities. The article under consideration analyses the past, present and future situation of fisheries management in the Baltic Sea. Emphasis is put on the functioning of the European Community’s Common Fisheries Policy (CFP). In order to achieve sustainable fisheries, the conservation of stocks is of prime importance. The new CFP as of December 2002 provides for this objective by introducing long-term management and recovery plans, emphasising the necessity of a healthy marine ecosystem, and allowing for flexible management tools. It is therefore concluded that Baltic Sea fisheries management is likely to benefit, if the opportunities for improvement, which the new CFP regulation has enshrined, are realised. |
| Keywords: | fisheries |
| JEL: | Q22 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:88&r=env |
| By: | Maren A. Lau |
| Abstract: | Global sea-levels are rising due to global warming. Major impacts on the world’s coasts are sand beach erosion, salination of ground water, and inundation. Adaptation is the only option to address these future threats as the mitigation of CO2 emissions is not capable of preventing sea-level rise. There are several organisational frameworks existing that can incorporate adaptation measures. Integrated Coastal Zone Management is proposed most often. Alternative frameworks are disaster management and sectoral frameworks involved in prevention activities, such as the water management that often holds responsibility for dike building. However, the integration of adaptation into an organisation framework is further dependent on institutional capacity within a political system. In order to illustrate what approach is feasible for a hierarchical political system the People’s Republic of China is taken as an example. An analysis of various frameworks and institutional responsibilities shows that the institutional dimension of organisation is decisive when seeking for an adequate framework to include adaptation to sea-level rise in. This paper is based on empirical results from a series of interviews and the analysis of official publications on frameworks and institutional responsibilities. It concludes with a recommendation on a climate change based framework. |
| Keywords: | adaptation, sea-level rise, climate change, institutions, frameworks |
| JEL: | Q54 |
| Date: | 2006–01 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:94&r=env |
| By: | BECCHETTI LEONARDO; CASTRIOTA STEFANO; LONDOÑO BEDOYA DAVID ANDRÉS |
| Abstract: | The effects of climate on well-being have been investigated by focusing on the impact of climate on real estate prices, rents and wages, migrations and, recently, human happiness. We follow this last direction by merging individual data on happiness from the World Value Survey (third and fourth waves) with climate conditions of the WVS respondents’ cities from the NOAA (National Oceanic & Atmospheric Administration of the US Department of Commerce) database. More specifically, we use more than 118,000 observations to test the impact of climate on happiness and estimate the effects on it of climate related gains/losses arising when individuals move from one city to another (e.g. from Rome to London). Our research documents the existence of significant links between several climatic factors (rain, fog, temperature, wind) and happiness. |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceiswp:247&r=env |
| By: | Christine Roeckmann; Michael A. St.John; Uwe A. Schneider; Friedrich W. Koester; Richard S.J. Tol (Economic and Social Research Institute, Dublin) |
| Abstract: | In order to test the implications of the establishment of a marine reserve in the Baltic Sea, a spatially disaggregated, discrete time, age-structured model for the Eastern Baltic cod (Gadus morhua callarias L.) stock was constructed. Functional relationships for recruitment and predation mortality were developed by multiple regression analyses. The resultant model output compares well with observed data from the fishery. The model was then applied to simulate stock development over a 50 year time period using different management policies and a variety of environmental conditions. The investigated management policies reduce fishing mortality and range from a moratorium on the Eastern Baltic cod fishery via the establishment of a permanent or a seasonal marine reserve in ICES subdivision 25 to a fishing as usual scenario. The environmental conditions incorporated were based on the size of the reproductive volume (RV) and comprise a best case and a worst case of reproductive conditions, and two more realistic scenarios, where we assumed that a historic series of RV-sizes reoccurs over the simulation period. Our results show a strong dependence of stock dynamics on the environmental conditions. Under prevailing low RV, our model projects stock extinction by the year 2020, if fishing continues as usual. Under the restrictive scenarios, where fishing mortality is reduced either directly or by implementation of a marine reserve, the stock benefits from an increase in stock size and an improved age-structure. A seasonal closure of SD 25 as opposed to a closure of the entire Baltic Sea appears to be sufficient to prevent the Eastern Baltic cod stock from falling below safe biological limits. |
| Keywords: | Baltic cod, management, age-structured model, population dynamics, MPA, environmental variability, reproductive volume |
| JEL: | Q22 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:63&r=env |
| By: | Jacqueline M. Hamilton; David J. Maddison; Richard S.J. Tol (Economic and Social Research Institute, Dublin) |
| Abstract: | A data set of the holiday destination choices of German tourists is segmented using phase in the life cycle; second, holiday motivation and holiday activities and third, the region of residency. For each segment demand is estimated using data on environmental and economic characteristics of countries. The optimal temperature, where demand peaks, ranges from 22°C to 24°C across the segments. More interestingly, the steepness of the temperature demand relationship is different for different segments. Even though the temperature optima are similar, changes in temperature, for example caused by climate change will have a larger effect on demand depending on the steepness of the temperature-demand relationship. A climate index is calculated for each country using climate data and the respective coefficients from the estimated demand equations. The climate index values are different across the segments: the segment containing those tourists who were swimming and sunbathing while on holiday has the highest index values of all of the segments. |
| Keywords: | tourism demand, segmentation, climate preferences |
| JEL: | L83 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:90&r=env |
| By: | Richard S.J. Tol (Economic and Social Research Institute, Dublin) |
| Abstract: | The European Commission and a number of its Member States have adopted a stringent long-term target for climate policy, namely that the global mean temperature should not rise more than 2°C above pre-industrial times. This target is supported by rather thin arguments, based on inadequate methods, sloppy reasoning, and selective citation. In the scientific literature on “dangerous interference with the climate system”, most studies discuss either methodological issues, or carefully lay out the arguments for or against a particular target. These studies do not make specific recommendations, with the exception of cost-benefit analyses which argue for less stringent policy targets. However, there are also a few studies that recommend a target without the supporting argumentation. Overall, the 2°C target of the EU seems unfounded. |
| Keywords: | Climate policy, Article 2, dangerous interference, European Union |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:92&r=env |
| By: | Löfgren, Åsa (Department of Economics, School of Business, Economics and Law, Göteborg University); Millock, Katrin (Université Paris 1 Panthéon-Sorbonne, CNRS, Centre d’Economie de la Sorbonne); Nauges, Céline (UMR LERNA-Université de Toulouse, Manufacture des Tabacs) |
| Abstract: | We propose a method for estimating hurdle rates for firms’ investments in pollution abatement technology, using ex post data. The method is based on a structural option value model where the future price of polluting fuel is the major source of uncertainty facing the firm. The econometric procedure is illustrated using a panel of firms from the Swedish pulp and paper industry, and the energy and heating sector from 2000 to 2003. The results indicate a hurdle rate of investment of almost 3 in the pulp and paper industry and almost 4 in the energy and heating sector. <p> |
| Keywords: | option value; fuel price uncertainty; investment decision; pollution abatement; panel data pulp and paper industry; energy and heating sector |
| JEL: | C33 D81 O33 Q48 Q53 |
| Date: | 2007–03–21 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0249&r=env |
| By: | Brian S. Fisher; Guy Jakeman; Hom M. Pant; Malte Schwoon; Richard S.J. Tol (Economic and Social Research Institute, Dublin) |
| Abstract: | We present the Canberra-Hamburg Integrated Model for Population (CHIMP), a new global population model for long-term projections. Distinguishing features of this model, compared to other model for secular population projections, are that (a) mortality, fertility, and migration are partly driven by per capita income; (b) large parts of the model have been estimated rather than calibrated; and (c) the model is in the public domain. Scenario experiments show similarities but also differences with other models. Similarities include rapid aging of the population and an eventual reversal of global population growth. The main difference is that CHIMP projects substantially higher populations, particularly in Africa, primarily because our data indicate a slower fertility decline than assumed elsewhere. Model runs show a strong interaction between population growth and economic growth, and a weak feedback of climate change on population growth. |
| Keywords: | population model, long term projections, global change, integrated assessment |
| JEL: | J11 Q54 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:69&r=env |
| By: | Kenny, Charles |
| Abstract: | The Stern Review adopts two interesting elements in its calculation of the costs and benefits of climate change mitigation. First is a ‘global welfarist’ approach that values the utility of the World’s people (now and into the future) equally, and sets global utility maximization as the correct goal for policy. Second is an assumption of a declining marginal utility to income. Consistent application of the ‘global welfarist’ approach and the declining marginal utility of income together would demand an urgent process of global income redistribution. Over the long term, this might see the richest ten percent of the World’s population facing an average redistributive tax rate in the region of 82 percent. |
| Keywords: | Stern Review; Climate Change; Welfare Economics |
| JEL: | Q54 O10 F20 |
| Date: | 2007–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:2281&r=env |
| By: | Marianne Zandersen; Richard S.J. Tol (Economic and Social Research Institute, Dublin) |
| Abstract: | This paper presents a meta-analysis of forest recreation in Europe based on studies that have applied the travel cost method covering 25 studies in 9 countries since 1979. We conduct the meta-regression with an increasing number of variables where level I includes only data available from the studies, level II aggregate socio-economic variables and level III site specific characteristics such as diversity, fraction of open land, and location. Data shows that consumer surplus varies between USD0.72 per trip to USD122 with a median of USD4.90 per trip. Results of the model with the best overall summary indicate that forest recreation benefits are positively influenced by an increasing level of costs per kilometre, opportunity cost of time and average distance travelled. Also large and popular forests, monotone vegetation and diverse age classes influence benefits positively. GDP, however, appear to have a negative impact on benefits and population density does not contribute significantly to predicting recreation welfare. |
| Keywords: | Travel Cost Method, Meta-analysis, Recreation, Forestry |
| JEL: | Q51 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:86&r=env |
| By: | Barbara Fliess; Hyung-Jong Lee; Olivia L. Dubreuil; Osvaldo Agatiello |
| Abstract: | Focusing on consumer demands in OECD markets and voluntary initiatives taken in the private sector, this study investigates how consumers are informed about the social and environmental conditions under which products have been produced. Consumers of OECD increasingly attach importance to how companies they buy from conduct their business, and the voluntary adoption of CSR policies is spreading in the private sector. But how do consumers know... |
| Keywords: | OECD, retail trade, multinationals, value chain |
| Date: | 2007–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaab:47-en&r=env |
| By: | Jan Marcus Matauschek |
| Abstract: | In recent decades protection of the environment has become an issue of wide public interest. Both on a national and an EU level a multitude of statutes and directives in this area have been enacted. In many cases, these provisions intervene into business activity. This paper explores the way in which environmental protection law can affect real estate projects. The paper uses the example of a development project in Hamburg/Germany, where a population of corncrakes (a small bird) halted a large scale housing project as the bird is protected under the EU Birds Directive (79/409/EEC). The author conducts a cost benefit analysis (CBA), comparing the stopped project and a newly proposed, amended project, which takes the requirements of the directive into account. The author reviews as to whether a study of this nature is justified under aspects of philosophy of science and as to whether the employed method of cost-benefit analysis is appropriate for this purpose By using the residual value method of land valuation the author determines the implicit value which society places on a corncrake. This value is defined as the difference between the residual land value of the stopped project and the residual land value of the alternative project. The value of the bird is thus expressed as the foregone profits which could have been realised with the first, much larger project. The result is that society's valuation of a corncrake amounts to approximately Euro7.2m. A sensitivity analysis and discussion of limitations conclude the paper. |
| URL: | http://d.repec.org/n?u=RePEc:bep:dewple:2005-1-1121&r=env |
| By: | Rabah Arezki; Frederik van der Ploeg |
| Abstract: | We criticize existing empirical results on the detrimental effects of natural resource dependence on the rate of economic growth after controlling for institutional quality, openness, and initial income. These results do not survive once we use instrumental variables techniques to correct for the endogenous nature of the explanatory variables. Furthermore, they suffer from omitted variables bias as they overestimate the effect of initial income per capita and thus underestimate the speed of conditional convergence. Instead, we provide new evidence for the impact of natural resource dependence on income per capita in a systematic empirical cross-country framework. In addition to a significant negative direct impact of natural resources on income per capita, we find a significant indirect effect of natural resources on institutions. We allow for interaction effects and provide evidence that the natural resource curse is particularly severe for economic performance in countries with a low degree of trade openness. Adopting policies directed toward more trade openness may thus soften the impact of a resource curse. We also check the robustness of our results by using a variety of instruments and also employing the ratio of natural capital rather than natural resource exports to national income as an explanatory variable. We find evidence that resource abundance, measured by the stock of natural capital, also induces a resource curse, but less severely for countries that are relatively open. |
| Keywords: | Resource curse , institutions , trade policies , growth performance , income per capita , Trade policy , |
| Date: | 2007–03–09 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/55&r=env |
| By: | Gede Wibawa; Laxman Joshi; Meine Van Noordwijk; Eric André Penot (Agriculteurs et innovations - Innovations et dynamiques des exploitations agricoles - [CIRAD : UPR43], UMR 85 - UMR innovation - [CIRAD : UMR85][INRA] - [sup-agro]) |
| Abstract: | Smallholder rubber plantations in Indonesia, representing more than 80% of the total rubber areas, are very unique in the world. Most smallholder rubber areas are multi-strata in nature. Rubber is not the only perennial crop in that area, but also mixed with timber trees (forest re-growth), fruit trees, and different annual crops. Scientists identified these multistrata systems or called “Jungle Rubber” have multiple functions such as main income source for many farmers; keeping certain level of the forest biodiversity; Carbon sequestration; soil and water conservation. Many efforts have been done by the Indonesian Government to improve the productivity of jungle rubber through monocuture system such as Nucleolus Estate for Smallholding (NES); Project Management Unit (PMU); and Partial System. However, the rate of rubber replanting through those specific projects are too small compared to the total rubber areas in Indonesia. Taking into account the positive aspects of the Rubber Based Agroforestry Systems (RAS), ICRAF, CIRAD and IRRI worked jointly to implement various RAS systems in order to provide farmers better technological options for managing their farms. Results presented in this paper are collected from both on-station and on-farm research. At on-station, rubber planted at a double rows spacing (6m x 2m x 14m) with and without perennial intercrops was monitored and compared to that of the normal spacing (6mx3m). Rubber girth with double row spacing reached tappable size at five years after planting and similar to that planted with normal spacing. Rubber growth at the plot planted with Acacia mangium a very fast growing tree, at the same time with rubber, was very slow: a haft of that of the other treatments. If the fast growing trees are planted two years after rubber planting, then rubber growth is similar to that of normal spacing. Three types of RAS were tested at farmers' plots (RAS1, RAS2, and RAS3). The total number of participants is about 150 farmers, in 100 ha plots, distributed in Jambi, West Kalimantan, West Sumatra and South Sumatra. Results of clone comparison in RAS 1 type of trial (maintenance only on rubber rows) showed that rubber growth variability was more due to the variability of farmers' plots and frequencies of weeding. Rubber clones such as PB 260; RRIC 100 and BPM1 planted under RAS 1 can adapt the RAS conditions and can be tapped at 5-7 years after planting. These findings provide farmers alternatives to develop more environmentally friendly and divers systems in their farms, compared to that of monoculture system. This paper presents also various results related to more intensive RAS (RAS1 and RAS 3). |
| Keywords: | Agroforestry; rubber ; timber trees ; Acacia mangium ; Imperata cylindrica ; RAS ; Jambi ; West Kalimantan ; West Sumatra ; South Sumatra |
| Date: | 2007–03–20 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00137596_v1&r=env |
| By: | Kerstin Ronneberger; Uwe A. Schneider; Richard S.J. Tol (Economic and Social Research Institute, Dublin) |
| Abstract: | The Kleines Land Use Model (KLUM), is a global agricultural landallocation model, developed as a tool to dynamically couple global state-of-the-art vegetation and economy models. The allocation process is based on profit maximisation, assuming risk aversion and decreasing returns to scales. The model is suited for long-term predictions, acknowledges spatial and biophysical diversity and enables the data exchange with common vegetation models. Finally, the effective simplicity of the mechanism facilitates online-coupling with larger models. Simulations of future crop allocation under climate change suggest that cultivation of cereals would fall in favour of minor crops such as vegetables and fruits. Total revenue of crop production is predicted to increase for most parts of the world. The comparison with two reference scenarios, where solely prices or yields are changed show that the observed results are dominated by the induced price changes. Losses in revenue prevail and changes in area are more balanced over the world when only the much smaller yield changes are applied. Yet, the simple sum of price and yield effects on crop allocation can differ in magnitude and sign from the real dynamics, emphasising the importance of simultaneous inclusion of economic and biophysical aspects of land-use decisions. |
| Keywords: | global land-use model, crop allocation, feed back loop, climate change |
| JEL: | Q54 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:65&r=env |
| By: | Marianne Zandersen; Mette Termansen; Frank S. Jensen |
| Abstract: | We estimate changes in the total recreative value over a 20 year time period of a large newly established forest, using mixed specification of a random utility models and geographic information system. The models are estimated using data from two identical surveys in 1977 and 1997. We conduct three different spatial value transfers and test these on the new forest. Results suggest that the new forest increased the recreative value nearly 70 times over the 20 years, primarily due the maturing of the forest and changed patterns of behaviour. The value transfer to the new forest range between an underestimate of 57% and an overestimate of 349%, depending on the sampling of the choice set used as study sites in the transfer. |
| Keywords: | recreation, random utility model, GIS |
| JEL: | Q23 Q51 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:80&r=env |
| By: | Andrés Gomez-Lobo (Department of Economics, University of Chile, Santiago, Chile.); Julio Peña (ILADES-Georgetown University, Universidad Alberto Hurtado); Patricio Barría (Fisheries Development Institute, Valparaíso, Chile.) |
| Abstract: | In 2001 an individual (operationally transferable) quota system was introduced for all the most important industrial fisheries in Chile. This system was put in place after years of declining stocks and over investment. In this paper we describe this reform and estimate related allocative efficiency benefits for the most important industrial fishery in the country, the southern pelagic fishery. Benefits were estimated using a bioeconomic model and Monte Carlo techniques. This approach allows benefits to be estimated using more realistic counterfactual scenarios than just comparing the fishery before and after the reform. Estimated discounted net benefits reach US$123 to US$366 million in the period 2001 to 2020. Fleet size fell from 148 active boats in 2000 to 65 in 2002 as a direct consequence of the reform. Among the interesting features of the recent Chilean experience is the way the political economy of the reform was facilitated by the prior introduction of de facto individual quotas within the framework of fishery research activities. When the authorities closed the southern pelagic fishery because of biological problems between 1997 and 2000, they organized ‘experimental’ fishing expeditions in which participant boats were given the right to fish a certain amount of resources per expedition. This pseudo quota system allowed fishermen to experience directly the benefits of individual quotas and that was instrumental to the political agreement leading to the reform. This successful gradual approach may be of interest to other countries planning to introduce individual quotas. Finally, it is important to note that the Chilean southern industrial pelagic fishery has average catches of over 1.4 million tons a year, making it one of the largest fisheries in the world to be regulated by individual quotas. |
| Keywords: | Bioeconomic model, pelagic fisheries, individual transferable quotas |
| JEL: | Q22 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:ila:ilades:inv179&r=env |
| By: | Ippei Fujiwara (Director and Senior Economist, Institute for Monetary and Economic Studies, Bank of Japan (E-mail: ippei.fujiwara@boj.or.jp)); Yuki Teranishi (Bank of Japan and Columbia University (E-mail: yt2153@columbia.edu)) |
| Abstract: | In this paper, we first construct a dynamic new Keynesian model that incorporates life-cycle behavior a la Gertler (1999), in order to study whether structural shocks to the economy have asymmetric effects on heterogeneous agents, namely workers and retirees. We also examine whether considerations of life-cycle and demographic structure alter the dynamic properties of the monetary business cycle model, specifically the degree of amplification in impulse responses. According to our simulation results, shocks indeed have asymmetric impacts on different households and the demographic structure does alter the size of responses against shocks by changing the degree of the trade-off between substitution and income effects. |
| Keywords: | Heterogenous Agents, Life-Cycle, New Keynesian Model |
| JEL: | E32 E50 J14 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:ime:imedps:07-e-04&r=env |