nep-env New Economics Papers
on Environmental Economics
Issue of 2007‒04‒21
seventeen papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. Energy Substitutions, Climate Change and Carbon Sinks By LAFFORGUE, Gilles; MAGNE, Bertrand; MOREAUX, Michel
  2. An endogenous timing analysis of international duopoly with transboundary stock pollution By Kenji Fujiwara; Norimichi Matsueda
  3. Gains from trade in a polluting product in the presence of transboundary stock pollution By Kenji Fujiwara; Norimichi Matsueda
  4. Does Better Environmental Performance Affect Revenues, Cost, or Both? Evidence From a Transition Economy By Dietrich Earnhart; Lubomir Lizal
  5. Efficiency in Managing the Environment and the Opportunity Cost of Pollution Abatement By Subhash C. Ray; Kankana Mukherjee
  6. Environmental Efficiency Measurement with Translog Distance Functions: A Parametric Approach By Cuesta, Rafael A.; Knox Lovell, C.A.; Zofío, José Luis
  7. Estimating demand for new car fuel economy in the UK 1970-2004 using a two-stage error correction model By David Bonilla; Tim Foxon
  9. Effects of transboundary pollution on the mode of international trade of a polluting good By Kenji Fujiwara; Norimichi Matsueda
  10. Sustainable development from an Islamic Perspective: meaning implications and policy concerns By Hasan, Zubair
  11. The Socioeconomic Determinants of Individual Environmental Concern: Evidence from Shanghai Data By Junyi Shen; Tatsuyoshi Saijo
  12. Emerging in between: the multi-level governance of renewable energy in the English regions By Adrian Smith
  13. Ordering the Extraction of Polluting Nonrenewable Resources By CHAKRAVORTY, Ujjayant; MOREAUX, Michel; TIDBALL, Mabel
  14. Watching Corn Grow: A Hedonic Study of the Iowa Landscape By Secchi, Silvia
  15. An Econometric Model of Wildfire Suppression Productivity By Jonathan Yoder; Mariam Lankoande
  16. Extracting Several Resource Deposits of Unknown Size: Optimal Order By Murray C. Kemp; Ngo Van Long
  17. Systèmes de transports urbains et impacts environnementaux : quelle évaluation ? Une analyse comparative des agglomérations de Bordeaux, Grenoble, Lyon et Paris By Damien Verry

  1. By: LAFFORGUE, Gilles; MAGNE, Bertrand; MOREAUX, Michel
    Date: 2007–01
  2. By: Kenji Fujiwara (School of Economics, Kwansei Gakuin University); Norimichi Matsueda (School of Economics, Kwansei Gakuin University)
    Abstract: This paper looks into potential determinants of the mode of international competition in a polluting good market by analyzing a so-called timing game between two environmentally concerned governments. From the equilibrium results of our intergovernmental game based on an international duopoly model with transboundary stock pollution, we show how an exact form of international competition depends on the magnitudes of international transportation coefficients of pollutant emissions and decay rates of pollutant stocks in respective countries as well as on other environmental and economic variables.
    Keywords: international duopoly, transboundary pollution, stock pollution, gains from trade, endogenous timing.
    JEL: F10 F12 Q20
    Date: 2007–04
  3. By: Kenji Fujiwara (School of Economics, Kwansei Gakuin University); Norimichi Matsueda (School of Economics, Kwansei Gakuin University)
    Abstract: This paper examines how the opening of trade affects a countryfs welfare in the context of an international polluting duopoly model with transboundary stock pollution. In this framework, we show that trade liberalization can have quite different welfare implications, depending on the mode of international competition and the magnitudes of international transportation coefficients of pollutant emissions and decay rates of pollutant stocks in respective countries, as well as on the values of other environmental and economic variables.
    Keywords: gains from trade, international duopoly, Cournot-Nash competition, Stackelberg competition, transboundary stock pollution.
    JEL: F10 F12 Q20
    Date: 2007–04
  4. By: Dietrich Earnhart; Lubomir Lizal
    Abstract: This study analyzes the effect of corporate environmental performance on financial performance in a transition economy. In particular, it assesses whether good environmental performance affects revenues, costs, or both, and if so, in which directions. As environmental performance improves, do revenues rise and costs fall so that profits unambiguously increase? Or vice versa? If both revenues and costs rise (or fall), does better environmental performance improve or undermine profitability? To answer these questions, our study analyzes the links from environmental performance to revenues, costs, and profits using an unbalanced panel of Czech firms from the years 1996 to 1998. The analytical results indicate strongly that better environmental performance improves profitability by driving down costs more than it drives down revenues, consistent with the substantial regulatory scrutiny exerted by environmental agencies and the primary pollution control approach implemented by firms during the sample period.
    Keywords: Czech Republic, environmental protection, pollution, financial performance
    JEL: D21 G39 Q53
    Date: 2007–02–01
  5. By: Subhash C. Ray (University of Connecticut); Kankana Mukherjee (Worcester Polytechnic Institute)
    Abstract: Using the directional distance function we study a cross section of 110 countries to examine the efficiency of management of the tradeoffs between pollution and income. The DEA model is reformulated to permit 'reverse disposability' of the bad output. Further, we interpret the optimal solution of the multiplier form of the DEA model as an iso-inefficiency line. This permits us to measure the shadow cost of the bad output for a country that is in the interior, rather than on the frontier of the production possibilities set. We also compare the relative environmental performance of countries in terms of emission intensity adjusted for technical efficiency. Only 10% of the countries are found to be on the frontier. Also, there is considerable inter-country variation in the imputed opportunity cost of CO2 reduction. Further, differences in technical efficiency contribute substantially to differences in the observed levels of CO2 intensity.
    Keywords: Data Envelopment Analysis, directional distance function, pollution- income tradeoff, shadow price.
    Date: 2007–04
  6. By: Cuesta, Rafael A. (Departamento de Economía, Universidad de Oviedo, E-33071, Oviedo, Spain.); Knox Lovell, C.A. (Department of Economics, Terry College of Business, University of Georgia, Athens, GA 30602, USA); Zofío, José Luis (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.)
    Abstract: We use a flexible parametric hyperbolic distance function to estimate environmental efficiency when some outputs are undesirable. Cuesta and Zofio (J. Prod. Analysis (2005), 31-48) introduced this distance function specification in conventional input-output space to estimate technical efficiency within a stochastic frontier context. We extend their approach to accommodate undesirable outputs and to estimate environmental efficiency within a stochastic frontier context. This provides a parametric counterpart to Färe et al.’s popular nonparametric environmental efficiency measures (Rev. Econ. Stat. 75 (1989), 90-98). The distance function model is applied to a panel of U.S. electricity generating units that produce marketed electricity and non-marketed SO2 emissions.
    Keywords: Undesirable outputs; parametric distance functions; stochastic frontier analysis; environmental efficiency
    JEL: C32 L95
    Date: 2007–03
  7. By: David Bonilla (Department of Land Economy, University of Cambridge, UK); Tim Foxon (Department of Land Economy, University of Cambridge, UK)
    Abstract: Over the past 30 years, governments have sought to stimulate improvements in new car fuel economy to contribute to air quality, energy security and climate change goals. We analyse the demand for new car fuel economy in the UK using a two-stage econometric model to investigate the drivers of this demand in the short and long run over the period 1970-2004.We find that higher incomes and long run price changes are the main drivers to achieve improvements in fuel economy particularly for gasoline cars; and that new car fuel economy changes were scarcely induced by the Voluntary Agreement on CO2 emissions reductions adopted in the 1990s. We find that the demand for fuel economy is price inelastic for both fuels, in agreement with other studies. Our calculated long run income elasticity (gasoline with -0.31 and diesel fuels with -0.20) values are above the range of international studies for gasoline but within the range for diesel.
    Keywords: fuel economy policy and standards; energy policy; energy demand; resource conservation; transport policy.
    JEL: Q2 Q4 R4
    Date: 2007
  8. By: Warwick McKibbin
    Date: 2007–03
  9. By: Kenji Fujiwara (School of Economics, Kwansei Gakuin University); Norimichi Matsueda (School of Economics, Kwansei Gakuin University)
    Abstract: This paper looks into potential determinants of the mode of international competition in a polluting good market by analyzing a strategic interaction between two environmentally concerned governments. From the equilibrium outcomes of our game based on an international duopoly model with transboundary pollution, we show how a resulting form of international competition can be influenced by, among other things, the magnitudes of the marginal damage cost and transboundary impact of pollution and also the degree of similarity between the two nations in these aspects.
    Keywords: international duopoly, transboundary pollution, gains from trade.
    JEL: F10 F12 Q20
    Date: 2007–04
  10. By: Hasan, Zubair
    Abstract: Abstract This paper examines the debate on the meaning of sustainable development and the policy implications of different approaches from an Islamic perspective. It integrates mainstream and Islamic positions on the subject and argues that to whatever definition of sustainable development one might subscribe, eventually, each ends in an environmental concern. This paper attempts to show that the continuous increase in output of goods and services worldwide imposes a trade off between material prosperity on the one hand and pollution poisoning of human beings on the other. It engages in the intensifying debate about how the benefits of the former and the negative impact of the latter could be more evenly distributed. The paper takes inspiration from the maqasid (objectives) of the Shari’ah and verses of the holy Qur’an that indicate a way out of this impasse. It holds that the worldview differences of secularism and Islam are the basic reason of divergence between their approaches to development. It argues that the Islamic approach is more agreeable to environmental protection and concludes that issues surrounding sustainable development have moral, ethical, social, and political complexities and that economics or economists alone cannot resolve the problem.
    Keywords: Sustainable; Development; Islamic perspective; Policy concerns
    JEL: Q56 Q5
    Date: 2007
  11. By: Junyi Shen (Osaka School of International Public Policy, Osaka University); Tatsuyoshi Saijo (ISER, Osaka University)
    Abstract: This study examines the influence of socioeconomic characteristics on eleven measures of environmental concern by applying a pooled sample of 1200 individuals in Shanghai, China. Previous studies, which made efforts to explain environmental concern as a function of social structure, suggest that there are traditionally five hypotheses (the age, gender, social class, residence, and political hypotheses) for socioeconomic determinants, which are associated with individual environmental concerns. Unlike those methodologies adopted in many previous studies, we apply an ordered probit model to test three hypotheses (the age, gender, and social class hypotheses) in this study. As a result, high income and high education level are found to be positively related to environmental concern as expected. However, we find that in contrast to most of the existing studies, the marginal effect of age on the probability of being environmentally concerned is positive in several measures, implying that the older are more concerned about the environment than the younger. In addition, weak evidences indicate that women are less concerned about the environment than men. Other socioeconomic characteristics such as employment status and household size are not significant in most of the environmental concern measures we defined.
    Keywords: Socioeconomic determinants, Environmental Concern, Ordered Probit Model, Chinese
    JEL: C25 C81 Q59
    Date: 2007–04
  12. By: Adrian Smith (SPRU, University of Sussex)
    Keywords: multi-level governance, renewable energy, English regions
    JEL: O30 Q20
    Date: 2007–04–13
  13. By: CHAKRAVORTY, Ujjayant; MOREAUX, Michel; TIDBALL, Mabel
    JEL: Q12 Q32 Q41
    Date: 2006–09
  14. By: Secchi, Silvia
    Abstract: Landscape amenities can be scarce in places with large areas of open space. Intensely farmed areas with high levels of monocropping and livestock production are akin to developed open space areas and do not provide many services in terms of landscape amenities. Open space in the form of farmland is plentiful, but parks and their services are in short supply. This issue is of particular importance for public policy because it is closely linked to the impact of externalities caused by agricultural activities and to the indirect effects of land use dynamics. This study looks at the impact of landscape amenities on rural residential property values in five counties in North Central Iowa using a hedonic pricing model based on geographic information systems. The effect of cropland, pasture, forest, and developed land as land uses surrounding the property is considered, as well as the impact of proximity to recreational areas. The study also includes the effect of other disamenities, such as livestock facilities and quarries, which can be considered part of the developed open space and are a common feature of the Iowa landscape.
    Keywords: environmental management, hedonic analysis, land use, spatial externalities.
    Date: 2007–04–18
  15. By: Jonathan Yoder; Mariam Lankoande (School of Economic Sciences, Washington State University)
    Abstract: We estimate a model of suppression productivity for individual fires, where suppression productivity is measured in terms of the reduction in the estimated market value of wildfire losses. Estimation results show that at the margin, every dollar increase in suppression costs reduces resource damage by 12 cents, while each dollar invested in pre-suppression reduces suppression expenditures by 3.76 dollars. These results suggest that there is an over-allocation of fire management funds to suppression activities relative to prevention measures in terms of costeffectiveness. This paper provides an empirical basis for a widely used economic model of wildfire management that seeks to minimize the sum of suppression costs and economic losses from wildfires, the cost plus net value change model of fire suppression (C+NVC).
    Keywords: wildfire suppression
    Date: 2006–09
  16. By: Murray C. Kemp; Ngo Van Long
    Abstract: Oil companies often announce revised estimates of their reserves. This indicates that stock uncertainty is a prevalent feature of natural resource industries. In this paper we consider the multi-deposit case where resource extraction produces information about the size of reserves. We show that the optimal order of extracting resource deposits depends both on the informational characteristics of the extraction process and on the extraction costs. Differences in extraction costs, a key consideration highlighted in Solow and Wan (1976), must be balanced against the relative value of information generated by the extraction of various deposits. Our model supplies an explanation of why high cost deposits are sometimes extracted when lower cost deposits have not been exhausted. <P>Les compagnies pétrolières révisent souvent les chiffres de leurs réserves, ce qui indique que l’incertitude concernant les stocks est prévalente. Nous considérons le cas où l’extraction donne des informations sur la taille des réserves. Nous prouvons que l’ordre optimal d’exploitation des stocks dépend des propriétés du processus d’extraction concernant la révélation d’information et des coûts. La différence des coûts, qui est une considération importante dans Solow and Wan (1976), doit être balancée contre la valeur informative des réserves. Notre modèle fournit une explication du fait que les réserves plus coûteuses sont parfois exploitées avant l’épuisement des réserves moins coûteuses.
    Keywords: order of extraction, value of information, uncertainty, ordre d’extraction, valeur de l’information, incertitude
    JEL: Q30
    Date: 2007–04–01
  17. By: Damien Verry (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat])
    Abstract: L'attractivité d'un territoire est de plus en plus évaluée à l'aune de critère environnementaux. L'objet de cet article est de proposer une méthodologie permettant de comparer les émissions de polluants et les consommations énergétiques liés aux déplacements urbains de quatre agglomérations françaises. Le but est notamment de relier de manière quantitative les pratiques de mobilité, différentes entre les agglomérations, aux émissions de CO2 par individus et par km. Quatre Diagnostics Energies Environnements Déplacements (DEED) sont réalisés à partir d'enquêtes décrivant la mobilité de plus de 60 000 individus interrogés sur leurs déplacements de la veille. Les résultats obtenus suggèrent qu'il est nécessaire de prendre en compte simultanément les différences d'émissions entre les agglomérations mais aussi à l'intérieur de celles ci.
    Keywords: Mobilité urbaine ; émissions de CO2 ; Enquêtes Ménages Déplacements ; DEED
    Date: 2007–04–16

This nep-env issue is ©2007 by Francisco S.Ramos. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.