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on Environmental Economics |
| By: | Barbara Stoschek |
| Abstract: | This paper uses a political-economy framework to analyze what consequences the exogenous introduction of a quantitative restriction on total emissions in a small open economy has on the stringency of domestic trade policy. The question is whether and to what extent the government, if it takes different lobby groups´ interests into consideration, has an incentive to compensate the polluting industry for stricter environmental regulations by granting higher protection to it. It turns out that the government will indeed tend to increase subsidization of the industry affected by environmental regulation. This compensation will even be more than complete as long as environmental interests are taken into account. Hence, contrary to what might be expected, a net benefit for the polluting sector arises from environmental restrictions. |
| Keywords: | Environmental Regulations; International Competitiveness; Political |
| JEL: | F18 Q52 Q58 |
| Date: | 2007–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:got:cegedp:65&r=env |
| By: | André MEUNIE (GREThA); Guillaume POUYANNE (GREThA) |
| Abstract: | The Environmental Kuznets Curve (EKC) has given rise to a flourishing literature since the beginning of the 90’s. The EKC postulates an inverted U-shaped relationship between income and polluting emissions: there would be a level of wealth beyond which polluting emissions would decrease. Surprisingly, this issue has rarely been applied to the cities. Yet we consider such a question as a pertinent one. This article aims at analyzing the Urban EKC (UEKC) hypothesis. It tests it with a sample of 37 cities in the world. Previous studies on the UEKC hypothesis are very scarce. They are the ground for us, to define a specific methodological posture. First, we use polluting emissions per capita instead of pollutants concentrations: thus we control for the influence of urban size. Second, we only take in account pollutants due to a unique source, which is daily mobility. This makes the explanation of the income-polluting emissions relation easier, as our comments are based on a specific, well constituted literature about factors of daily mobility. We expose the theoretical mechanisms by which the UEKC due to daily mobility could be validated. The impact of income on polluting emissions is threefold : behavioural, with a direct effect and an indirect one ; technical (the environmental efficiency of the vehicles increases) ; political (planning authorities wish to evolve towards a « sustainable mobility »). The empirical part of the paper is a test of the UEKC on a sample of 37 cities in the world. We present three important results. First, the estimation of quadratic regressions gives an inverted U-shaped relationship for most of the pollutants, which doesn’t permit to invalidate the UEKC hypothesis. Second, we show that the explanation of such curves is linked to two sets of factors: individual behaviours (e.g. modal choice) and collective choices (e.g. transit supply). Third, we discuss the validity of the UEKC hypothesis, that is we seek to explain the level of polluting emissions. As many factors are entangled, we use a principal components analysis to show that the influence of income may in fact reflect the influence of both urban form and consumers’ habits on polluting emissions due to daily mobility. |
| Keywords: | Environmental Kuznets Curve ; daily mobility ; urban ; polluting emissions |
| JEL: | Q53 Q56 R12 R14 R41 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2007-04&r=env |
| By: | Leah G. Traub; Hilary Sigman |
| Abstract: | Under most U.S. environmental laws and some health and safety laws, states may apply to implement and enforce the law, through a process known as authorization or primacy. The paper presents a simple model of the strategic interaction between the federal and state governments with such voluntary decentralization. The model suggests that the federal government may design the policy so that states that desire stringent regulation authorize, whereas other states remain under the federal program. We then test the implications of this model using data on U.S. water pollution and hazardous waste regulations, two of the most important environmental programs to allow authorization. Consistent with the results of our model, we find that states with stronger environmental preferences authorize more quickly and more fully under both policies. This evidence runs counter to concerns that states use control of their programs to undercut federal environmental standards. |
| JEL: | H77 Q53 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13238&r=env |
| By: | Basak Bayramoglu (PSE - Paris-Jourdan Sciences Economiques - [CNRS : UMR8545] - [Ecole des Hautes Etudes en Sciences Sociales][Ecole Nationale des Ponts et Chaussées][Ecole Normale Supérieure de Paris], CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I]) |
| Abstract: | This paper studies the link between the design of international environmental agreements and the incentives for the private sector to invest in cleaner technologies. More specifically, it compares the performance, in the Paretoo sense, of two types of agreement : an agreement on a uniform standard with transfers and an agreement on differentiated standards without transfers. To achieve this goal, we use a multi-stage game where the private sector anticipates its irreversible investment given the expected level of abatement standards, resulting from future bilateral negotiations. Our findings indicate that whenever countries are able to partially commit, the agreement on a uniform standard may be preferable, as it creates greater incentives for firms to invest in costly abatement technology. This result relies on the low level of the set-up cost of this technology. If this level is sufficiently high, the announcement and implementation of the agreement on a uniform standard with transfers is not optimal, because it takes away the incentive of all firms to invest in a new abatement technology. |
| Keywords: | agreements, standards, transfers, technology adoption, irreversible investment, bargaining, transboundary pollution. |
| Date: | 2007–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00159563_v1&r=env |
| By: | Finger, Robert; Schmid, Stéphanie |
| Abstract: | A model that integrates biophysical simulations in an economic model is used to analyze the impact of climate change on crop production. The biophysical model simulates future plant-management-climate relationships and the economic model simulates farmers’ adaptation actions to climate change using a nonlinear programming approach. Beyond the development of average yields, special attention is devoted to the impact of climate change on crop yield variability. This study analyzes corn and winter wheat production on the Swiss Plateau with respect to climate change scenarios that cover the period of 2030-2050. In our model, adaptation options such as changes in seeding dates, changes in production intensity and the adoption of irrigation farming are considered. Different scenarios of climate change, output prices and farmers’ risk aversion are applied in order to show the sensitivity of adaptation strategies and crop yields, respectively, on these factors. Our results show that adaptation actions, yields and yield variation highly depend on both climate change and output prices. The sensitivity of adaptation options and yields, respectively, to prices and risk aversion for winter wheat is much lower than for corn because of different growing periods. In general, our results show that both corn and winter wheat yields increase in the next decades. In contrast to other studies, we find the coefficient of variation of corn and winter wheat yields to decrease. We therefore conclude that simple adaptation measures are sufficient to take advantage of climate change in Swiss crop farming. |
| Keywords: | climate change; robust estimation; yield variation; corn; winter wheat; market liberalization |
| JEL: | Q12 C61 C10 Q57 Q54 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3943&r=env |
| By: | Sittidaj Pongkijvorasin (Department of Economics, University of Hawaii at Manoa); James Roumasset (Department of Economics, University of Hawaii at Manoa); Thomas Kae’o Duarte (Department of Botany, University of Hawaii at Manoa) |
| Abstract: | This paper develops a regional hydrologic-ecologic-economic model of groundwater use and a nearshore ecosystem. Particularly, we model coastal groundwater management and its effects on discharge, nearshore water quality, and marine biota (e.g., indigenous marine algae). We show that incorporating the external effects on nearshore resources increases the optimal steady-state head level. Numerical simulations are illustrated using data from the Kuki’o region on the island of Hawaii. Two different approaches for incorporating the nearshore resource are examined. We find that including algae’s market value directly in the objective function calls for lower, albeit slightly lower, water extraction rate in all periods. If a minimum constraint is placed on the stock of the keystone species, greater conservation may be indicated. The constraint also results in non-monotonic paths of water extraction, head level, and water price in the optimal solution. |
| Keywords: | groundwater management, submarine groundwater discharge, stock externality, nearshore resources, safe minimum standard, marine algae, dynamic optimization model |
| JEL: | Q25 Q28 C61 D62 |
| Date: | 2007–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:200713&r=env |
| By: | Sylvie FERRARI (GREThA); Jacques MERY (CEMAGREF) |
| Abstract: | The aim of this paper is to explore the connections between the time dimension of economic phenomena and that of natural ones within the context of global (joint emissions of the energy sector) or local (joint product of waste) pollutions affecting present and future generations. Discounting constitutes a first way but leads to some difficulties when fairness must be taken into account. Furthermore, to take into account the interdependencies between economics and natural environment involves irreversibility of time. At last, ethics which is a key dimension of the sustainable development is introduced with Jonas’s responsibility principle. In this way, discounting can be used under some limits regarding economic decisions. |
| Keywords: | intergenerational equity; discounting; responsibility principle; irreversibility; sustainable development |
| JEL: | H43 Q56 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2007-10&r=env |
| By: | Tixier, Maud (ESSEC Business School) |
| Abstract: | Because of their specific features (isolation, important sea shores, difficult access, scattering, limited natural resources, prone to cultural disasters, large imports, etc.) islands and small island states need to be protected. They represent case studies regarding sustainable tourism, just like arid zones and mountainous regions. This article takes Cyprus as an example to assess positive and negative aspects which, from a tourist point of view, characterize each of the traditional pillars of sustainability: social, environmental and economic, including patrimonial and cultural. The appraisal as described is largely positive. |
| Keywords: | Cyprus; Sustainability; Tourism; Social; Economic; Environmental; Island |
| JEL: | F00 O10 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:essewp:dr-07011&r=env |
| By: | Alain Nadai (CIRED - Centre international de recherche sur l'environnement et le développement - [CIRAD : UMR56][CNRS : UMR8568] - [Ecole des Hautes Etudes en Sciences Sociales][Ecole Nationale des Ponts et Chaussées][Ecole Nationale du Génie Rural des Eaux et des Forêts]) |
| Abstract: | Since the early 1990s, national ecolabelling programmes have proliferated worldwide. The European Union (EU) implemented such a regional program in 1991. This decision was part of a broader orientation towards Integrated Product Policy approach in the EU. Since 1991, the development of European ecolabels has been slow and difficult. This paper examines industrial strategies vis-à-vis the EU ecolabel in order to understand the problems faced by the regulator in the development of this ecolabel.<br /><br />The first part of the paper defines and uses the concept of credence good in order to argue that the consumer cannot assess the ecolabel. Based on the examination of the development of the European ecolabel, the second part points out three variables that seem to influence the development of product eco-labels : i) the type of industry (i.e. the degree of heterogeneity between the sets of products sold by the different firms); ii) the threat of direct governmental regulation on the environmental quality of the product; and, iii) the magnitude of the final demand for a green variant of the product. The paper concludes with a discussion of on policy implications for policy makers interested in considering or promoting the use of ecolabels. |
| Keywords: | quality, eco-labeling, voluntary environmental regulation. |
| Date: | 2007–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00159961_v1&r=env |
| By: | László Szerb (University of Pécs, Hungary); Siri Terjesen (Brisbane Graduate School of Business, Australia; Max Planck Institute of Economics, Germany); Gábor Rappai (University of Pécs, Hungary) |
| Abstract: | This study explores individual and country-level environmental drivers of informal "seed" investment. We examine four types of informal investors based on business ownership experience (or no such experience) and close family relationship with investee (or no such relationship): "classic love money", "outsider", "kin owner" and "classic business angel" investors. At the environmental level, we are interested in the role of economic development, income tax policies, start-up costs, pro-enterrise government programmes, availability of debt financing, entrepreneurship education and culture. Using Global Entrepreneurship Monitor data from telephone interiews with 257,793 individuals in 31 countries, including 5,960 informal investors, we report drivers for the four types of seed investment. Descriptive statistics are consistent with prior research: informal investors are likely to be older males who work full-time, earn high incomes, perceive start-up opportunities in the environment, and believe that they have the skills to start their own businesses. At the environmental level, we find that countries with higher percentages of informal investors are significantly likely to have higher levels of economic development, higher business start-up costs, higher levels of entrepreneurship education, lower income taxes and lower power distance. Other environmental effects on the four populations of informal investors are reported and discussed, as well as implications for practice, policy and future research. |
| Keywords: | informal investment, individual drivers, environmental drivers, entrepreneurial careers, business ownership, new venture financing |
| Date: | 2007–07–02 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-030&r=env |
| By: | Shah, Deepak |
| Abstract: | Many states in the country have initiated various measures to protect their forest resources. Maharashtra is no exception to this phenomenon. An attempt, therefore, has been made in this paper to examine the extent to which this state is successful in conserving and managing its forest resources. The main foci of attention of this study are on evaluating various forest related indicators of Maharashtra such as distribution of forest area, outturn of major and minor forest produce, income and expenditure pattern on state forestry, extent of social forestry, and afforestation, etc.The study revealed very interesting observations. One of the major observations of this study was the sharp decline in revenue receipts from state forestry, especially after the late eighties period. Very slow growth in total value of forest produce harvested and a sharp increase in total expenditure on state forestry were found to be the major causative factors responsible for this decline in revenue receipts. Although the Government has banned felling of trees in many parts of the state, it has also adversely affected not only the harvesting of forest produce and thereby revenue receipts from state forestry but also the working of FLCS in the state. The study provides certain policy suggestions that will not only help the state to increase its revenue receipts from state forestry but also in respect of achieving its goal of maintaining ecological balance in the state. |
| Keywords: | Management Forest Resources |
| JEL: | Q23 |
| Date: | 2007–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3890&r=env |
| By: | Alain Nadai (CIRED - Centre international de recherche sur l'environnement et le développement - [CIRAD : UMR56][CNRS : UMR8568] - [Ecole des Hautes Etudes en Sciences Sociales][Ecole Nationale des Ponts et Chaussées][Ecole Nationale du Génie Rural des Eaux et des Forêts]) |
| Abstract: | Quality labels are not new, but the last decade saw labeling schemes to be increasingly targeted at expert qualities – i.e. qualities involving a high degree of scientific expertise in order to be assessed. The paper takes a close look at the regulatory and institutional framework underlying the development of one of these labels: the EU ecolabeling program (CEE, 1992). In order to better understand the conditions for the development of product ecolabels, we examine a success story, the case of the paints and varnishes European Ecolabel and contrast it the result with case of industrial opposition (detergent industry). The comparison pints at the importance of the negotiation phase in the development of product ecolabels. It also suggests that the degree of technological heterogeneity of the concerned industry - i.e. the extent to which the environmental performance of the products sold by the different firms are different - may be a variable determining the chances of success in the development of an ecolabel. The conclusion examines the lessons that can be drawn for the development of environmentally effective product ecolabels. It proposes tracks for further research on the subject. |
| Keywords: | ecolabel ; industry ; competition ; negotiation |
| Date: | 2007–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00159973_v1&r=env |
| By: | Shah, Deepak |
| Abstract: | Many states in India have initiated various measures to protect their forest resources. Maharashtra is no exception to this phenomenon. An attempt, therefore, has been made in this paper to examine the extent to which this state is successful in conserving and managing its forest resources. The main foci of attention of this study are on evaluating various forest related indicators of Maharashtra such as distribution of forest area, outturn of major and minor forest produce, income and expenditure pattern on state forestry, extent of social forestry, and afforestation, etc. The study revealed very interesting observations. One of the major observations of this study was the sharp decline in revenue receipts from state forestry, especially after the late eighties period. Very slow growth in total value of forest produce harvested and a sharp increase in total expenditure on state forestry were found to be the major causative factors responsible for this decline in revenue receipts. Although the Government has banned felling of trees in many parts of the state, it has also adversely affected not only the harvesting of forest produce and thereby revenue receipts from state forestry but also the working of FLCS in the state. The study provides certain policy suggestions that will not only help the state to increase its revenue receipts from state forestry but also in respect of achieving its goal of maintaining ecological balance in the state. |
| Keywords: | Management Forest Resources |
| JEL: | Q23 |
| Date: | 2007–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3920&r=env |
| By: | Kimberly Burneet (Department of Economics, University of Puget Sound); James Roumasset (Department of Economics, University of Hawaii at Manoa); Yacov Tsur (Department of Agricultural Economics & Management, Hebrew University of Jerusalem) |
| Abstract: | This paper develops a two-stage model for the optimal management of a potential invasive species. The arrival of an invasive species is modeled as an irreversible event with an uncertain arrival time. The model is solved in two stages, beginning with the post-invasion stage. In this stage, we assume perfect certainty regarding population size and arrivals. The loss-minimizing paths of prevention and control are identified, resulting in a minimized present value penalty associated with the invasion. After calculating this penalty, we analyze the pre-invasion stage and solve for the level of prevention expenditures that will minimize expected total cost. For the case of the Brown Tree Snake potentially invading Hawaii, we find that under a regime of precommitment, pre-invasion expenditures on prevention should be approximately $3.2 million today, decreasing every year until invasion. However, if the planner is permitted to re-evaluate the threat following a non-event, prevention will be lower ($2.96 million a year) and constant until invasion. Once invasion occurs, optimal management requires lower annual expenditures on prevention ($3.1 million) but requires $1.6 million to be spent on control annually to keep the population at its steady state level. |
| Keywords: | catastrophe, hazard function, invasive species, Brown Tree Snake, Boiga irregularis, prevention and control, Hawaii |
| JEL: | Q20 Q28 Q54 Q57 |
| Date: | 2007–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:200715&r=env |
| By: | Peter A. Groothuis; Jana D. Groothuis; John C. Whitehead |
| Abstract: | A willingness to accept framework is used to measure the compensation required to allow wind generation windmills to be built in the mountains of North Carolina. We address why the NIMBY syndrome may arise when choosing site locations, the perceived property rights of view-sheds, as well as the perceptions of the status quo in the southern Appalachian Mountains. We find that individuals who perceive wind energy as a clean source of power require less compensation. Those who retire to the mountains or individuals who have ancestors from Watauga County require more compensation to accept windmills in their view-shed. We find that annual compensation is about twenty three dollars per household. In the aggregate, citizens need to be compensated by about one-half million dollars a year to allow wind electrical generation turbines in Watauga County. In addition, we find in a bivariate-probit analysis that individuals who are more likely to participate in a green energy program also are more likely to allow electrical generation wind mills in their view-shed suggesting that the green on green environmental debate is overstated. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:apl:wpaper:07-12&r=env |
| By: | Basak Bayramoglu (PSE - Paris-Jourdan Sciences Economiques - [CNRS : UMR8545] - [Ecole des Hautes Etudes en Sciences Sociales][Ecole Nationale des Ponts et Chaussées][Ecole Normale Supérieure de Paris], CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I]); Jean-François Jacques (EQUIPE UNIVERSITAIRE DE RECHERCHE "INSTITUTIONS : COORDINATION, ORGANISATION" - EURIsCO - [Université Paris Dauphine - Paris IX]) |
| Abstract: | This note proposes an example which contradicts the idea that similar countries will negotiate an agreement on a uniform standard. It shows that strictly identical countries may have an interest in reducing their emissions differently, and not in a uniform way. This result relies on the existence of fixed costs in the abatement technology. Identical countries could be better off by signing an agreement on differentiated standards in order to exploit increasing returns to scale in the abatement activities. More specifically, one of the countries abates for both, and pays for the fixed cost of investment. In return, it is compensated by monetary transfers for this effort. We show that the level of fixed cost must be sufficiently high in this case. |
| Keywords: | Transboundary pollution, cooperative games, bargaining, standards, transfers, fixed cost. |
| Date: | 2007–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00159575_v1&r=env |
| By: | Shah, Deepak |
| Abstract: | Maharashtra has 720 km. of coastline with the continental shelf area of 111512 sq. km. There are as many as 32 inland varieties of fish produced in this state. Among these varieties, shrimps, prawns, harpodon neherias, ribbon fish, otalithes, pomfrets, anchoviella, mackeral and cattle fish put together account for over 70 per cent share in total inland fish production of Maharashtra. Brihan Mumbai and Thane are the only two major regions of the state accounting for bulk of the total inland fish production. Though Maharashtra accounts for a significant share in total marine fish production of India, her share in total fish production of India has declined over the past two decades mainly due to a sharp decline in her share in total marine fish production of India. The major problem faced by the marine fisheries of Maharashtra is relating to depletion of resources due to illegal presence of foreign vessels and vessels belonging to other states, which appeared to have created pressure on the coast line. As a result, the marine fish production of Maharashtra has grown at very low pace during the last two decades. In order to tackle this problem, there is need for the Government of India to introduce zonalisation of coast line in the National Fishing Policy. This will certainly help in checking the depletion of marine resources. In fact, the present fishing fleet of the state is not capable of exploiting the deep sea resources. It is to be further noted that there has been decline in inland water spread area and numerical strength of fish curing yards in the state. The number of fishery schools in the state has also stagnated over the last two decades. These are certainly disturbing features of the fisheries sector of Maharashtra. Although in order to develop fisheries sector, the department of fisheries in the state is conducting various training programme relating to carp fish seed production, fresh water prawn culture, integrated fish farming and management of aquarium, etc., there is also need to educate fishermen with respect to dissemination of information relating to modern fishing techniques and efficient marketing of fish catch. Equally important is the need for more innovative technologies in this sector, diffusion of developed technology by extension workers and adoption by the clients. Education of fishermen about modern fishing techniques has significant impact on adoption of recommended fish culture practices by the farmers. Further, extension and mass media participation have strong positive relationship with adoption of fish culture practices. Nonetheless, inadequate infrastructure and flow of information technology are the major barriers for better market integration in the existing marine fish markets of India. |
| Keywords: | Management Fisheries Development |
| JEL: | Q22 |
| Date: | 2007–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3924&r=env |
| By: | Kimberly Burneet (Department of Economics, University of Puget Sound); Sean D’Evelyn (Department of Economics, University of Hawaii at Manoa); Brooks Kaiser (Department of Economics, Gettysburg College); Porntawee Nantamanasikarn (Department of Economics, University of Hawaii at Manoa); James Roumasset (Department of Economics, University of Hawaii at Manoa) |
| Abstract: | In this paper, an integrated model for the prevention and control of an invasive species is developed. The generality of the model allows it to be used for both existing and potential threats to the system of interest. The deterministic nature of arrivals in the model allows for a clear examination of the tradeoffs inherent when choosing between prevention and control strategies. We illuminate how optimal expenditure paths change in response to various biological and economic parameters for the case of the Brown treesnake in Hawaii. Results suggest that it is more advantageous to spend money finding the small population of snakes as they occur than attempting to prevent all future introductions. Like the drunk that looks for his keys only where the light is, public policy may fail to look “beyond the lamppost” for snakes that have already arrived but have not yet been detected. Actively searching for a potential population of snakes rather than waiting for an accidental discovery may save Hawaii tens to hundreds of millions of dollars in future damages, interdiction expenditures, and control costs. |
| Keywords: | invasive species, brown tree snake, Boiga irregularis, prevention and control, Hawaii |
| JEL: | Q20 Q28 Q51 Q57 |
| Date: | 2007–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:200714&r=env |