nep-env New Economics Papers
on Environmental Economics
Issue of 2007‒09‒30
thirteen papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. The economic impact of climate change on agriculture in Cameroon By Lambi, Cornelius M.; Molua, Ernest L.
  2. Non Market Valuation in New Zealand:1974 through 2005 By Richard Yao; Pamela Kaval
  3. Costly Enforcement of Voluntary Environmental Agreements with Industries By David M. McEvoy; John K. Stranlund
  4. Enforcement and Over-Compliance By Jay P. Shimshack; Michael B. Ward
  5. Temporal and spatial homogeneity in air pollutants panel EKC estimations: Two nonparametric tests applied to Spanish provinces By Ordás Criado, Carlos
  6. Policy vs. Consumer Pressure: Innovation and Diffusion of Alternative Bleaching Technologies in the Pulp Industry By David Popp; Tamara Hafner; Nick Johnstone
  7. Environmental innovation under Cournot competition By Maria Eugenia, SANIN; Skerdilajda, ZANAJ
  8. Information Disclosure Policies: Evidence from the Electricity Industry By Magali Delmas; Maria Montes-Sancho; Jay P. Shimshack
  9. Natural Resources: Are They Really a Curse? By Alexandr Cerny; Randall K. Filer
  10. The Value of Collective Reputation for Environmentally Friendly Production Methods: The Case of Val di Gresta By Ricardo Scarpa; Mara Thiene; Francesco Marangon
  11. The sustainable enterprise. The multi-fiduciary perspective to the EU sustainability strategy By Giuseppe Danese
  12. La caña de azúcar: ¿una amarga externalidad By Eleonora Dávalos Álvarez
  13. Property rights in a very poor country : tenure insecurity and investment in Ethiopia By Gautam, Madhur; Dercon, Stefan; Ali, Daniel Ayalew

  1. By: Lambi, Cornelius M.; Molua, Ernest L.
    Abstract: This study examines the impact of climate change on crop farming in Cameroon. The country ' s economy is predominantly agrarian and agriculture and the exploitation of natural resources remain the driving force for the country ' s economic development. Fluctuations in national income are due not merely to the decline in world demand for Cameroon ' s traditional agricultural exports or to mistakes in economic policy making, but also to the vagaries of the weather. Based on a farm-level survey of more than 800 farms, the study employs a Ricardian cross-sectional approach to measure the relationship between climate and the net revenue from crops. Net revenue is regressed on climate, water flow, soil, and economic variables. Further, uniform scenarios assume that only one aspect of climate changes and the change is uniform across the whole country. The analysis finds that net revenues fall as precipitation decreases or temperatures increase across all the surveyed farms. The study reaffirms that agr iculture in Cameroon is often limited by seasonality and the availability of moisture. Although other physical factors, such as soil and relief, have an important influence on agriculture, climate remains the dominant influence on the variety of crops cultivated and the types of agriculture practiced.
    Keywords: Climate Change,Environmental Economics & Policies,Global Environment Facility,Common Property Resource Development,Economic Theory & Research
    Date: 2007–09–01
  2. By: Richard Yao (University of Waikato); Pamela Kaval (University of Waikato)
    Abstract: Non-market valuation (NMV) is recognized as an essential tool in policy decision making worldwide. In this paper, we investigate the history of NMV, specifically in relation to New Zealand (NZ), by compiling and analyzing all available published studies. Results show a significant increase in the number of studies, specifically those requested by government agencies, following the passage of the NZ Resource Management Act of 1991. Studies were found to be concentrated in three major areas: outdoor recreation, environmental conservation/management, and travel time savings. These three areas covered eight environmental commodities, the value of which totaled NZ$72 billion, or 50% of NZ GDP, with the highest valued commodity being biodiversity services. While our analysis yielded many positive results, we did discover, however, a severe lack of studies in many areas including pest control, water resources and outdoor recreation.
    Keywords: non-market valuation; New Zealand; consumer surplus; Resource Management Act
    JEL: B4 Q2 Q26
    Date: 2007–09–19
  3. By: David M. McEvoy; John K. Stranlund
    Abstract: Although the theoretical literature on the performance of voluntary approaches to environmental protection has progressed quite far in the last decade, no one has rigorously addressed the obvious point that even voluntary emissions control policies must be enforced. This paper examines the consequences of the need for costly enforcement of voluntary environmental agreements with industries on the ability of these agreements to meet regulatory objectives, the levels of industry participation with these agreements, and the relative efficiency of voluntary and regulatory approaches. We find that enforcement costs that are borne by the members of a voluntary emissions control agreement limit the circumstances under which an agreement can form in place of an emissions tax. However, if an agreement does form, member-financed enforcement induces greater participation than if compliance with the agreement could be enforced without cost to its members. Moreover, a voluntary emission control agreement with an industry can be a more efficient way to achieve an environmental quality objective than an emission tax, but only if: (1) the members of an agreement bear the costs of enforcing compliance with the agreement; (2) there exists member-financed agreements that reach the government’s environmental quality target while leaving the members of the agreement at least as well off as they would be under an emissions tax, and (3) the enforcer of the agreement has a significantly better monitoring technology or a higher sanction available to it than the government. Key Words:
    Date: 2007
  4. By: Jay P. Shimshack; Michael B. Ward
    Abstract: Economists generally view environmental enforcement as a tool to secure compliance with regulations. This paper demonstrates that credible enforcement significantly increases statutory overcompliance with regulations as well. We find that many plants with discharges typically below legally permitted levels reduce discharges further when regulators issue fines, even on other plants. Also, likely non-compliant plants often respond to sanctions by reducing discharges well beyond reductions required by law. Thus, increased enforcement generates substantial discharge reductions above and beyond those expected from simply deterring violations.
    Keywords: Over-compliance; Fines; Compliance; Enforcement; Regulation; Pollution Policy
    JEL: K42 Q58 Q53
    Date: 2007
  5. By: Ordás Criado, Carlos
    Abstract: Although panel data have been used intensively by a wealth of studies investigating the GDP-pollution relationship, the poolability assumption used to model these data is almost never addressed. This paper applies a strategy to test the poolability assumption with methods robust to functional misspecification. Nonparametric poolability tests are performed to check the temporal and spatial homogeneity of the panel and their results are compared with the conventional F-tests for a balanced panel of 48 Spanish provinces on four air pollutant emissions (CH4, CO, CO2 and NMVOC) over the 1990-2002 period. We show that temporal homogeneity may allow the pooling of the data and drive to well-defined nonparametric and parametric cross-sectional U-inverted shapes for all air pollutants. However, the presence of spatial heterogeneity makes this shape compatible with different timeseries patterns in every province - mainly increasing or decreasing depending on the pollutant. These results highlight the extreme sensitivity of the income-pollution relationship to region- or country-specific factors.
    Keywords: Environmental Kuznets Curve; Air pollutants; Non/Semiparametric estimations; Poolability tests
    JEL: C23 Q53 C14 O40
    Date: 2007–08–31
  6. By: David Popp; Tamara Hafner; Nick Johnstone
    Abstract: In the late 1980s and early 1990s, concern over dioxin in both paper products and wastewater led to the development of techniques that reduced the use of chlorine in the pulp industry. Both regulatory and consumer pressure motivated this change. We use patent data to examine the evolution of two completing bleaching technologies in five major paper-producing countries, both of which reduce the use of chlorine in the pulping process. By the end of the 1990s, nearly all pulp production in these countries used one of these technologies. Unlike other papers using patents to study environmentally-friendly innovation, we focus on a process innovation, rather than on end-of-the-pipe solutions to pollution. Moreover, while previous studies emphasize the importance of regulation for inducing innovation, here we find substantial innovation occurring before regulations were in place. Instead, pressure from consumers to reduce the chlorine content of paper drives the first round of innovation. However, while some companies choose to adopt these technologies in response to consumer pressure, not all firms will differentiate their product in this way. Thus, governments need to regulate if their goal is broad diffusion of the environmental technology.
    JEL: O31 O33 Q53 Q55
    Date: 2007–09
  7. By: Maria Eugenia, SANIN (UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE)); Skerdilajda, ZANAJ (UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE) and Universita di Siena)
    Abstract: In this paper, we address the incentives to invest in environmental innovation of enterprises that exercise market power in the output market and also buy and sell pollution permits. Differently from the existing literature, using a market approach we explicitly model the interaction between the output market, where firms play ˆ la Cournot, and the permits market. We find that, in the new equilibrium firms behave symmetrically, that is, they either both innovate to protect their market share in the output market or they both choose not to innovate. Whether the innovation equilibrium arises or not depends on the output demand and on the productivity enhancement and not on the distribution of permits among firms. Finally, we show that, under this market configuration, collusion can be welfare enhancing.
    Keywords: environmental innovation, tradable permits, interaction ˆ la Cournot
    JEL: D43 L13 Q55
    Date: 2007–09–17
  8. By: Magali Delmas; Maria Montes-Sancho; Jay P. Shimshack
    Abstract: A “third wave” of environmental policy has recently emerged that emphasizes information provision as an integral part of the risk mitigation strategy. While theory suggests information programs may correct market failures and improve welfare, the empirical effectiveness of these programs remains largely undetermined. We show that mandatory information disclosure programs in the electricity industry achieve stated policy goals. We that the average proportion of fossil fuels decreases and the average proportion of clean increases in response to disclosure programs. However, the programs also produce unintended consequences. Customer composition and pre-existing fuel mix significantly affect program response, suggesting that effective information disclosure policies may not be efficient.
    Keywords: disclosure, information, fuel mix, electric utilities
    JEL: D83 Q58 D21
    Date: 2007
  9. By: Alexandr Cerny; Randall K. Filer
    Abstract: The curse of natural resources detected in numerous cross-country growth regressions isquestioned. Although natural resource dependence is associated with slow economic growth, there is no evidence that natural resource abundance per se is negatively related to growth. Thus, the supposed link between resource dependence and growth arises not from the numerator of the dependence measures (i.e. resources themselves) but rather, because of the inherent relationship between slow growth and a small non-resource sector caused by other undetermined characteristics of the economy.
    Keywords: Natural resources; Economic growth; Institutions.
    JEL: O13 Q32 Q38
    Date: 2007–03
  10. By: Ricardo Scarpa (University of Waikato); Mara Thiene (University of Padua); Francesco Marangon (University of Udine)
    Abstract: This paper investigates preferences for various environment-friendly production systems using 1949 choices from a sample of 240 respondents that chose amongst different types of carrots. The and multi-attribute stated-preference data collection was based on an experimental designed tailored to identify interaction effects between production methods and place of origin we estimate the effect of collective reputations for growers of an Alpine valley known to be completely dedicated to organic production. The implied WTP distributions are positve for organic and integrated pest management and provide evidence of recognition of a collective reputation for environmentally friendly production methods. Marginal utility of income is found to be systematically linked to socio-economic covariates, while unobserved heterogeneity is found for organic and bio-dynamic production methods and for place of origin, but not for integrated pest management. WTP for organic produce from Val di Gresta is found to be around 1-2 euro/kg depending on budget constraints, and not statistically significant for bio-dynamic production. The study confirms the existence of the growers' reputation for EFPMs and provides an empirical estimate of the premium the market awards to such a reputation.
    Keywords: Collective reputation; mixed logit; random utility parameters; sustainable agriculture; Choice modeling; Organic methods
    JEL: C15 C25 Q26
    Date: 2007–09–07
  11. By: Giuseppe Danese
    Abstract: This essay deals with two issues. First, it tries to delineate, via the concept of enlarged fiduciary proviso, the contribution of Corporate Social Responsibility (CSR) to the implementation of the EU Sustainability Strategy. The primary aim of the European institutions in delineating such strategy was to promote a concern for the environment, interpreted here as a proxy for the welfare of future generations of stakeholders. Progresses towards sustainable development can be made if we interpret CSR as a governance framework that extends fiduciary protection from a mono-stakeholder perspective, in which the sole relevant constituency for the design of corporate policy is the shareholders’, to a multi-stakeholder perspective, in which legitimate claims are held by a variety of constituencies, possibly operating at different times. Secondly, the essay tries to establish an organic link between the concept of sustainability and a Social Contract account of the business enterprise. The Social Contract of the stakeholders, an ideal reference point for corporate policy-makers, is formed behind a veil of ignorance, resulting in an agreement that is both impartial and nonhistorical.
    Keywords: Corporate Social responsibility (CSR), Sustainability Strategy, Fiduciary Duties.
    JEL: M14 O16 Q01
    Date: 2007
  12. By: Eleonora Dávalos Álvarez
    Abstract: Existen numerosos estudios acerca de la relación entre la contaminación del aire y las enfermedades respiratorias, pero generalmente han sido realizados en grandes ciudades de países desarrollados donde dicho problema es asociado a las emisiones de fuentes móviles y fijas. Esta investigación se centra en una pequeña ciudad de Colombia: Palmira (Valle del Cauca) con no más de 300.000 habitantes, pero con un serio problema de contaminación originado por la quema de la caña de azúcar. De este modo, se plantea una función lineal para establecer si la quema de la caña de azúcar tiene relación con la concentración de partículas menores a diez micras (PM10), seguida de una función concentración-respuesta para establecer si las variaciones en la concentración de PM10 afectan la morbilidad. La relación entre la quema de la caña de azúcar y la concentración de PM10 se estimó por medio de un modelo de mínimos cuadrados ordinarios, mientras que en la relación entre las variaciones en la concentración del PM10 y la morbilidad se empleó un modelo Poisson. En ambas estimaciones se utilizaron datos de series de tiempo diarias entre febrero y junio de 2004. Se halló una asociación positiva entre aumentos en la quema de la caña de azúcar y la concentración del contaminante, seguida de una relación positiva entre la concentración del contaminante y el número de consultas médicas por infecciones respiratorias agudas (IRA). Este documento analiza por primera vez los efectos de la quema de la caña de azúcar en la salud pública en Colombia.
    Date: 2007–05–24
  13. By: Gautam, Madhur; Dercon, Stefan; Ali, Daniel Ayalew
    Abstract: This paper provides evidence from one of the poorest countries of the world that the property rights matter for efficiency, investment, and growth. With all land state-owned, the threat of land redistribution never appears far off the agenda. Land rental and leasing have been made legal, but transfer rights remain restricted and the perception of continuing tenure insecurity remains quite strong. Using a unique panel data set, this study investigates whether transfer rights and tenure insecurity affect household investment decisions, focusing on trees and shrubs. The panel data estimates suggest that limited perceived transfer rights, and the threat of expropriation, negatively affect long-term investment in Ethiopian agriculture, contributing to the low returns from land and perpetuating low growth and poverty.
    Keywords: Common Property Resource Development,Forestry,Municipal Housing and Land,Rural Development Knowledge & Information Systems,Urban Housing
    Date: 2007–09–01

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