nep-env New Economics Papers
on Environmental Economics
Issue of 2007‒10‒27
eleven papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. Are Pollution Permits a Cure for Unregulated Growth Diseases ? By Alain Jean-Marie; Philippe Fabien Prieur; Philippe Mabel Tidball
  2. Toward Farsightedly Stable International Environmental Agreements, Part two By Dritan Osmani; Richard S.J. Tol
  3. A short note on joint welfare maximization assumptions By Dritan Osmani; Richard S.J. Tol
  4. The relationship between rainfall and human density and its implications for future water stress in sub-Saharan Africa By David le Blanc; Romain Perez
  5. Emissions Control and the Regulation of Product Markets: The Case of Automobiles By Rasha Ahmed; Kathleen Segerson
  6. Designing economic instruments for the environment in a decentralized fiscal system By Banzhaf, H. Spencer; Alm, James
  7. Further Results on “An Endogenous Growth Model with Embodied Energy-Saving Technical Change” By Hakan Yetkiner; Adrian von Zon
  8. Acceptable regulations to reduce common resource extraction By AMBEC Stefan; SEBI Carine
  9. Are demand elasticities affected by politically determined tax levels? : simultaneous estimates of gasoline demand and price By Flood, Lennart; Islam, Nizamul; Sterner, Thomas
  10. Slow Pyrolysis vs Gasification : mass and energy balances using a predictive model By Céline Gisèle Jung; André Fontana
  11. Caractérisation des matières résiduaires et déchets. Modèle prédictif du comportement d’un déchet By Céline Gisèle Jung

  1. By: Alain Jean-Marie; Philippe Fabien Prieur; Philippe Mabel Tidball
    Abstract: We consider an OLG model with emissions arising from production and potential irreversible pollution. Pollution control goes through a system of permits and private agents can also maintain the environment. In this setting, we prove that there exist multiple equilibria. Due to the possible irreversibility of pollution, the economy can be dragged into both environmental and poverty traps. First, we show that choosing a global quota on emissions at the lowest level beyond a critical threshold is a means to avoid the two types of traps. Next, we analyze the impact of a political reform on other equilibria. When the agents do not engage in maintenance, a fall in the quota implies a reduction of pollution but is detrimental to capital accumulation while, in the other case, it procures a double dividend.
    Date: 2007–10
  2. By: Dritan Osmani; Richard S.J. Tol (Economic and Social Research Institute, Dublin, Ireland)
    Abstract: We investigate the stability of International Environmental Agreements (IEA) by applying game theory. The paper extends further our previous research on farsightedly stable coalitions and preferred farsightedly stable coalitions (Osmani & Tol 2007). The integrated assessment model FUND provides the cost-bene¯t payo® functions of pollution abatement for sixteen di®erent world regions. The stability concept of d'Aspremont et al. (1983) and farsighted stability of Chwe (1994) are compared. The d'Aspremont stability assumes that players are myopic while the farsighted stability concept captures the perfect foresight of the players and predicts which coalitions can be formed when players are farsighted. All farsightedly stable and D'Aspremont stable coalitions are found and their improvement to environment and welfare are computed.
    Keywords: game theory, integrated assessment modeling, farsighted stability, D'Aspremont stability, coalition formation
    JEL: C02 C72 H41
    Date: 2007–10
  3. By: Dritan Osmani; Richard S.J. Tol (Economic and Social Research Institute, Dublin, Ireland)
    Abstract: Non-cooperative game theoretical models of international environmental agreements (IEAs) use the assumption that coalition of signatories maximize their joint welfare. The joint maxi- mization assumption is compared with di®erent sharing pro¯t schemes such as Shapley value, Nash bargaining solution and Consensus Value. The results show that the joint welfare max- imization assumption is similar with Nash Bargaining solution.
    Keywords: game theory, coalition formation, joint welfare maximization, Shapley value, Nash bargaining solution, Consensus Value, international environmental agreements
    JEL: C02 C72 H41
    Date: 2007–10
  4. By: David le Blanc; Romain Perez
    Abstract: This paper uses Geographic Information System (GIS) data on population density, rainfall and climate change scenarios in order to identify areas that will be subject to increased water stress due to insufficient precipitation to support their projected population levels in 2050. Density increases across the continent should lead to a significant increase in the extent of water stressed zones, especially around the Sahel belt and in Eastern Africa. Changes in rainfall, the pattern of which remains inherently uncertain today, could mitigate or compound those effects. Consequences of unsustainably high local densities such as migrations are bound to become more prevalent.
    Keywords: climate change, rainfall, climate modeling, demographic growth, migrations, Africa
    JEL: Q25 Q54 Q56
    Date: 2007–10
  5. By: Rasha Ahmed (University of Connecticut); Kathleen Segerson (University of Connecticut)
    Abstract: The paper investigates alternative policies to regulate emissions from polluting product markets, specifically considering the case of the automobiles market. The two policies we consider are: a quota that limits the quantity produced of the polluting model and a more flexible average efficiency standard that requires a minimum energy efficiency across all models produced by a firm, similar to the US Corporate Average Fuel Economy (CAFE) standards. We use a duopoly model of vertical differentiation where firms produce both an economy (i.e., low polluting) version and a luxury (i.e., high polluting) version of a given product. We show that while a quota can raise firm profit over a certain range, CAFE always reduces firm profit relative to the pre-regulation. We also show that while the quota reduces emissions, it is possible that emissions increase under CAFE. The optimal policy choice will depend on the magnitude of unit damages. We show that when unit damages are sufficiently high, the quota policy is more efficient than the average efficiency standard. This suggests that instead of tightening CAFE to limit damages from emissions, policy makers can shift to a quota policy which is both welfare enhancing and more profitable for firms.
    Keywords: automobiles market, emission control, green markets, energy/fuel efficiency
    JEL: Q48 Q58
    Date: 2007–10
  6. By: Banzhaf, H. Spencer; Alm, James
    Abstract: When external effects are important, markets will be inefficient, and economists have considered several broad classes of economic instruments to correct these inefficiencies. However, the standard economic analysis has tended to neglect important distinctions and interactions between the geographic scope of pollutants, the enforcement authority of various levels of government, and the fiscal responsibilities of the levels of government. For example, externalities genera ted in a particular local area may be confined to the local area or may spill over to other jurisdictions. Also, local governments may be well informed about how best to regulate or enforce pollution control within their jurisdiction, but they may not consider the effects of their actions on other jurisdictions. Finally, the existence of locally-generated waste emissions affects the appropriate assignment of both expenditure and tax responsibilities among levels of government. The standard analysis therefore focuses mainly upon an aggregate (or national) perspective, it typically ignores the possibility that the externality may be created and addressed by local governments, and it does not consider the implications of decentralization for the design of economic instruments targeted at environmental problems. This paper examines the implications of decentralization for the design of corrective policies; that is, how does one design economic instruments in a decentralized fiscal system in which externalities exist at the local level and in which subnational governments have the power to provide local public services, as well as to choose tax instruments that can both finance these expenditures and correct the market failures of externalities?
    Keywords: Environmental Economics & Policies,Debt Markets,Taxation & Subsidies,Public Sector Economics & Finance,Emerging Markets
    Date: 2007–10–01
  7. By: Hakan Yetkiner (Department of Economics, Izmir University of Economics); Adrian von Zon (Department of Economics, Maastricht University)
    Abstract: In this short paper we add a non-renewable resource sector to van Zon and Yetkiner (2003) that extended Romer (1990) by including energy consumption of intermediate goods in a context of endogenous and embodied technical change. Van Zon and Yetkiner (2003) showed that the growth rate depends negatively on the growth of exogenous real energy prices. In this paper, we endogenise the growth rate of real energy prices by introducing a non-renewable resource sector into the model. This allows us to study the comparative statics of the model. We show that changes in technology parameters promote growth, while others disfavour growth.
    Keywords: Endogenous growth; energy-saving technological change; Hotelling’s rule
    JEL: O31 Q43 O41
    Date: 2007–08
  8. By: AMBEC Stefan (LERNA, TSE); SEBI Carine
    Date: 2007–10
  9. By: Flood, Lennart (Department of Economics, School of Business, Economics and Law, Göteborg University); Islam, Nizamul (Department of Economics, School of Business, Economics and Law, Göteborg University); Sterner, Thomas (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Raising the price of fossil fuels is a key component of any effective policy to deal with climate change. Just how effective such policies are is decided by the price elasticities of demand. Many papers have studied this without recognising that not only is there a demand side response: quantities are decided by the price but also there is a reverse causality: the level of consumtion affects the political acceptability of the taxes which are the main component of the final price. Thus prices affect consumption levels, in turn, have an affect on taxes and thus consumer prices. This paper estimates these functions simultaneously to show that there is indeed an effect on the demand elasticity.<p>
    Keywords: climate change; simultaneous; tax
    JEL: C33 Q54
    Date: 2007–10–15
  10. By: Céline Gisèle Jung (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels.); André Fontana (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels.)
    Abstract: When the recovery of mixed plastics is not economically viable, the main issue today is land filling or incineration. The present study shows the opportunities in producing gaseous or liquid substitution fuels by pyrolysis or gasification. By both processes, the issued fuels characteristics are quite different so that the application fields have to be optimized. If plastics are mixed with other waste, sorting could be too expensive. Using our predictive model, pyrolysis mass balance could be evaluated so that the fuels qualities could be predicted.
    Keywords: pyrolysis, gasification, mass balance, energy balance, waste plastics, substitution fuels
    Date: 2007–10
  11. By: Céline Gisèle Jung (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels.)
    Abstract: La caractérisation de déchets est une démarche essentielle pour pouvoir prévoir leur comportement par différents types de technologie. Cette approche devrait permettre le choix d’un mode de traitement de manière à optimiser les objectifs de valorisation matière ou énergie. Sur base de cette caractérisation, le modèle prédictif présenté dans ce chapitre permet de prévoir les bilans matière et d’estimer les PCI des phases produites lors de traitements tels l’incinération, la pyrolyse, la gazéification et la biométhanisation.
    Date: 2007–10

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