nep-env New Economics Papers
on Environmental Economics
Issue of 2008‒01‒05
seventeen papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. A Pricing Mechanism for CO2 Emissions that Incorporates Future Revisions of Estimates of the Cost of Today?s Emissions By T. Nicolaus Tideman; Florenz Plassmann
  2. The Power of Monthly Data in the GSOEP : How the Chernobyl Catastrophe Affected People's Life Satisfaction and Environmental Concerns By Eva M. Berger
  3. Conservation: From Voluntary Restraint to a Voluntary Price Premium By Matthew Kotchen; Michael Moore
  4. Environment, Human Development and Economic Growth after Liberalisation: An Analysis of Indian States By Mukherjee, Sacchidananda; Chakraborty, Debashis
  5. Strategic Voting for Noncooperative Environmental Policies in Open Economies By Hattori, Keisuke
  6. Public and private environmental spending. A political economy approach By Pierre-André Jouvet; Philippe Michel; Pierre Pestieau
  7. Reductions in Ozone Concentrations Due to Controls on Variability in Industrial Flare Emissions in Houston, Texas By Junsang Nam; Mort Webster; Yosuke Kimura; Harvey Jeffries; William Vizuete; David T. Allen
  9. European carbon prices fundamentals in 2005-2007: the effects of energy markets, temperatures and sectorial production By Emilie Alberola; Julien Pierre Chevallier; Benoît Chèze
  10. THE EFFECTS ON ENVIRONMENTAL INVESTMENT OF CHANGES IN TOURISM DEMAND By Accinelli, Elvio; Brida, Juan Gabriel; Carrera, Edgar; Pereyra, Juan
  11. LIBERALIZATION AND REGULATION IN THE EU ENERGY MARKET By Ilie, Livia; Horobet , Alexandra; Popescu , Corina
  12. Gasoline content regulation as a trade barrier: do boutique fuels discourage fuel imports? By Adriana Z. Fernandez; Robert W. Gilmer; Jonathon L. Story
  13. The Effect of Variability in Industrial Emissions on Ozone Formation in Houston, Texas By Mort Webster; Junsang Nam; Yosuke Kimura; Harvey Jeffries; William Vizuete; David T. Allen
  14. Ecological-economic viability as a criterion of strong sustainability under uncertainty By Stefan Baumgärtner; Martin F. Quaas
  15. GIS and geographically weighted regression in stated preferences analysis of the externalities produced by linear infrastructures By Giaccaria Sergio; Frontuto Vito
  16. Optimal Fishing Policy for Two Species in a Three-Species Predator-Prey Model The case of Capelin, Cod and Juvenile Herring in the Barents Sea By Aanestad, Sigurd; Sandal, Leif K.; Eide, Arne
  17. Farmland Conservation in The Netherlands and British Columbia, Canada: A Comparative Analysis Using GIS-based Hedonic Pricing Models By Geerte Cotteleer; Tracy Stobbe; G. Cornelis van Kooten

  1. By: T. Nicolaus Tideman; Florenz Plassmann
    Abstract: The efficiency of mechanisms to control CO2 emissions is limited by disagreement about the harm from these emissions. Thus existing emission control mechanisms require negotiated compromise regarding either the efficient price or the level of emissions to be tolerated. As an alternative to conventional mechanisms, we offer a mechanism in which today?s price of emissions is determined by a market-based estimate of future beliefs about the cost of emissions. This reduces the uncertainty about the right price for emissions and makes it likely that emitters will base their emission decisions on more accurate estimates of the harm they cause.
    Keywords: Environmental regulation, Climate change, Prediction market
    Date: 2007
  2. By: Eva M. Berger
    Keywords: Subjective well-being, happiness, Environmental protection, household panel, SOEP
    Date: 2007
  3. By: Matthew Kotchen; Michael Moore
    Abstract: This paper investigates how concern for the environment translates into predictable patterns of consumer behavior. Two types of behavior are considered. First, individuals who care about environmental quality may voluntarily restrain their consumption of goods and services that generate a negative externality. Second, individuals may choose to pay a price premium for goods and services that are more environmentally benign. A theoretical model identifies a symmetry between such voluntary restraint and a voluntary price premium that mirrors the symmetry between environmental policies based on either quantities (quotas) or prices (taxes). We test predictions of the model in an empirical study of household electricity consumption with introduction of a price-premium, green-electricity program. We find evidence of voluntary restraint and its relation to a voluntary price premium. The empirical results are consistent with the theoretical model of voluntary conservation.
    JEL: H23 Q3
    Date: 2007–12
  4. By: Mukherjee, Sacchidananda; Chakraborty, Debashis
    Abstract: Economic growth does not necessarily ensure environmental sustainability for a country. The relationship between the two is far more complicated for developing countries like India, given the dependence of a large section of the population on natural resources for livelihood. Under this backdrop, the current study attempts to analyze the relationships among Environmental Quality (EQ), Human Development (HD) and Economic Growth (EG) for 14 major Indian States during post liberalisation period (1991-2004). Further, for understanding the changes in EQ with the advancement of economic liberalisation, the analysis is carried out by dividing the sample period into two: Period A (1990–1996) and Period B (1997–2004). For both the sub-periods, 63 environmental indicators have been clustered under eight broad environmental groups and an overall index of EQ using the HDI methodology. The EQ ranks of the States exhibit variation over time, implying that environment has both spatial and temporal dimensions. Ranking of the States across different environmental criteria (groups) show that different States possess different strengths and weaknesses in managing various aspects of EQ. The HDI rankings of the States for the two periods are constructed by the HDI technique following the National Human Development Report 2001 methodology. We attempt to test for the Environmental Kuznets Curve hypothesis through multivariate OLS regression models, which indicate presence of non-linear relationship between several individual environmental groups and per capita net state domestic product (PCNSDP). The relationship between EQ and economic growth however does not become clear from the current study. The regression results involving individual environment groups and HDI score indicate a slanting N-shaped relationship. The paper concludes that individual States should adopt environmental management practices based on their local (at the most disaggregated level) environmental information. Moreover, since environmental sustainability and human well-being are complementary to each other, individual States should attempt to translate the economic growth to human well-being.
    Keywords: Environmental Quality; Economic Liberalisation; Economic Growth; Human Development; India.
    JEL: Q50 O10 O15 O13 Q24 Q01 Q25 O1 I2 Q40 O4 I10
    Date: 2007–07
  5. By: Hattori, Keisuke
    Abstract: In this paper, we construct a political-economy model of international noncooperative environmental policymaking, and examine the strategic incentives for voters to elect an environmental policymaker in open economies. We show that under several circumstances, citizens have an incentive to deliberately vote for a candidate whose environmental preferences differ from their own. Further, the strategic voting incentives are crucially depend on the environmental policy tools employed by the government, the international market structures, and the degree of product differentiation among firms.
    Keywords: strategic voting; the race to the bottom; market structure; environmental policy
    JEL: F18 D72 D43
    Date: 2007–12–18
  6. By: Pierre-André Jouvet; Philippe Michel; Pierre Pestieau
    Abstract: This paper studies the determination of public investment in environmental quality when there are private alternatives. Public investment is chosen by majority voting. When consumption and environmental quality are complementary one may observe a solution of the type "ends against the middle".
    Date: 2007
  7. By: Junsang Nam; Mort Webster; Yosuke Kimura; Harvey Jeffries; William Vizuete; David T. Allen
    Abstract: High concentrations of ozone in the Houston/Galveston area are associated with industrial plumes of highly reactive hydrocarbons, mixed with NOx. The emissions leading to these plumes can have significant temporal variability, and photochemical modeling indicates that the emissions variability can lead to increases and decreases of 10-50 ppb, or more, in ozone concentrations. Therefore, in regions with extensive industrial emissions, accounting for emission variability can be important in accurately predicting peak ozone concentrations, and in assessing the effectiveness of emission control strategies. This work compares the changes in ozone concentrations associated with two strategies for reducing flare emissions in Houston, Texas. One strategy eliminates the highest emission flow rates, that occur relatively infrequently, and a second strategy reduces emissions that occur at a nearly constant level. If emission variability is accounted for in air quality modeling, these control scenarios are predicted to be much more effective in reducing the expected value of daily maximum ozone concentrations than if similar reductions in the mass of emissions are made and constant emissions are assumed. The change in the expected value of daily maximum ozone concentration per ton of emissions reduced, when emissions variability is accounted for, is 5-10 times the change predicted when constant (deterministic) inventories are used.
    Date: 2007–08
  8. By: Baros, Zoltan; Dávid, Lorant Denes
    Abstract: As a consequence of the rapid growth of the tourism sector, special emphasis is placed on destinations and tourism products connected to or based on certain physical and environmental factors. However, the negative environmental consequences of tourism are, in many cases, overemphasised to the social and/or economic elements of sustainable development. Thus, it is important to find an adequate balance of the elements mentioned above within tourism development in order to achieve an optimal way of fulfilling all requirements of sustainable development. In order to this, a potential method is introduced by applying the Sustainability Value Map, developed originally for buildings and urban development projects, to the evaluation of sustainable tourism products. This method implies further questions arisen concerning the selection of the right set of indicators and the importance of local or regional issues. Using it as a tool, it may promote the process of holistic tourism planning and development.
    Keywords: environmentalism; sustainable tourism; environmental impacts; sustainability value map
    JEL: L83
    Date: 2007–11
  9. By: Emilie Alberola; Julien Pierre Chevallier; Benoît Chèze
    Abstract: This article aims at characterizing the daily price fundamentals of European Union Allowances (EUAs) traded since 2005 as part of the Emissions Trading Scheme (ETS). First, the presence of two structural changes on April, 2006 following the disclosure of 2005 verified emissions and on October, 2006 following the European Commission announcement of stricter Phase II allocation allow to isolate distinct fundamentals evolving overtime. The results extend previous literature by showing that spot prices react not only to other energy markets and temperatures, but also to economic activity within the main sectors covered by the EU ETS such as proxied by sectoral production indices. Besides, the sub-period decomposition of the pilot phase gives a better grasp of institutional and market events that drive allowance price changes.
    Keywords: Carbon Emissions Trading, Market Price Fundamentals, EU ETS
    JEL: Q40 Q48 Q54
    Date: 2007
  10. By: Accinelli, Elvio; Brida, Juan Gabriel; Carrera, Edgar; Pereyra, Juan
    Abstract: In this short paper we analyze the impact of tourist demand in hotel rooms on the investment of hotels on environmental quality. We show that when income of the tourists increases, then to maintain the demand for rooms, the hotels must in-crease the investment on the environmental quality of the region where there is an increment of the tourist activity. In the particular case where we have three differ-ent hotel chains located in three different tourist regions, we show that the incen-tive of hotel chains to invest in environmental quality depends on the demand for days of rest on the part of tourists and on the level of aggregate income. We also show that if total income increase, then the incentive to invest in environmental quality increases in the region where the price of a hotel room is lower.
    Keywords: environmental investment; hotelling competition; service quality; sustainable tourism
    JEL: M0 D0 L83
    Date: 2007–11
  11. By: Ilie, Livia; Horobet , Alexandra; Popescu , Corina
    Abstract: Competition ensures competitive prices. In this respect, the liberalisation of the EU energy markets is a must. The regulatory framework for the energy markets should be properly designed and implemented by the member states in order to ensure enough competition. This paper aims to analyse the status quo of the EU energy markets in terms of regulatory framework and degree of competition and to recommend improvements of the system in order to balance the issues of competition, energy security and environment protection in the EU energy markets.
    Keywords: Energy market; regulation; competition; energy security; climate change
    JEL: K2 L5 Q4
    Date: 2007–10
  12. By: Adriana Z. Fernandez; Robert W. Gilmer; Jonathon L. Story
    Abstract: This paper examines the impact of Clean Air Act Amendments of 1990 (CAAA) environmental regulations on U.S. motor gasoline import patterns. Following the damage to U.S. petroleum refining infrastructure from hurricanes Katrina and Rita, the federal government provided temporary relief for several weeks from so-called boutique fuel specifications designed to improve air quality in certain regions of the country. These temporary waivers increased marketers’ ability to sell gasoline originally destined for specific regional markets into a greater number of markets. We hypothesize that these same waivers also encouraged gasoline imports more than increased prices would have alone. We test our hypothesis using two analyses. The first consists of a simple transfer function analysis designed to separate price effects (and thus effects of refinery closures) from the effects of regulatory relief. The second analysis consists of a natural experiment comparing the primary recipient of regulatory relief—the Gulf Coast gasoline market— to the rest of the United States. Both analyses suggest that the CAAA-related specifications prevent a substantial amount of gasoline imports from entering the United States under normal circumstances.
    Date: 2007
  13. By: Mort Webster; Junsang Nam; Yosuke Kimura; Harvey Jeffries; William Vizuete; David T. Allen
    Abstract: Ambient observations have indicated that high concentrations of ozone observed in the Houston/Galveston area are associated with plumes of highly reactive hydrocarbons, mixed with NOBxB, from industrial facilities. Ambient observations and industrial process data, such as mass flow rates for industrial flares, indicate that the VOCs associated with these industrial emissions can have significant temporal variability. To characterize the effect of this variability in emissions on ozone formation in Houston, data were collected on the temporal variability of industrial emissions or emission surrogates (e.g., mass flow rates to flares). The observed emissions variability was then used to construct region-wide emission inventories with variable industrial emissions, and the impacts of the variability on ozone formation were examined for two types of meteorological conditions, both of which lead to high ozone concentrations in Houston. The air quality simulations indicate that variability in industrial emissions has the potential to cause increases and decreases of 10-52 ppb (13-316%), or more, in ozone concentration. The largest of these differences are restricted to regions of 10-20 kmP2P, but the variability also has the potential to increase region wide maxima in ozone concentrations by up to 12 ppb.
    Date: 2007–08
  14. By: Stefan Baumgärtner (Centre for Sustainability, Leuphana University of Lüneburg); Martin F. Quaas (Department of Ecological Modelling, UFZ-Centre for Environmental Research Leipzig-Halle)
    Abstract: Strong sustainability, according to the common definition, requires that different natural and economic capital stocks have to be maintained as physical quantities separately. Yet, in a world of uncertainty this cannot be guaranteed. To therefore define strong sustainability under uncertainty in an operational manner, we propose to use the concept of viability. Viability means that the dierent components and functions of a dynamic, stochastic system at any time remain in a domain where the future existence of these components and functions is guaranteed with suciently high probability. We develop a unifying and general ecological-economic concept of viability that encompasses the traditional ecological and economic notions of viability as special cases. It provides an operational criterion of strong sustainability under conditions of uncertainty. We illustrate this concept and demonstrate its usefulness by applying it to livestock grazing management in semi-arid rangelands.
    Keywords: capital (natural and economic), ecological-economic systems, ecosystem services, funds, stocks, sustainability, uncertainty, viability
    JEL: D81 Q01 Q57
    Date: 2007–11
  15. By: Giaccaria Sergio (University of Turin); Frontuto Vito (University of Turin)
    Abstract: The paper uses Contingent Valuation to investigate the externalities from linear infrastructures, with a particular concern for their dependence on characteristics of the local context within which they are perceived. We employ Geographical Information Systems and a spatial econometric technique, the Geographic Weighted Regression, integrated in a dichotomous choice CV in order to improve both the sampling design and the econometric analysis of a CV survey. These tools are helpful when local factors with an important spatial variability may have a crucial explanatory role in the structure of individual preferences. The Geographic Weighted Regression is introduced, beside GIS, as a way to enhance the flexibility of a stated preference analysis, by fitting local changes and highlighting spatial non-stationarity in the relationships between estimated WTP and explanatory variables. This local approach is compared with a standard double bounded contingent valuation through an empirical study about high voltage transmission lines. The GWR methodology has not been applied before in environmental economics. The paper shows its significance in testing the consistency of the standard approach by monitoring the spatial patterns in the distribution of the WTP and the spatial stability of the parameters estimated in order to compute the conditional WTPs.
    Date: 2007–12
  16. By: Aanestad, Sigurd (Dept. of Economics and Management, Norwegian College of Fishery Science, University of Tromsø); Sandal, Leif K. (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration); Eide, Arne (Dept. of Economics and Management, Norwegian College of Fishery Science, University of Tromsø)
    Abstract: This paper presents a management model for the Barents Sea capelin and cod fisheries including juvenile herring in the biological model as the young herring influences the cod-capelin system. The objective of the study is to balance model-complexity of biology and economics when investigating possible optimal catch strategies given that one aims to maximize economic rent in the fishery. The three species constitute a highly dynamic system, also because prey-predation relations are functions of ages within each stock. A top-down approach is employed and the biological growth equations relate to stock biomass estimates. Economic relations are based on empirical data and previous studies. Optimal fishing strategies are identified by employing a numerical feedback rule for optimal fishing through dynamic programming. The feedback rule suggests that previous TAC (total allowable catch) levels on average have been too large for both capelin and cod over the past 30 years, according to the management objectives assumed in the study. Moreover, presence of some herring in the system is important for the economic yield although the herring fishery is closed. This indicates that a focus only on the capelin-predator role of herring is too narrow, as herring is also an important prey for cod.
    Keywords: Biological growth equations; numerical feedback rule; dynamic programming
    JEL: C61
    Date: 2007–12–22
  17. By: Geerte Cotteleer; Tracy Stobbe; G. Cornelis van Kooten
    Abstract: As a result of urban development farmland in many countries is under pressure. Reasons to preserve farmland are related to cultural heritage, food safety, open space, the environment, but also slowing and restricting development is a reason. To protect farmland countries use different land use policies. This paper will look specifically at two jurisdictions: The Netherlands and a particularly rich farming area in British Columbia, Canada. For these areas we will investigate how the institutions and laws present in these jurisdictions contribute to agricultural land preservation. We will analyse farmland values in a GIS-based hedonic pricing framework to answer this question. This combination enables us to analyse direct impacts of laws and regulations within the hedonic pricing framework. Moreover, we can use farm values to analyse farm survivability, and the level of speculation on farmland in the urban-rural fringe, where farmland is under urban pressure.
    Keywords: Hedonic pricing models, zoning policies, Geographical Information System, agricultural land values at the urban fringe
    JEL: Q10 Q15 R52
    Date: 2007–11

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