nep-env New Economics Papers
on Environmental Economics
Issue of 2008‒09‒13
28 papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. Differential adaptation strategies to climate change in African cropland by agro-ecological zones By Seo, Niggol; Mendelsohn, Robert; Kurukulasuriya, Pradeep; Dinar, Ariel; Hassan, Rashid
  2. Addressing Climate Change with a Comprehensive U.S. Cap-and-Trade System By Robert N. Stavins
  3. Fiscal policy instruments for reducing congestion and atmospheric emissions in the transport sector : a review By Timilsina, Govinda R.; Dulal, Hari B.
  4. A ricardian analysis of the distribution of climate change impacts on agriculture across agro-ecological zones in Africa By Seo, S. Niggol; Mendelsohn, Robert; Dinar, Ariel; Hassan, Rashid; Kurukulasuriya, Pradeep
  5. Mainstreaming climate adaptation into development assistance in Mozambique: Institutional barriers and opportunities By Sietz, Diana; Boschutz, Maria; Klein, Richard JT; Lotsch, Alexander
  6. Coalition Formation and the Ancillary Benefits of Climate Policy By Michael Finus; Dirk T.G. Rübbelke
  7. Impact of Revised CO2 Growth Projections for China on Global Stabilization Goals By Geoffrey J. Blanford; Richard G. Richels; Thomas F. Rutherford
  8. Structural change and performance of the German environmental sector By Horbach, Jens; Blien, Uwe; Hauff, Michael von
  9. Long-term adaptation : selecting farm types across agro-ecological zones in Africa By Seo, Niggol; Mendelsohn, Robert; Dinar, Ariel; Kurukulasuriya, Pradeep; Hassan, Rashid
  10. Differential adaptation strategies by agro-ecological zones in African livestock management By Seo, S. Niggol; Mendelsohn, Robert; Dinar, Ariel; Kurukulasuriya, Pradeep
  11. Technological Uncertainty and Cost-effectiveness of CO2 Emission Trading Schemes By Löschel, Andreas; Otto, Vincent M.
  12. The Impact of a Carbon Tax on Economic Growth and Carbon Dioxide Emissions in Ireland By Thomas Conefrey; John Fitz Gerald; Laura Malaguzzi Valeri; Richard S. J. Tol
  13. Life expectancy and the environment By Fabio Mariani; Agustin Pérez-Barahona; Natacha Raffin
  14. Natural disturbances and natural hazards in mountain forests: a framework for the economic valuation By Sandra Notaro; Alessandro Paletto
  15. Testing a Flood Protection Case by Means of a Group Decision Support System By Adriaan Perrels; Molarius Riitta; Porthin Markus; Rosqvist Tony
  16. A structural ricardian analysis of climate change impacts and adaptations in African agriculture By Seo, S. Niggol; Mendelsohn, Robert
  17. Comparing Price and Non-price Approaches to Urban Water Conservation By Sheila M. Olmstead; Robert N. Stavins
  18. Environmental activism and dynamics of unit-based pricing systems By Dijkgraaf, E.; Gradus, R.
  19. A Choice Modelling Approach for Assessment of Use and Quasi-Option Values in Urban Planning for Areas of Environmental Interest By Elisabetta Strazzera; Elisabetta Cherchi; Silvia Ferrini
  20. Investigating the Impact of climate change on the robustness of index-based microinsurance in Malawi By Hochrainer, S.; Mechler, R.; Pflug, G.; Lotsch, A.
  21. Transportation fuel use, technology and standards: The role of credibility and expectations By Eskeland, Gunnar S.; Mideksa, Torben K.
  22. Risk Aversion, Time Preference, and the Social Cost of Carbon By David Anthoff; Richard S. J. Tol; Gary W. Yohe
  23. Does forest damage have an economic impact? A case study from the Italian Alps By Sandra Notaro; Alessandro Paletto; Roberta Raffaelli
  24. Constructed wetlands : a promising wastewater treatment system for small localities : experiences from Latin America By Gauss, Martin
  25. Domestic water pricing with household surveys : a study of acceptability and willingness to pay in Chongqing, China By Wang, Hua; Xie, Jian; Li, Honglin
  26. Grenelle de l’environnement, climat et énergie : un an après By Alain Grandjean; Patrick Criqui
  27. HIV/AIDS, climate change and disaster management : challenges for institutions in Malawi By Suarez, Pablo; Givah, Precious; Storey, Kelvin; Lotsch, Alexander

  1. By: Seo, Niggol; Mendelsohn, Robert; Kurukulasuriya, Pradeep; Dinar, Ariel; Hassan, Rashid
    Abstract: This paper quantifies how African farmers have adapted their crop and irrigation decisions to their farm's current agro-ecological zone. The results indicate that farmers carefully consider the climate and other conditions of their farm when making these choices. These results are then used to forecast how farmers might change their irrigation and crop choice decisions if climate changes. The model predicts African farmers would adopt irrigation more often under a very hot and dry climate scenario but less often with a mild and wet scenario. However, farms in the deserts, lowland humid forest, or mid elevation humid forest would reduce irrigation even in the very hot and dry climate scenario. Area under fruits and vegetables would increase Africa-wide with the very hot and dry climate scenario, except in the lowland semi-arid agro-ecological zone. Millet would increase overall under the mild and wet scenario, but decline substantially in the lowland dry savannah and lowland semi-arid agro-ecological zones. Maize would be chosen less often across all the agro-ecological zones under both climate scenarios. Wheat would decrease across Africa. The authors recommend that care must be taken to match adaptations to local conditions because the optimal adaptation would depend on the agro-ecological zone and the climate scenario.
    Keywords: Crops&Crop Management Systems,Climate Change,Food&Beverage Industry,Renewable Energy,Rural Poverty Reduction
    Date: 2008–04–01
  2. By: Robert N. Stavins (Harvard University)
    Abstract: There is growing impetus for a domestic U.S. climate policy that can provide meaningful reductions in emissions of CO2 and other greenhouse gases. I describe and analyze an up- stream, economy-wide CO2 cap-and-trade system which implements a gradual trajectory of emissions reductions (with inclusion over time of non-CO2 greenhouse gases), and includes mechanisms to reduce cost uncertainty. Initially, half of the allowances are allocated through auction and half through free distribution, with the share being auctioned gradually increasing to 100 percent over 25 years. The system provides for linkage with emission reduction credit projects in other countries, harmonization over time with effective cap-and-trade systems in other countries and regions, and appropriate linkage with actions taken in other countries, in order to establish a level playing field among domestically produced and imported products.
    Keywords: Cap-and-Trade System, Carbon Dioxide, Greenhouse Gas Emissions, Global Climate Change, Carbon Taxes
    JEL: Q54 Q28 Q38 Q48 Q58
    Date: 2008–09
  3. By: Timilsina, Govinda R.; Dulal, Hari B.
    Abstract: This paper reviews the literature on the fiscal policy instruments commonly used to reduce transport sector externalities. The findings show that congestion charges would reduce vehicle traffic by 9 to 12 percent and significantly improve environmental quality. The vehicle tax literature suggests that every 1 percent increase in vehicle taxes would reduce vehicle miles by 0.22 to 0.45 percent and CO2 emissions by 0.19 percent. The fuel tax is the most common fiscal policy instrument; however its primary objective is to raise government revenues rather than to reduce emissions and traffic congestion. Although subsidizing public transportation is a common practice, reducing emissions has not been the primary objective of such subsidies. Nevertheless, it is shown that transport sector emissions would be higher in the absence of both public transportation subsidies and fuel taxation. Subsidies are also the main policy tool for the promotion of clean fuels and vehicles. Although some studies are very critical of biofuel subsidies, the literature is mostly supportive of clean vehicle subsidies.
    Keywords: Transport Economics Policy&Planning,Environmental Economics&Policies,Transport and Environment,Taxation&Subsidies,Transport in Urban Areas
    Date: 2008–06–01
  4. By: Seo, S. Niggol; Mendelsohn, Robert; Dinar, Ariel; Hassan, Rashid; Kurukulasuriya, Pradeep
    Abstract: This paper examines the distribution of climate change impacts across the 16 agro-ecological zones in Africa using data from the Food and Agriculture Organization combined with economic survey data from a Global Environment Facility/World Bank project. Net revenue per hectare of cropland is regressed on a set of climate, soil, and socio-economic variables using different econometric specifications"with"and"without"country fixed effects. Country fixed effects slightly reduce predicted future climate related damage to agriculture. With a mild climate scenario, African farmers gain income from climate change; with a more severe scenario, they lose income. Some locations are more affected than others. The analysis of agro-ecological zones implies that the effects of climate change will vary across Africa. For example, currently productive areas such as dry/moist savannah are more vulnerable to climate change while currently less productive agricultural zones such as humid forest or sub-humid zones become more productive in the future. The agro-ecological zone classification can help explain the variation of impacts across the landscape.
    Keywords: Climate Change,Global Environment Facility,Common Property Resource Development,Rural Poverty Reduction,Transport and Environment
    Date: 2008–04–01
  5. By: Sietz, Diana; Boschutz, Maria; Klein, Richard JT; Lotsch, Alexander
    Abstract: Based on a literature review and expert interviews, this paper analyzes the most important climate impacts on development goals and explores relevant institutions in the context of mainstreaming climate adaptation into development assistance in Mozambique. Climate variability and change can significantly hinder progress toward attaining the Millennium Development Goals and poverty aggravates the country's climate vulnerability. Because Mozambique is one of the major recipients of official development assistance in the world, there is a clear interest in ensuring that the risks of climate impacts are incorporated into the country's development investments. A screening of donor activities at the sub-national level shows that a high share of development assistance is invested in climate-sensitive sectors, partly in areas that are particularly exposed to droughts, floods, and cyclones. The authors find that Mozambique has a supportive legislative environment and donors have a high awareness of climate risks. However, limited individual, organizational, networking, and financial capacity constrain mainstreaming initiatives. Given strong limitations at the national level, bilateral and multilateral donors can play a key role in fostering institutional capacity in Mozambique.
    Keywords: Climate Change,Environmental Economics&Policies,Common Property Resource Development,Global Environment Facility,Rural Poverty Reduction
    Date: 2008–09–01
  6. By: Michael Finus (University of Stirling); Dirk T.G. Rübbelke (Center for International Climate and Environmental Research)
    Abstract: Several studies found ancillary benefits of environmental policy to be of considerable size. These additional private benefits imply not only higher cooperative but also noncooperative abatement targets. However, beyond these largely undisputed important quantitative effects, there are qualitative and strategic implications associated with ancillary benefits: climate policy is no longer a pure but an impure public good. In this paper, we investigate these implications in a setting of non-cooperative coalition formation. In particular, we address the following questions. 1) Do ancillary benefits increase participation in international environmental agreements? 2) Do ancillary benefits raise the success of these treaties in welfare terms?
    Keywords: Ancillary Benefits, Climate Policy, Coalition Formation, Game Theory, Impure Public Goods
    JEL: C72 H87 Q54
    Date: 2008–07
  7. By: Geoffrey J. Blanford (Electric Power Research Institute); Richard G. Richels (Electric Power Research Institute); Thomas F. Rutherford (Centre for Energy Policy and Economics)
    Abstract: Recent growth in carbon dioxide emissions from China’s energy sector has exceeded expectations. In a major US government study of future emissions released in 2007 (1), participating models appear to have substantially underestimated the near-term rate of increase in China’s emissions. We present a recalibration of one of those models to be consistent with both current observations and historical development patterns. The implications of the new specification for the feasibility of commonly discussed stabilization targets, particularly when considering incomplete global participation, are profound. Unless China’s emissions begin to depart soon from their (newly projected) business-as-usual path, stringent stabilization goals may be unattainable. The current round of global policy negotiations must engage China and other developing countries, not to the exclusion of emissions reductions in the developed world and possibly with the help of significant financial incentives, if such goals are to be achieved. It is in all nations’ interests to work cooperatively to limit our interference with the global climate.
    Keywords: Energy-Economy Modeling, China, Economic Growth Rates, Energy Intensity, International Climate Policy
    JEL: Q48 H23 O13
    Date: 2008–09
  8. By: Horbach, Jens; Blien, Uwe (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Hauff, Michael von
    Abstract: "The so-called Environmental Sector produces technologies, products and services that prevent or reduce environmental damages. On the background of growing environmental problems such as climate protection this sector seems to be more and more important. Contrary to that, a theoretical model shows that this hypothesis may not be true for all sections of the environmental sector. End-of-pipe solutions that operate independently from production processes are mostly driven by environmental regulation so that the demand for these products reacts rather inelastic. This may not be the case for cleaner technologies that are in most cases an integrated part of the production process. Cost-savings are a major motivation to introduce these technologies and products. Unfortunately, the statistical recording of cleaner technologies is very problematic because these technologies or products can not easily be identified separately. This is also the case for our empirical analysis using data from the establishment panel of the Institute for Employment Research. Our analysis of structural change shows a drastic decline of the number of firms and employment in environmental sectors dominated by end-of-pipe but there are positive employment developments and expectations for those cleaner technologies that are captured by our data. This observation is confirmed by an econometric analysis explaining the driving forces of the market shares of firms in the environmental sector." (author's abstract, IAB-Doku) ((en))
    Keywords: IAB-Betriebspanel, Umweltschutzindustrie, Umweltverträglichkeit, Produktionstechnik, Klimaschutz, Wirtschaftsstrukturwandel, Marktanteil - Determinanten, Unternehmensentwicklung, Beschäftigungsentwicklung, Umsatzentwicklung, Nachfrageentwicklung, Umweltverschmutzung, Wasser, Gewässerschutz, Luft, Luftreinhaltung, Recycling, Abfallbeseitigung, Umweltforschung
    JEL: Q52 J21
    Date: 2008–09–02
  9. By: Seo, Niggol; Mendelsohn, Robert; Dinar, Ariel; Kurukulasuriya, Pradeep; Hassan, Rashid
    Abstract: Using economic data from more than 8,500 household surveys across 10 African countries, this paper examines whether the choice of farm type depends on the climate and agro-ecological zone of each farm. The paper also studies how farm type choice varies across farmers in each zone, using a multinomial logit choice model. Farmers are observed to choose from one of the following five types of farms: rainfed crop-only, irrigated crop-only, mixed rainfed (crop and livestock), mixed irrigated, and livestock-only farming. The authors compare current decisions against future decisions as if the only change were climate change. They focus on two climate scenarios from existing climate models: the Canadian Climate Centre scenario, which is hot and dry, and the Parallel Climate Model scenario, which is mild and wet. The results indicate that the change in farm types varies dramatically by climate scenario but also by agro-ecological zone. Policy makers must be careful to encourage the appropriate suite of measures to promote the most adapted farm type to each location.
    Keywords: Crops&Crop Management Systems,Climate Change,Agriculture&Farming Systems,Livestock&Animal Husbandry,Rural Development Knowledge&Information Systems
    Date: 2008–04–01
  10. By: Seo, S. Niggol; Mendelsohn, Robert; Dinar, Ariel; Kurukulasuriya, Pradeep
    Abstract: This paper examines how farmers have adapted their livestock operation to the current climate in each agro-ecological zone in Africa. The authors examine how climate has affected the farmer's choice to raise livestock or not and the choice of animal species. To measure adaptation, the analysis regresses the farmer's choice on climate, soil, water flow, and socio-economic variables. The findings show that climate does in fact affect the farmer's decision about whether to raise livestock and the species. The paper also simulates how future climates may alter these decisions using forecasts from climate models and the estimated model. With a hot dry scenario, livestock ownership will increase slightly across all of Africa, but especially in West Africa and high elevation agro-ecological zones. Dairy cattle will decrease in semi-arid regions, sheep will increase in the lowlands, and chickens will increase at high elevations. With a mild and wet scenario, however, livestock adoption will fall dramatically in lowland and high latitude moist agro-ecological zones. Beef cattle will increase and sheep will fall in dry zones, dairy cattle will fall precipitously and goats will rise in moist zones, and chickens will increase at high elevations but fall at mid elevations. Livestock adaptations depend on the climate scenario and will vary across the landscape. Agro-ecological zones are a useful way to capture how these changes differ from place to place.
    Keywords: Livestock&Animal Husbandry,Wildlife Resources,Peri-Urban Communities,Rural Urban Linkages,Dairies&Dairying
    Date: 2008–04–01
  11. By: Löschel, Andreas; Otto, Vincent M.
    Abstract: This paper studies implications of uncertainty about the arrival date of a competitive CO2 backstop technology for the design of cost-effective CO2 emission trading schemes. For this purpose, we develop a dynamic general equilibrium model that captures empirical links between CO2 emissions associated with energy use, the rate and direction of technical change and the economy. We specify CO2 capture and storage (CCS) as the backstop technology whose competitiveness is anticipated or not. We find that the discounted welfare loss associated with the environmental target is lower if CCS is not anticipated and that CO2 shadow prices are then relatively high in the years before CCS is competitive. By not simply postponing the implementation of an emission reduction strategy until CCS is competitive, one relies more on economy-wide technical change and its welfare-enhancing technology externalities, thus allowing for a higher steady state. Dieses Papier untersucht die Implikationen von Unsicherheit bezüglich der Verfügbarkeit einer kompetitiven Technologie zur Kohlenstoffabscheidung und –speicherung auf die Ausgestaltung kosteneffektiver CO2 Emissionshandelssysteme. Zu diesem Zweck wird ein dynamisches rechenbares allgemeines Gleichgewichtsmodell entwickelt, welches den empirischen Zusammenhang zwischen CO2 Emissionen, Rate und Richtung des technischen Wandels und wirtschaftlichen Aktivitäten berücksichtigt. Kohlenstoffabscheidung und –speicherung wird als sogenannte Backstop-Technologie modelliert, deren Wirtschaftlichkeit antizipiert wird oder eben nicht. Die Simulationsergebnisse zeigen, dass die diskontierten Wohlfahrtsverluste der Klimapolitik niedriger sind, wenn die Technologie zur Kohlenstoffabscheidung und –speicherung nicht antizipiert wird. In diesem Fall sind die Preise für CO2 Emissionszertifikate vor der unerwarteten Einführung der Backstop-Technologie relativ hoch. Es wird nicht einfach auf die Wirtschaftlichkeit der Kohlenstoffabscheidung und – speicherung gewartet. Vielmehr wird ohne die Berücksichtigung von Kohlenstoffabscheidung und – speicherung ein strikterer Politikpfad zur Erreichung der klimapolitischen Ziele implementiert, der die Internalisierung von technologischen Externalitäten und somit ein höheres Wohlfahrtsniveau ermöglicht. Die Umweltpolitik sollte gegeben der großen technologischen Unsicherheiten vorsichtig sein, Vermeidungsanstrengungen zu verschieben und auf eine Wunderwaffe zu Lösung des Klimaproblems im Energiesektor zu warten.
    Keywords: CO2 capture and storage, computable general equilibrium modeling, directed technical change, emission trading, technological uncertainty
    JEL: D58 D83 H23 O33 Q43
    Date: 2008
  12. By: Thomas Conefrey (Economic and Social Research Institute (ESRI)); John Fitz Gerald (Economic and Social Research Institute (ESRI)); Laura Malaguzzi Valeri (Economic and Social Research Institute (ESRI)); Richard S. J. Tol (Economic and Social Research Institute (ESRI))
    Abstract: This paper analyses the medium-term effects of a carbon tax on growth and CO2 emissions in Ireland, a small open economy. We find that a double dividend exists if the carbon tax revenue is recycled through reduced income taxes. If the revenue is recycled by giving a lump-sum transfer to households, a double dividend is unlikely. We also determine that a greater incidence of the carbon tax falls on capital than on labour. When combined with a decrease in income tax, there is a clear shift of the tax burden from labour to capital. Finally, most of the effect on the economy is due to changes in the competitiveness of the manufacturing and market services sectors. These results hold even if we allow changes in energy prices to have an enhanced (detrimental) effect on Ireland’s competitiveness.
    Keywords: carbon tax; Ireland; double dividend; tax incidence
    JEL: H23 Q54
    Date: 2008–08
  13. By: Fabio Mariani (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Ecole d'économie de Paris - Paris School of Economics - Université Panthéon-Sorbonne - Paris I); Agustin Pérez-Barahona (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Natacha Raffin (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Ecole d'économie de Paris - Paris School of Economics - Université Panthéon-Sorbonne - Paris I)
    Abstract: We present an OLG model in which life expectancy and environmental quality dynamics are jointly determined. Agents may invest in environmental quality, depending on how much they expect to live, but also in order to leave good environmental conditions to future generations. In turn, environmental conditions affects life expectancy.The model produces multiple steady states development regimes) and initial conditions do matter. In particular, some countries may be trapped in a low life expectancy /low environmental quality trap. This outcome is consistent with stylized facts relating life expectancy and environmental performance measures. Possible strategies to escape from this kind of trap are also discussed. Finally, this result is robust to the introduction of human capital through parental education expenditures.
    Keywords: Environmental quality; life expectancy; poverty traps.
    Date: 2008–09
  14. By: Sandra Notaro; Alessandro Paletto
    Abstract: This paper focuses on the economic aspects of the protective role of forests against natural hazards, developing an estimation methodology applicable on a local scale. We identified the main variables that influence on a local level those forest attributes involved directly or indirectly in protection with the aim of zoning forests in homogeneous areas in terms of the level of protection they offer. Applying the replacement cost method a monetary value of the protective function can be estimated for homogeneous zones. The zoning permits the cost of replacement works to be calculated precisely according to the characteristics of the territory in each zone. The methodology was tested in the province of Trento (North East Italy) in an area where forests serve multiple functions and where the social objectives are intimately linked to those of indirect protection of the mountain slopes and direct protection of human activities. The estimation of the protective function of mountain forests enables environmental concerns to be included in economic decision-making by integrating economic and ecological approaches. It could be useful as a criterion for ranking different forest management options, i.e. forest management approaches based on the principle of close-to-nature forestry with management forms that focus on the productive function of forests. Accordingly it could enable forest managers to build consensus around management forms that take into account natural hazards and natural disturbances.
    Date: 2008
  15. By: Adriaan Perrels; Molarius Riitta; Porthin Markus; Rosqvist Tony
    Abstract: The report discusses an experimental decision-making simulation session applied to a flood protection case study against the backdrop of flood risks reinforced by climate change. A diverse set of interest groups was represented in the session that was facilitated by risk analysts using groupware. The purpose of the session was to test the decision analytic process, to learn about stakeholders? tendencies towards types of solutions and their possible underlying explanations. Therefore quantitative ratings have limited value in this case. The exercise is part of a larger study (TOLERATE) concerning socio-economic impacts of climate change enhanced extreme weather conditions.
    Keywords: Climate change, climate change adaptation, extreme event, flood, Group Decision Support System
    Date: 2008–09–02
  16. By: Seo, S. Niggol; Mendelsohn, Robert
    Abstract: This paper develops a Structural Ricardian model to measure climate change impacts that explicitly models the choice of farm type in African agriculture. This two stage model first estimates the type of farm chosen and then the conditional incomes of each farm type after removing selection biases. The results indicate that increases in temperature encourage farmers to adopt mixed farming and avoid specialized farms such as crop-only or livestock-only farms. Increases in precipitation encourage farmers to shift from irrigated to rainfed crops. As temperatures increase, farm incomes from crop-only farms or livestock-only farms fall whereas incomes from mixed farms increase. With precipitation increases, farm incomes from irrigated farms fall whereas incomes from rainfed farms increase. Naturally, the Structural Ricardian model predicts much smaller impacts than a model that holds farm type fixed. With a hot dry climate scenario, the Structural Ricardian model predicts that farm income will fall 50 percent but the fixed farm type model predicts farm incomes will fall 75 percent.
    Keywords: Crops&Crop Management Systems,Agriculture&Farming Systems,Livestock&Animal Husbandry,Climate Change,Rural Development Knowledge&Information Systems
    Date: 2008–04–01
  17. By: Sheila M. Olmstead (Yale School of Forestry and Environmental Studies); Robert N. Stavins (Harvard University)
    Abstract: Urban water conservation is typically achieved through prescriptive regulations, including the rationing of water for particular uses and requirements for the installation of particular technologies. A significant shift has occurred in pollution control regulations toward market-based policies in recent decades. We offer an analysis of the relative merits of market-based and prescriptive approaches to water conservation, where prices have rarely been used to allocate scarce supplies. The analysis emphasizes the emerging theoretical and empirical evidence that using prices to manage water demand is more cost-effective than implementing non-price conservation programs, similar to results for pollution control in earlier decades. Price-based approaches also have advantages in terms of monitoring and enforcement. In terms of predictability and equity, neither policy instrument has an inherent advantage over the other. As in any policy context, political considerations are important.
    Keywords: Cost-effectiveness, Water Conservation, Market-based Approaches, Policy Instrument Choice, Water Price
    JEL: Q25 Q28 Q58 L95
    Date: 2008–09
  18. By: Dijkgraaf, E. (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Gradus, R.
    Abstract: It is well-known that unit-based pricing systems have a significant effect on the quantity of collected waste. Part of this effect may, however, result from a selection bias or environmental activism effect. Based on a pooled cross-section for the Netherlands for 1998- 2005 we show that despite the correction for environmental activism the effect of the weight and bag unit-based pricing system on the quantity of waste is sizeable. Moreover, this environmental activism effect is decreasing over time, so that the most environmental friendly municipalities implement unit-based pricing systems at first. In addition, we show that the volume-effects of the different unit-based pricing systems are rather stable over time. Although we find some evidence for a learning effect, nearly no evidence is found for an awareness erosion effect. This means at least that the effect of unit-based pricing does not decrease over time, which is reassuring from an environmental point of view. Pricing waste helps.
    Keywords: Unit-based pricing; selection bias, dynamics; learning effect
    JEL: H31 H71 Q38
    Date: 2008
  19. By: Elisabetta Strazzera (University of Cagliari); Elisabetta Cherchi (DIT and CIREM, University of Cagliari); Silvia Ferrini (DEPFID, University of Siena, CSERGE and University of East Anglia)
    Abstract: This study adopts a discrete choice modelling methodology to evaluate individuals’ preferences over planning alternatives for an urban site of environmental interest. Since such projects involve some uncertainty and irreversibility, a special attention is devoted to the estimation of the quasi-option values which are associated to project development. Two distinct measures for the quasi-option value are estimated, and both coefficients indicate that the public places a significant value on reduction of the possibility of adverse irreversible effects: a more prudent development strategy is valued about four times more than a procedure that provides a lesser hedge against undesired outcomes. Furthermore, the study involved elicitation of intertemporal preferences over projects with different time spans, and estimation of the implicit discount rates: the values obtained seem high if compared to standard discount rates applied to public projects, but not far from current interest rates on consumption.
    Keywords: Urban Planning, Environmental Values, Choice Modelling, Use Values, Quasi-option Values, Discounting
    JEL: C35 Q51 R41
    Date: 2008–07
  20. By: Hochrainer, S.; Mechler, R.; Pflug, G.; Lotsch, A.
    Abstract: This analysis explores the potential impact of climate change on the viability of the Malawi weather insurance program making use of scenarios of climate change-induced variations in rainfall patterns. The analysis is important from a methodological and policy perspective. By combining catastrophe insurance modeling with climate modeling, the methodology demonstrates the feasibility, albeit with large uncertainties, of estimating the effects of climate change on the near and long-term future of microinsurance schemes serving the poor. By providing a model-based estimate of the incremental role of climate change, along with the associated uncertainties, this methodology can quantitatively demonstrate the need for financial assistance to protect micro-insurance pools against climate-change induced insolvency. This isof major concern to donors, nongovernmental organizations, and others supporting these innovative systems; those actually at-risk; and insurers. A quantitative estimate of the additional burden that climate change imposes on weather insurance for poor regions is of interest to organizations funding adaptation.
    Keywords: Climate Change,Debt Markets,Hazard Risk Management,,Banks&Banking Reform
    Date: 2008–05–01
  21. By: Eskeland, Gunnar S.; Mideksa, Torben K.
    Abstract: There is a debate among policy analysts about whether fuel taxes alone are the most effective policy to reduce fuel use by motorists, or whether to also use mandatory standards for fuel efficiency. A problem with a policy mandating fuel economy standards is the"rebound effect,"whereby owners with more efficient vehicles increase vehicle usage. If an important part of negative externalities from transport are associated with vehicle kilometers (accidents, congestion, road wear) rather than fuel consumption, the rebound effect increases negative externalities. Taxes and standards should be mutually supportive because fuel taxes often meet political resistance. Over time, fuel efficiency standards can reduce political resistance to fuel taxes. Thus, by raising fuel efficiency standards now, politicians may be able to pursue higher fuel tax paths in the future. Another argument in support of fuel efficiency standards and similar policies is that standards to a greater extent than taxes can be announced in advance and still be credible and change the behavior of inventors, firms, and other agents in society. A further argument is that standards can be used with greater force and commitment through international coordination.
    Keywords: Transport Economics Policy&Planning,Transport and Environment,Environmental Economics&Policies,Energy Production and Transportation,Oil Refining&Gas Industry
    Date: 2008–08–01
  22. By: David Anthoff (Economic and Social Research Institute (ESRI)); Richard S. J. Tol (Economic and Social Research Institute (ESRI)); Gary W. Yohe (Wesleyan University)
    Abstract: The Stern Review reported a social cost of carbon of over $300/tC, calling for ambitious climate policy. We here conduct a systematic sensitivity analysis of this result on two crucial parameters: the rate of pure time preference, and the rate of risk aversion. We show that the social cost of carbon lies anywhere in between 0 and $120,000/tC. However, if we restrict these two parameters to match observed behavior, an expected social cost of carbon of $60/tC results. If we correct this estimate for income differences across the world, the social cost of carbon rises to over $200/tC.
    Date: 2008–09
  23. By: Sandra Notaro; Alessandro Paletto; Roberta Raffaelli
    Abstract: The aim of this paper is to take stock of the situation regarding the main types of damage to forests and their respective economic consequences, with reference to a case study in the Italian Alps (Trentino province). Each kind of damage (wind and snow, defoliation, fire and tillage) has been analysed in terms of its impact on four forest functions (production, protection, tourism-recreation and carbon sequestration) and evaluated in monetary terms. Market value was used to estimate the production and carbon sequestration functions, replacement cost method for protection, and contingent valuation for tourism-recreation. Applying desk research on damage caused by the main biotic and abiotic factors to this particular case study led to estimate a annual damage of about € 1,633,595 equal to € 4.73 per hectar. This can be considered a lower bound estimate of possibly greater damage. Another interesting result emerged from the evaluation exercise is that the wealth of information produced through monitoring and scientific research in the last twenty years does not readily lend itself to economic analysis.
    Keywords: forest damage, forest functions, interaction between damage and functions, economic valuation, Alpine forests
    Date: 2008
  24. By: Gauss, Martin
    Abstract: This report provides an overview of how constructed wetlands serve as natural wastewater treatment systems. It focuses especially on the subsurface horizontal flow type-a technology that has high potential for small and medium-size communities because of its simplicity, performance reliability, and low operation and maintenance requirements. The ability of this wetland to reduce pathogens renders the effluent suitable for irrigation of certain crop species if additional health and environmental protection measures are taken. This report describes several experiences with constructed wetland schemes in Central and South America: a full-scale pilot plant in Nicaragua, a community-managed constructed wetland scheme in El Salvador, and other systems in Colombia, Brazil, and Peru. Although the report focuses on technology issues, it stresses the importance of adequate arrangements for operation and maintains to guarantee the long-term treatment performance of the constructed wetland scheme. Furthermore, community participation and complementary actions such as promoting hygiene are crucial elements for sustainable wastewater treatment projects and maximization of health and environmental benefits.
    Keywords: Wetlands,Water and Industry,Wastewater Treatment,Sanitation and Sewerage,Water Supply and Systems
    Date: 2008–04–01
  25. By: Wang, Hua; Xie, Jian; Li, Honglin
    Abstract: In determining domestic water prices, policy makers often need to use information about the demand side rather than only relying on information about the supply side. Household surveys have frequently been employed to collect demand-side information. This paper presents a multiple bounded discrete choice household survey model. It discusses how the model can be utilized to collect and analyze information about the acceptability of different water prices by different types of households, as well as households'willingness to pay for water service improvement. The results obtained from these surveys can be directly utilized in the development of water pricing and subsidy policies. The paper also presents an empirical multiple bounded discrete choice study conducted in Chongqing, China. In this case, domestic water service quality was seriously inadequate, but financial resources were insufficient to improve service quality. With a survey of about 1,500 households in five suburban districts in Chongqing Municipality, this study shows that a significant increase in the water price is feasible as long as the poorest households can be properly subsidized and certain public awareness and accountability campaigns can be conducted to make the price increase more acceptable to the public. The analysis also indicates that the order in which hypothetical prices are presented to respondents systematically affects their answers, and should be taken into account when designing survey instruments.
    Keywords: Town Water Supply and Sanitation,Water Supply and Sanitation Governance and Institutions,Environmental Economics&Policies,Water and Industry,Water Supply and Systems
    Date: 2008–08–01
  26. By: Alain Grandjean (Carbone 4 - Carbone 4); Patrick Criqui (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : UMR5252 - Université Pierre Mendès-France - Grenoble II)
    Abstract: Le Grenelle de l'environnement a marqué une date importante dans l'élaboration de la politique environnementale de la France. Il a permis notamment de montrer que les différentes parties-prenantes étaient capables de s'entendre sur des objectifs précis. Mais il manque encore le signal de fiscalité environnementale qui permettra de déclencher la transition énergétique.
    Keywords: politique environnementale ; politique énergétique ; incitation ; France
    Date: 2008–05
  27. By: Suarez, Pablo; Givah, Precious; Storey, Kelvin; Lotsch, Alexander
    Abstract: Southern African institutions involved in disaster management face two major new threats: the HIV/AIDS pandemic (eroding organizational capacity and increasing vulnerability of the population), and climate change (higher risk of extreme events and disasters). Analyzing the combined effects of these two threats on six disaster-related institutions in Malawi, the authors find evidence of a growing gap between demand for their services and capacity to satisfy that demand. HIV/AIDS leads to staff attrition, high vacancy rates, absenteeism, increased workload and other negative effects enhanced by human resources policies and financial limitations. Many necessary tasks cannot be carried out adequately with constraints such as the 42 percent vacancy rate in the Department of Poverty and Disaster Management Affairs, or the reduction of rainfall stations operated by the Meteorological Service from over 800 in 1988 to just 135 in 2006. The authors highlight implications of declining organizational capacity for climate change adaptation, and formulate recommendations.
    Keywords: Population Policies,HIV AIDS,Hazard Risk Management,Health Monitoring&Evaluation,Climate Change
    Date: 2008–05–01
  28. By: Carlos Gustavo Cano
    Abstract: El cambio climático es una realidad inequívoca. Sus impactos en el mediano y el largo plazo constituyen la más grave amenaza para la supervivencia de las próximas generaciones. Y en el corto plazo, los países en vía de desarrollo, que en su mayoría se encuentran en el trópico y por tanto experimentan las más altas temperaturas, además de contar con economías fuertemente dependientes de la agricultura, son los más expuestos a los potenciales daños provocados por el fenómeno, a pesar de su mínima contribución a las principales causas del mismo, o sea la emisión de los denominados gases de efecto invernadero provenientes del uso de los combustibles fósiles. Desde el ángulo de la ciencia económica, el cambio climático constituye la más pronunciada falla del mercado en la historia de la humanidad. Por tanto, la forma más eficaz de emprender desde ahora su corrección debe ser a través de mecanismos del propio mercado, de suerte que, dentro del marco de la teoría de las externalidades de Pigou, fundamentalmente por intermedio de medidas de índole fiscal, sus costos - y sus beneficios - se reflejen en los precios de los bienes y servicios. Específicamente un sistema combinado de ‘topes y comercio’ y de gravámenes a las emisiones de flujos de carbono, inspirado en la experiencia pionera de la Unión Europea tanto en el ámbito de la llamada reforma fiscal ecológica como en el mercado de los créditos de carbono, y adoptado a nivel global, debe ser el primer paso en esa dirección. Igualmente es urgente otorgarle a la reducción de la deforestación – la mayor fuente de las emisiones en las áreas tropicales - y a la reforestación y la forestación según el caso, el reconocimiento como actividades elegibles para el otorgamiento de créditos de carbono. Y, en el caso de Colombia, en asocio de sus vecinos de la Amazonia, donde se encuentra el 40 por ciento del bosque tropical húmedo que aún queda en el planeta, la formulación y ejecución de un megaproyecto en dicha macro-región, a fin de someterlo a la consideración de la próxima cumbre de las Naciones Unidas sobre el cambio climático a finales del 2009 en Conpenhage, como el primero y más grande avance del mundo en tal materia.
    Date: 2008–09–07

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