nep-env New Economics Papers
on Environmental Economics
Issue of 2008‒10‒13
eight papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. Border tax adjustments and the EU-ETS By Ton Manders; Paul Veenendaal
  2. Ecological dumping under foreign investment quotas By Yasuyuki Sugiyama; Muneyuki Saito
  3. International Environmental Agreement: a Dynamic Model of Emissions Reduction By Marta Biancardi; Andrea Di Liddo
  4. Modern Management: Good for the Environment or just Hot Air? By Nicholas Bloom; Christos Genakos; Ralf Martin; Raffaella Sadun
  5. The influence of Economics on agricultural systems: an evolutionary and ecological perspective By Kevin Marechal; Hélène Aubaret-Joachain; Jean-Paul Ledant
  6. Relative Consumption and Resource Extraction By Francisco Alvarez-Cuadrado; Ngo Van Long
  7. Correspondence analysis of raw data By Michael Greenacre
  8. Il sistema internazionale delle emissioni, gli strumenti di flessibilità e le forme di incentivazione in Italia By Papa Stefano

  1. By: Ton Manders; Paul Veenendaal
    Abstract: If the EU stands alone in adopting climate policy and imposes a strict emissions ceiling, competitiveness of EU energy-intensive sectors will be affected negatively. Relocation of EU energy-intensive firms to countries with a lax regime also leads to carbon leakage. However, when use is made of the opportunities of the Clean Development Mechanism these impacts are very modest. Border tax adjustments (BTAs) to ‘level the playing field’ between domestic and foreign producers may be considered to address the concerns about both competitiveness and carbon leakage. It is far from clear whether these measures are WTO-proof. Simulations show that both an import levy and an export refund restore competitiveness to a certain extent. BTAs may lower the costs for energy-intensive sectors, but induce higher costs for other sectors. This paper uses a general equilibrium model to quantify and assess the implications of a number of policy scenarios.
    Keywords: climate policy; border tax; revenue recycling; Clean Development Mechanism
    JEL: Q53
    Date: 2008–10
  2. By: Yasuyuki Sugiyama (Graduate School of Economics, Osaka University); Muneyuki Saito (Graduate School of Economics, Osaka University)
    Abstract: In this paper, we examine the discrimination of emission taxes between the export and nontradable sectors in a small country. A few articles indicate that there should be no differentiation of environmental policies between sectors in a small country if the government uses indirect instruments as emission taxes. However, we show that the discrimination of emission taxes may occur in a small country that imposes foreign investment quotas. In particular, the possibility that ecological dumping occurs is higher if export goods are more labor intensive than import goods, as in developing countries. Moreover, in the case where imported goods are most capital intensive, both emission tax rates may be lower than marginal environmental damage, and ecological dumping may occur. It is also shown that easing foreign capital quotas may deteriorate the small countryfs welfare.
    Keywords: ecological dumping, emission tax, nontraded goods, international trade, capital movement
    JEL: F18 F20
    Date: 2008–09
  3. By: Marta Biancardi; Andrea Di Liddo
    Abstract: We model an International Environmental Agreement as a two stages game: during the first stage each country decides whether or not to join the agreement while, in the second stage, the quantity of emissions reduction is choosen. Players determine their abatement levels in a dynamic setting, given the dynamics of pollution stock and the strategies of other countries. Players may act cooperatively, building coalitions and acting according to the interest of the coalition, or they make their choices taking care of their individual interest only. Countries can behave myopically or in a farsighted way. As a consequence, the size of stable coalition can completely change. A continuous time framework is choosen in the present paper and consequently the problem is studied by a differential game.
    Keywords: IEA, Differential games, Coalition stability.
    Date: 2008–09
  4. By: Nicholas Bloom; Christos Genakos; Ralf Martin; Raffaella Sadun
    Abstract: We use an innovative methodology to measure management practices in over 300 manufacturing firms in the UK. We then match this management data to production and energy usage information for establishments owned by these firms. We find that establishments in better managed firms are significantly less energy intensive. They use less energy per unit of output, and also in relation to other factor inputs. This is quantitatively substantial: going from the 25th to the 75th percentile of management practices is associated with a 17.4% reduction in energy intensity. This negative relationship is robust to a variety of controls for industry, location, technology and other factor inputs. Better managed firms are also significantly more productive. One interpretation of these results is that well managed firms are adopting modern lean manufacturing practices, which allows them to increase productivity by using energy more efficiently. This suggests that improving the management practices of manufacturing firms may help to reduce greenhouse gas emissions.
    JEL: L26 L6 M11 M12 Q40 Q41
    Date: 2008–10
  5. By: Kevin Marechal (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels and CEESE, Université Libre de Bruxelles.); Hélène Aubaret-Joachain (Institut pour un Développement durable, Ottignies, Belgique); Jean-Paul Ledant (Institut pour un Développement durable, Ottignies, Belgique)
    Abstract: Putting agricultural systems on a more sustainable path is a crucial policy issue. Within that context, the objective of this paper is to show how the unsustainable character of current agricultural systems is strongly related to the prevailing rationale of mainstream economics and the Cartesian-Newtonian worldview on which it is founded. Using the example of the transformation of post-war agriculture in France, our analysis underlines the profound influence of the logic of mainstream economics on the modernisation of agricultural systems. The resulting transformation of agricultural systems based on the triptych specialisation-intensification-concentration is then further explored regarding its negative impacts in terms of sustainability. Particular attention is dedicated to environmental impacts, given their magnitude and the fact that mainstream economics, because of its “mechanistic reductionist” framework, has intrinsic difficulties in dealing with them. Since the fundamental assumptions of mainstream economics are being strongly challenged, it becomes legitimate to resort to an alternative economic framework for designing appropriate policies and measures. Given that many empirical studies demonstrates that agricultural systems may be locked-in to some extent, the choice an evolutionary line of thought in an ecological perspective is quite straightforward. This approach of economic change both underlines its historically-contingent nature and the role played by systemic interdependencies. Through underlining the path-dependence of agricultural systems, the use of the evolutionary framework in an ecological perspective allows us to shed a new light on their transformation by suggesting some strategies (i.e. niche accumulation and hybridisation) that have proven efficient in overcoming cases of lock-in in other fields.
    Keywords: Agricultural systems; Mechanistic reductionism; Evolutionary economics; Path-dependence and lock-in; Environmental pressures
    Date: 2008–10
  6. By: Francisco Alvarez-Cuadrado; Ngo Van Long
    Abstract: This paper presents a simple model of resource extraction where preferences are household's preferences depend on relative consumption levels. We identify two dimensions along which consumption externalities distort the efficient extraction of resources: (i) the static trade-off between consumption and effort, and (ii) the dynamic trade-off between current and future consumption. In general, households over-exploit the natural resource stocks, resulting in steady state stocks lower than the efficient stocks of resources that would be chosen by a benevolent central planner. We propose a tax mechanism to induce the first best outcome. <P>On présente un modèle d’exploitation d’une ressource naturelle dans lequel les ménages accordent une importance à la consommation relative, soit la différence entre leur consommation et celle de leur groupe de référence. On identifie deux dimensions de distorsion. Premièrement, il y a la distorsion dans le choix du niveau d’effort. Deuxièmement, il y a la distorsion dans le choix entre la consommation présente et la consommation dans le futur. En général, les ménages ont tendance à exploiter les ressources naturelles de facon excessive. Par conséquent, les stocks de ressources à l’état stationnaire sont plus petits que ceux qu’aurait choisis un planificateur central. On propose une règle de taxation qui assure les résultats optimaux.
    Keywords: relative consumption, relative income hypothesis, permanent income hypothesis, consommation relative, revenue relative, l’hypothèse de la revenue permanente.
    JEL: D62 Q20 Q50
    Date: 2008–10–01
  7. By: Michael Greenacre
    Abstract: Correspondence analysis has found extensive use in the social and environmental sciences as a method for visualizing the patterns of association in a table of frequencies. Inherent to the method is the expression of the frequencies in each row or each column relative to their respective totals, and it is these sets of relative frequencies (called profiles) that are visualized. This “relativization” of the frequencies makes perfect sense in social science applications where sample sizes vary across different demographic groups, and so the frequencies need to be expressed relative to these different bases in order to make these groups comparable. But in ecological applications sampling is usually performed on equal areas or equal volumes so that the absolute abundances of the different species are of relevance, in which case relativization is optional. In this paper we define the correspondence analysis of raw abundance data and discuss its properties, comparing these with the regular correspondence analysis based on relative abundances.
    Keywords: Abundance data, biplot, profiles, visualization
    JEL: C19 C88
    Date: 2008–09
  8. By: Papa Stefano
    Date: 2008–10

This nep-env issue is ©2008 by Francisco S.Ramos. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.