|
on Environmental Economics |
| By: | Cullen, Joseph |
| Abstract: | Production subsidies for renewable energy have experienced intermittent support from the federal government. One reason for less than united support arises from uncertainty over the environmental impact of projects implemented because of such subsidies. Wind energy in particular has taken advantage of federal subsidies, but what has been the environmental impact? Taking investment in wind capacity as given, I am able to identify the short run substitution patterns between wind power and conventional power for one geographic area of the US electric grid. I exploit the exogenous nature of wind to identify generator level substitution of wind generated electricity for conventionally generated electricity. I then quantify the avoided emissions and associated costs using generator level emissions information and market clearing prices for pollution permits. The end result is the value of avoided emissions due to government subsidies. |
| Keywords: | Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6027&r=env |
| By: | Arief Anshory Yusuf (Department of Economics, Padjadjaran University); Arief Ramayandi (Center for Economics and Development Studies Dept. of Economics, Padjadjaran University) |
| Abstract: | Reducing fuel subsidy and taxing carbon have a tendency toward reducing energy consumption and carbon emissions. However, both instruments may have differing impacts in their magnitudes of the emissions reduction and on the economy as a whole. Using INDONESIA-E3 (Economy-Equity-Environment) model, a computable general equilibrium (CGE) model which includes carbon emissions, carbon taxation, as well as, strong feature in distributional analysis, this paper compares and contrast the two instruments to find which policy is better in improving the three pillars of sustainable development: economy, equity, and the environment. The result suggests that given the same amount of government budget saving, carbon tax is relatively superior to using a fuel subsidy reduction instrument, because it can accelerate the decline in CO2 emissions with a lower cost on the economy in terms of GDP reduction with more favorable distributional effect. This has not taken into account the economic incentives it creates for the economy to be less reliant on carbon-intensive energy. |
| Keywords: | Carbon Tax, Fuel Subsidyc Climate Change, CGE, Indonesia |
| JEL: | D30 D58 Q40 Q48 Q54 Q56 Q58 |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:unp:wpaper:200808&r=env |
| By: | Karp, Larry |
| Abstract: | One argument in favor of market based pollution control policies is sometimes exaggerated, and a different argument is usually ignored. Regardless of whether investment is fixed or endogenous, market based policies might lead to a higher or lower equilibrium abatement compared to the level under command and control policies. Therefore, economists should be cautious about trying to convince anti-market environmentalists of the benefit of market based policies on the grounds that these promote environmental goals. However, market based policies reduce regulatory uncertainty. Under command and control emissions policies, there are multiple rational expectations competitive equilibria at the investment stage. From the standpoint of individual firms, this multiplicity looks like regulatory uncertainty. Market based policies eliminate this uncertainty. These results hold in an environment with common knowledge about market fundamentals. In a global games setting the unique investment equilibrium under command and control emissions policies is constrained efficient. |
| Keywords: | tradable permits, coordination games, multiple equilibria, global games, regulatory uncertainty, climate change policies, California AB32, Environmental Economics and Policy, C79, L51, Q58, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6030&r=env |
| By: | Sanderson, Todd; Ancev, Tiho; Betz, Regina |
| Abstract: | Trading schemes for emission allowances have become a panacea for nations aspiring to reduce their aggregate emissions of greenhouse gases from industry in a cost-effective manner. The contention of this paper is that an emissions trading scheme (ETS) should not be based on blanket coverage of installations on a downstream level, but should rather be designed to include some installations, and from some industrial sectors. In the case of an ETS there are high costs of administration, monitoring and transacting imposed on the installations covered. These costs are supposed to be more than offset by the cost savings realised through trading in the market for emission allowances. However, the paper shows that not all installations can fully offset administrative costs, and are therefore exposed to higher cost compared to a situation under an alternative instrument (e.g. standard). The paper formulates a conceptual framework for analysing overall cost and benefits from an ETS in the light of administration and transactions costs. It theoretically establishes a threshold point for optimal coverage of installations on a downstream level. The paper uses data from EU ETS to empirically determine optimal coverage for selected sectors. The results indicate that blanket coverage is more costly than the determined optimum coverage plan. |
| Keywords: | Climate Change, Emissions Trading Scheme, European Union, Marginal Abatement Costs, Environmental Policy, Environmental Economics and Policy, International Relations/Trade, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6047&r=env |
| By: | Freebairn, John |
| Abstract: | The paper argues from first principles and with supporting related empirical evidence that most of the final incidence of emissions taxes or tradable permits will fall on consumers of greenhouse gas intensive products. This distributional outcome supports an emissions reduction strategy of an emissions tax or auctioning the tradable permits, rather than gifting permits in a grandfather arrangement to current polluters as was done in Europe and has currency with proposals for Australia. Greenhouse gas emissions and climate change is a global pollution problem that gives rise to a prisoner€ٳ dilemma problem in which the global cooperative solution in undermined by individual countries free-riding. Some of the issues and challenges to be overcome to reach a cooperative global policy package are discussed, including the different interests and perspectives of developed and developing countries. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6770&r=env |
| By: | Michael A. Ash (University of Massachusetts Amherst); James K. Boyce (University of Massachusetts Amherst) |
| Abstract: | Measures of corporate environmental justice performance can be a valuable tool in efforts to promote corporate social responsibility and to document systematic patterns of environmental injustice. This paper develops such a measure based on the extent to which toxic air emissions from industrial facilities disproportionately impact racial and ethnic minorities and low-income people. Applying the measure to 100 major corporate air polluters in the United States, we find wide variation in the extent of disproportional exposures. In a number of cases, minorities bear more than half of the total human health impacts from the firm's industrial air pollution. |
| Keywords: | Corporate social responsibility; corporate environmental performance; environmental justice; air pollution |
| JEL: | M14 Q52 Q56 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2008-16&r=env |
| By: | Nedanovski, Pece |
| Abstract: | The demand for harmonization of domestic policies across countries is seen as a precondition for globalization. Does globalization conflict with environmental protection? The relationship between two of them is too complex. From the viewpoint of its protection, the environment must be seen as a whole. In the same time, the utility function based on income and pollution, is not identical and homothetic across different countries. It appears that the diversity in environmental protection is legitimate. In order to provide a sustainable environmental policy in transitional circumstances, the R. of Macedonia needs a balance between the goals of social development, economic progress and environmental protection. So far, because of the institutional development gap, only few economic instruments have been implemented in environmental protection in Macedonia. Consequently, the environmental policy including economic instruments should be considered with a view to balance the environmental achievements with its social and economic implications. |
| Keywords: | economic instruments, environmental protection, sustainability, globalization, Environmental Economics and Policy, International Development, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:5994&r=env |
| By: | Ranjan, Ram |
| Abstract: | Replaced with revised version of paper 06/18/08. Former title: Non-Linearity in Belief and Environmental Risk Dynamics |
| Keywords: | Belief dynamics, ecological hysteresis, water scarcity, groundwater dependent ecosystems, threshold effects, Environmental Economics and Policy, Resource /Energy Economics and Policy, Risk and Uncertainty, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:5999&r=env |
| By: | Gillespie, Rob |
| Abstract: | This paper conveniently skips any controversy associated with the science of climate change. On the assumption that greenhouse gas emissions are causing climate change that is detrimental to humanity, the paper focuses on some economic dimensions of the issue which seem to be poorly understood by Australian media commentators, policy analysts, interest groups and the political parties. Using a neoclassical welfare economics framework the paper explores the costs and benefits of greenhouse gas abatement with reference to the findings of the Stern Report, the setting of greenhouse gas targets by Australian political parties, the danger of the government €ܰicking winnersÂ€Ý and the emerging carbon theory of value. The paper concludes with a brief review of the relative merits of a carbon tax and a cap and trade approach. Key Words: This paper conveniently skips any controversy associated with the science of climate change. On the assumption that greenhouse gas emissions are causing climate change that is detrimental to humanity, the paper focuses on some economic dimensions of the issue which seem to be poorly understood by Australian media commentators, policy analysts, interest groups and the political parties. Using a neoclassical welfare economics framework the paper explores the costs and benefits of greenhouse gas abatement with reference to the findings of the Stern Report, the setting of greenhouse gas targets by Australian political parties, the danger of the government €ܰicking winnersÂ€Ý and the emerging carbon theory of value. The paper concludes with a brief review of the relative merits of a carbon tax and a cap and trade approach. |
| Keywords: | climate change, economics, targets, policy, carbon tax, cap and trade, Environmental Economics and Policy, Political Economy, Public Economics, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6006&r=env |
| By: | Cacho, Oscar |
| Abstract: | Payment for carbon sequestration by agriculture and forestry can provide incentives for adoption of sustainable agricultural practices. However, a project involving contracts with farmers may face high transaction costs in showing that net emission reductions are real and attributable to the project. This paper presents a model of project participation that includes transaction and abatement costs. A project feasibility frontier (PFF) is derived, which shows the minimum project size that is feasible for any given market price of carbon. The PFF is used to analyse how the design of a climate mitigation program may affect the feasibility of actual projects. |
| Keywords: | Climate Policy, Greenhouse Effect, Carbon Sequestration, Agroforestry, Transaction Costs, Environmental Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6007&r=env |
| By: | Wise, Russell; Cacho, Oscar |
| Abstract: | In many areas of developing countries, economic and institutional factors often combine to give farmers incentives to clear forests and repeatedly plant food crops without sufficiently replenishing the soils. These activities lead to large-scale land degradation and contribute to global warming through the release of greenhouse gases into the atmosphere. We investigate whether agroforestry systems might alleviate these trends when carbon-credit payments are available under the Clean Development Mechanism of the Kyoto Protocol. A meta-modelling framework is adopted, comprising an econometric-production model of a smallholding in Sumatra. The model is used within a dynamic-programming algorithm to determine optimal combinations of tree/crop area, tree-rotation length, and firewood harvest. Results show the influence of soil-carbon stocks and discount rates on optimal strategies and reveal interesting implications for joint management of agriculture and carbon. |
| Keywords: | bio-economic meta-modelling, Indonesia, agroforestry, carbon credits, dynamic programming, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6772&r=env |
| By: | Crowe, Bronwyn; White, Ben; Pannell, Dave; Lindner, Bob |
| Abstract: | Government and non-government conservation agencies have long-term goals and objectives to provide environmental services, such as conserving the biodiversity of Australian native vegetation. In addition to national parks and reserves, private lands are often included in conservation programs to achieve these objectives. Formal contracts are entered into between the private landholder and the conservation agency to provide environmental services, or more commonly to provide inputs that are likely to lead to environmental services. The paper examines the costs and benefits of monitoring these conservation contracts when biodiversity change is stochastic. |
| Keywords: | conservation, compliance, monitoring, enforcement, environmental regulation, Environmental Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:5990&r=env |
| By: | Sahlén, Linda (Department of Economics, Umeå University) |
| Abstract: | In this paper, the likely effects of an environmental fiscal reform in Namibia are examined using a Computable General Equilibrium model. Namibia is a natural resource rich country with poverty alleviation as one important target on the policy agenda. One way for the government of simultaneously ensuring both a sustainable use of the resources and a less skewed income distribution might be to introduce an environmental fiscal reform, where taxes on natural and environmental resources (fish rents, energy and water) are recycled in order to give additional benefits (in terms of GDP, employment and income distribution) to the economy. The results indicate that for some recycling options, there is scope for additional benefits. Subsidizing unskilled labour would give the most favourable result, at least in terms of real GDP and employment. However, poverty might not only be a question of employment; since food constitutes a significant part of poor households’ expenditures, a decrease in taxes on food might be an interesting option if GDP, employment, income distribution and environmental impacts are considered in combination. |
| Keywords: | computable general equilibrium model; environmental fiscal reform; revenue recycling |
| JEL: | D58 H21 O13 Q25 |
| Date: | 2008–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0757&r=env |
| By: | Bennett, Jeff; Dumsday, Rob; Gillespie, Rob |
| Abstract: | The Victorian Environmental Assessment Council is conducting an investigation into the management of the public land River Red Gum Forests of the Murray River Valley in Victoria. In this paper the authors apply the results of an earlier Choice Modelling exercise commissioned by VEAC to estimate the non-use values of the forests. A Benefit Cost Analysis of VEAC's draft recommendations included assessment of the market and non market values associated with different River Red Gum forest management strategies. It is concluded that the use of water for environmental flows is competitive with its use for irrigation. Other economic values associated with timber harvesting, grazing and duck hunting are small in comparison with the water values. |
| Keywords: | Choice Modelling, Environment, River Red Gums, Benefit Cost Analysis, Water Resources, Land Economics/Use, Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6029&r=env |
| By: | Guerrero, Santiago; Innes, Robert |
| Abstract: | State-level statutes provide firms that engage in environmental self-audits, and that self-report their environmental violations, with a variety of different regulatory rewards, including "immunity" from penalties and "privilege" for information contained in self-audits. This paper studies a panel of State-level industries from 1989-2003, in order to determine the effects of the different statutes on toxic pollution and government inspections. We find that, by encouraging self-auditing, privilege and limited immunity protections tend to reduce pollution and government enforcement activity; however, more sweeping immunity protections, by reducing firms' pollution prevention incentives, raise toxic pollution and government inspection oversight. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6204&r=env |
| By: | Maung, Thein A.; McCarl, Bruce A. |
| Abstract: | In the past, studies on agricultural feedstocks for energy production were motivated by rising fossil fuel prices interpreted by many as caused by resource depletion. However, today's studies are mainly motivated by concerns for climate change and global warming. Currently, most studies concentrate on liquid fuels with little study devoted toward electricity. This study examines crop residues for electricity production in the context of climate change and global warming. We use sector modeling to simulate future market penetration for biopower production from crop residues. Our findings suggest that crop residues cost much more than coal because they have lower heat content and higher production/hauling costs. For crop residues to have any role in electricity generation either the carbon or carbon dioxide equivalent greenhouse gas price must rise to about 15 dollars per ton or the price of coal has to increase to about 43 dollars per ton. We find crop residues with higher heat content and lower production costs such as wheat residues have greater opportunities in biopower production than the residues with lower heat content and higher production costs. In addition, the analysis shows that improvements in crop yield do not have much impact on biopower production. However, the energy recovery efficiency does have significant positive impact but only if the carbon equivalent price rises substantially. The analysis also indicates the desirability of cofiring biomass as opposed to 100% replacement because this reduces hauling costs and increases the efficiency of heat recovery. In terms of policy implications, imposing carbon emission pricing could be an important step in inducing electric power producers to include agricultural biomass in their fuel-mix power generation portfolios and achieve greenhouse gas emission reductions. |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6417&r=env |
| By: | Bi, Xiang; Khanna, Madhu |
| Abstract: | Replaced with revised version of paper 07/25/08. |
| Keywords: | 33/50 program, Toxic release inventory, Releases, Program evaluation, Environmental Economics and Policy, Q58, Q53, L60, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6258&r=env |
| By: | Sinden, J.A.; Downey, Paul O.; Hester, Susan M.; Cacho, Oscar |
| Abstract: | Valuation of the gains from protection of biodiversity is difficult because the services that provide the benefits do not normally pass through markets where prices can form. But the services sometimes pass through markets where consumers or producers behave in a market-oriented manner, and so the values implicit in this behaviour can be identified and derived. Estimates of the benefits of biodiversity protection are derived from the costs of protecting native plant communities from a major weed in Australia, by following this approach. In 1999, invasion of coastal areas of New South Wales by bitou bush (Chrysanthemoides monilifera subsp. rotundata (DC.) T. Norl.) was listed as a key process threatening native plants under the NSW Threatened Species Conservation Act 1995. In accordance with the Act, the Department of Environment and Climate Change prepared a Threat Abatement Plan (TAP) to reduce the impacts of bitou bush on biodiversity at each threatened site. The costs of protecting sites vary closely with the number of priority native species and communities at each site. Following standard economic assumptions about market transactions, these costs are interpreted to provide values the benefits of protecting extra species, communities, and sites. Key words: Bitou bush, Chrysanthemoides monilifera, threat abatement plan, valuation of biodiversity, benefit-cost analysis, weed control, defensive-expenditure method. |
| Keywords: | Bitou bush, Chrysanthemoides monilifera, threat abatement plan, valuation of biodiversity, benefit-cost analysis, weed control, defensive-expenditure method, Demand and Price Analysis, Environmental Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:5988&r=env |
| By: | Nordblom, Tom; Reeson, Andrew; Whitten, Stuart; Finlayson, John D.; Kelly, Jason A.; Hume, Iain H. |
| Abstract: | Shortfalls in water supplies are perhaps the greatest practical NRM policy concern in Australia today, looming larger in many minds than the great international debates on greenhouse gasses, climate change and biodiversity. Because forest land cover uses more water than any other, wide expansion of upstream tree plantations can significantly reduce water yields upon which downstream urban, agricultural and wetlands depend. We consider the economic efficiency and equity (profitability and distributional) consequences of upstream land use change. The €إnvironmental services€٠of concern in our study are the mean annual quantities and qualities (volumes and salt concentrations) of water flowing from upper parts of a catchment to the downstream interests holding entitlements to that water. We consider the presence or absence of high salinity concentrations (C) in a tributary to the water supply of urban and other high-security users; the presence or absence of policy and/or markets giving strong incentives for upstream tree plantations (P); and the presence or absence of a policy that water entitlements (E) must be purchased from existing entitlement holders before new upstream tree plantations are allowed. A factorial experiment examining all eight €عes/no€٠combinations of these conditions is defined to explore the associated distributions of upstream and downstream impacts. |
| Keywords: | experimental economics, land use, rival water uses, MBI, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6249&r=env |
| By: | Connor, Jeffery; Kirby, Mac; Schwabe, Kurt; Lukasiewicz, Anna; Kaczan, David |
| Abstract: | This article evaluates irrigated agriculture sector response and resultant economic impacts of climate change for a part of the Murray Darling Basin in Australia. A water balance model is used to predict reduced basin inflows for mild, moderate and severe climate change scenarios involving 10, 20, 40 Celcius warming, and predict 13%, 38% and 63% reduced inflows. Impact on irrigated agricultural production and profitability are estimated with a mathematical programming model using a two-stage approach that simulanteously estimates short and long-run adjustments. The model accounts for a range of adaptive responses including: deficit irrigation, temporarily fallowing some areas, and permanently reducing irrigated area and changing the mix of crops. The results suggest that relatively low cost adaptation strategies are available for moderate reduction in water availability and thus costs of such reduction are likely to be relatively small. In more severe climate change scenarios greater costs are estimated, adaptations predicted include a reduction in total area irrigated, investments in efficient irrigation, and a shift away from perennial to annual crops as the latter can be managed more profitably when water allocations in some years are very low. |
| Keywords: | Environmental Economics and Policy, Land Economics/Use, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:5974&r=env |
| By: | Delmas, Magali A.; Doctori-Blass, Vered; Shuster, Kara |
| Keywords: | organic wine, biodynamic wine, labeling, case study, Agribusiness, Agricultural and Food Policy, Environmental Economics and Policy, Food Consumption/Nutrition/Food Safety, |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aawewp:37326&r=env |
| By: | Fraser, Rob |
| Abstract: | This paper examines the issue of incentive-compatibility within environmental stewardship schemes where incentive payments to farmers to provide environmental goods and services are based on foregone agricultural income. The particular focus of the paper is on the role of land heterogeneity, whether in terms of agricultural value or environmental value, in leading to divergences between the actual and the socially optimal level of provision of environmental goods and services. It is shown that such goods and services are systematically over or under-provided depending on the characteristics of land heterogeneity both within and between landscape regions. It is therefore concluded that incentive payments should be based on social willingness-to pay for the provision of environmental goods and services. |
| Keywords: | Environmental Economics and Policy, Institutional and Behavioral Economics, Land Economics/Use, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6038&r=env |
| By: | Persson, Lars (Department of Economics, Umeå University) |
| Abstract: | This thesis consists of an introductory chapter and four papers, which relate to environmental policy in the presence of transboundary environmental damage. Paper [I] concerns public policy in a multi-jurisdiction framework with transboundary environmental damage. Each jurisdiction is assumed large in the sense that its government is able to inuence the world-market producer price of the externality-generating good. This gives rise to additional incentives of relevance for national public policy in the non-cooperative Nash equilibrium. With the uncoordinated equilibrium as the reference case, the welfare eects from coordinated changes in public policy variables are analyzed. Paper [II] analyses welfare eects of coordinated changes in environmental and capital taxation in the presence of transboundary environmental externalities and wage bargaining externalities. In the wage bargaining between rms and labor unions, rms use the threat of moving abroad to moderate wage claims, which means that domestic policy inuences wage formation abroad. The specic framework implies welfare eects of policy coordination that correspond to each of the respective international interaction mentioned above. In paper [III], national governments face political pressure from environmental and industrial lobby groups, while pollution taxes are determined in an international negotiation. It is shown that a general increase in the environmental concern and the weight the governments attach to social welfare both tend to increase the pollution tax. However, allowing for asymmetries between the countries means that a general increase in the environmental concern has the potential to reduce the pollution tax. Paper [IV] studies national environmental policies in an economic federation characterized by decentralized leadership. The federal government sets emission targets for each member country, which are implemented by the national governments. Although all national governments have commitment power vis-à-vis the federal government, one of them also has commitment power vis-à-vis the other member countries. This creates incentives to act strategically toward the federal government, as well as toward other members. |
| Keywords: | environmental policy; transboundary externalities; lobbying; international negotiations; policy coordination; endogenous world-market prices; optimal taxation; economic federation |
| JEL: | D62 F18 H21 H23 H70 J51 |
| Date: | 2008–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0755&r=env |
| By: | Duncan, Rod; Morrison, Mark |
| Abstract: | Environmental offsets have been proposed as a technique for managing the environmental impacts of new developments in regions that are not in compliance with environmental standards. By requiring developers to 'offset' any impacts by purchasing 'environmental credits', environmental quality can be maintained or even improved. Environmental offsets have a lot of intuitive appeal, and are being used widely in the USA, Australia and other countries. However there is at present no robust theoretical framework for analyzing the use of offsets, which has led to some of the weaknesses of existing programs and criticisms against the use of offsets. We present an economic model for designing offset programs that is based on identifying and valuing environmental service flows. We also discuss a number of factors that influence the effectiveness efficiency of offset programs including fungibility, effects on incentives of landholders and uncertainty and make recommendations about how to respond to these factors based on our model. The distributional effects of offsets are also explored and it is noted that offsets are not distributionally neutral. We argue on the basis of distributional effects that it is not appropriate to use offsets alone to seek to improve environmental quality. Furthermore, we recommend the combining of offsets with other market-based instruments such as Pigouvian taxes or cap and trade systems in order to reduce the negative distributional effects of offset programs, provide greater scope for achieving environmental improvements and to increase the probability of achieving first best (socially optimal) solutions. |
| Keywords: | offsets, market-based instruments, efficiency, distribution, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6041&r=env |
| By: | Bell, Brian; Menzies, Sharon; Yap, Michael; Kerr, Geoff |
| Abstract: | This paper reports on a case study to establish dollar values for loss of biodiversity in the New Zealand coastal marine environment. The study uses the European Shore Crab (Carcinas maenas) as the example alien invasive species and the Pauatahanui Inlet, Wellington, New Zealand, as the ecosystem representative of the coastal marine environment. Choice modelling is the stated preference tool used to elicit marginal dollar values for these various attributes of the inlet. Reallocation of existing government expenditure is used as the payment mechanism. Results indicate a wide range of dollar values for the marginal losses to the environment, with no clear trend on a distance-decay relationship. The probability distributions of the dollar values of the environmental attributes tended to have a concentration around the median with very wide tails, especially on the high side. This indicates that most people generally agreed on a dollar value, but a very few individuals expressed extremely high values. The study concludes that the dollar values for loss of biodiversity and other environmental attributes do provide useful information to decision makers, but considerable caution needs to be exercised when applying these values in benefit cost studies. Marginal rate of substitution estimates between environmental attributes will be useful for estimating money values for attributes identified given future work estimates a statistically significant money value for one. |
| Keywords: | choice modelling, tax reallocation, biosecurity, coastal marine, Environmental Economics and Policy, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:5978&r=env |
| By: | Bennett, Jeff; Gillespie, Rob; Dumsday, Rob |
| Abstract: | The populist view of economic development and the environment is that advances in one will necessarily result in a decline in the other. Evidence in the Australian context is that the dual goals can be achieved simultaneously. As economic development progresses, the increasing levels of income stimulate greater demand for environmental improvements. The population engages in more environmentally focused consumption and calls for its governments to introduce more policies designed to rehabilitate and protect environmental assets. Concurrently, the increasing levels of wealth allow for increasing expenditure on research and development into production processes that generate greater productivity and less environmental damage. The Australian agricultural sector provides numerous examples of concurrent improvements in productivity and environmental condition. Zero tillage broad acre grain cultivation practices have led to lower rates of soil erosion and have enriched soil biota while delivering higher productivity. Similarly, the introduction of integrated pest management, including the planting of pest and herbicide tolerant species, has improved water quality in cotton growing areas. A key implication from this analysis is that policies to improve environmental conditions should not be focused on stifling economic growth. Rather, governments should strive for policies that will encourage economic growth--such as the installation of property rights that are both well defined and defended. Concurrently, policies specifically designed to deal with potential environmental problems should be enacted. For instance, the establishment of property rights to water and the setting aside of allocations for environmental flows will encourage both economic development and environmental protection. |
| Keywords: | economic development, environmental protection, agriculture, policy, Environmental Economics and Policy, Financial Economics, Political Economy, Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6040&r=env |
| By: | Graham, Mary |
| Abstract: | Agricultural production, by its nature, impacts both positively and negatively on the environment. Impacts can be point source or diffuse; however all should be considered in performance measurement. To estimate potential environmental impacts from the use of nitrogen fertilizer, a biophysical model of dairy grazing systems, DairyMod, is used to simulate individual farming practices and determine the likely extent of leaching and run-off from each farm. Although not the only environmental impacts of farming, leaching and run-off are two variables that can be measured and combined with other marketed inputs to determine farm performance. |
| Keywords: | Crop Production/Industries, Environmental Economics and Policy, Livestock Production/Industries, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6773&r=env |
| By: | Serrao, Amilcar |
| Abstract: | This paper develops an environmental performance index by applying the benefit of the doubt weighting and the Malmquist index concepts using Kuosmanen and Kortelainen€ٳ approaches. The main difference between these approaches and other methods is that environmental performance is based on the definition of the eco-efficiency as the ratio of economic value added to the environmental damage index. The overall environmental performance index is also decomposed into two components representing changes due to technological progress (or regress) and due to changes in relative eco-efficiency. The dynamic environmental performance analysis is applied to 15 European agricultures from 1990 to 2004. Model results show that technical progress mostly explain overall environmental performance growth, while relative eco-efficiency changes have been minor for most European agricultures for the sample period. |
| Keywords: | Benefit of the doubt weighting, Data Envelopment Analysis, Eco-efficiency, Environmental performance analysis, Malmquist Index, Agricultural Activity, Environmental Economics and Policy, Research Methods/ Statistical Methods, Q57, C43, C61, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6152&r=env |
| By: | Ranjan, Ram; Tapsuwan, Sorada |
| Abstract: | This paper explores the concept of agricultural resilience in the context of climate change related water scarcity. Specifically, the impact of water scarcity on agricultural production is analyzed to derive the timing of exit decisions for farmers faced with the prospect of declining profitability in agriculture but increasing benefits from land rezoning in future. The prospects of land rezoning are modeled as a poison process which may or may not be influenced by farmer€ٳ water abstraction decisions. Selling out of agriculture before land rezoning has an impatience cost as the farmer does not gain the maximum speculative rewards. The analysis highlights the role of such speculative rewards in making farmers resilient to declining profitability in agriculture and also identifies the circumstances under which the water prices may be an ineffective policy tool for allocating water. An empirical application is performed using the above model for the case of a drought prone region in Western Australia. |
| Keywords: | agricultural resilience, exit timing, water scarcity, climate change, Environmental Economics and Policy, Farm Management, Land Economics/Use, Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:5998&r=env |
| By: | Feng, Hongli; Rubin, Ofir D.; Babcock, Bruce A. |
| Abstract: | Life cycle analysis (LCA) is the standard approach used to evaluate the greenhouse gas (GHG) benefits of biofuels. However, it is increasingly recognized that LCA results do not account for some impacts including land use changes that have important implications on GHGs. Thus, an alternative accounting system that goes beyond LCA is needed. In this paper, we contribute to the literature by laying out the basics of a system-wide accounting (SWA) method that takes into account all potential changes in GHGs resulting from biofuel expansion. We applied both LCA and SWA to assess the GHG impacts of ethanol based on Iowa corn. Growing corn in rotation with soybeans generated 35% less GHG emissions than growing corn after corn. Based on average corn production, ethanol's GHG benefits were lower in 2007 than in 2006 because of an increase in continuous corn in 2007. When only additional corn was considered, ethanol emitted about 22% less GHGs than gasoline. Results from SWA varied with the choice of baseline and the definition of geographical boundaries. Using 2006 as a baseline and 2007 as a scenario, corn ethanol's benefits were about 20% of the emissions of gasoline. If we expand geographical limits beyond Iowa, but assume the same emission rates for soybean production and land use changes as those in Iowa, then corn ethanol generated more GHG emissions than gasoline. These results highlight the importance of boundary definition for both LCA and SWA |
| Keywords: | biofuels, corn ethanol, greenhouse gas, life cycle analysis, system-wide accounting, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6503&r=env |
| By: | Baek, Jungho; Cho, Yong S.; Koo, Won W. |
| Abstract: | The dynamic relationships among trade, income and the environment for developed and developing countries are examined using a cointegration analysis. Results suggest that trade and income growth tend to increase environmental quality in developed countries, whereas they have detrimental effects on environmental quality in most developing countries. It is also found that for developed countries the causal relationship appears to run from trade and income to the environment - a change in trade and income growth causes a consequent change in environmental quality, and the opposite relationship holds for developing countries. |
| Keywords: | Developed countries, Developing countries, Environmental quality, Globalization, Time-series analysis, Trade, Environmental Economics and Policy, International Relations/Trade, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6510&r=env |
| By: | Azad, Md Abdus Samad; Liem, Monkia; Ancev, Tihomir; Lee, Lisa Yu-Ting |
| Abstract: | Irrigation enterprises can be evaluated from a perspective of technical and environmental efficiency. This study determines the technical and environmental efficiency in irrigated cotton enterprises. This is achieved by investigating efficiency at cotton enterprise in the case study area of the Mooki Catchment, located in northern New South Wales. Deep drainage loss which contributes to salinity is considered as an environmental detrimental output. Using four different specifications of Data Envelopment Analysis relative efficiency rankings are determined for each agricultural area in the catchment. This result is then compared to biophysical characteristics from previous studies to help identify the particular features of an area which may influence outcomes that are both environmentally sound and economically efficient. With the identification of the most and least efficient cotton irrigating areas in the region, policymakers can construct a relative ranking system to best determine policy directions in order to achieve economic and environmental objectives. |
| Keywords: | Cotton, Irrigation, Deep Drainage, Environmental Efficiency, Crop Production/Industries, Environmental Economics and Policy, Land Economics/Use, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6004&r=env |
| By: | Kutschukian, Jean-Marc |
| Abstract: | Economists, especially agricultural economists, have undertaken extensive analysis of the gains of technological-based scientific research. This is in stark contrast to the efforts undertaken to understand the economic effects of environmental scientific research. Economic evaluation of environmental science is important because knowledge-based government agencies are regularly required to justify their research expenditure and set clear priorities for their research programmes. This paper addresses the gap in the literature by offering a general framework for evaluating environmental scientific research. The paper is structured around two themes central to appraisals of environmental research: (a) the non-market nature of environmental outcomes; and (b) the pathways to achieve these outcomes. Some of the more important and unique issues addressed include the links between the natural systems being researched, the benefits in terms of resulting goods and services, and their subsequent values, as well as the factors influencing the overall contribution research makes to environmental decision-making. |
| Keywords: | Environmental Economics and Policy, Research and Development/Tech Change/Emerging Technologies, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6026&r=env |
| By: | Larson, Donald F.; Ambrosi, Philippe; Dinar, Ariel; Rahman, Shaikh Mahfuzur; Entler, Rebecca |
| Abstract: | The scale of investment needed to slow greenhouse gas emissions is larger than governments can manage through transfers. Therefore, climate change policies rely heavily on markets and private capital. This is especially true in the case of the Kyoto Protocol with its provisions for trade and investment injoint projects. This paper describes institutions and policies important for new carbon markets and explains their origins. Research efforts that explore conceptual aspects of current policy are surveyed along with empirical studies that make predictions about how carbon markets will work and perform. The authors summarize early investment and price outcomes from newly formed markets and point out areas where markets have preformed as predicted and areas where markets remain incomplete. Overall the scale of carbon-market investment planned exceeds earlier expectations, but the geographic dispersion of investment is uneven and important opportunities for abatement remain untapped in some sectors, indicating a need for additional research on how investment markets work. How best to promote the development and deployment of new technologies is another promising area for study identified in the paper. |
| Keywords: | Carbon Policy and Trading,Energy and Environment,Environment and Energy Efficiency,Climate Change,Transport and Environment |
| Date: | 2008–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4761&r=env |
| By: | Innes, Robert; Mitra, Arnab |
| Abstract: | This paper studies the potential effects of political pressure on environmental law enforcement in the Unites States. Prior work, most notably the key works of Deily and Gray, document the sensitivity of U.S. environmental enforcement to economic circumstances of regulated firms. However, the sensitivity of environmental enforcement may be motivated not only by cost-benefit criterion (economic costs of environmental enforcement against troubled firms in high unemployment areas are high) but also by political considerations, and most likely both. We are interested in identifying whether political influence directly affected environmental enforcement during the years 1990-2005, which cover most part of the Bush and Clinton administrations. Using political, demographic and income related data from various sources and mapping them with EPA's data on facility level inspection, we find evidence that political processes at the local, state and federal level do matter for facility level inspection. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6128&r=env |
| By: | Kingwell, Ross; Farré, Imma |
| Abstract: | Down-scaled global circulation modelling is combined with wheat growth simulation modelling to generate yield responses to times of sowing under current and projected climatic conditions for several locations in the grainbelt of Western Australia. A model for investment in crop sowing machinery draws on these simulated yield relationships at each location and is used to determine a farmer€ٳ optimal investment in crop sowing work rate capacity under current and projected climate regimes. The key finding is that at most locations the projected change in climate has marked impacts on profit distributions from grain production, yet mostly modest changes in the farmer€ٳ investment in machinery work rate form part of the profit-maximising response to climate change at each location. There is also a divergence in machinery investment response between high versus low rainfall locations, with increases and decreases in work rates respectively being forecast. However, as illustrated for a few locations, the changes in investment in work rate within a broadly similar rainfall region are not uniform; principally due to climate change differently affecting the pattern of yield response to time of sowing at each location. |
| Keywords: | climate change, farm machinery, farm management, machinery investment, Environmental Economics and Policy, Farm Management, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6011&r=env |
| By: | Thaeripour, Farzad; Hertel, Thomas W.; Tyner, Wallace E.; Beckman, Jayson F.; Birur, Dileep K. |
| Abstract: | The biofuel industry has been rapidly growing around the world in recent years. Several papers have used general equilibrium models and addressed the economy-wide and environmental consequences of producing biofuels at a large scale. They mainly argue that since biofuels are mostly produced from agricultural sources, their effects are largely felt in agricultural markets with major land use and environmental consequences. In this paper, we argue that virtually all of these studies have overstated the impact of liquid biofuels on agricultural markets due to the fact that they have ignored the role of by-products resulting from the production of biofuels. Feed by-products of the biofuel industry, such as Dried Distillers Grains with Solubles (DDGS) and biodiesel by-products (BDBP) such as soy and rapeseed meals, can be used in the livestock industry as substitutes for grains and oilseed meals used in this industry. Hence, their presence mitigates the price impacts of biofuel production on the livestock and food industries. The importance of incorporating by-products of biofuel production in economic models is well recognized by some partial equilibrium analyses of biofuel production. However, to date, this issue has not been tackled by those conducting CGE analysis of biofuels programs. Accordingly, this paper explicitly introduces DDGS and BDBP, the major by-products of grain based ethanol and biodiesel production processes, into a worldwide CGE model and analyzes the economic and environmental impacts of regional and international mandate policies designed to stimulate bioenergy production and use. We first explicitly introduce by-products of biofuel production into the GTAP-BIO database, originally developed by Taheripour et al. (2007). Then we explicitly bring in DDGS and BDBP into the Energy-Environmental version of the Global Trade Analysis Project (GTAP-E) model, originally developed by Burniaux and Truong (2002), and recently modified by McDougall and Golub (2007) and Birur, Hertel, and Tyner (2008). The structure of the GTAP-E model is redesigned to handle the production and consumption of biofuels and their by-products, in particular DDGS, across the world. Unlike many CGE models which are characterized by single product sectors, here grain based ethanol and DDGS jointly are produced by an industry, named EthanolC. The biodiesel industry also produces two products of biodiesel and BDBP jointly. This paper divides the world economy into 22 commodities, 20 industries, and 18 regions and then examines global impacts of the US Energy Independence and Security Act of 2007 and the European Union mandates for promoting biofuel production in the presence of by-products. We show that models with and without by-products demonstrate different portraits from the economic impacts of international biofuel mandates for the world economy in 2015. While both models demonstrate significant changes in the agricultural production pattern across the world, the model with by-products shows smaller changes in the production of cereal grains and larger changes for oilseeds products in the US and EU, and the reverse for Brazil. For example, the US production of cereal grains increases by 10.8% and 16.4% with and without by-products, respectively. The difference between these two numbers corresponds to 646 million bushels of corn. In the presence of by-products, prices change less due to the mandate policies. For example, the model with no by-products predicts that the price of cereal grains grows 22.7% in the US during the time period of 2006 to 2015. The corresponding number for the model with by-products is 14%. The model with no by-products predicts that the price of oilseeds increases by 62.5% in the EU during 2006-2015. In the presence of by-products, this price grows 56.4%. Finally, we show that incorporating DDGS into the model significantly changes the land use consequences of the biofuel mandate polices. |
| Keywords: | Resource /Energy Economics and Policy, Environmental Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6452&r=env |
| By: | Greiner, Romy; Miller, Owen; Patterson, Louisa |
| Abstract: | The onus on landholders in relation to environmental performance is ever increasing. One tool for achieving environmental improvements is the design and promotion of region-specific €آest management practices€٠(BMPs). These are conservation practices aimed at reducing diffuse source pollution from agricultural lands and thus improving end-of-catchment water quality. A suite of grazing BMPs were developed for the Burdekin Dry Tropics region in a consultative fashion but without explicit consideration of knowledge of adoption processes. It is known from the literature that farmers€٠goals and risk perceptions in particular influence adoption decisions. This paper utilises the data from an earlier grazier survey to explore to what extent grazier motivations and risk perceptions influence the adoption of BMPs. The results demonstrate clear correlations between both motivations and risk attitudes, and the adoption of recommended BMPs, with specific preferences for different BMPs. We conclude that a sound understanding of landholders€٠motivations and risk attitudes is required€ԩn a regional, industry and environmental context€Դo tailor programmes aimed at improving regional environmental performance. |
| Keywords: | conservation practices, adoption, water quality, grazing, Burdekin River catchment, best management practices, risk management, motivations, empirical research, correlations, factor analysis, Environmental Economics and Policy, Farm Management, Risk and Uncertainty, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6002&r=env |
| By: | Fang, Xingming; Hu, Xiaoping; Wang, H. Holly |
| Abstract: | Whether the high economic growth of China is sustainable is the matter of interest to the public, government and academic circle of China and meanwhile it catches the attention of the world because the development of China has been exerting increasing impact on the world economy. Since the high economic growth of China has been promoted by heavy and chemical industry (HCI) to a great extent, which resulted in high consumption of energy resource, high consumption of mineral resources and high emission of pollutants (the €ܴriple highness€ݩ, the sustainability of high economic growth of China depends on a sustainable growth road for China€ٳ HCI and effective control on the €ܴriple highness€ݮ We find that the contributing factors of the €ܴriple highnessÂ€Ý are not the growth of HCI itself but the small scale and out dated technology. We conclude that the €ܴriple highnessÂ€Ý can be effectively controlled if some proper measures are adopted and the high growth of China can be sustainable. |
| Keywords: | economic growth, energy, resource, pollution, International Development, Resource /Energy Economics and Policy, O10, O11, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6274&r=env |
| By: | Farrell, Terence C. |
| Abstract: | Economic benefits that arise from conservation farming practices need to be assessed over several years to account for improvements in soil structure and nutrient levels. A gross margin model was used to assess benefits over the eight-year period 1999-2006 for 12 regions in the central west of NSW. The annual benefits from improved soil structure ranged from $2.46 to $12.82 per hectare (ha). A reduction in tractor power produced annual savings in the range of $0.60 to $4.05 per ha. The cost of soil compaction by livestock grazing on crop areas ranged from $3.41 to $14.90 per ha. The break-even time to pay back costs for the conversion of machinery for no-till seeding was two to three seasons. |
| Keywords: | No-till, conservation, farming, tillage, cropping systems, Environmental Economics and Policy, Farm Management, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6177&r=env |
| By: | Hertzler, Greg |
| Abstract: | Non market valuation and bio economic modelling are combined in a dynamic model of ecosystem services. A mathematical proof demonstrates that the imputed price of natural capital contains all non market values and that scarcity rent is the total value of ecosystem services. A dynamic demand system, including characteristics is derived. New methods are developed for dynamic welfare analysis and both revealed and stated preference methods are proposed for estimating the price of natural capital. Estimation is simple if we avoid surveying consumers who degrade the ecosystem and instead consult owners who accrue the scarcity rent and conserve for the future. |
| Keywords: | Non market valuation, ecosystem services, Lancaster demand, welfare analysis, analytical solutions, Demand and Price Analysis, Environmental Economics and Policy, Research Methods/ Statistical Methods, Q57, Q51, Q56, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6024&r=env |
| By: | Ngugi, Daniel; Mullen, Jeff; Bergstrom, John |
| Abstract: | A model of land allocation at the aggregate watershed level was developed assuming profit/net benefit maximization under risk neutrality. The econometric land use model was analyzed as an equation by equation SURE model as all the independent variables were the same for both equations. In analyzing effect of land use change on water quality, we took year 2005 as our baseline and postulated three land use scenarios. We applied Benefit Transfer techniques to value water quality changes resulting from land use change and estimated lower bounds for WTP to improve water quality to meet the FCB criterion for drinking water supply and fishing waters and BOD (DO) criteria for fishing waters.Water quality modeling revealed that land use change would result in increased runoff, and associated increase in FCB and BOD/DO violations. But the BOD/DO violations could be curtailed by managing urban growth as evidenced absence of BOD violations in the managed growth scenario. Our study finds there may be problems of FCB under all postulated future land use scenarios. The findings also support existing literature that there are problems with FCB violation in the study area at the moment. Finally, it seems that the people of UCRB would be willing to pay a lower bound value between USD 15,785,740 and USD 16,141,230 per year to create and maintain quality standards for fishing and drinking water supply. |
| Keywords: | Ecosystem, Economic value, North Georgia, land use, land use change, fish, water quality, structural time series, willingness to pay, benefit transfer, forecasting, vector autoregression, Upper Chattahoochee River, Environmental Economics and Policy, Land Economics/Use, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6119&r=env |
| By: | ARAVINDHAKSHAN, Sijesh C.; EPPLIN, Francis M.; TALIAFERRO, Charles |
| Abstract: | Biomass yield to nitrogen response functions were determined for four perennial grass species. The species, nitrogen level, and harvest frequency that maximize expected net returns given the climate and soils of the U.S. Southern Plains were determined. For most combinations of biomass and nitrogen price, switchgrass is the optimal species. |
| Keywords: | Crop Production/Industries, Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6081&r=env |
| By: | Adelaja, Soji; Hailu, Yohannes G. |
| Abstract: | Food and energy security have increasingly acquired key natural resource policy focus. As alternative energy solutions become more land intensive, the potential implication to the agricultural sector becomes of policy interest. This study investigated the impact of projected wind energy development in Michigan on the agricultural sector. Results indicate that land lease payments overtime for wind turbine siting are expected to generate $50 million per year, impacting agricultural viability. Spatial distribution analysis suggests that most of the projected lease payments to farmers are concentrated in low value agricultural land, low value agricultural production, urban influenced, and low net farm income locations. We found that the spatial distribution of wind energy impact on agricultural viability is wide, but significant in some counties, by a margin of more than 50% net farm income gain. As renewable energy development becomes more land intensive, the potential cross-sectoral impacts need to be carefully considered. |
| Keywords: | agricultural viability, renewable energy, land use, spatial analysis, Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6132&r=env |
| By: | Collins, Alan R.; Maille, Peter |
| Abstract: | This research involved a field experiment using watershed payments as an incentive for farmers to address agricultural non-point pollution (ANP). Objectives were to: (1) describe how payments were estimated for a field experiment; (2) explain why a team approach is needed for ANP; (3) discuss the essential elements used for recruitment of farmers into a field experiment setting; and (4) address whether or not farmers were motivated to participate and pursue ANP abatement. One year into the experiment, the results are encouraging. About one-half of farmers who attended meetings are participating. They own or operate approximately 41% of the agricultural land in the watershed. Farmer actions to date have included determining an allocation formula for the payment, requesting watershed wide sampling, and cost sharing of ANP abatement. |
| Keywords: | field experiment, team approach, agricultural non-point pollution, performance-based incentives, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6342&r=env |
| By: | Gong, Wendy; Sinden, Jack; Jones, Randall |
| Abstract: | Invasive animal pests inflict many kinds of damage on the environment, and threaten native fauna and flora. We attempt to value the benefits from the extra biodiversity that is protected if these threats were removed. The NSW Rural Lands Protection Board is a major agency that undertakes pest control, and is organised into 48 districts across the state. A cross-sectional set of data on Board expenditures, pest abundance, and environmental and climatic characteristics, was compiled by district and analysed. The number of threatened native plant and animal species increases with pest abundance and with the total number of native species present in the district. But the number of threatened species decreases as Board expenditures on pest control increase. The value of preserving an extra species is derived from these changes in expenditure, following conventional economic principles. Then the potential gain in economic surplus is estimated if the threats to biodiversity were removed. The results so far suggest that the value of the total benefit of protecting an extra species is at least $44,250 per year, and the potential gain in surplus for New South Wales if the threats were removed is at least $132m per year. This change in surplus is also the total economic loss because invasive pests threaten native flora and fauna. If only half the native species could be protected, the avoidable economic loss is at least $95.7m per year. The assumptions and limitations of these estimates are discussed. |
| Keywords: | Invasive animal pests, unpriced values, biodiversity gains, native flora and fauna, Environmental Economics and Policy, Political Economy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:5995&r=env |
| By: | Bryan K. Mignone |
| Abstract: | The overall economic efficiency of a quantity-based approach to greenhouse gas mitigation depends strongly on the extent to which such a program provides opportunities for compliance flexibility, particularly with regard to the timing of emissions abatement. Here I consider a program in which annual targets are determined by choosing the optimal time path of reductions consistent with an exogenously prescribed cumulative reduction target and fixed technology set. I then show that if the availability of low-carbon technology is initially more constrained than anticipated, the optimal reduction path shifts abatement toward later compliance periods. For this reason, a rigid policy in which fixed annual targets are strictly enforced in every year yields a cumulative environmental outcome identical to the optimal policy but an economic outcome worse than the optimal policy. On the other hand, a policy that aligns actual prices (or equivalently, costs) with expected prices by simply imposing an explicit price ceiling (often referred to as a "safety valve") yields the opposite result. Comparison among these multiple scenarios implies that there are significant gains to realizing the optimal path but that further refinement of the actual regulatory instrument will be necessary to achieve that goal in a real cap-and-trade system. |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:acb:camaaa:2008-36&r=env |
| By: | Özgöç-Çağlar, C. Derya; Farnsworth, Richard L. |
| Abstract: | The Environmental Quality Incentives Program and other voluntary Federal conservation programs follow a similar approach for enrollment. Consistent with the legislation, agency personnel identify eligibility criteria, suitable conservation practices, and a process to score, rank, and select applications for funding. Our research outlines a formal multiple criteria decision analysis system that is broadly applicable to current Federal conservation programs to score, rank, and enroll applications, and distribute program funds. Then, we apply the decision system to Indiana€ٳ EQIP program using data from 2005. The incorporation of GLEAMS model improved our estimates of water quality impacts by reintroducing the spatial heterogeneity. |
| Keywords: | Multiple Criteria Decision Analysis, Federal Conservation Programs, Environmental Quality Incentives Program, GLEAMS, Environmental Economics and Policy, Research Methods/ Statistical Methods, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:5986&r=env |
| By: | Ronan, Glenn; Cartwright, Carina |
| Abstract: | After more than a decade in opposition, the win by the Australian Labor Party (ALP) at the 2007 Federal Election focuses attention on their pre-election policies. The paper summarises ALP pre-election policies for primary industries, including the resources and seafood sectors; indicates program and policy funding where it is clearly indicated in the policy papers, and commences an interpretation of the implications and opportunities that may develop as the new government proceeds to discuss its policies and their implementation. A major shift in the context for all primary industries policies to 'climate change', irrespective of whether the component policies appear to be little changed is articulated. The detail of climate change policy awaits the Climate Change Review by Professor Ross Garnaut in mid-2008. The immediate implications and opportunities for all specific policies is that they need to be viewed through the new and overarching lens of 'adapting to climate change'. |
| Keywords: | Environmental Economics and Policy, Political Economy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6039&r=env |
| By: | Tavani, Daniele |
| Abstract: | In a simple Neoclassical Growth Model with endogenous technical change, I expand on the hypothesis of Induced Innovation including a production externality from a xed input, called `land', which represents the carrying capacity of the earth's atmosphere. Land is assumed to be congested by the use of labor and capital in production. A market economy where land is free will fail to reach a steady state, and may end up in either of three possible cases: (i) a catastrophe driven by overaccumulation; (ii) a state in which Induced Innovation stops capital deepening but not environmental decline; (iii) a path of perpetual decumulation of capital resembling an industrial counterrevolution. A planned economy, instead, will assign a shadow-price to land, thus setting in motion the Induced Innovation engine and fostering land-augmenting technological progress which will reduce environmental stress. The unique equilibrium if this economy is found to be locally asymptotically stable in the numerical analysis for substitution elasticities smaller than 1. The corresponding direction of technical change is characterized by constant shares of all inputs, a positive growth rate of labor- and land-augmenting technologies, and by a rate of growth of capital-augmentation equal to zero. |
| Keywords: | Induced Innovation; Climate Change; Technological Change; Functional Distribution of Income. |
| JEL: | O30 Q55 |
| Date: | 2008–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:11525&r=env |
| By: | Greenhalgh, Suzie; Selman, Mindy |
| Abstract: | Water quality trading is continually being explored and implemented to improve water quality in many parts of the world. They are being used to cost-effectively reduce point and/or non-point source obligations to meet water quality goals such as nutrient discharge limits. A comparison between evolving trading programs in New Zealand and some in North America illustrate a number of differences as well as similarities in terms of the successes and hurdles. These can be used to better design more effective programs. |
| Keywords: | water quality, trading, nutrients, market-based, non-point source, point source, Environmental Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6028&r=env |
| By: | Schmidt, Carmel Elizabeth |
| Abstract: | Wetlands are often refereed to as the €ثidney of the river€٬ but what is the value of the water filtration they provide, and what is the cost of wetland destruction? This paper determines the economic value of wetlands for water filtration. It demonstrates that wetlands are of considerable economic value, even where the volume of water filtered is in excess of that required for domestic consumption. It argues that if legislation required those who destroy natural wetlands to replace the water filtration process the wetlands once provided, it would be necessary to construct water filtration plants at significant cost. |
| Keywords: | ecosystem services, wetlands, water filtration, valuation, Environmental Economics and Policy, Land Economics/Use, Political Economy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:5985&r=env |
| By: | Bonabana-Wabbi, Jackline; Taylor, Daniel B. |
| Abstract: | Two experimental procedures were employed to value both health and environmental benefits from reducing pesticide use in Uganda. The first experiment, an incentive compatible auction involved subjects with incomplete information placing bids to avoid consuming potentially contaminated groundnuts/water in a framed field experimental procedure. Three experimental treatments (information, proxy good, and group treatments) were used. Subjects were endowed with a monetary amount (starting capital) equivalent to half the country€ٳ per capita daily income (in small denominations). Two hundred and fifty seven respondents were involved in a total of 35 experimental sessions in Kampala and Iganga districts. The Kampala sample consisted of urban (professional) residents while the Iganga sample consisted of rural (groundnut farmer) residents. Analyses with Tobit models indicated that subjects are willing to pay significant amounts to avoid ill health outcomes, although these values vary by region, by treatment and by socio-economic characteristics. Gender differences were important in explaining bid behavior, with male respondents in both study areas bidding higher to avoid ill health outcomes than females. Consistent with a priori expectation, rural population€ٳ average willingness to pay to avoid ill health outcomes was lower (by 11.4 percent) than the urban population€ٳ willingness to pay perhaps reflecting the poverty level/low incomes in the rural areas and how it translates into reduced regard for health and environmental improvements. Salaried respondents in Kampala were willing to pay more than those on hourly wages. Tests of hypotheses suggested: (i) providing brief information to subjects just prior to the valuation exercise does not influence bid behavior, (ii) subjects are indifferent to the source of contamination: willingness to pay to avoid health outcomes from potentially contaminated water versus groundnuts are not significantly different, and (iii) the classical tendency to free-ride in public goods provision was observed in both urban and rural areas, and this phenomenon was more pronounced in the urban than the rural area. The second experimental procedure, choice experiments, involved 132 urban respondents making repeated choices from a set of scenarios described by attributes of water quality, an environmental good. Water quality was represented by profiles of water safety levels at varying costs. Analysis using a conditional (fixed effects) logit model showed that urban subjects highly discount unsafe drinking water, and were willing to pay less for safe agricultural water, a result not unexpected considering that the urban population is not directly involved in agricultural activities and thus may not value agricultural water quality as much as drinking water quality. It was also found that subjects€٠utility increased with the cost of a water sample (inconsistent with a downward sloping demand curve), suggesting perhaps that they perceived higher cost water to be associated with higher quality water. Advertisements for bottled water in Uganda would have consumers believe that higher cost bottled water is higher quality. |
| Keywords: | Experimental auctions, Choice experiments, Crop Production/Industries, Environmental Economics and Policy, Health Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6441&r=env |
| By: | Key, Nigel; McBride, William D.; Ribaudo, Marc |
| Abstract: | In recent years, structural changes in the hog sector, including increasing farm size and regional shifts in production, have altered manure management practices. Over the same period, changes to the Clean Water Act, new state regulations, and increasing local conflicts over odor have influenced manure management decisions. This study uses data from two national surveys of hog farmers to examine how hog manure management practices vary with the scale of production and how these practices evolved between 1998 and 2004. The findings provide insights into the effects of structural changes and recent policies on manure management technologies and practices, the use of nutrient management plans, and manure application rates. |
| Keywords: | hog production, manure management, structural change, environmental regulation, Livestock Production/Industries, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6071&r=env |
| By: | Williamson, Brendon; Villano, Renato; Fleming, Euan |
| Abstract: | With the current drought in South-Eastern Australia highlighting the scarcity and value of inland Australia€ٳ water resources, focus turns to how these resources can be allocated more efficiently. The first major step was taken almost a decade ago with the separation of land and water property rights allowing openly traded water markets. This study assesses the potential economic benefits that options contracts bring to the water market in the Murray Valley water market. Exotic call options are estimated using both Black-Scholes and skewness-and-kurtosis-amended Black-Scholes financial option pricing methods that are based on three years of data on water prices. While the presence of options would result in significant economic benefits in the more efficient trade of water on the open market for lower-value crops, there were mixed results from the attempt to price such options. |
| Keywords: | options, skewness-and-kurtosis-amended Black-Scholes model, water, Environmental Economics and Policy, Financial Economics, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:5992&r=env |
| By: | Deininger, Klaus; Ali, Daniel Ayalew; Alemu, Tekie |
| Abstract: | Although early attempts at land titling in Africa were often unsuccessful, the need to secure rights in view of increased demand for land, options for registration of a continuum of individual or communal rights under new laws, and the scope for reducing costs by combining information technology with participatory methods have led to renewed interest. This paper uses a difference-in-difference approach to assess economic impacts of a low-cost registration program in Ethiopia that, over 5 years, covered some 20 million parcels. Despite policy constraints, the program increased tenure security, land-related investment, and rental market participation and yielded benefits significantly above the cost of implementation. |
| Keywords: | Environmental Economics&Policies,Urban Housing,Climate Change,Common Property Resource Development,Rural Land Policies for Poverty Reduction |
| Date: | 2008–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4764&r=env |
| By: | Busch, Jonah; Cullen, Ross |
| Abstract: | Although an estimated US$6 billion is invested annually in our planet€ٳ biological diversity, little research has been conducted on which conservation treatments work best or provide best value for money. Conserving biodiversity efficiently depends on identifying conservation treatments which provide greatest return on investment. Where controlled experiments are not possible, panel econometric techniques can be used to determine the effectiveness of conservation treatments. A long-running Yellow-Eyed Penguin (Megadyptes antipodes) nest count in New Zealand presents a golden opportunity to compare the effectiveness and cost effectiveness of three commonly used conservation treatments€Դrapping of introduced predators, revegetation, and intensive management. Following ecological theory, we specify a density-dependent population growth rate. We control for year effects and site characteristics such as land cover, slope, and elevation. We confront the possibility of selection bias in treatment with site fixed effects and with an instrumental variable based on site accessibility. Of the three treatments analyzed, only intensive management is significantly correlated with increases in sitelevel penguin population growth rate. We estimate the marginal cost of providing yellow-eyed penguins through intensive management to be NZ$68,600 per nest. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6012&r=env |
| By: | Wendt, Minh |
| Abstract: | Replaced with revised version of paper 08/01/08. |
| Keywords: | Food Consumption/Nutrition/Food Safety, Health Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6571&r=env |
| By: | Gelso, Brett |
| Abstract: | In 1983, US Minerals Management Service (MMS) switched from the Lease Nomination sale format to Area-Wide Leasing (AWL). Since a complete econometric analysis of the effects of AWL on government revenue has not been conducted in almost twenty years, the purpose of this study was to determine the effects of AWL on government revenue. Results indicated that AWL reduced government revenue by $1,170 to $1,308 on a per acre basis, which is consistent with the findings in prior literature. |
| Keywords: | Area-Wide Leasing (AWL), Outer Continental Shelf (OCS), High Bonus Bids, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:37680&r=env |
| By: | Pagiola, Stefano; Zhang, Wei; Colom, Ale |
| Abstract: | Payments for Environmental Services (PES) are being increasingly used as conservation instruments, particularly in Latin America. PES programs seek to capture part of the benefits derived from environmental services and channel them to natural resource managers who generate these services, thus increasing their incentive to conserve them. Many have assumed that these payments would go mostly to poor land users, and thus contribute to poverty reduction. There has been little empirical verification of this assumption to date, however. The PES approach was conceptualized as a mechanism to improve the efficiency of natural resource management, and not as a mechanism for poverty reduction. Pagiola et al. (2005) identified three main questions regarding the linkages between PES and poverty: (1) Who are the actual and potential participants in PES programs, and how many of them are poor? (2) Are poorer households able to participate in PES programs? And (3) are poor households affected indirectly by PES programs? We focus here on the first question of eligibility. This study examines whether the recipients of payments for environmental services are likely to be poor. Our focus is on watershed-scale PES mechanisms in which water users make payments to service providers. In Guatemala, as in other countries, it has long been argued that land users in marginal areas such as the steep slopes of upper watersheds tend to be poor. We use data from highland Guatemala to examine this assumed close spatial correlation between areas of high poverty and areas that provide environmental services. We first identify specific watershed areas in which PES mechanisms could potentially be developed, based on the presence of major downstream water uses such as hydroelectric power generation, domestic water supply, and irrigation. We then compare these areas with the spatial distribution of poverty in the country, allowing us to ask two questions that are central to the potential for PES to reach the poor: (1) How many of the potential providers of water services are poor? The local poverty impact of a PES program on poverty will depend on whether potential providers are poor or not. And (2) how many of the poor are potential water service providers? The potential impact of PES on poverty at a national scale will depend on whether many of the poor are in fact in areas where PES mechanisms might be implemented. Even if most potential PES recipients are poor, it may be that few of the poor are potential PES recipients. We map the €طater supply areas€٠by identifying the location of the intakes from which users obtain their water and then delineating the portions of the watershed that contribute to those intakes. About 1.9 million ha have significant potential for development of PES mechanisms through the presence of major water uses. This area is under-estimated as data could only be obtained for a subset of all users. All water supply areas are not equivalent. Some have substantial potential for PES because of the importance of downstream water uses, while others have more limited potential. For each user, we collect information on the nature and magnitude of their water use and construct use-specific indices of the relative importance or €ܶalueÂ€Ý of water supply areas. With about 56% of its population under the poverty line, Guatemala has one of the highest poverty rates in Central America. Using the watershed-level poverty map developed by Nelson and Chomitz (2007), we analyze both the poverty rate and the poverty density in water supply areas. Our analysis shows that both the poverty rate and the poverty density in the water supply areas vary substantially. The average poverty rate in water supply areas is only 44 percent, which is lower than the national average of 53%. There is essentially no correlation between the importance of a water supply area and the poverty rate of people living within it. The total number of poor that could potentially be reached if PES mechanisms were developed in all water supply areas is about 1.76 million, or 73% of the country€ٳ poor. This analysis only considers the potential for PES programs to reach the poor. Even where many of the potential service providers are poor, it does not follow that the poor will get the benefits. A variety of obstacles, including insecure land tenure, lack of title, small farm holdings, and lack of access to credit might limit the participation by the poor in a PES program. The extent to which these problems prove to be obstacles in practice depends on the specific characteristics of the PES program and the conditions under which it is implemented. References: Nelson and Chomitz. 2007. Environment, Development and Sustainability 9(4): 369. Pagiola et al. 2005. World Development 33(2): 237. |
| Keywords: | Payments for Environmental Services (PES), watershed, poverty, Guatemala, Environmental Economics and Policy, International Development, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:42932&r=env |
| By: | Sippel, M.; Neuhoff, K. |
| Abstract: | This article examines what may be taken into account, when designing a mechanism of international public finance to support south-north cooperation on domestic climate policies in developing countries. We draw lessons from existing mechanisms of conditional transfers. Experience with conditionality provisions that the World Bank, the IMF, and bilateral donors apply to development assistance is varied. Conditionality provisions applied during the EU enlargement process are generally evaluated more positively, as the shared objective is increased credibility and participation. Clearly defining global emissions reductions as a shared objective could offer similar opportunities for cooperation. We discuss lessons that might be of relevance to the design of cooperative climate policy. |
| Keywords: | International cooperation, incentive schemes, mechanism design |
| JEL: | F02 H11 H77 O10 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:0849&r=env |
| By: | Bontems, Philippe |
| Abstract: | In this paper, we develop a model of regulation for a set of heterogenous farmers whose production yields to environmental externalities. The goal of the regulator is first to offer some income support depending on collective preferences towards income redistribution and second to internalize externalities. The optimal policy is constrained by the information available. We first consider the second best where the regulator is able to observe all individuals decisions in terms of inputs and individual profit, but not the individual farming labor supply. We characterized the generalized transfer in function of the desire to redistribute and the underlying characteristics of the production process. In a second step, we assume that the regulator has only information on aggregate consumption of inputs and hence can only tax/subsidy linearly inputs and output. However, because the accounting profit remains observable, a non linear transfer of profit is still part of the optimal policy. In the last part of the paper, we endogenize the market price of land and examine how the optimal policy should be modified. |
| Keywords: | asymmetric information, agricultural policy, agri-environmental policy, income support, Agricultural and Food Policy, Environmental Economics and Policy, Q18, Q12, Q58, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6246&r=env |
| By: | Canning, Patrick; Perez, Agnes |
| Abstract: | This study examines wine trade in the United States to assess the impact of higher energy costs on the average distance of world and U.S. regional wine shipments, or wine miles, to U.S. markets. To examine this issue we calibrate a spatial equilibrium model of the U.S. wine industry. The model accounts for (i) consumer preferences for variety, (ii) monopolistic-competition/increasing-returns in the production of differentiated wine products, and (iii) transportation costs. Wine production areas are grouped into nine U.S. and seven world producing regions. U.S. markets are grouped into the 50 States plus the District of Columbia. Results indicate that U.S. consumers are willing to pay substantial transportation costs in order to consume a wide variety of wines from premier U.S. and world wine growing regions. As increasing energy costs drive up the price of freight services, wine mile impacts are limited by the degree of regional product differentiation in U.S. and world producing regions. |
| Keywords: | Demand and Price Analysis, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aawewp:43891&r=env |
| By: | Stahlman, Michael; McCann, Laura M.J.; Gedikoglu, Haluk |
| Abstract: | Phytase represents a potential win/win management practice for non-ruminant producers since it can reduce the need for phosphorous supplementation and also result in lower phosphorous runoff. Cost of phytase has decreased and cost of phosphorous has increased. The reported adoption rate for phytase for non-ruminants was 17.2 percent, however it is currently added to virtually all swine and poultry premixes by feed manufacturers due to the cost savings. People were more likely to say they use phytase if they think it is profitable, not time intensive, and improves water quality. |
| Keywords: | manure, phytase, phosphorous, adoption, Environmental Economics and Policy, Livestock Production/Industries, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:43235&r=env |
| By: | Wang, Honglin; Reardon, Thomas |
| Abstract: | This paper introduces social learning into irreversible investment theory through parameter uncertainty, and shows that social learning could reduce parameter uncertainty to facilitate irreversible investment technology adoption. The theoretic model is tested by using household level data from energy saving greenhouse adoption in northern China, and empirical evidences are consistent with the theory: social learning has significantly positive impacts on greenhouse adoption, while market volatility discourages the adoption. |
| Keywords: | Social Learning, Technology Adoption, Irreversible Investment, Parameter Uncertainty, Energy Saving Greenhouse, Environmental Economics and Policy, Research and Development/Tech Change/Emerging Technologies, O12, O31, C61, D83, G12, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6310&r=env |
| By: | Eric BERR ( (GREThA-GRES) |
| Abstract: | While sustainable development is a unanimously accepted watchword today, we wish to show that the post Keynesian school, even if it did not emphasize on environmental issues and, generally speaking, on sustainable development as such, has tools that make it relevant on this topic. Indeed, post Keynesian sustainable development can be close to Sachs’ ecodevelopment, which is inspired by Kalecki. Thus, post Keynesianism and ecodevelopment share the same position related to economic growth. They meet, via the concept of radical uncertainty, on the importance of the precautionary principle. If the implications of the principle of effective demand seem to oppose them, these divergences can be easily overcome. |
| Keywords: | sustainable development, ecodevelopment, Kalecki, Keynes, Sachs, post Keynesian |
| JEL: | B30 B59 E12 O11 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:grs:wpegrs:2008-18&r=env |
| By: | Gorddard, Russell; Whitten, Stuart; Reeson, Andrew |
| Abstract: | Making conservation program payments conditional on outcomes offers potential efficiency and innovation improvements over input based contracts. This paper explores the trade-offs involved in choosing the payment criteria for biodiversity tenders. A model where the budget for a conservation tender can be allocated to input, outcome or mixed payments is used to explore the impacts of hidden actions, adverse selection, and landholder risk aversion on the optimal policy design. We discuss the implications of these results for the design of the €؎est Egg€٠tender. This tender is targeting habitat and breeding of ground-nesting birds in the New South Wales Murray Catchment. |
| Keywords: | OUTCOME CONTRACTS, RISK AVERSION, BIODIVERSITY TENDERS, CONTRACT DESIGN, NEST EGG, Environmental Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:5979&r=env |
| By: | Eric BERR (GREThA UMR CNRS 5113) |
| Abstract: | While sustainable development is a unanimously accepted watchword today, we wish to show that the post Keynesian school, even if it did not emphasize on environmental issues and, generally speaking, on sustainable development as such, has tools that make it relevant on this topic. Indeed, post Keynesian sustainable development can be close to Sachs’ ecodevelopment, which is inspired by Kalecki. Thus, post Keynesianism and ecodevelopment share the same position related to economic growth. They meet, via the concept of radical uncertainty, on the importance of the precautionary principle. If the implications of the principle of effective demand seem to oppose them, these divergences can be easily overcome. |
| Keywords: | ustainable development, ecodevelopment, Kalecki, Keynes, Sachs, post Keynesian |
| JEL: | B59 E12 O11 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2008-24&r=env |
| By: | Jones, Randall; Kemp, David; Michalk, David; Takahashi, Taro |
| Abstract: | Chinese grasslands are suffering considerable pressures from human and livestock populations. It has been estimated that 90% of Chinese grasslands are suffering from light to heavy levels of degradation. Allied to this is the low household income of herders and farmers dependant upon livestock products for their livelihood. Although a range of reasons have been proposed for the high levels of grassland degradation, principal among these are the high stocking rates adopted by farmers. This not only results in high utilisation rates of the pasture biomass, leading to bare areas and soil erosion, but individual animal productivity rates also decline. This paper presents the results of a modelling study of a grassland system in Gansu Province and Inner Mongolia Autonomous Region in northern China. This shows that reducing stocking rates leads to not only an increase in livestock productivity, but wholefarm returns are also increased. From a sustainability perspective, the greater pasture biomass remaining on the grassland also reduces the incidence of soil erosion in the areas. |
| Keywords: | sustainable grazing, bioeconomic model, China, Farm Management, Livestock Production/Industries, Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6019&r=env |
| By: | Soman, Sethuram; Misgna, Girmay; Kraft, Steven; Lant, Chris; Beaulieu, Jeff |
| Abstract: | Landowner characteristics influence his/her willingness to change landuse practices to provide more or less environmental benefits. However, most studies of agricultural/environmental polices identify landowners as homogenous. And, the primary cause of failure of many environmental and other polices is the lack of knowledge on how humans may respond to polices based on changes in their behavior (Stern, 1993). From socioeconomic theory and empirical research, landowners can be identified as individuals who make agricultural landuse decisions independently based on their objectives. Identifying possible classes of landowners, assessing how each would potentially respond to policy alternatives, and the resulting pattern of land uses in a watershed or a riparian corridor would be very useful to policy makers as they evaluated alternatives. Agricultural landscapes are important producers of ecosystem services. The mix of ecosystem services and commodity outputs of an agricultural landscape depends on the spatial pattern of land uses emerging from individual land use decisions. However, many empirical studies show that the production of ecosystem services from agricultural landscapes is declining. This is consistent with research conducted over the last few decades showing there is a narrow range of social circumstances under which landowners are willing to make investments in the present to achieve public benefits in the future through investing in natural capital resulting in public goods which are frequently produced as ecosystem services. In this study an agent-based model within a watershed planning context is used to analyze the tradeoffs involved in producing a number of ecosystem services and agricultural commodities given price and policy scenarios while assuming three different types of agents in terms of their goals. The agents represent landowners who have been divided into a number of different groups based on their goals and the size of their farm operations. The multi-agent-based model is developed using a heuristic search and optimization technique called genetic algorithm (GA) (Holland), which belongs to a broader class of evolutionary algorithms. GAs exhibit three properties (1) they start with a population of solution, (2) they explore the solution space through recombination and mutation and (3) they evaluate individual solutions based on their appropriate fitness value(s), for example given profit maximizing agents this would be gross margin. A GA is a heuristic stochastic search and optimization method, which works by mimicking the evolutionary principles and chromosomal processing in natural genetics. The three economic agents that are modeled are based on variations in their objective functions and constraints. This study will help in identifying the tradeoffs associated with various agents in the provision of ecosystem services and agricultural commodities. The agent model developed here will help policy and decision maker identify the various agents within the watershed and assess various policy options based on that information. The study will also help to understand the interaction and feedback between the agents and their environment associated with various policy initiatives. The results of the study indicate that the agent model correctly predicts the actual landuse landcover map by 75 percent. |
| Keywords: | Multifunctional agriculture, Agent based modeling, Genetic Algorithm, Environmental Economics and Policy, Land Economics/Use, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6142&r=env |
| By: | Lee, Min-Yang |
| Abstract: | The effects of "localized depletion" of a pelagic fishery (herring) on a non-extractive marine activity (tourism) are investigated. Proponents of the localized depletion theory claim that intense fishing effort can lead to areas that are unsuitable for predators like tuna, groundfish, and whales. This leads to poor outcomes for the fishing and whale-watching industries. However, there has been no consensus in the scientific community about the existence of this phenomenon. Localized depletion would be consistent with an economic theory of joint production, in which nearshore herring stocks are an input in production of both herring and whale-watching trips. A unique dataset of daily whale-watching outcomes is combined with fishing effort and oceanographic data. This dataset is used to test the hypothesis that intensive fishing effort increases the search time of whale-watching companies. Our results suggest that while fishing has a statistically significant impact on sightings, this magnitude of this effect is fairly small. Sightings seem to be determined mostly by large scale oceanographic processes. These results should be of interest to policymakers in determining future fishing regulations. |
| Keywords: | whales, fishing, panel data, search, Ecosystem Based Management, Resource /Energy Economics and Policy, Q57, Q26, Q22, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6086&r=env |
| By: | Delmas, Magali A.; Grant, Laura E. |
| Abstract: | Eco-labeling signals that a product has been eco-certified. While there is increasing use of eco-labeling practices, there is still little understanding of the conditions under which eco-labels can command price premiums. In this paper, we argue that the certification of environmental practices by a third party should be analyzed as a strategy distinct from although related to the advertisement of the eco-certification through a label posted on the product. By assessing eco-labeling and eco-certification strategies separately, we are able to identify benefits associated with the certification process independently from those associated with the actual label. More specifically, we argue in the context of the wine industry that eco-certification can provide benefits, such as improved reputation in the industry or increased product quality, which can lead to a price premium without the need to use the eco-label. We estimate this price premium of wine due to the eco-certification of grapes using 13,400 observations of wine price, quality rating, varietals, vintage, and number of bottles produced, for the period 1998-2005. Overall, certifying wine increases the price by 13%, yet including an eco-label reduces the price by 20%. This result confirms the negative connotation associated by consumers with organic wine. The price premium of this luxury good due to certification acts independently from its label, a confounding result not previously demonstrated by related literature. |
| Keywords: | organic wine, wine market, price premium, eco-wine, Demand and Price Analysis, Environmental Economics and Policy, |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aawewp:37325&r=env |
| By: | Stohs, Stephen M. |
| Abstract: | Many production processes feature joint production of a desirable output with an undesirable byproduct. Producers and consumers of the desirable output mutually benefit at the expense of non-consumers, who bear external damage costs imposed by production of the undesirable byproduct. A standard approach to regulating such production activities is through the combination of a limit on allowable production effort in conjunction with a cap on the level of the undesirable output. The situation is greatly complicated when the production externality is a random function which depends on the level of production effort. In this case, capping undesirable output induces a random limit on the level of the production effort, assuming further production is prohibited once the undesirable output cap is reached. One situation which fits the above description is that of controlling protected species bycatch in commercial fisheries management. Because protected species are typically rare or endangered, and hence limited in population size and distribution, protected species bycatch is by nature a rare event, subject to random variation over time periods or areas where fishing effort occurs. A standard approach to protected species bycatch mitigation is to employ some combination of effort limit and protected species take caps within a given fishing season, in order to ensure that fishing effort ends before an unacceptably large number of protected species takes has occurred. Given the inherent randomness of protected species bycatch for a given level of fishing effort, a number of questions of interest arise in comparing alternative bycatch management regimes, including: 1. If effort reaches the regulatory limit, what is the likely range of variation in bycatch? 2. What is the likely range of effort under regulation by protected species take caps? 3. What is the effect on the allowable range of effort if take caps are simultaneously implemented for multiple protected species? 4. With multiple take caps and an overall effort limit, what are the probabilities for hitting each of the different possible caps or limit? A probabilistic framework is developed herein to address these and related questions. I use a Poisson distribution to model the probability distribution of bycatch conditional on a given level of effort. A Bayesian framework for deriving predictive distributions of bycatch conditional on fishing effort is used to obtain the stochastic effort limit for a given specified limit and take caps. The methodology is applied to observer data from the Hawaii-based longline fishery for swordfish in order to address the questions posed above. |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6570&r=env |
| By: | Trapnell, Lindsay; Malcolm, Bill |
| Abstract: | Clearing of trees and native vegetation over the past 160 years has led to increasing rates of dryland salinization in the Goulburn-Broken Catchment area. In its dryland section, within the Goulburn Highlands, South West Goulburn, and the Broken Highlands subcatchments, hydrologic balance exists. But in the Riverine Plains comprising the Goulburn and Broken Plains sub-catchments, where average annual rainfalls are less than 600 mm per annum, it will be many decades before hydrologic balance is achieved. This study is set in the Broken Plains sub-catchment where over the next 100 years, it is expected that deep drainage of annual rainfall will cause watertables to rise to within two metres of the ground surface. Such rises of groundwater will lead to marked land degradation, initially in the form of induced waterlogging and ultimately increased dryland salinity. There is therefore a critical need to redress this increasing problem. One main way of doing so is by introducing deeprooted perennial species such as lucerne into the landscape. Lucerne has a higher level of water extraction than annual crops and pasture. However, one of the barriers to farmers changing from annual subterranean clover pasture to lucerne is uncertainty about the effects of such a change and the chance of reduced average profit or its volatility. This study seeks to reduce that uncertainty by investigating changes in profitability and cash flow across the Broken Plains sub-catchment where farming with lucerne replaces cropping with subterranean clover pasture. |
| Keywords: | Crop Production/Industries, Environmental Economics and Policy, Farm Management, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:5972&r=env |
| By: | Ugarte, Daniel De La Torre; He, Lixia; Jensen, Kimberly L.; English, Burton C.; Willis, Kaelin |
| Abstract: | Feedstock production for large scale development of the U.S. ethanol industry and introduction of cellulose€Ӵo-ethanol technology will require extensive changes in land use and impact water demand and quality. This study compares two scenarios: attaining a 60 billion gallon per year target of ethanol by 2030 and a billion gallon per year biodiesel target by 2012 with cellulose-to-ethanol technology introduced in 2012 and also delayed until 2015. Results suggest water demands and quality will vary regionally with cellulosic feedstock production. Policy emphasis on reduced and no-till practices needs to be complementary to increased crop residue use. |
| Keywords: | Agricultural and Food Policy, Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6700&r=env |
| By: | Higgins, Lindsey M.; Richardson, James W.; Outlaw, Joe L. |
| Abstract: | With the passage of the Energy Policy Act, the rapidly expanding number of ethanol plants, and the fury with which ethanol is being promoted, it is clear that ethanol will play a rising role in our domestic energy supply. Along with this rise there will be an increase in the consumptive use of water by ethanol production facilities. Regions, such as the Texas High Plains, that are already considered to be water stressed have the potential of being impacted. The objective of this research is to assess the potential impact the addition of an ethanol plant may have on the Texas High Plains and to determine how increased water costs will transform the economic viability of an ethanol plant. |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6533&r=env |
| By: | Akter, Sonia; Brouwer, Roy; Chowdhury, Saria; Aziz, Salina |
| Abstract: | The paper presents empirical evidence of the determinants of catastrophe insurance participation in one of the poorest and most disaster prone countries in the world. In a large-scale household survey carried out in 2006 we ask 3,000 residents in six different districts in Bangladesh facing various environmental risk exposure levels about their willingness to participate in a catastrophe insurance programme. Combining factors put forward in risk theory and economics, we estimate a model of insurance participation. We show that the household decision to participate in the insurance programme differs depending on both exogenous and endogenous risk exposure levels. As predicted by micro-economic theory, ability to pay, measured in terms of household income and access to credit, significantly affects insurance participation. Furthermore, among the sociodemographic factors investigated in this case study, respondent education and occupation are found to significantly influence household decision making. Our study suggests that low participation rates for catastrophe insurance in a developing country can be explained by high rates of illiteracy and limited access to credit. |
| Keywords: | Natural disasters, catastrophe, insurance, participation, risk, Bangladesh, Consumer/Household Economics, Environmental Economics and Policy, International Development, Risk and Uncertainty, Q54, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:5984&r=env |
| By: | Cai, Yongxia; Shaw, W. Douglass; Wu, Ximing |
| Abstract: | Self protection and altruism are crucial behavioral factors in determining the effectiveness of public policies aimed to improve human health from environmental hazards. This paper examined people€ٳ arsenic mortality risk perception in the drinking water for themselves and their children using the Bayesian learning framework. A two-stage structural model within the random utility framework was developed to model the household€ٳ risk averting behavior with respect to arsenic-related mortality risk. The empirical results indicate that parents engage in a form of mixed altruism. Parents are willing to spend more to make a trade-off between their risk and their children€ٳ risk. |
| Keywords: | Resource /Energy Economics and Policy, Risk and Uncertainty, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6149&r=env |
| By: | O'BRIEN, Daniel; WOOLVERTON, Mike; MADDY, Lucas; POZO, Veronica; ROE, Josh; TAJCHMAN, Jenna; YEAGER, Elizabeth |
| Abstract: | The development of grain-based ethanol production in Kansas has had a marked impact upon the feedgrain and livestock industries of the state. The increased focus on feedgrain production stemming from ethanol development impacts the use and sustainability of Kansas water resources, and has changed the proportional mix of crops grown in the state. The need to handle increased amounts of feedgrains and to transport them to ethanol plants has affected the functional role of local grain elevators as well as the directional flow of grain within the state. The grain trucking industry has been dramatically affected by the increase in demand for moving both feedstock inputs and co-product outputs to and from ethanol plants in the state. |
| Keywords: | Crop Production/Industries, Livestock Production/Industries, Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6432&r=env |
| By: | Yamazaki, Satoshi |
| Abstract: | This paper analyses a fisheries management strategy, marine reserves switching, in which a non-fishing area is created, removed, or rotated from one site to another according to economic criteria through time. Using a dynamic optimisation framework under uncertainty, with the different fish dispersal processes, the optimal switching strategy and density distributions of the biomass, harvest, and net profit are simulated and compared under different management scenarios. This study will provide a decision and modelling framework for the design of marine reserves to achieve desired management goals. |
| Keywords: | bioeconomic model, fisheries management, marine reserves, uncertainty, Resource /Energy Economics and Policy, Risk and Uncertainty, Q22, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6003&r=env |
| By: | Huelgas, Zenaida M.; Templeton, Deborah; Castanar, Pamela |
| Abstract: | The aim of the €ܔhree Reductions, Three GainsÂ€Ý (3R3G) project is to reduce production costs, improve farmers€٠health, and protect the environment in irrigated rice production in Vietnam through the reduced use of seeds, nitrogen fertilizer, and pesticides. It was developed by the International Rice Research Institute and introduced to farmers in South Vietnam by the Ministry of Agriculture and Rural Development in early 2000 through traditional extension work and mass media. Farm survey data provide evidence of adoption of 3R3G primarily in terms of lowering seed rates. The resultant changes in the farm production/cost structure and farmer profits are measured. |
| Keywords: | information-intensive technology, technology transfer, farm-level impacts, Environmental Economics and Policy, Farm Management, Productivity Analysis, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:6014&r=env |
| By: | Mehta, Shefali V.; Haight, Robert G.; Homans, Frances R. |
| Abstract: | Paper removed for editing at author's request 08/07/08. |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6548&r=env |
| By: | Robert H. Hicks (Department of Economics, College of William and Mary); Alan C. Haynie (Alaska Fisheries Science Center,National Marine Fisheries Service); Kurt E. Schnier (Department of Economics,Andrew Young School of Policy Studies, Georgia State University) |
| Abstract: | A substantial theoretical and experimental literature has focused on the conditions under which cooperative behavior among actors providing public goods or extracting common-pool resources arises. The literature identifies the importance of coercion, small groups of actors, or the existence of social norms as conducive to cooperation. This research empirically investigates cooperative behavior in a natural resource extraction industry in which the provision of a public good (bycatch avoidance) in the Alaskan flatfish fishery is essential to the duration of the fishing season, and an information provision mechanism exists to relay information to all individuals. Using a mixed logit model of spatial fishing behavior our results show that conditionally cooperative behavior is prevalent but deteriorates as bycatch constraints tighten. |
| Keywords: | cooperative games, spatial econometrics, fisheries, location choice |
| JEL: | Q22 C25 D71 |
| Date: | 2008–11–14 |
| URL: | http://d.repec.org/n?u=RePEc:cwm:wpaper:80&r=env |
| By: | Bartczak, Anna; Lindhjem, Henrik; Navrud, Ståle; Zandersen, Marianne; Zylicz, Tomasz |
| Abstract: | Recreation benefits constitute a substantial part of the total economic value of forests, and are important for the choice of multi-functional forest policies. The application of methods valuing such benefits is in its infancy in transition economies in Central and Eastern Europe (CEE), so value estimates for policy use are sometimes transferred from Western Europe proportionally scaled down by GDP. However, little is known about how recreation values vary with income, and one risks underestimating benefits in CEE. This paper reports the findings of the first comprehensive, national-level study in any CEE country estimating annual and per trip forest recreation values in Poland using the Travel Cost (TC) and Contingent Valuation (CV) methods. Two in-person interview surveys of forest recreation behaviour were carried out. The first was administered onsite in ten representative forest areas, and the other in the homes of a national sample of adult Poles. Results show that forest recreation is highly valued in Poland, at Euros 0.64 – 6.93 per trip per person, depending on the valuation method. Both trip frequency and per trip values are higher than the average in Western Europe, despite a lower income level. Thus, a simple GDP-adjusted transfer from Western Europe would substantially undervalue forest recreation in Poland. Further, a comparison of TC consumer surplus estimates and GDP/capita in Europe shows no clear relationship, indicating that a range of cultural, institutional and other factors may be important |
| Keywords: | Forest; recreation; valuation; transition economy |
| JEL: | H41 Q51 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:11483&r=env |
| By: | Chen, Yong; Jayaprakash, Ciriyam; Irwin, Elena G. |
| Abstract: | This paper establishes a coupled human-ecological model where slow-varying migration is interacting with fast-varying nutrient dynamics in lake ecology. The nonlinearity and fast-slow dynamics built in the model can generate regime shifts (that is, shifts between different equilibrium states) and slowly-reversible ecological changes. Because ecological conditions do affect and are affected by uncoordinated individual decisions on migration and land-use, the policy challenge does not only lie in the optimal use of ecological service but also in the provision of the right incentives that regulates individual behavior. The possibility of regime shifts and slowly-reversible changes in this coupled model makes policy analysis more interesting and technically challenging. Within this framework, this paper shows that specification of relative time scale between the fast and slow dynamic processes is crucial for the analysis of the system dynamics with/without policy intervention. The calculated solutions show that specification of relative time scale can significantly change the cost, magnitude and length of active intervention in optimal policy. This paper shows that optimal policy (even when resilience does not enter into optimization problem) will always increase the resilience of the desirable equilibrium in the coupled system. The extent of this improvement in resilience depends crucially on the relative time scale. It also shows that simplifying assumptions on the relative time scale can lead to incorrect predictions for both the short-and long-run dynamics. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6195&r=env |
| By: | Whitten, Stuart; Reeson, Andrew; Windle, Jill; Rolfe, John |
| Abstract: | Participation is a relative concept. Too much implies high costs of administration and many losers in a competitive process. Too little implies relatively few gains from trade are accessed. Thus the aim is to optimise rather than maximise participation. In this paper we outline some rules of thumb for setting participation targets and develop a framework for identifying barriers to achieving targets. We use the framework to evaluate six case study tenders covering a variety of land management objectives. These case studies provided pragmatic on-ground lessons in managing participation in real tender applications and resulted in several further lessons for participation management in tender design. |
| Keywords: | Environmental Economics and Policy, Industrial Organization, Land Economics/Use, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aare08:5973&r=env |
| By: | Sardana, Kavita; Bowker, J. Michael; Bergstrom, John C.; Starbuck, C. Megan; English, Donald B.K. |
| Abstract: | Spatial differences in site characteristics and user populations may result in heterogeneity of recreation preferences and values across geographic regions. Non-linear mixed effects models provide a potential means of accounting for this heterogeneity. This approach was tested by estimating a national-level recreation demand model with encouraging results. |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6437&r=env |
| By: | JINDAL, Rohit |
| Abstract: | This paper determines the demand for a forestry program amongst rural households in western Kenya. It is based on a field survey with 277 households, using a stratified random sampling approach. The study follows attribute based method to elicit farmers€٠preferences. Demand is measured in terms of additional number of trees that a household is willing to plant under different price schedules, including direct economic incentive to plant new seedlings. The mean willingness to plant new trees per household increases from 44 trees when farmers have to pay 10ksh/seedling, to 244 trees when farmers receive a payment of 10ksh/seedling. The paper uses fixed effects, random effects and random effect tobit models to estimate relevant parameters. Hausman specification test is returned insignificant, while implies that random effects specification is not incorrect. Price of seedlings (negative effect), availability of timber species (positive effect), gender of the respondent (men likely to plant more trees than women), and availability of agricultural labor at the household (positive) were all found to be significant. Increase in price of a seedling by 1Ksh reduced demand by nine seedlings, while addition of an adult who works full-time on the family farm will raise the demand for seedlings by 18. Furthermore, farmers in Yala River basin were likely to plant more trees than those in the Nyando River basin. |
| Keywords: | Kenya, Lake Victoria, demand, tree seedlings, attribute based method, Demand and Price Analysis, Resource /Energy Economics and Policy, C23, Q23, Q57, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6347&r=env |
| By: | Maldonado, Jorge H.; Moreno-Sanchez, Rocio del Pilar |
| Abstract: | Economic Experimental Games (EEG) have challenged the theoretical prediction showing that individuals balance own and collective interests when making decisions that deviate away from suboptimal Nash equilibrium. However, few studies have analyzed whether these deviations from Nash equilibrium towards social optimum are affected as the stock of resource changes. Performing EEG with real fishers we test the hypothesis that behavior of participants €Óeasured as relative deviations from Nash equilibrium- differs under a situation of abundance versus a situation of scarcity. The design of our EEG is based on a profit maximization model that incorporates intertemporal effects of aggregated extraction. Our findings show that in a situation of scarcity, players over extract the resource making decisions above the Nash equilibrium, obtaining less profit, mining the others-regarding interest, and exacerbating the tragedy of the commons. This result challenges previous general findings from the EEG literature. When individuals face abundance of the resource, however, they deviate downward from the individualistic and myopic behavior prediction. This phenomenon of private inefficient over exploitation is corrected when management strategies are introduced in the game, which underlines the importance of institutions. |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6528&r=env |
| By: | Suter, Jordan F.; Conrad, Jon; Gomes, Carla P.; van Hoeve, Willem Jan; Sabharwal, Ashish |
| Abstract: | In an attempt to address the negative ecological impacts of habitat fragmentation, wildlife corridors have been proposed as a way to connect areas of biological significance. In this paper, a model to maximize the amount of suitable wildlife habitat in a fully connected parcel network linking core habitat areas subject to a budget constraint is introduced. The standard economic framework of maximizing habitat benefits subject to a budget constraint that we employ in this paper is a divergence from other recently proposed models that focus only on minimizing the cost of a single parcel-wide corridor. While the budget constrained optimization model that we introduce is intuitively appealing, it presents substantial computational challenges above determining the cost-minimizing corridor. The optimization model is applied to the design of a wildlife corridor for grizzly bears in the U.S. Northern Rockies and is shown to drastically increase the aggregate habitat suitability of the corridor over parcel selection based on cost minimization alone. The relative tradeoffs between corridor cost and habitat suitability are illustrated through the construction of an efficiency frontier and, for cases where optimization is computationally impractical, a heuristic is suggested that closely approximates the optimally selected corridor. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6207&r=env |
| By: | Klemick, Heather |
| Abstract: | This article examines the determinants of forest cover and land use efficiency in a shifting cultivation system. A conceptual model demonstrates that liquidity constraints encourage farmers to allocate more land to forest fallow and less to cultivation by limiting input purchases. Data from farm households in the Eastern Brazilian Amazon allow me to test whether farmers allocate land between cropping and fallow efficiently from an individual or a community perspective. I find that many farmers devote more land to fallow than is privately optimal, benefiting community income as a whole due to positive local externalities provided by secondary forest. I also estimate the effect of a variety of socioeconomic and agroecological factors on fallow allocation and land use efficiency. I find over-fallowing to be negatively associated with commercial credit use, suggesting that liquidity constraints do hinder agricultural intensification. |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6473&r=env |
| By: | Cobourn, Kelly; Goodhue, Rachael E.; Williams, Jeffrey; Zalom, Frank |
| Abstract: | Estimating the economic impact of a pest requires linking biological and economic systems via a damage function. The most common damage function approach links exogenous pest populations to cumulative commodity yield losses at harvest. This type of representation is a reduced form because is not pest population levels per se that drive damage, but the underlying factors that affect pest populations and the susceptibility of the host. We specify and estimate a structural damage function and compare the results with those of the reduced form. We do so using two alternative models, one that explains the level of crop damage from a pest, and one that explains the timing of that damage during the host€ٳ growing season. We address our objectives within an empirical application to the olive fruit fly in California. In formulating the structural damage function, we draw from current scientific literature on olive fly and olive fruit phenology. The structural damage function takes into account the feedback between climate, host susceptibility, and pest populations. Moreover, the structural approach disaggregates damage rates across space and time, unlike the typical reduced form. The estimation results indicate that endogeneity is a salient concern in both the timing of initial crop damage, and in the levels of damage evidenced in some cultivars. The structural damage function dominates the trapping-based reduced form in terms of explanatory power in every model estimated. |
| Keywords: | Crop Production/Industries, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6530&r=env |
| By: | Stone, Edward A.; Wu, Junjie |
| Abstract: | There is broad concern that humans are transforming our environment. This transformation has potential to impact humanity as we depend on the environment ecosystem services. According to the Millennium Assessment (2005), degradation and unsustainable exploitation presently threaten over 60% of ecosystem services with real implications for health and standards of living. Furthermore, both the exploitation of ecosystem services and the growth rate of that exploitation have been far higher in recent decades than ever before due to population growth and rising standards of living, i.e. consumption. Increasing pressure on ecosystem services has driven thinking on mitigation strategies. Payment for ecosystem services (PES) has emerged as a strategy to encourage provision of services or, often, to discourage activities that reduce provision. In economic terms, the inability of agents to capture the full rents of service provision results in divergent private and social values. By creating markets for these services, PES arrangements can correct this disincentive and bring provision closer to the socially optimal level. While private sector PES schemes have been envisioned and in some cases implemented, most large-scale PES programs to date have been implemented by governments. We consider optimal design of policy aimed at increasing the provision of services from private land. In particular, we examine on a theoretical level the possibility of optimal decision-making hierarchies among government agencies targeting ecosystem service provision. Should we have multiple agencies focusing on separate services or one agency coordinating efforts across services? Should policy be implemented nationally, regionally, or locally? Under what conditions and assumptions does one organizational structure stand out as optimal? To answer these questions, we adapt the model of hierarchy design developed by Hart and Moore (JPE, 2005). We develop a two period model of decision-making with n agencies and m assets. The assets are parcels available for targeting under PES schemes. Each agency is tasked with thinking about how to use a subset of the m assets to enhance service provision, according to its mission. Also associated with each agency is some probability of success in its task - i.e., the probability of thinking of a productive use for the assigned subset of assets - and a value generated for society if the task is completed. There is some rivality among assets; the use of an asset by one agency may preclude its use by another. Determination of seniority and assignment of tasks occur in period 0. In period 1, agencies with access to all assets they require carry out the tasks and generate value for society. Assets are unavailable if put to a conflicting use by a senior agency. Altering the hierarchy structure alters the set of completed tasks and thus the total value. We optimize across hierarchies by assigning tasks and seniority in period 0 to maximize total expected value in period 1. Following the development of the model, we explore implications and results. To demonstrate the driving intuition, we provide results in the two-agency, three-agency, and general case. Our results shed light on the optimal design of hierarchies, including the optimal relationship between coordinators (those considering how to use many assets simultaneously) and specialists (those considering a narrower subset of assets). The model relies on a number of assumptions - some of which are more restrictive than others - and we examine the implications for our results of relaxing assumptions. Two preliminary results stand out as generally applicable. First, in an optimal hierarchy an agency's seniority should be inversely related to its probability of success. So agencies with a low probability of having an idea about how to use the assets assigned to them should have high seniority. This seems counter-intuitive as the value of an idea is not considered, but it becomes clearer considering that tasks and seniority are assigned in period 0 to maximize period 1 total expected value. With this endogenized task selection, no agency would be assigned a task with low value and a low probability of success. Second, crisscross hierarchies are never optimal. This result, which states that agency a should never be senior to agency b on one asset and junior on another, is more intuitive. The central contribution of this paper is the adaptation of a theoretical model of hierarchy design to the context of programs targeting ecosystem services. The nature of interaction between various government entities involved in encouraging service provision necessitated an alternative representation of rivality between agencies. Assumptions were evaluated and revised based on their applicability to behavior in this context. Future research may involve further modification of the model to account for issues like threshold effects, joint production, and uncertainty. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea08:6253&r=env |