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on Environmental Economics |
| By: | Hotel , Michael (Dept. of Economics, University of Oslo) |
| Abstract: | Fossil fuels are non-renewable carbon resources, and the extraction path of these resources depends both on present and future demand. When this “Hotelling feature”is taken into consideration, the whole price path of carbon fuel will shift downwards as a response to the reduced cost of the renewable substitute. An implication of this is that greenhouse gas emissions in the near future may increase as a response to the reduced cost of the renewable substitute. If this is the case, increased climate costs may outweigh the bene…ts of reduced costs of a substitute, thus reducing overall social welfare. |
| Keywords: | Climate change; exhaustible resources; renewable energy |
| JEL: | Q30 Q42 Q54 |
| Date: | 2008–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2008_029&r=env |
| By: | Alexeeva-Talebi, Victoria; Anger, Niels; Löschel, Andreas |
| Abstract: | Ambitious unilateral EU environmental policy has raised concerns about adverse competitiveness implications for European energy-intensive and export-oriented sectors. We analyze the economic and environmental implications of two different measures to address these concerns in the EU Emission Trading Scheme (EU ETS): border tax adjustments (BTA) and the Clean Development Mechanism (CDM). Numerical simulations with a computable general equilibrium model of the global economy demonstrate that alternative BTA regimes are suitable to alleviate adverse competiveness implications of unilateral European climate policy on energy-intensive and export-oriented industries. The regulatory protection of these industries via subsidies for EU exporters and tariffs for non-EU importers goes, however, at the expense of sectors which are excluded from the EU ETS. We show that the choice of alternative benchmarks (i.e. carbon intensities) for the level of BTA substantially affects these competitiveness implications. The simulations further indicate that limited access to low-cost emission abatement via the CDM in the EU ETS alleviates adverse competitiveness impacts to a comparable extent as the most ambitious BTA scheme. Increasing “where-flexibility” of emission abatement thus represents an attractive market-based alternative to the application of border tax adjustments in unilateral climate policy. |
| Keywords: | Emissions Trading, EU ETS, Competitiveness, Border tax adjustments, Clean Development Mechanism, CGE model |
| JEL: | D58 F18 H23 Q48 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7437&r=env |
| By: | Turner, Karen; Hanley, Nick; De Fence, Janine |
| Abstract: | The Environmental Kuznets Curve (EKC) hypothesis focuses on the argument that rising prosperity will eventually be accompanied by falling pollution levels as a result of one or more of three factors: (1) structural change in the economy; (2) demand for environmental quality increasing at a more-than-proportional rate; (3) technological progress. Here, we focus on the third of these. In particular, energy efficiency is commonly regarded as a key element of climate policy in terms of achieving reductions in economy-wide CO2 emissions over time. However, a growing literature suggests that improvements in energy efficiency will lead to rebound (or backfire) effects that partially (or wholly) offset energy savings from efficiency improvements. In this paper we consider whether increasing labour productivity will have a more beneficial, or more predictable, impact on CO2/GDP ratios than improvements in energy efficiency. We do this by using CGE models of the Scottish regional and UK national economies to analyse the impacts of a simple 5% exogenous (and costless) increase in energy or labour augmenting technological progress. |
| Keywords: | Computable general equilibrium models; Technical progress; Energy efficiency; Labour productivity; Environmental kuznets curve |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2009-02&r=env |
| By: | paunic, alida |
| Abstract: | Significant non renewable energy reserves could lead to lower investment in renewable technologies and further help growth of GHG emissions. Current state of renewable technology allows implementation at competitive market rate (wind) whose development could bring further industrial prosperity, environmental benefits, international recognition, reduce future energy uncertainties, keep natural resources to future generation leaving positive bequest value Canada large GNP brings, besides well being , obligation of clean technology developments taking leading role in promotion of sustainable development, helping developing and low income countries to import technologies, develop its renewable possibilities and keep strong commitments and respect in international agreements. |
| Keywords: | renewables; Canada; |
| JEL: | Q32 Q50 |
| Date: | 2009–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13163&r=env |
| By: | Ronald Schettkat (Schumpeter School of Business and Economics, University of Wuppertal) |
| Abstract: | Are efficiency improvements in the use of natural resources the key for sustainable development, are they the solution to environmental problems, or will second round effects –so-called rebound effects- compensate or even overcompensate potential savings, will they fire back? The answer to this question will have fundamental policy implications but the research on rebound effects does not provide clear results. This paper aims to clarify the theoretical basis of various analytical approaches which lead to widely different estimates of rebound effects. |
| Keywords: | Agriculture; Natural Resources; Energy; Environment; Primary Products; Technological Change; Choices and Consequences; Sustainable Development; Nonrenewable Resources and Conservation; Demand and Supply; Energy; Demand and Supply; Environmental Economics; Technological Innovation |
| JEL: | Q01 O13 Q3 Q30 Q31 O33 Q4 Q40 Q41 Q5 Q50 Q55 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:bwu:schdps:sdp09002&r=env |
| By: | Böhringer, Christoph; Moslener, Ulf; Oberndorfer, Ulrich; Ziegler, Andreas |
| Abstract: | We analyze the productivity effects of environmental (green) investment as well as of environmental expenditures and energy expenditures. For this purpose, we follow a production function approach where we account for these investment and expenditure categories as inputs. Based on a panel dataset for the German manufacturing industry between 1996 and 2002 we find that both environmental and energy expenditures do not contribute to production growth. In contrast, environmental investment positively impinges upon production growth as a productivity driver. We thus conclude that environmental regulation should stimulate investment in order to be compatible with economic goals such as productivity. |
| Keywords: | environmental performance, environmental regulation, productivity |
| JEL: | D24 Q28 Q58 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7433&r=env |
| By: | Ang, James |
| Abstract: | Although the economy of China has grown very strongly over the last few decades, this spectacular performance has come at the expense of rapid environmental deterioration. Amidst animated debate on the issue of global warming, this study attempts to explore the determinants of CO2 emissions in China using aggregate data for more than half a century. Adopting an analytical framework that combines the environmental literature with modern endogenous growth theories, the results indicate that CO2 emissions in China are negatively related to research intensity, technology transfer and the absorptive capacity of the economy to assimilate foreign technology. Our findings also indicate that more energy use, higher income and greater trade openness tend to cause more CO2 emissions. |
| Keywords: | Environmental pollution; endogenous growth theory; R&D; China. |
| JEL: | Q50 O53 O30 Q40 O40 |
| Date: | 2009–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13261&r=env |
| By: | Karen Turner (Department of Economics, University of Strathclyde); Nick Hanley (Department of Economics, University of Stirling); Janine De Fence (Department of Economics, University of Strathclyde) |
| Abstract: | The Environmental Kuznets Curve (EKC) hypothesis focuses on the argument that rising prosperity will eventually be accompanied by falling pollution levels as a result of one or more of three factors: (1) structural change in the economy; (2) demand for environmental quality increasing at a more-than-proportional rate; (3) technological progress. Here, we focus on the third of these. In particular, energy efficiency is commonly regarded as a key element of climate policy in terms of achieving reductions in economy-wide CO2 emissions over time. However, a growing literature suggests that improvements in energy efficiency will lead to rebound (or backfire) effects that partially (or wholly) offset energy savings from efficiency improvements. Where efficiency improvements are aimed at the production side of the economy, the net impact of increased efficiency in any input to production will depend on the combination and relative strength of substitution, output/competitiveness, composition and income effects that occur in response to changes in effective and actual factor prices, as well as on the structure of the economy in question, including which sectors are targeted with the efficiency improvement. In this paper we consider whether increasing labour productivity will have a more beneficial, or more predictable, impact on CO2/GDP ratios than improvements in energy efficiency. We do this by using CGE models of the Scottish regional and UK national economies to analyse the impacts of a simple 5% exogenous (and costless) increase in energy or labour augmenting technological progress. |
| Keywords: | Scomputable general equilibrium models; technical progress; energy efficiency; labour productivity; environmental kuznets curve |
| JEL: | D57 D58 R15 Q41 Q43 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:0908&r=env |
| By: | Michael Hübler |
| Abstract: | This paper introduces intra- and inter-sectoral technology diffusion via FDI and imports into a recursive-dynamic CGE model for climate policy analyses. It analyzes China’s accession to a Post Kyoto emission regime that keeps global emissions from 2012 on constant. Due to ongoing energy efficiency gains, partly stemming from international technology diffusion, China will become a net seller of emission permits and steadily reduce emissions, possibly below their 2004 level until 2030. This will reduce the world CO2 price significantly. The impact of supporting foreign firms and of reducing import tariffs on Chinese welfare will not significantly change when China joins the Post Kyoto regime |
| Keywords: | Technology diffusion, technology transfer, trade, FDI, climate change, China |
| JEL: | F18 F21 N75 O33 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1479&r=env |
| By: | Asheim, Geir B. (Dept. of Economics, University of Oslo); Holtsmark, Bjart (Statistics Norway) |
| Abstract: | Recent contributions show that climate agreements with broad participation can be implemented as weakly renegotiation-proof equilibria in simple models of greenhouse gas abatement where each country has a binary choice between cooperating (i.e., abate emissions) or defecting (no abatement). Here we show that this result carries over to a model where countries have a continuum of emission choices. Indeed, a Pareto-efficient climate agreement can always be implemented as a weakly renegotiation-proof equilibrium, for a sufficiently high discount factor. This means that one need not trade-off a “narrow but deep” treaty with a “broad but shallow” treaty. |
| Keywords: | Climate agreements; Pareto-effiency; greenhouse gases; |
| JEL: | A10 |
| Date: | 2008–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2008_023&r=env |
| By: | Dinar, Ariel (University of California); Mahfuzur Rahman, Shaikh (Texas Tech University,); Larson, Donald (The World Bank); Ambrosi, Philippe (The World Bank) |
| Abstract: | The Clean Development Mechanism, a provision of The Kyoto Protocol, allows countries that have pledged to reduce their greenhouse gas emissions to gain credit toward their treaty obligations by investing in projects located in developing (host) countries. Such projects are expected to benefit both parties by providing low-cost abatement opportunities for the investor-country, while facilitating capital and technology flows to the host country. This paper analyzes the Clean Development Mechanism market, emphasizing the cooperation aspects between host and investor countries. The analysis uses a dichotomous (yes/no) variable and three continuous variants to measure the level of cooperation, namely the number of joint projects, the volume of carbon dioxide abatement, and the volume of investment in the projects. The results suggest that economic development, institutional development, the energy structure of the economies, the level of country vulnerability to various climate change effects, and the state of international relations between the host and investor countries are good predictors of the level of cooperation in Clean Development Mechanism projects. The main policy conclusions include the importance of simplifying the project regulation/clearance cycle; improving the governance structure host and investor countries; and strengthening trade or other long-term economic activities that engage the countries. |
| Keywords: | Abatement; animal waste; Approach; atmosphere; availability; barrier; bilateral trade; biomass; Business Climate; business environment; business regulation; business regulations; capital investments |
| Date: | 2008–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4786&r=env |
| By: | Francisco J. André (Department of Economics, Universidad Pablo de Olavide); Abderrahmane Sokri (DRDC Centre for Operational Research and Analysis, Ottawa, Canada); Georges Zaccour (Chair in Game Theory and Management and GERAD, HEC Montréal, Canada) |
| Abstract: | A Public Disclosure Program (PDP) is compared to a traditional environmental regulation (exemplified by a tax/subsidy) in a simple dynamic framework. A PDP aims at revealing the environmental record of firms to the public. This information affects its image (goodwill or brand equity), and ultimately its profit. In our model, this impact is endogenous, i.e., a firm polluting less than its prescribed target would win consumer's sympathy and raises its goodwill, whereas it is the other way around when the firm exceeds its emissions quota. The evolution of this goodwill is assumed to depend also on green activities or advertising expenditures. Within this framework, we analyse how a PDP affects the firm's optimal policies regarding emissions, pricing and advertising as compared to a traditional regulation. We show that advertising acts as a complementary device to pricing and that emissions are increasing in goodwill. We also conclude that the effects of a PDP are more pronounced than those of traditional instruments for firms with a high goodwill. Moreover, we study under which conditions a PDP may be profit improving and we connect this issue to the possibility that a PDP can induce firms to overcomply with the standard. The numerical value of the emission target is rather innocuous in a market-based setting but it turns to be a crucial variable in the presence of a PDP. The theoretical results are complemented with a numerical illustration. |
| Keywords: | Market-based Environmental Regulation, Public Disclosure Program, Pricing, Advertising, Goodwill, Optimal Control. |
| JEL: | C61 Q58 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:pab:wpaper:09.02&r=env |
| By: | Thomas S. Lontzek; Wilfried Rickels |
| Abstract: | In the presence of rising carbon concentrations more attention should be given to the role of the oceans as a sink for atmospheric carbon. We do so by setting up a simple dynamic global carbon cycle model with two reservoirs containing atmosphere and two ocean layers. The net flux between these reservoirs is determined by the relative reservoir size and therefore constitutes a more appropriate description of the carbon cycle than a proportional decay assumption. We exploit the specific feature of our model, the mixing of the carbon reservoirs, by allowing for a special form of carbon capture and storage: The capture of CO2 from the air and the sequestration of CO2 into the deep ocean reservoir. We study the socially optimal anthropogenic intervention of the global carbon cycle using a non-renewable resource stock. We find that this kind of carbon capture and storage facilitates achieving strict stabilization targets for the atmospheric carbon content. It accelerates the slow natural flux within the carbon cycle, and because of its temporary abatement character it dampens the overshooting of the atmospheric reservoir. Furthermore, we analyze the optimal paths of the carbon tax. The carbon tax shows to be inverted u-shaped but depending on the initial sizes of the reservoirs and the speed of carbon fluxes between the reservoirs we also find the optimal tax to be increasing, decreasing or u-shaped. Finally, we suggest to link the level of the carbon tax to the declining ability of the deep ocean to absorb atmospheric carbon |
| Keywords: | exhaustible resource, CCS, ocean sinks, ocean sequestration, air capture, carbon tax, carbon cycle |
| JEL: | Q32 Q54 C61 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1475&r=env |
| By: | Mota, Rui Pedro; Domingos, Tiago; Martins, Victor |
| Abstract: | The context of this paper is the measurement of welfare and weak sustainability, defined as non-declining utility, in dynamic economies, i.e., green, environmental or comprehensive accounting. We estimate the green net national product and genuine saving for Portugal 1991-2005, accounting for the disamenity of air pollution emissions, the depreciation of commercial forests - pine and eucalyptus -, the value of time (through technological progress), excluding the effect of business cycles and discussing the assumptions behind the usual terms included in the empirics of comprehensive accounting. For the accounting period considered we find that both GNNP and GS are positive, thereby indicating no sustainability problem in Portugal, although both GNNP and GS depict a trend towards unsustainability. Excluding technological progress there is a contradiction in the sustainability message: GS is negative after 2002, whereas GNNP is always positive, indicating that welfare increased. |
| Keywords: | Welfare measures; green accounting; technological progress; business cycles |
| JEL: | C51 C61 Q20 |
| Date: | 2008–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:13347&r=env |
| By: | Ekbom, Anders (Department of Economics, School of Business, Economics and Law, Göteborg University); Brown, Gardner M. (Department of Economics, School of Business, Economics and Law, Göteborg University); Sterner, Thomas (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | Soil erosion and fertilizer run-off cause serious flow externalities in downstream environments through-out the world. Social costs include e.g. loss of health, life and production due to pollution and eutrophication of freshwater resources, reduced life of hydro-power plants, increased turbidity, and degradation of coral reefs and marine resources. The key optimal control models on soil capital management omit downstream externalities and assume that the individual farmer and society share the same objective function. In the presence of externalities, there is a discrepancy. In this paper the social planner aims at maximizing the profits from agriculture subject to a soil dynamics-constraint and external damage costs caused by downstream contamination from soil and fertilizer leakage. These effects are not considered by the farmer. Comparative statics analysis shows that factors which promote a low discount rate (tenure security, access to credits, crop insurance etc.) will reduce soil erosion and nutrient leakage and promote accumulation of soil capital. Socially optimal subsidies for soil conservation not only will build-up soil capital and increase on-site crop production, but will also reduce nutrient leakage and soil loss. A charge on fertilizer would reduce fertilizer use and thus reduce the water pollution caused by leakage of inorganic nutrients. Based on our model results, combined with an extended discussion on policy instruments, we conclude that the government should try to provide incentives, not necessarily to stop soil loss per se (since the farmers will look after their own capital) but to avoid contamination of downstream environments, where the resource users have few opportunities to negotiate with the upstream farmers, who may even be unaware of the problems they cause.<p> |
| Keywords: | optimal control theory; micro analysis of farm firms; resource management; soil erosion |
| JEL: | C61 Q12 Q20 |
| Date: | 2009–01–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0341&r=env |
| By: | Nævdal , Eric (Ragnar Frisch Centre for Economic Research); Vislie, Jon (Dept. of Economics, University of Oslo) |
| Abstract: | Discounting in the presence of catastrophic risk is a hotly debated issue, in particular with respect to climate change. Many scientists and laymen concerned with potentially catastrophic impacts feel that if an increase in the discount rate drastically increases the likelihood of catastrophic outcomes, this discredits economic cost-benefit calculations. This paper argues that this intuition is sound and that if cost-benefit calculations are done within a model that encompasses the type of catastrophic risk that these scientists worry about, the resulting stabilization target will only be slightly influenced by the discount rate. This is shown within a stylized model of a risk neutral decision maker facing a problem with a catastrophic threshold with unknown location. |
| Keywords: | climate change; discounting; catastrophic risk; optimal control |
| JEL: | A10 |
| Date: | 2008–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2008_028&r=env |
| By: | Førsund, Finn R. (Dept. of Economics, University of Oslo) |
| Abstract: | The materials balance principle points to the crucial role of material inputs in generating residuals in production processes. Pollution modelling must be of a multi-output nature. The most flexible transformation function in outputs and inputs used in textbooks is too general to make sense in pollution modelling. Specifying bads as if they are inputs, although may be defendable on a macro level as a reduced form, hides explicit considerations of various modification activities. Extending the non-parametric efficiency approach to cover bads as outputs, assuming weak disposability of the bads as the only change in the modelling of the technology, has serious weaknesses. A complete taxonomy of inputs as to the impact on both residuals and marketed products as joint outputs is derived, based on factorially determined multi-output production, thus providing information for choice of policy instruments. |
| Keywords: | Multiple-output production; pollution; bads; purification; DEA |
| JEL: | D62 Q50 |
| Date: | 2008–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2008_030&r=env |
| By: | Paolo Chiades (Banca d'Italia); Roberto Torrini (Banca d'Italia) |
| Abstract: | The modernization of the solid waste management sector prompted by the Ronchi decree of 1997 has proceeded slowly and is far from being completed. Regional differentials in the effectiveness of local policies and in the efficiency of waste collection and disposal firms are still large. Southern regions are lagging behind while northern regions on the whole have achieved the environmental objectives and modernized the waste management system. Local differences in service methods and quality have affected operating costs, which are higher on average in the South. Significant problems of economic regulation have yet to be solved. The self-sufficiency principle for the treatment and disposal phases and their high level of integration with the collection phase hamper competition and make it desirable for there to be regulation of the terms and condition for access to disposal facilities. Moreover, should the Government decide to adopt a vertically integrated legal monopoly model, with compulsory competitive tendering, some doubts could arise concerning the ability of local authorities to perform this task, given the complexity of the underlying contracts. Assigning responsibility for the economic regulation of the sector to a national authority could prove to be helpful. |
| Keywords: | Public utilities, Solid waste management, Economic regulation |
| JEL: | L32 L51 Q53 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_22_08&r=env |
| By: | Lund, Diderik (Dept. of Economics, University of Oslo) |
| Abstract: | The literature on taxation of rents from nonrenewable resources uses different theoretical assumptions and methods and a variety of empirical observations to arrive at widely diverging conclusions. Many studies use models and methods which disregard uncertainty, investigating distortionary effects of different taxes on whether, when, and how to explore for, develop and operate resource deposits. Introducing uncertainty into the analysis opens a range of challenges, and leads to results which cast doubt upon the relevance of studies which neglect uncertainty. There are, however, several ways to analyze uncertainty, regarding companies' behavior, resource price processes, and diversification opportunities, all with different implications for taxation. Methods developed in financial economics since the 1980's are promising, but still not in widespread use. Some more specific topics covered in this review are optimal risk sharing between companies and gov- ernments, time consistency and scal stability, the relationship between taxes and discount rates, and transfer pricing. |
| Keywords: | Natural resources; rent tax; royalty; oil; minerals; energy |
| JEL: | B20 H20 H25 L71 O13 Q38 |
| Date: | 2009–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2009_001&r=env |
| By: | Arifin, B.; Swallow, B.; Suyanto; Coe, R. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:raf:wpaper:b15527&r=env |
| By: | Johann Eekhoff; Janina Jänsch; Steffen J. Roth; Christian Vossler |
| Abstract: | In diesem Diskussionspapier wird die Möglichkeit dargestellt, durch eine maßgebliche Nutzung des Clean Development Mechanism (CDM) die vorgegebenen Klimaschutzziele möglichst effizient, also mit möglichst geringen Kosten zu erreichen. Eine effiziente Reduzierung der CO2-Emissionen hilft, die für die Erreichung umweltpolitischer Ziele verbundenen Kosten auf das unvermeidbare Maß zu begrenzen und somit die Zustimmung der Bevölkerung zu ehrgeizigen Klimaschutzzielen nicht leichtfertig zu gefährden. |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:kln:iwpdip:dp01/08&r=env |
| By: | Sang, J.; Swallow, B.; Nyabenge, M.; Bondotich, D.; Yatich, T.; Duraiappah, A.; Yashiro, M. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:raf:wpaper:b15658&r=env |
| By: | Ekbom, Anders (Department of Economics, School of Business, Economics and Law, Göteborg University); Sterner, Thomas (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | This paper integrates traditional economic variables, soil properties and variables on soil conservation technologies in order to estimate agricultural output among small-scale farmers in Kenya’s central highlands. The study has methodological, empirical as well as policy results. The key methodological result is that integrating traditional economics and soil science is highly worthwhile in this area of research. Omitting measures of soil capital can cause omitted variables bias since farmers’ choice of inputs depend both on the quality and status of the soil capital and on other economic conditions such as availability and cost of labour, fertilizers, manure and other inputs. The study shows that: (i) models which include soil capital and soil conservation technologies yield a considerably lower output elasticity of farm-yard manure; (ii) mean output elasticities of key soil nutrients like nitrogen (N) and potassium (K) are positive and relatively large; (iii) counter to our expectations, the mean output elasticity of phosphorus (P) is negative; (iv) soil conservation technologies like green manure and terraces are positively associated with output and yield relatively large output elasticities. The central policy conclusion is that while fertilizers are generally beneficial, their application is a complex art and more is not necessarily better. The limited local market supply of fertilizers, combined with the different output effects of N, P and K, point at the importance of improving the performance of input markets and strengthening agricultural extension. Further, given the policy debate on the impact and usefulness of government subsidies to soil conservation, our results suggest that soil conservation investments contribute to increase farmers’ output. Consequently, government support to appropriate soil conservation investments arrests soil erosion, prevents downstream externalities and assists farmers’ efforts to increase food production and food security.<p> |
| Keywords: | micro analysis of farm firms; resource management |
| JEL: | Q12 Q20 |
| Date: | 2009–01–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0340&r=env |