nep-env New Economics Papers
on Environmental Economics
Issue of 2009‒04‒13
fourteen papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. Future meat consumption: potential greenhouse gas emissions from meat production in Malaysia By Tey , (John) Yeong-Sheng
  2. Interactions of Reduced Deforestation and the Carbon Market: The Role of Market Regulations and Future Commitments By Anger, Niels; Dixon, Alistair; Livengood, Erich
  3. Discounting for Climate Change By Anthoff, David; Tol, Richard S. J.; Yohe, Gary W.
  4. Knowledge Base Determinants of Technology Sourcing in the Clean Development Mechanism Projects By Doranova, Asel; Costa, Ionara; Duysters, Geert
  5. Stochastic environmental effects, demographic variation, and economic growth By Azomahou, Theophile; Mishra, Tapas
  6. Measuring Eco-Innovation By Arundel, Anthony; Kemp, René
  7. On Cleaner Technologies in a Transboundary Pollution Game By Benchekroun, H.; Ray Chaudhuri, A.
  8. What is the Top Priority on Climate Change? By Paul Klemperer
  9. Environmental Damage and Price Taking Behaviour by Firms and Consumers By Harold Houba; Hans Kremers
  10. Multi-Attribute Choice Modeling of Australia’s Rivers and Wetlands: A Meta-Analysis of Ten Years of Research By Roy Brouwer
  11. Residents' Benefits Evaluation of Urban Development Plans - A Willingnes-To-Accept Model for a Multi-functional Land Use Project in Amsterdam By Caroline A. Rodenburg; Peter Nijkamp; Henri L.F. de Groot; Erik T. Verhoef
  12. The Ethics of Distribution in a Warming Planet By John E. Roemer
  13. Empirical analysis of solid management waste costs: Some evidence from Galicia, Spain By Germà Bel; Xavier Fageda
  14. Education, Corruption and the Natural Resource Curse By Aldave, Iván; García-Peñalosa, Cecilia

  1. By: Tey , (John) Yeong-Sheng
    Abstract: This study shows that there is mounting meat consumption which is to be met by higher meat production. As the result, higher gas emission of CO2 is expected from increasing meat production. This is led by poultry and beef production which is likely to produce most of the greenhouse gas emissions from meat production in Malaysia. It is crucial to incorporate environmental consideration into livestock policy in National Agricultural Policy 4 and Tenth Malaysian Plan.
    Keywords: Meat; consumption; production; gas emission.
    JEL: Q50 Q11
    Date: 2009–01–15
  2. By: Anger, Niels; Dixon, Alistair; Livengood, Erich
    Abstract: Reducing emissions from deforestation and degradation (REDD) has been proposed as a potentially inexpensive and plentiful source of emission abatement to supplement other longterm climate policies. However, critics doubt that REDD credits are environmentally equivalent to domestic emission reductions, and suggest an excess supply may disrupt carbon markets. In this context, we investigate the economic implications of emissions market regulations and future emissions reduction commitments, as well as uncertainties in REDD credit supply. Numerical simulations with a multi-country equilibrium model of the global emissions market show unrestricted exchange of REDD units reduces the international carbon price by half and cuts Annex I compliance costs by roughly one third. Restricting supply or demand of REDD credits reduces price impacts, but comes at the cost of economic efficiency. Alternatively, Annex I reduction commitments could be increased by almost two thirds at constant carbon prices. While REDD provides large economic benefits for tropical rainforest regions, any REDD policy scenario also reduces wealth transfers to traditional CDM host countries through increased competition on the supply-side of the carbon market.
    Keywords: Climate Change, Kyoto Protocol, Emissions Trading, Deforestation, REDD
    JEL: C60 D61 Q23 Q58
    Date: 2009
  3. By: Anthoff, David; Tol, Richard S. J.; Yohe, Gary W.
    Abstract: It is well-known that the discount rate is crucially important for estimating the social cost of carbon, a standard indicator for the seriousness of climate change and desirable level of climate policy. The Ramsey equation for the discount rate has three components: the pure rate of time preference, a measure of relative risk aversion, and the rate of growth of per capita consumption. Much of the attention on the appropriate discount rate for long-term environmental problems has focussed on the role played by the pure rate of time preference in this formulation. We show that the other two elements are numerically just as important in considerations of anthropogenic climate change. The elasticity of the marginal utility with respect to consumption is particularly important because it assumes three roles: consumption smoothing over time, risk aversion, and inequity aversion. Given the large uncertainties about climate change and widely asymmetric impacts, the assumed rates of risk and inequity version can be expected to play significant roles. The consumption growth rate plays four roles. It is one of the determinants of the discount rate, and one of the drivers of emissions and hence climate change. We find that the impacts of climate change grow slower than income, so that the effective discount rate is higher than the real discount rate. The differential growth rate between rich and poor countries determines the time evolution of the size of the equity weights. As there are a number of crucial but uncertain parameters, it is no surprise that one can obtain almost any estimate of the social cost of carbon. We even show that, for a low pure rate of time preference, the estimate of the social cost of carbon is indeed arbitrary – as one can exclude neither large positive nor large negative impacts in the very long run. However, if we probabilistically constrain the parameters to values that are implied by observed behaviour, we find that the social cost of carbon, corrected for uncertainty and inequity, is 61 US dollar per metric tonne of carbon.
    Keywords: Social cost of carbon, climate change, pure time preference, risk aversion, inequity aversion, income elasticity, time horizon, uncertainty
    JEL: Q54
    Date: 2009
  4. By: Doranova, Asel (UNU-MERIT); Costa, Ionara (UNU-MERIT); Duysters, Geert (UNU-MERIT, Technical University Eindhoven)
    Abstract: The Clean Development Mechanism (CDM) is one of the three greenhouse gas emission reduction and trading instruments of the Kyoto Protocol (KP). The CDM allows governments and business entities from developed countries to offset their emissions liabilities by reducing or avoiding emissions in developing countries, where it is often cheaper to do so. Examples of CDM projects include the installation of various renewable energy producing facilities, cutting the GHG emissions in industry and waste management, or projects focused on improving energy efficiency. From the sustainable development perspectives CDM has been alleged as a new channel of transfer and diffusion of climate friendly technologies (CFT) in developing countries. However we are evidencing that the majority of the CDM projects deploy local sources of technology, which challenges the North- South technology transfer paradigm established under the sustainable development agenda of the KP. This paper is an attempt to explain technology sourcing patterns in CDM projects through employment of knowledge base determinants. On the basis of an empirical analysis we conclude that in countries with a stronger knowledge base in CFT, CDM project implementers tend to go for local and combined technologies and less for foreign technologies.
    Keywords: Clean Development Mechanism, CDM, Kyoto Protocol, Technology
    JEL: Q01 Q28 Q48 O31 O33 O38
    Date: 2009
  5. By: Azomahou, Theophile (UNU-MERIT); Mishra, Tapas (School of Business and Economics, University of Wales Swansea)
    Abstract: We consider a stochastic environment to study interactions among pollution growth, demographic changes, and economic growth. Drawing on the empirical findings of slow convergence patterns of pollution shocks (viz., with a long-memory), we build an analytical framework where stochastic environmental feedback effects on population changes are reflected upon aggregate economic growth. Long-memory in economic growth, in our model, is shown to arise due to the inherent stochasticity in environmental and demographic system. Empirical results for a set of developed and developing countries generally support our conjecture. Simulation experiment is carried out to lend additional support to this claim.
    Keywords: Environmental Quality, Long-memory, Demographic Dynamics, Economic Growth
    JEL: C13 J11 O47
    Date: 2009
  6. By: Arundel, Anthony (UNU-MERIT); Kemp, René (UNU-MERIT)
    Abstract: In this paper we offer a discussion of eco-innovation and methods for measuring it. Eco-innovation is a new concept of great importance to business and policy makers, covering many innovations of environmental benefit. Past research and measurement activity primarily focused on pollution control and abatement activities or on the environmental goods and services sector. We argue that eco-innovation research and data collection should not be limited to such environmentally motivated innovations, but should encompass all products, processes, or organizational innovations with environmental benefits. Attention should be broadened to include innovation in or oriented towards resource use, energy efficiency, greenhouse gas reduction, waste minimization, reuse and recycling, new materials (for example nanotechnology-based) and eco-design. Research should cover the drivers, patterns, and benefits of eco-innovation for each of these applications, since these factors are likely to differ. For measuring eco-innovation, no single method or indicator is likely to be sufficient. In general, one should therefore apply different methods for analyzing eco-innovation – to see the “whole elephant” instead of just a part. More effort should be devoted towards direct measurement of eco-innovation outputs using documentary and digital sources to complement the current emphasis on innovation inputs such as R&D or patents. Innovation can also be measured indirectly from changes in resource efficiency and productivity. These two avenues are underexplored and should be given more attention in order to augment our rather narrow knowledge basis.
    Keywords: eco-innovation, environment, innovation, measurement, indicators, data needs
    JEL: O13 O31 Q55
    Date: 2009
  7. By: Benchekroun, H.; Ray Chaudhuri, A. (Tilburg University, Center for Economic Research)
    Abstract: We show that in a non-cooperative transboundary pollution game, a cleaner technology (i.e., a decrease in the emission to output ratio) induces each country to increase its emissions and ultimately can yield a higher level of pollution and reduce social welfare.
    Keywords: transboundary pollution;technological innovation;differential game
    JEL: Q55
    Date: 2009
  8. By: Paul Klemperer (Nuffield College, Oxford University)
    Abstract: What should be the West's top priority for climate-change policy? This article is a revised and updated version of my talk to the Potsdam Global Sustainability Symposium (which drafted the "Potsdam Declaration" presented to the 2007 UN Climate Change Conference in Bali).
    Date: 2009–01–01
  9. By: Harold Houba (VU University Amsterdam); Hans Kremers (Deutsches Institut für Wirtschaftsforschung (DIW))
    Abstract: Integrated assessment models lack a microeconomic foundation in modelling environmental damages to the economy. To overcome this, damage coefficients are incorporated in standard microeconomic models. Firms and consumers take both damages and prices as given. Demand, supply, profit and expenditure functions under damage coefficients are derived that allow easy implementation in applied economic models through appropriate price distortions related to such coefficients. For the consumer, Slutsky's equations are derived. The different speeds of equilibrium adjustment in economic and climate models is reconciled in the Recursive Equilibrium with Environmental Damages (REED). An exchange economy and Robinson Crusoe economy illustrate our approach.
    Keywords: environmental damage; substitution effects; income effects; Slutky's equations; equilibrium
    JEL: Q41 Q51 Q52 D11 D12 D51
    Date: 2009–04–07
  10. By: Roy Brouwer (Institute for Environmental Studies, Department of Environmental Economics, VU University Amsterdam, The Netherlands)
    Abstract: A meta-analysis is presented of the empirical findings of 10 years of choice experiment applications to water and wetland management issues in Australia. A random effects Tobit model is estimated to investigate the suitability of using existing willingness to pay (WTP) values derived from estimated choice models for the purpose of benefits transfer. The random effects model outperforms the fixed effects model in terms of predictive power. An analysis of variance reveals that the survey method, sample size, and statistical model are important determinants of estimation precision and error. The use of different attributes, measurement units and levels in choice experiments makes it hard to compare WTP values for environmental attributes from different studies. The benefits associated with current and possible future use of the water resources are valued significantly higher than the nonuse benefits. Except for the systematically lower values for the Fitzroy, WTP values are more or less transferable across catchments. Other important control variables when transferring the results from choice models across water and wetland policy contexts include income levels of the population of beneficiaries and methodological study characteristics such as the number of choice tasks in the choice experiment.
    Keywords: choice experiments, stated preferences, value transfer, validity
    JEL: Q25 Q51
    Date: 2009–03
  11. By: Caroline A. Rodenburg (VU University Amsterdam); Peter Nijkamp (VU University Amsterdam); Henri L.F. de Groot (VU University Amsterdam); Erik T. Verhoef (VU University Amsterdam)
    Abstract: Urban re-development projects may generate various positive as well as negative spatial externalities to the existing population in a given area. This study aims to assess the order of magnitude of the expected net benefits for incumbent residents from a large scale project in the Southern part of Amsterdam (the Netherlands), which is planned to transform the area into a large multi-functional urban centre. We employ a specific stated preference method (viz. a willingness-to-accept method) to assess the net socio-economic benefits for the population in the area concerned. Our approach explicitly considers perceived costs and benefits in the foreseen „end-states‟ as well as those incurred during the transitional (construction) phase towards such end-states. It is concluded that the multi-functional urban re-development project under consideration is not supported by the residents in the area, as the long-run benefits are perceived to be overshadowed by the short-run environmental nuisances.
    Keywords: multi-functional land use; stated preference; urban development
    JEL: Q15 R52 O18
    Date: 2009–03–18
  12. By: John E. Roemer (Yale University)
    Abstract: The discounted-utilitarian social welfare function (DU) is used by the great majority of researchers studying intergenerational resource allocation in the presence of climate change (e.g., W. Nordhaus, M. Weitzman, N. Stern, and P. Dasgupta). I present three justifications for using DU: (1) the view that the first generation's preferences should be hegemonic, (2) the viewpoint of a utilitarian Ethical Observer who maximizes expected utility when the existence of future generations is uncertain, and (3) axiomatic justifications (as in classical social-choice theory). I argue that only justification (2) provides an ethically convincing justification, and that, only if one endorses utilitarianism as a good ethic. Recent work by Llavador, Roemer and Silvestre challenges the utilitarian assumption, and argues that sustaining human welfare at the highest possible level forever, or sustaining the growth rate of human welfare (at a fixed exogenous growth rate), are more attractive ethical choices. The work of these authors, which studies the optimal intergenerational paths of resource allocatiobn under the sustainabilitarian objectives, is briefly reviewed and contrasted with the discounted-utilitarian approach.
    Keywords: Climate change, Intergenerational justice, Sustainability, Utilitarianism
    JEL: D70 D90 D63
    Date: 2009–04
  13. By: Germà Bel (Faculty of Economics, University of Barcelona); Xavier Fageda (Faculty of Economics, University of Barcelona)
    Abstract: This paper analyses the factors that determine solid waste service costs. The empirical analysis is based on information derived from a survey conducted in a sample of Galician municipalities. The results reveal economies of scale in municipalities of fewer than 50,000 inhabitants, such that cooperation between these municipalities could lead to cost savings. It also appears that private delivery is not cheaper than public delivery. Finally, designating a larger proportion of the total waste volume to recycling does not imply greater costs.
    Keywords: solid waste services, costs, local government
    Date: 2009–04
  14. By: Aldave, Iván (Central Bank of Peru and GREQAM); García-Peñalosa, Cecilia (GREQAM and CNRS)
    Abstract: The empirical evidence on the determinants of growth across countries has found that growth is lower when natural resources are abundant, corruption widespread and educational attainment low. An extensive literature has examined the way in which these three variables can impact growth, but has tended to address them separately. In this paper we argue that corruption and education are interrelated and that both crucially depend on a country’s endowment of natural resources. The key element is the fact that resources affect the relative returns to investing in human and in political capital, and, through these investments, output levels and growth. In this context, inequality plays a key role both as a determinant of the possible equilibria of the economy and as an outcome of the growth process.
    Keywords: natural resources, corruption, human capital, growth, inequality
    JEL: O11 O13 O15
    Date: 2009–04

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