nep-env New Economics Papers
on Environmental Economics
Issue of 2009‒05‒02
twenty papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. Analysis of the regional impacts of Climate Policy in Japan By Okajima, Shigeharu
  2. Spatial Heterogeneity in Environmental Regulation Enforcement and the Firm Location Decision among U.S. Counties By O. Ashton Morgan; Simon Condliffe
  3. Green R&D versus End-of-Pipe Emission Abatement: A Model of Directed Technical Change By Michael Rauscher
  4. Sustainable financing for ocean and coastal management in Jamaica: The potential for revenues from tourist user fees By Edwards, Peter E.T.
  5. Valuing international marine resources: A meta-analysis on the Baltic Sea By Ahtiainen, Heini
  6. Microfinance and Environment: Does the Participation in the Microcredit Based Social Forestry of Proshika in Bangladesh Improve Environmental Literacy? By Chowdhury, M. Jahangir Alam
  7. Towards a Genuine Sustainability Standard for Biofuel Production By de Gorter, Harry; Tsur, Yacov
  8. Environmental Tax and the Distribution of Income with Heterogeneous Workers. By Mireille Chiroleu-Assouline; Mouez Fodha
  9. Environmental Technology Transfer via Free Trade By Takeshi Iida; Kenji Takeuchi
  10. Pollution and International Trade in Services By Arik Levinson
  11. Exports and Externalities: the other side of trade and ecological risk and Technology Diffusion in a Competitive World By Travis Warziniack; David Finnoff; Jason F. Shogren; Jonathan Bossenbroek; David Lodge
  12. Development paths for emerging innovation systems: implications for environmental innovations By Floortje Alkemade; Marko Hekkert
  13. Optimal nuclear waste burial policy under uncertainty. By Alain Ayong Le Kama; Mouez Fodha
  14. On the Self-interested Use of Equity in International Climate Negotiations By Andreas Lange; Andreas Löschel; Carsten Vogt; Andreas Ziegler
  15. Tragedies on Natural Resources a Commons and Anticommons Approach By Manuel Coelho, José Filipe and Manuel Ferreira
  16. Heterogeneity among agent types and second-best management for non-market ecological services By Fenichel, Eli P.
  17. Bringing Growth Theory "Down to Earth" By Lopez, Ramon; Stocking, Andrew
  18. Using Biomedical Technologies to Inform Economic Modeling: Challenges and Opportunities for Improving Analysis of Environmental Policies By Roe, Brian E.; Haab, Timothy C.
  19. Natural Resources, Social Conflict and Poverty Trap By Davide Fiaschi
  20. How Best to Auction Natural Resources By Peter Cramton

  1. By: Okajima, Shigeharu
    Abstract: After great improvements in energy efficiency in the 1970âs, Japan has made little progress in reducing energy consumption since 1990, the base year for the Kyoto Protocol. This study is motivated by the recent growing demands among policy makers to find all possibilities for saving energy. To make informed decisions on how to save energy, policy makers need detailed information on energy consumption structures within each jurisdiction. First, in this article, I decompose national level energy intensity into efficiency and activity effects with the Fisher Ideal index, and then estimate regressions on prefecture level residential electricity demand between 1990 and 2003. It is found that national level energy intensity declined by seventy three percent from 1970 to 2003; sixty three percent of the decline may be attributed to improvement in energy efficiency.ã Energy intensity, however, has slightly increased since early 1990âs. Secondly, this paper explores the impact of reduction of carbon emission on the economy. I find that the Japanese government needs to enact the environmental taxes on a $12/ton in order to meet the Kyoto Protocol. It is also found that imposing a $12/ton environmental tax reduces Japanese GDP by around six percent and equivalent variations in urban regions fall while equivalent variations in rural regions rise.
    Keywords: Fisher index, Energy intensity, Regional Computable General Equilibrium, Environmental taxes, Environmental Economics and Policy, Resource /Energy Economics and Policy,
    Date: 2009
  2. By: O. Ashton Morgan; Simon Condliffe
    Abstract: We estimate a negative binomial model with fixed effects to examine the impact of spatial differences in environmental regulation on manufacturing capital flows. Using a newly available data set, we find that stricter air quality standards deter births of polluting plants, suggesting heterogeneity in regulatory standards may create a temporal browning process. We also find that spatial differences in environmental regulation do not play a role in the location decision of non-pollution intensive plants. Key Words: Environmental regulation, firm location, air pollution
    JEL: R38 Q28 Q53
    Date: 2009
  3. By: Michael Rauscher (University of Rostock)
    Abstract: The paper looks at a model of directed technical change in an environmental-economics context. Firms can do conventional or "green" R&D or they can abate emissions at the end of pipe. The paper has two main foci. On the one hand, it investigates the impact of environmental regulation on the allocation of resources to conventional R&D, green R&D, and end- of-pipe abatement. On the other hand, it addresses the question whether stricter emission standards should be used to support green R&D and/or economic growth.
    Keywords: economic growth and the environment, directed technical change
    JEL: Q55 O41
    Date: 2009
  4. By: Edwards, Peter E.T.
    Abstract: This study explores the feasibility of implementing a sustainable funding mechanism for ocean and coastal management in Jamaica. Results show that tourists are more willing to pay for an “environmental tax” than a general “tourism development tax”. The study found that an environmental surcharge of US$2 per person could generate $3.4M per year for management with 0.2% rate of decline in tourist visitation. Negative impacts from the imposition of additional taxes on annual tourist visitation rates could be minimised by providing information on how the revenues from the tax will be allocated for management activities.
    Keywords: Jamaica reefs; Resource management; Coastal tourism; Tourist user fees
    JEL: Q50 Q00 Q26
    Date: 2008–06
  5. By: Ahtiainen, Heini
    Abstract: The study uses meta-analysis to provide insights into the value of international marine resources, illustrating the issue with the case of the Baltic Sea. Willingness to pay for water quality improvements varies systematically with factors such as a countryâs income level, characteristics of the change in water quality, water body type, study year and methodology. The results of the meta analysis are applied to benefit transfer in order to assess the distribution of the benefits of marine protection measures between the Baltic Sea countries and to compare the results with previous research. The net benefits of protecting the Baltic are positive, but they are asymmetrically distributed between the littoral countries.
    Keywords: meta-analysis, water quality valuation, marine areas, the Baltic Sea, Environmental Economics and Policy, Research Methods/ Statistical Methods, Q26, Q51,
    Date: 2009–04
  6. By: Chowdhury, M. Jahangir Alam
    Abstract: The study intends to assess the impact of the participation in the microcredit based social forestry program of Proshika in Bangladesh on the environmental literacy of participating households. The analysis is based on a household-level survey of 450 households. Considering the endogeneity in program participation, the instrumental variable (IV) technique has been used to achieve the objective of the paper. The results indicate that the participation in the social forestry program of Proshika significantly enhances the environmental literacy of participating households.
    Keywords: Microcredit, Social Forestry, Environmental Literacy, Proshika, Bangladesh,
    Date: 2008–08
  7. By: de Gorter, Harry; Tsur, Yacov
    Abstract: Sustainability standards for biofuel production calculated via life cycle accounting (LCA) require a certain reduction in greenhouse gas (GHG) emissions relative to gasoline. Recently it has been shown that LCA gives biased results and should be extended to incorporate indirect land use change (iLUC). We show that even including iLUCs, LCA is still biased and distorted because it is based on GHG emission and uptake calculations, which assume economic values only if (i) the environmental price of carbon is constant over time and (ii) the social discount rate (SDR) equals zero. We offer a sustainability standard free of these restrictions, expressed in terms of a range of SDRs and a maximal GHG payback period. Applying our methodology to Brazilian and U.S. data, we find that in Brazil conversion to biofuel production of two land types is genuinely sustainable, i.e., satisfies our sustainability standard, whereas in the United States no land type satisfies our criterion. Furthermore, the social value of CO2e savings by having the ethanol production from 12.8 million hectares of U.S. corn be produced in Brazil instead may be as high as $817.7 bil.
    Keywords: Sustainability, Biofuel Production, Environmental Economics and Policy, International Development, International Relations/Trade, Political Economy,
    Date: 2009–03
  8. By: Mireille Chiroleu-Assouline (Paris School of Economics - Centre d'Economie de la Sorbonne); Mouez Fodha (Paris School of Economics - Centre d'Economie de la Sorbonne)
    Abstract: This paper analyzes the environmental tax policy issues within an overlapping generations models framework. The objective is to analyze whether an environmental tax policy can respect the two equity principles simultaneously, the vertical as well the horizontal one. We characterize the necessary conditions for the obtaining of a Pareto improving shift when the revenue of the pollution tax is recycled by a change in the labor tax rate or by a change in the distributive properties of the labor tax. We show that, depending on the production function elasticities and on the heterogeneity characteristics of labor supply, an appropriate policy mix could be designed in order to leave each workers' class unharmed by the environmental tax reform. It will consist in an increase of the progressivity of the labor tax together with a decrease of the minimal wage tax rate.
    Keywords: Environmental tax, overlapping generations model,double dividend, tax progressivity.
    JEL: D60 D62 E62 H23
    Date: 2008–12
  9. By: Takeshi Iida (Graduate School of Economics, Kobe University); Kenji Takeuchi (Graduate School of Economics, Kobe University)
    Abstract: This paper considers a model of international duopoly with global pollution to investigate the impact of tariff policy and licensing contracts on environmental technology transfer. Our main finding is that free trade is not always preferable.When the protection of intellectual property rights (IPR) is within a certain range, there is a possibility that the total world welfare is higher under a positive tariff rate than under a zero tariff rate. This implies that the protection of IPR beyond the range is a prerequisite for the justification of free trade.We also show how developing countries are induced to sign a licensing contract.Even if the licensing does not directly improve the competitiveness of the firm in the developing country, raising the tariff rate can increase the revenue of the country. In contrast, when there is no licensing agreement, the local government sets a lower tariff rate and diffuses the products of foreign firms,because the products of local firms are associated with pollution.
    Keywords: Environmental technology transfer; Free trade; Tariff protection, Licensing
    JEL: D43 F13 L13 Q56
    Date: 2009–04
  10. By: Arik Levinson
    Abstract: Two central topics in recent rounds of international trade negotiations have been environmental concerns, and services trade. While each is undoubtedly important, they are unrelated. In this paper I show that the services-environment link is small, for two reasons. First, services account for only a small fraction of overall pollution. For none of five major air pollutants does the service sector account for even four percent of total emissions; for three of the five services account for less than one percent. Second, those service industries that do pollute are the least likely to be traded internationally. Those services for which the U.S. collects and publishes international trade data – presumably those services that are traded internationally – are less polluting than services for which trade data do not exist – presumably because the services are not traded. Even if we limit attention to the services that are traded across borders, the service industries most intensively traded are the ones that pollute the least. The bottom line is simple. International services trade bears little relation to the environment, because services in general contribute relatively little to overall pollution, and those industries that are traded internationally are among the least polluting.
    JEL: F18 Q56
    Date: 2009–04
  11. By: Travis Warziniack (University of Heidelberg, Department of Economics); David Finnoff (University of Wyoming); Jason F. Shogren (University of Wyoming); Jonathan Bossenbroek (University of Toledo); David Lodge (University of Notre Dame)
    Abstract: This paper develops a general equilibrium model to measure welfare effects of taxes for correcting environmental externalities caused by domestic trade, focusing on exter- nalities that arise through exports. Externalities from exports come from a number of sources. Domestically owned ships, planes, and automobiles can become contaminated while visiting other regions and bring unwanted pests home, and species can be in- troduced by contaminated visitors that enter a region to consume goods and services. The paper combines insights from the public finance literature on corrective environ- mental taxes and trade literature on domestically provided services. We find that past methods for measuring welfare effects are inadequate for a wide range of externalities and show the most widely used corrective mechanism, taxes on the sector imposing the environmental externality, may often do more harm than good. The motivation for this paper is the expansion of invasive species' ranges within the United States. We apply our analytical model to the specifc example of quagga and zebra mussel (Dreissena polymorpha and Dreissena rostiformis bugenis) invasion into the U.S Pacific Northwest.
    Keywords: environmental regulation, tax interactions, invasive species, environment and trade
    JEL: Q20 Q26 Q27 Q56 Q57 F18
    Date: 2009–04
  12. By: Floortje Alkemade; Marko Hekkert
    Abstract: The functions of innovations systems approach states that in order for an innovation system to function well several key process or functions have to be addressed. Earlier contributions on this topic provide empirical descriptions of innovation systems over time and present analyses of how the key activities fluctuate over time .This body of literature shows that there are considerable differences between function fulfillments in different innovation systems making it difficult to directly compare innovation systems. In this paper we present a first step towards such a more theoretically based approach by describing how innovation system ideally functions over time and then use this approach to analyze 17 case studies of technological innovation systems regarding environmental innovations in the Netherlands. More specifically, we describe desirable patterns of function fulfillment over the lifecycle of a technological innovation system, thereby focusing on the transition from the exploratory phase to the growth phase. We then compare these theoretical patterns to assess 17 technological innovation systems concerning environmental technologies. Outcomes show that environmental innovations in general follow similar patterns to mostly market-driven innovations but that some key processes remain unaddressed. This leads to important insights for policymakers.
    Keywords: environmental innovations, technological innovation systems
    Date: 2009–04
  13. By: Alain Ayong Le Kama (EQUIPPE - Université de Lille 1); Mouez Fodha (Paris School of Economics - Centre d'Economie de la Sorbonne)
    Abstract: The aim of this paper is to study the optimal nuclear waste burial policy under an uncertainty : the possibility that an accident might occur in the future. The framework is an optimal growth model with pollution disutility. We show, under some conditions on the waste burial policy, that nuclear power may be a long-term solution for the world energy demand. Under uncertainty on the future safety of the buried waste, the social planner will decide to decrease the rate of waste burying, but the evolution of consumption and hence the evolution of the level of buried waste, are ambiguous. Depending on some simple conditions on the balanced growth rate of the economy and on the preference parameters of the households, the optimal amount of buried waste may increase, even if there is a risk of accident in the future.
    Keywords: Nuclear waste, pollution, growth, uncertainty.
    JEL: D90 Q53
    Date: 2008–07
  14. By: Andreas Lange; Andreas Löschel; Carsten Vogt; Andreas Ziegler
    Abstract: We discuss self-interested uses of equity arguments in international climate negotiations. Using unique data from a world-wide survey of agents involved in international climate policy, we show that the perceived support of different equity rules by countries or groups of countries may be explained by their economic costs. Despite being self-interested, equity arguments may be perceived as being used for different reasons, for example, out of fairness considerations or in order to facilitate negotiations. Consistent with experimental and behavioral studies on fairness perceptions, we find that individuals are more likely to state reasons with positive attributes if they evaluate their own region or regions that support the individual’s personally preferred equity rule. Negotiators perceive the use of equity by regions as less influenced by pressure from interest groups.
    JEL: D63 H41 Q54
    Date: 2009–04
  15. By: Manuel Coelho, José Filipe and Manuel Ferreira
    Abstract: Ambiguous concepts blur analytical and policy prescription clarity. In the literature on Natural Resources it would be difficult to find a concept as misunderstood as commons. This paper clarifies this confusion and establishes an adequate conceptualisation. A typology of property-rights regimes relevant to common property resources is presented and a new concept – anticommons - is introduced. The reflex of this regimes distinction on the design of the natural resources policy is discussed and this conceptualisation is used to study exemplar cases in the area of fisheries and aquaculture policy in Portugal. Key Words: Property rights, commons, anticommons, entrepreneur, fisheries
    JEL: K11 Q20
    Date: 2009–03
  16. By: Fenichel, Eli P.
    Abstract: Second-best management affects different agent types differently, and heterogeneity among agents may create instances when only second best management is feasible. Capital-theoretic bioeconomic modeling often has imposed representative agent assumptions that may not capture this heterogeneity. Interactions between agent heterogeneity and second-best management have received little attention. Such heterogeneity is particularly important when management actions do not directly affect extensive margin decisions. We employ a microparameter model in a dynamic bioeconomic model to incorporate agent heterogeneity and intensive and extensive margin decisions for a nonmarket good, recreational fishing. The model yields qualitatively different management recommendations when a representative agent is assumed than when heterogeneity is included using the microparameter approach.
    Keywords: entry-exit, microparameter, bioeconomics, recreational fishing, landing limits, optimal control, Resource /Energy Economics and Policy, Q20, Q22, Q26,
    Date: 2009–04–15
  17. By: Lopez, Ramon; Stocking, Andrew
    Abstract: Explicitly accounting for certain basic physical laws governing the âearthâ sector dramatically enriches our ability to explain a high degree of diversity in observed patterns of economic growth. We provide a theoretical explanation of why some countries have been able to sustain a more or less constant and positive rate of economic growth for many decades while so many others have failed to do so. The analysis predicts that countries that have an over abundance of physical capital (a concept that is precisely defined in the text) may be unable to sustain a positive rate of economic growth over the long run. Too much physical capital may affect the dynamics of the economy ultimately leading to stagnation. The plausibility of the growth model introduced here is demonstrated by its ability to predict some important stylized facts for which standard endogenous growth models generally cannot account.
    Keywords: endogenous growth theory, unbalanced growth, structural change, stagnation, Environmental Economics and Policy, International Development, Labor and Human Capital, Political Economy, E22, Q01, O41,
    Date: 2009
  18. By: Roe, Brian E.; Haab, Timothy C.
    Abstract: Advances in biomedical technology have irrevocably jarred open the black box of human decision making, offering social scientists the potential to validate, reject, refine and redefine the individual models of resource allocation that form the foundation of modern economics. In this paper we (1) provide a comprehensive overview of the biomedical methods that may be harnessed by economists and other social scientists to better understand the economic decision making process; (2) review research that utilizes these biomedical methods to illuminate fundamental aspects of the decision making process; and (3) summarize evidence from this literature concerning the basic tenants of neoclassical utility that are often invoked for positive welfare analysis of environmental policies. We conclude by raising questions about the future path of policy related research and the role biomedical technologies will play in defining that path.
    Keywords: neuroeconomics, neuroscience, brain imaging, genetics, welfare economics, utility theory, biology, decision making, preferences, Institutional and Behavioral Economics, Research Methods/ Statistical Methods, D01, D03, D6, D87,
    Date: 2009
  19. By: Davide Fiaschi
    Abstract: The paper analyses a model where the fight for the appropriation of rents from natural resources between two groups leads to multiple equilibria. The possibility to be trapped into the low-income equilibrium, characterized by strong social conflict (civil war) and stagnation of income, increases with the weakness of political institutions, the population growth rate, the amount of rents from natural resources and the rate of depletion of natural resources and decreases with the level of per capita income, the investment rate and the length of life expectancy of individuals. The size of minority has an ambiguous effect, widening the range of income leading to low-income equilibrium, but also raising incentives to reach an agreement, i.e. a social contract, without any social conflict. Empirical evidence appears to support these findings.
    Keywords: natural resources, social conflict, poverty trap, institutions,civil war
    JEL: O11 O43 Q34 D74
    Date: 2009–04–20
  20. By: Peter Cramton (Economics Department, University of Maryland)
    Abstract: I study the design of auctions of natural resources, such as oil or mineral rights. A good auction design promotes both an efficient assignment of rights and competitive revenues for the seller. The structure of bidder preferences and the degree of competition are key factors in determining the best design. With weak competition and simple value structures, a simultaneous first-price sealed-bid auction may suffice. With more complex value structures, a dynamic auction with package bids likely is needed to promote efficiency and revenue objectives. Bidding on production shares, rather than bonuses, typically increases government take by reducing oil or mining company risk.
    Keywords: Auctions, natural resource auctions, oil auctions
    JEL: D44
    Date: 2009

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