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on Environmental Economics |
| By: | Golub, Alla; Hertel, Thomas; Rose, Steven; Sohngen, Brent; Avetisyan, Misak |
| Abstract: | Land-based activities are responsible for a large part of global greenhouse gas (GHG) emissions, yet the economics of land-use decisions have rarely been explicitly modeled in global mitigation studies. This paper integrates the analysis of land use related non-CO2 emissions and carbon forest sequestration with more conventional analyses of CO2 emissions from fossil fuel combustion to provide a comprehensive assessment of the relative role of land in global GHG emissions and mitigation. For this paper, we utilize a new general equilibrium framework which effectively captures the opportunity costs of land-use decisions in agriculture and forestry, the implications of these decisions for GHG emissions, as well as mitigation options in agriculture and forestry. By combining this with a more conventional analysis of fossil fuel-based CO2 emissions mitigation, we are able to analyze trade-offs and feedbacks between GHG emissions reductions in land-based and fossil fuel combustion intensive sectors. We explore the general equilibrium effects when land rents are endogenous and large-scale adoption of mitigation technologies produces feedbacks across sectors and regions. |
| Keywords: | Climate policy, land use related emissions, carbon forest sequestration, CGE, Environmental Economics and Policy, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49513&r=env |
| By: | Zhang, Zhenyu; Schoengold, Karina |
| Abstract: | Many countries have achieved moderate to dramatic growth during the last few decades, and the world-widely continued economic growth results in increased wealth and deteriorated environment. The relationship between economic growth and environmental quality has received great attention in empirical and theoretical studies. But results are mixed: some find that economic development inevitably leads to environmental deterioration due to resource depletion and pollution, while others find that continued economic development helps to improve environmental quality. Further works are required in a specific context to answer the question whether environmental improvement is compatible with continued economic growth. We intend to provide insight on the potential for carbon emissions control within one nation in the absence of international agreement. The electricity generation sector in China was chosen to demonstrate the economic impact of possible emissions control on the production of power industry in this study. The important economic questions include: What are the optimal policies to provide firms with the incentive to abate carbon emission? Does taxation or subsidy work? What are the impacts of emission control on economic growth? An endogenous growth model is set to represent a regulated power industry , and a Coub-Douglas production function is used to describe the joint production of electricity and carbon emissions. The modified Hamilton approach is employed to solve the model under three possible polices: emission fee, coal tax and abatement subsidy. The theoretical analysis suggests that firms have no incentive to abate in the absence of regulation, and finds that the ratio of emissions to desired output is not a constant, but a function of productive capital and other parameters. The non-constant ratio provides the theoretical grounds to choose the appropriate policies for emissions control. And the sustainable growth could be achieved when appropriate environmental instruments are chosen. Moreover, the optimal conditions derived from the model, rather than ad hoc specification, are used to examine the relationship between desired output and emissions for empirical analysis. Data comes from the China Statistical Yearbook and China Electric Power Yearbook, providing the provincial information for the period 1993-2003. Joint estimation of emissions and output is done using full information maximum likelihood (FIML) method. The optimal emission tax rates are estimated as 59.78%, 13.78% and 6.88% corresponding to abatement efficiencies of 1%, 5% and 10%, respectively. The optimal input tax rates ( ) are 54.05%, 56.13%, 57.55% 65.11% corresponding to discount rate ( ) of 0.05, 0.08, 0.10, 0.20 respectively. The results suggest that the sustainable growth could be achieved when appropriate environmental instruments are chosen, and emission tax is preferred to input tax in the sense of social cost, whenever detection of emissions is not costly and abatement technology allows removing at least 5% of total emissions at pipe end. |
| Keywords: | Economic growth, carbon emission control, power generation, China, Environmental Economics and Policy, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49363&r=env |
| By: | Hadrich, Joleen C.; Wolf, Christopher A. |
| Abstract: | Nutrient management and air emissions continue to be an area of increased management control on all livestock operations as environmental regulations become more stringent. Agricultural producers must consider uncertainty surrounding the timing of and potential increases of environmental policy controls, such as emission taxes, when making future investment decisions. An optimal control theory framework was applied to a dairy farm facing an uncertain increase in emission taxes and an unknown date at which emission taxes will take effect. The optimal investment path considering these uncertainties was solved implicitly and compared to a full certainty case. |
| Keywords: | air emissions, environmental regulations, irreversible investment, uncertainty, Environmental Economics and Policy, Livestock Production/Industries, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49316&r=env |
| By: | Cai, Yongxia; McCarl, Bruce A. |
| Abstract: | Panel models with random effects are used to estimate how climate influences in-stream surface water supply, municipal water demand, crop yields and irrigation water use. The results are added into TEXRIVERSIM, a state wide economic, hydrological, environmental and inter-basin water transfer (IBTs) investment model, through the objective function and hydrological constraints. A climate change related scenario analysis from the Global Circulation Models (GCMs)--Hadley, Canadian, BCCR and NCAR with SRES scenarios A1B, B1, and A2 indicates that inter-basin water transfers not only greatly relax water scarcity problems for major cities and industrial counties, but also create growth opportunity for Houston. However, while destination basins receive the benefits, source basins will experience dramatic reduction in in-stream flow and water flows to bays and estuaries. Climate change requires accelerated water development with more IBTs proving economically feasible depending on the GCMs and SRES scenarios. |
| Keywords: | Climate Change, Inter-basin Water Transfers, Water Scarcity, Environmental Stream Flows, Environmental Economics and Policy, Q25, Q54, Q58, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49933&r=env |
| By: | Hadrich, J.C.; Wolf, C.A. |
| Keywords: | citizen complaints, environmental compliance, livestock farms, manure management, Environmental Economics and Policy, Farm Management, Q24, Q53, Q58, |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:midasp:49274&r=env |
| By: | Birur, Dileep K.; Golub, Alla A.; Hertel, Thomas W.; Rose, Steven K. |
| Abstract: | Several studies in the recent past have offered a contrasting and wide range of perspectives on economic and environmental implications of biofuels. In this study we develop a comprehensive and consistent framework for analyzing the global economic interactions and the direct and indirect impacts of biofuels production on greenhouse gas (GHG) emissions. We utilize a global Computable General Equilibrium (CGE) model which consists of interaction of energy commodities with explicit biofuels and their by-product sectors, land endowment classified by agro-ecological zones, and emission of four major GHGs - carbon dioxide, methane, nitrous oxide, fluorinated gases from agricultural and economic activities, including emissions associated with biofuel feedstock, crop conversion to fuel, and land cover conversion through change in ecosystem carbon stock. This study also pays special attention to pasture-crop and Conservative Reserve Program land due to their potential sectoral competition for land. In this paper, we examine the proposed policies for biofuels expansion in the US, EU and Brazil, as well as alternative potential trajectories of larger and smaller growth, including a collapse of the traditional biofuels market. The impact on GHG emissions are decomposed and associated with the individual drivers behind the biofuels boom, including: changes in subsidies, rising oil prices, and other major policy drivers. |
| Keywords: | Biofuels, Renewable Energy, Computable General Equilibrium (CGE), Agro Ecological Zones (AEZs), Land use change, Greenhouse Gas Emission., Environmental Economics and Policy, International Relations/Trade, Land Economics/Use, Resource /Energy Economics and Policy, C68, Q18, Q42, R14, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49473&r=env |
| By: | Jolejole, Maria Christina B.; Swinton, Scott M.; Lupi, Frank |
| Abstract: | This paper examines the willingness of farmers to participate in hypothetical programs that would pay them to adopt cropping practices that enhance provision of ecosystem services from agriculture. A survey of 3,000 Michigan corn and soybean farmers elicited willingness to adopt four sets of cropping practices that reflected increasing levels of environmental stewardship. Acreage enrollments in the programs were modeled using hurdle models. The acreage that farmers would be willing to enroll depends chiefly on farm size and the perception of environmental improvements from the practices. For farms over 500 acres, the payment offered was also a significant inducement to acreage enrollment in all systems examined. This paper advances the literature on adoption of agro-environmental practices by developing a supply function for crop acreage managed for environmental stewardship. Like prior studies of environmental technology adoption in agriculture, we find that environmental attitudes and affiliations, age, education and current farming practices are influential. But we find that the low cost suppliers of environmental services are the largest farms. Agricultural policies based on payment for environmental services that aim for cost-effective environmental impact will likely achieve most of their impact from larger farms. |
| Keywords: | Willingness to participate, willingness to accept, stated preference, supply response, ecosystem services, payment for environmental services, agricultural policy, agro-environmental policy, environmental policy, corn, soybean, Environmental Economics and Policy, Q18, Q51, Q57, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49356&r=env |
| By: | Ando, Amy W.; Shah, Payal |
| Abstract: | The dominant paradigm of conservation-reserve planning in economics is to optimize the provision of physical conservation benefits (measured in units like species protected) given a budget constraint. Large-scale biology-based priority setting implies that the value we place on biodiversity and ecosystem function is not affected by human proximity to that natural capital. There is significant evidence, however, that human willingness to pay (WTP) for conservation declines with distance (e.g. Loomis 2000) â a phenomenon we refer to as âspatial value decayâ. This paper begins a new strand of the conservation planning literature that takes demand-side factors â the location of people in the landscape and the degree to which their willingness to pay for an environmental amenity depends on proximity to that amenity â into account. We use theoretical models of linear abstract landscapes to explore the impact of demand-side factors on two facets of optimal conservation choices: siting of a single reserve when conservation value is greatest near a critical site in the landscape (optimal targeting), and siting of multiple reserves when fragmentation reduces physical conservation services produced (optimal agglomeration). Our results show how optimal conservation planning might differ from straight ecological prescriptions. While minimum fragmentation is often optimal, planners can usefully employ increased fragmentation to capture value when peopleâs preferences are not very highly localized. In a targeting problem, the ecologically critical site is often the right thing to protect, but optimal policy balances proximity to critical site with proximity to people. In some scenarios, the payoff to using a reserve design approach that considers demand-side factors is large. Finally, we find that spatial value decay reduces the maximum levels of welfare and environmental services that can be gained from any conservation-planning approach. When spatial value decay is present because people are simply unaware of environmental resources farther away from where they live, education campaigns might serve to increase social welfare and environmental services. |
| Keywords: | conservation, endangered species, optimal reserve-site selection, spatial, demand-side, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q24, Q57, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49209&r=env |
| By: | Schaible, Glenn D.; Kim, C.S.; Aillery, Marcel P. |
| Keywords: | Technology adoption, Water conservation, Irrigation, Dynamic groundwater models, Sustainable agriculture, Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49244&r=env |
| By: | Gopalakrishnan, Sathya; Smith, Martin D.; Slott, Jordan M.; Murray, A. Brad |
| Keywords: | beach nourishment, beach width, erosion, hedonic, non-market valuation, morpho-economics, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q24, Q51, Q54, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49261&r=env |
| By: | Arguedas, Carmen (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Camacho, Eva (Universidad Jaume I de Castellón); Zofío, José Luis (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.; Departamento de Análisis Económico: Teoría e Historia Económica. Universidad Autónoma de Madrid) |
| Abstract: | In this paper, we study the incentives to adopt advanced abatement technologies in the presence of imperfect compliance. Surprisingly, incentives to adopt advanced abatement technologies remain intact under emission taxes and pollution abatement subsidies when compared to the perfect compliance scenario. However, under emission standards imperfect compliance increases firms’ incentives to invest under certain assumptions, whereas under an emission permit mechanism investment incentives decrease only if widespread non-compliance induces a (sufficient) reduction in the permit price. Our results are valid for fairly general characteristics of the monitoring and enforcement strategies commonly found in both, theoretical and empirical applications. |
| Keywords: | environmental policy; technology adoption; monitoring; non-compliance |
| JEL: | K42 L51 Q28 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:uam:wpaper:200903&r=env |
| By: | Ribaudo, Marc; Ghosh, Gaurov; Shortle, James |
| Abstract: | The Environmental Protection Agency and the U.S. Department of Agriculture are promoting point/nonpoint trading as a way of reducing the costs of meeting water quality goals while giving nonpoint sources a larger role in meeting those goals. Farms can create offsets or credits in a point/nonpoint trading program by implementing management practices such as conservation tillage, nutrient management, and buffer strips. To be eligible to sell credits, farmers must first comply with baseline requirements. The EPA defines a baseline as the pollutant control requirements that apply to a seller in the absence of trading. EPA guidance recommends that the baseline for nonpoint sources be management practices that are consistent with the water quality goal. A farmer would not be able to create credits until the minimum practice standards are met. An alternative baseline is those practices being implemented at the time the trading program starts. The selection of the baseline has major implications for which farmers benefit from trading, the cost of nonpoint source credits, and ultimately the number of credits that nonpoint sources can sell to regulated point sources. We use a simple model of the average profit-maximizing dairy farmer operating in the Conestoga (PA) watershed to evaluate the implications of baseline requirements on the cost and quantity of credits that can be produced for sale in a water quality trading market, and which farmers benefit most from trading. |
| Keywords: | nonpoint pollution, emissions trading, management practices, Environmental Economics and Policy, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49258&r=env |
| By: | Baker, Justin; Murray, Brian |
| Abstract: | This study explores the interactions of groundwater extraction, quality, and greenhouse-gas (GHG) emissions within a productive agricultural region. Two conceptual models are proposed. In the first, GHG emissions are managed at the local level, and an efficient level of abatement is solved for endogenously to the system. Here, regional management of GHG emissions offers an alternative policy tool for managing quantity/quality by internalizing the costs of a common externality associated with both groundwater extraction and nitrogen fertilizer application. A simple numerical simulation is used to illustrate the potential groundwater co-benefits of managing agricultural GHG emissions within the system. The second model reflects the reality that GHG mitigation efforts will occur at the national or international level; agricultural markets and production will respond according to the scope of the policy mechanism and the anticipated effect on agricultural markets and input costs. For this scenario, the impacts of GHG mitigation on regional groundwater supplies are ambiguous. A set of scenarios is derived in which groundwater co-benefits or co-costs can be expected within a region. Groundwater managers should be cognizant of the indirect market pressures created by agricultural GHG mitigation and bioenergy development, and should adapt conservation and quality protection measures accordingly. |
| Keywords: | Groundwater, GHG Mitigation, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q25, Q53, Q54, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49481&r=env |
| By: | Sam, Abdoul G. |
| Abstract: | A two-way fixed effects Poisson model is used to investigate the impact of 43 EPA-sponsored pollution prevention (P2) practices on compliance and enforcement for a sample of facilities in the US manufacturing sector. I find that P2 adoption reduces environmental violations in three industries while increasing violations in two others. P2 adoption also spurs fewer enforcement actions in three industries. I further partition the P2 practices into three categories based on their approach to improve environmental performance. In doing so, I find that practices that involve changes in operating procedures--about a third of adopted P2 practices--such as instituting a self-inspection and monitoring program to discover spills or leak sources, improving maintenance scheduling and/or labeling procedures, are effective in reducing violations while practices that involve equipment or material changes are not. I also find that adopters of practices that require changes in either procedures or manufacturing equipment--about half of adopted practices--are rewarded with a more cooperative treatment of environmental infractions with fewer enforcement actions. |
| Keywords: | Pollution Prevention Act, P2 practices, compliance, enforcement, Poisson models, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q53, L51, C23, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49306&r=env |
| By: | Acosta, Montserrat; Sohngen, Brent |
| Abstract: | There is widespread recognition that forestry carbon credits can reduce the net emissions of carbon into the atmosphere. Designing systems to sequester carbon, however, has proven difficult due to a number of efficiency issues, including leakage. Leakage occurs when policy makers develop carbon projects in specific places which protect some parcels of land, but leave other parcels of land unprotected. This analysis uses a newly developed model of global land use change from an established forestry and land use model, described in Sohngen et al. (1999); Sohngen and Mendelsohn (2003); and Kindermann et al. (2008). To assess leakage we estimate carbon under storage under one scenario where the world is awarded carbon credits and another where tropical developing nations are awarded the credits. We focus our results on several regions, namely Brazil, the rest of South America, Sub-Saharan Africa and Southeast Asia. Carbon prices are assumed to be constant, and range from US$0 tC to US$900 tC. The model adjusts global land uses to these specific policies, and leakage is assessed by comparing carbon gains within the project areas to net global changes in carbon. A number of policy relevant results emerge. First, the estimates indicate that leakage ranges from 2% to more than 14%. Second, as carbon credits increase, leakage decreases across the world. |
| Keywords: | Carbon Sequestration, Leakage, Carbon Credits, Environmental Economics and Policy, Land Economics/Use, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49468&r=env |
| By: | Lee, Yoon; Yoon, Taeyeon; Shah, Farhed |
| Abstract: | A dynamic optimization framework is used to analyze integrated watershed management and suggest appropriate policies. Soil conservation, reservoir level sediment release, downstream water allocation and water quality are subject to control. Application of the model to the Aswan Dam watershed illustrates the need for international cooperation to manage shared watersheds. |
| Keywords: | Watershed management, Soil erosion, Reservoir sedimentation, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q25, Q53, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49478&r=env |
| By: | Tanellari, Eftila; Bosch, Darrell; Mykerezi, Elton |
| Keywords: | willingness to pay, risk perceptions, water infrastructure, simultaneous equation model, Environmental Economics and Policy, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49535&r=env |
| By: | D. Dragone; L. Lambertini; A. Palestini |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:658&r=env |
| By: | Keiser, David A.; Mullen, Jeffrey D.; Bergstrom, John C.; Smith, Nathan B.; Radcliffe, David E.; Risse, Mark L.; Fowler, Laurie A. |
| Abstract: | Water quality trading (trading) as a means to improve water quality has become an increasingly popular instrument considered by environmental policy makers. Although the U.S. Environmental Protection Agency lists more than forty current trading programs in the U.S., only a few active markets exist. The literature identifies several hurdles to trading, overcoming which requires a deeper understanding of the interaction between local environmental, legal, and economic conditions. Particular challenges include thin markets, uncertainty related to the course and fate of nutrient flows, varying degrees of political support, and high transaction costs related to market infrastructure, monitoring, and enforcement. These hindrances often arise from and contribute to the confinement of trading to tight ecological and political boundaries. This paper explores the effect of these boundaries on the potential for trading in two southeastern reservoirs and their respective watersheds. Results provide insight into the effects of the spatial expansion of markets. These findings contribute to the current dialogue that seeks to better understand barriers to trading. |
| Keywords: | water quality trading, phosphorus trading, nutrient trading, water pollution, pollution markets, Environmental Economics and Policy, Land Economics/Use, Public Economics, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49323&r=env |
| By: | D. Dragone; L. Lambertini; A. Palestini |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:662&r=env |
| By: | Li, Man; Wu, JunJie; Deng, Xiangzheng |
| Abstract: | This project examines the driving forces behind the land-use change and evaluates the effects of land-use transition on soil organic carbon density and sequestration cost in China. It contributes to the literature in three aspects. First, it applies a discrete choice method to model multiple land-use options with a unique set of high-quality data. Second, it conducts a comprehensive analysis of biophysical characteristics and changes in soil carbon storage caused by land-use change. Third, it examines the economic efficiency of alternative land use policies as instruments for carbon sequestration in China. |
| Keywords: | carbon sequestration, land-use, soil organic carbon density, China, Environmental Economics and Policy, Land Economics/Use, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49568&r=env |
| By: | Zhao, Tianli; Sado, Yukako; Boisvert, Richard N.; Poe, Gregory L. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49509&r=env |
| By: | Rahman, Shaikh Mahfuzur; Larson, Donald; Dinar, Ariel |
| Abstract: | This paper examines the cost structure of emissions abatement through different types of Clean Development Mechanism (CDM) projects. Alternative models for abatement costs are specified and estimated using CDM project-specific data. Empirical results indicate that there exist economies of scale in emission abatement through the CDM projects, and that the marginal cost of abatement significantly varies across different types of projects. The distribution of various CDM project types corresponds to the relative attractiveness of the types, in terms of the structure of the estimated marginal cost function. Thus, empirical results suggest that the CDM market operates efficiently and sends the right signals to the investors, which further explains the shying away from costly carbon sequestration projects funded by many international development agencies, such as the World Bank. Contrary to the hypothesis that that the marginal costs of abatement through CDM decrease over time due to experience or learning by doing, empirical results show non-decreasing marginal cost of abatement over time. This finding suggests that there may be other incentives to invest in certain types of CDM projects in specific locations, thus implying location-specificity of various investment opportunities. While non-decreasing marginal cost of abatement over time implies a tougher prospect for CDM in future commitment periods, the current growth pattern of the CDM suggests that this flexibility provision of the Kyoto Protocol is still highly attractive for the host and investor countries. |
| Keywords: | Cost Emissions Abatement Clean Development Mechanism, Environmental Economics and Policy, |
| Date: | 2009–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49397&r=env |
| By: | Chen, Xiaoguang; Khanna, Madhu; Onal, Hayri |
| Abstract: | This paper develops a dynamic micro-economic land use model that maximizes social welfare and internalizes externality from greenhouse gas emissions to obtain the optimal land use allocation for traditional row crops and bioenergy crops (corn stover, miscanthus and switchgrass), the mix of cellulosic feedstocks and fuel and food prices. We use this carbon tax policy as a benchmark to compare the implications of existing biofuel policies on land use, social welfare and the environment for the 2007-2022 period. The model is operationalized using yields of perennial grasses obtained from a biophysical model, county level data on yields of traditional row crops and production costs for row crops and bioenergy crops in Illinois. We show that a carbon tax policy that is directly related to carbon intensity of fuels can generate the highest social welfare among alternative policy scenarios. The existing ethanol tax credits result in substantial deadweight losses and higher GHG emissions as compared to the baseline. Ethanol blending mandates with subsidies lead to further welfare losses and higher GHG emissions. To meet advanced biofuel blending mandates, corn stover and miscanthus are used but the mix of viable cellulosic feedstocks varies spatially and temporally. Corn stover is viable mainly in central and northern Illinois while miscanthus acres are primarily concentrated on southern Illinois. The blending mandates lead to a significant shift in acreage from soybeans and pasture to corn and a change in crop rotation and tillage practices. |
| Keywords: | cellulosic ethanol, land use, social welfare, greenhouse gas emissions, Land Economics/Use, Resource /Energy Economics and Policy, Q42, Q24, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49484&r=env |
| By: | McCarl, Bruce; Villavicencio, Xavier; Wu, Ximing |
| Abstract: | This paper examines the role that climate change might be playing in the declining returns to agricultural research. For this purpose, we estimate a cross-section time-series model of agricultural total factor productivity for the U.S. states over the period 1970â1999, with the inclusion of climatic variables, and controlling for non stationarity of the data. Our findings suggest that after controlling for climatic variables and non stationarity, the effect of Public Agricultural Research Capital over Total Factor Productivity is reduced. |
| Keywords: | Climate Change, Factor Productivity, Returns to Research, Panel Data, Environmental Economics and Policy, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, C33, O13, Q16, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49452&r=env |
| By: | Banerjee, Simanti; Shortle, James S.; Kwasnica, Anthony M. |
| Abstract: | There is much interest among economists and policy makers in the use of reverse auctions to purchase habitat conservation on private lands as a mechanism for minimizing public expenditures to achieve desired conservation outcomes. Examples are the Conservation Reserve Program (US) and Environmental Stewardship Scheme (UK). An important limitation of these auctions as implemented to date is that there is no explicit consideration of the spatial pattern of participation in the evaluation of bids. In this study we present the structure of a simple auction â the Agglomeration Vickrey Auction that implements a Vickrey-Clarke-Groves mechanism. The auction is designed to attain conservation goals through specific spatial patterns of land management while minimizing the total budgetary cost. We present the theoretical structure of the AVA and provide simple numerical examples to illustrate the effectiveness of the mechanism. We conclude with a section documenting the experiments that are to be conducted as a part of the future research on this study. |
| Keywords: | auctions, environmental conservation, spatial, Environmental Economics and Policy, Land Economics/Use, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49337&r=env |
| By: | Hand, Michael S.; Nickerson, Cynthia |
| Abstract: | Per-unit costs for conservation investments in the Environmental Quality Incentives Program (EQIP) are determined by market prices for conservation practices and payment cost-share rates. This study examines the relative importance of these factors in determining the size of the most common conservation investment in EQIP. Results suggest that per unit costs have a significant but inelastic impact on the size of conservation investment; as expected, higher per-unit costs are associated with smaller investments. This effect is largely due to variation in market prices of conservation practices for the majority of farmers. However, cost-share rates may play a role for some limited resource farmers. |
| Keywords: | EQIP, cost share, beginning farmer, limited resource producer, conservation, Agricultural and Food Policy, Environmental Economics and Policy, |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49257&r=env |
| By: | Nicolas Drouin Deziel (GREDI, Faculte d'administration, Université de Sherbrooke); Jie He (GREDI, Faculte d'administration, Université de Sherbrooke); Luc Savard (GREDI, Faculte d'administration, Université de Sherbrooke) |
| Abstract: | L’estimation des coûts liés à l’imposition de limites aux émissions de gaz à effet de serre (GES) a fait l’objet de beaucoup d’attention médiatique dernièrement. La Chine étant un des plus grands émetteurs de GES, l’évaluation des coûts pour l’économie chinoise est donc primordiale. Dans ce travail, nous évaluons le coût de l’imposition d’une taxe sur les émissions de CO2 à l’aide d’un modèle d’équilibre général calculable de l’économie chinoise. Le modèle permet la substitution des intrants énergétiques. L’intrant énergie est décomposé en quatre sources à savoir l’électricité, le pétrole, le charbon et le gaz. Les émissions de CO2 sont directement liées à la consommation des combustibles fossiles. Le cadre chinois est particulier par son utilisation intensive du charbon comme source d’énergie. La question est évaluée à travers des taxes sur les émissions de CO2. La taxe sur les émissions de CO2 permettrait d’abaisser les émissions chinoises totales de 5,2%, l’objectif général de réduction des émissions du Protocole de Kyoto. Nous analysons aussi un choc sur les prix mondiaux du pétrole ainsi qu’une combinaison de ces deux chocs. Les possibilités de substitution particulières au contexte chinois permettraient de réduire les émissions à relativement peu de coûts. |
| Keywords: | China, Global warming, environmental tax, CGE modeling |
| JEL: | Q53 D58 Q54 Q58 |
| Date: | 2009–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:shr:wpaper:09-10&r=env |
| By: | Nene, Gibson; Azzam, Azzeddine M.; Schoengold, Karina |
| Abstract: | The U.S hog production industry has been continually subjected to rapid structural changes since the early 1990s. The industryâs move towards more concentrated large hog farms and geographical concentration of such farms, have triggered public concerns over the dangers such big animal feeding operations are likely to pose to the waters of the country. This study investigates the implications of state-level environmental regulations on the structure of hog farms. The results of this study suggest that environmental regulations will result in one of three possible scenarios: (1) a more competitive industry in which small hog operations are not adversely affected which will allow more small operations to enter rather than exit the industry; (2) a more concentrated hog production industry in which large operations survive while small operations exit the industry; (3) no change in the structure of the industry where both sizes of operations are not significantly affected by environmental stringency. |
| Keywords: | Perfect competition, U.S. hog production industry, Environmental regulations, Environmental Economics and Policy, Livestock Production/Industries, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49395&r=env |
| By: | Keeney, Roman |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49456&r=env |
| By: | Chakravorty, Ujjayant (University of Alberta, Department of Economics); Hubert, Marie-Helene (University of Alberta School of Business); Nostbakken, Linda (University of Alberta School of Business) |
| Abstract: | Many countries are actively encouraging the supply of biofuels as a low carbon alternative to the use of fossil fuels for transportation. To what extent do these trends imply a reallocation of scarce land away from food to fuel production? This paper critically reviews the small but growing literature in this area. We find that an increase in biofuel production may have a significant effect on food prices and in certain parts of the world, in speeding up deforestation through land conversion. However, more work needs to be done to examine the effect of newer generation biofuel technologies that are less land-intensive as well as the effect of environmental regulation and trade policies on land allocation between fuel and food. |
| Keywords: | agricultural production; biofuel economics; climate policy; environmental regulation; land allocation |
| Date: | 2009–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2009_020&r=env |
| By: | Michael I. Cragg; Matthew E. Kahn |
| Abstract: | Stringent regulation for mitigating greenhouse gas emissions will impose different costs across geographical regions. Low-carbon, environmentalist states, such as California, would bear less of the incidence of such regulation than high-carbon Midwestern states. Such anticipated costs are likely to influence Congressional voting patterns. This paper uses several geographical data sets to document that conservative, poor areas have higher per-capita carbon emissions than liberal, richer areas. Representatives from such areas are shown to have much lower probabilities of voting in favor of anti-carbon legislation. In the 111th Congress, the Energy and Commerce Committee consists of members who represent high carbon districts. These geographical facts suggest that the Obama Administration and the Waxman Committee will face distributional challenges in building a majority voting coalition in favor of internalizing the carbon externality. |
| JEL: | Q4 Q54 R1 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14963&r=env |
| By: | Jakus, Paul M.; Shaw, W. Douglass; Nguyen, To N.; Walker, Mark |
| Abstract: | The demand for bottled water has increased rapidly over the past decade, but bottled water is extremely costly compared to tap water. The convenience of bottled water surely matters to consumers, but are others factors at work? This manuscript examines whether purchases of bottled water are associated with the perceived risk of tap water. All of the past studies on bottled water consumption have used simple scale measures of perceived risk that do not correspond to risk measures used by risk analysts. We elicit a probability-based measure of risk and find that as perceived risks rise, expenditures for bottled water rise. |
| Keywords: | Environmental Economics and Policy, Risk and Uncertainty, Q25, Q53, I12, |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49221&r=env |
| By: | H. Allen Klaiber; V. Kerry Smith |
| Abstract: | This paper outlines a new framework for gauging the properties of quasi-experimental estimates of the willingness to pay (WTP) for changes in environmental and other non-market amenities. As a rule, quasi-experimental methods cannot offer alternative hypotheses to judge the quality of their quasi random assignments of treatment and control outcomes to economic agents. Their results must be judged by the explanation of the event used to construct the assignment and the counter examples offered as robustness checks for the logic of each application. This paper develops a four-step procedure for situations that rely on housing price capitalization. It is a computational analog to Chetty’s [2009] call for considering the measurement objectives as part of evaluating the relevance of reduced versus structural form modeling strategies. Two diverse applications are used to establish the method’s relevance for environmental problems. The first examines the value of a conversion of land cover from xeric to wet landscape. The second examines the clean-up of hazardous waste sites. We find that even when quasi-experimental methods have access to statistically ideal instruments their performance in measuring general equilibrium WTP depends on other aspects of each application. |
| JEL: | C21 D61 Q51 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14957&r=env |
| By: | Liu, Xiangping; Lynch, Lori |
| Abstract: | Maryland has introduced a number of land preservation programs over the past 40 years to permanently preserve resource lands. Although new programs can increase the number of acres being preserved, they might have unintended impact on land preservation due to interaction with existing land preservation programs. The Maryland Rural Legacy program began in 1997 by designating large contiguous blocks of land and focusing its preservation efforts only in those areas. The programâs could attract existing programs to shift their preservation effort into this designated rural legacy areas if there exist economy of scale or they subsidized existing programsâ effort through matching funds. Alternatively, it could crowd out the othersâ preservation efforts in these areas if the RL program raises the cost of preserving there. Using parcel level data and a property score matching method, we find: 1) parcels in designated RL areas are more attractive to preservation programs, 2) the RL program crowds in the preservation effort of the other programs, and 3) RL program preserves more parcels and acres of land in these areas due to increased funding. |
| Keywords: | Crowding effects, Designated preservation areas, Land preservation, Agricultural and Food Policy, Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy, Q18, Q24, Q28, Q58, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49339&r=env |
| By: | Ahmed, Syud Amer; Diffenbaugh, Noah S.; Hertel, Thomas W.; Ramankutty, Navin; Rios, Ana R.; Rowhani, Pedram |
| Abstract: | Climate volatility will increase in the future, with agricultural productivity expected to become increasingly volatile as well. For Tanzania, where food production and prices are sensitive to the climate, rising climate volatility can have severe implications for poverty. We develop and use an integrated framework to estimate the poverty vulnerabilities of different socio-economic strata in Tanzania under current and future climate. We find that households across various strata are similarly vulnerable to being impoverished when considered in terms of their stratumâs populations, with poverty vulnerability of all groups higher in the 21st Century than in the late 20th Century. When the contributions of the different strata to the national poverty changes are taken into account, the rural and urban households with diversified income sources are found to account for the largest poverty changes due to their large shares in initial total poverty. |
| Keywords: | climate, volatility, poverty vulnerability, Tanzania, Environmental Economics and Policy, Food Security and Poverty, International Development, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49358&r=env |
| By: | Parsons, George R.; Stefanova, Stela |
| Abstract: | We evaluate the stability of coefficient and willingness to pay (WTP) estimates for recreation services over two time periods. To address this question, we estimate a Random Utility Maximization (RUM) model of recreation demand, using two datasets from different time periods, but concerning the same study area. We then compare the estimation results and evaluate the temporal stability of preferences that drive recreation choices. The two datasets are on trips made by Delaware residents to beaches in the Mid-Atlantic region: Delaware, New Jersey, Maryland and Northern Virginia. The first dataset was collected using a mail survey in 1997 and the second dataset was gathered through an Internet survey in 2005. Besides the time periods, and the survey methods, there are also significant sample size differences between the two datasets. In the 1997 sample, 400 Delaware residents made at least one day trip, while in the 2005 dataset, only 50 Delawareans visited the beaches of interest. |
| Keywords: | recreation demand, nonmarket valuation, Environmental Economics and Policy, Q51, Q26, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49296&r=env |
| By: | Toth, Sandor F.; Rabotyagov, Sergey S.; Ettl, Gregory J. |
| Abstract: | We attempt to design a market framework (which we call ECOSEL) for private provision of forest ecosystem services. ECOSEL is a non-regulatory framework that uses a voluntary public good provision mechanism (in a form of an auction) in conjunction with a multiobjective optimization algorithm to create a market for forest ecosystem services. It is expected to be attractive to the demand side of the ecosystem service market since only Pareto-efficient bundles of services are offered for auction, and it is expected to be attractive to the supply side as well by creating a source of non-timber income for forest landowners. ECOSEL is capable of flexible response to demand for other relevant dimensions of forestrelated environmental amenities such as biodiversity, viewshed or recreational services. Following Rothâs (2002) advice on behavior of economists as âmarket engineersâ, we use both experimental economics to improve the design of the ecosystem services market. Concurrently, we provide experimental evidence on the efficiency and revenue-generating properties of a multi-good subscription game of incomplete information. |
| Keywords: | Environmental Economics and Policy, Marketing, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49565&r=env |
| By: | Enrico Moretti; Matthew Neidell |
| Abstract: | A pervasive problem in the literature on the health costs of pollution is that optimizing individuals may compensate for increases in pollution by reducing their exposure to protect their health. This implies that estimates of the health effects of pollution may vastly understate the full welfare effects of pollution, particularly for individuals most at risk who have the greatest incentive to adopt compensatory behavior. Furthermore, using ambient monitors to approximate individual exposure to pollution may induce considerable measurement error. We overcome these issues by estimating the short run effects of ozone on respiratory related health conditions using daily boat arrivals and departures into the two major ports of Los Angeles as an instrumental variable for ozone levels. While daily variation in boat traffic is a major contributor to local ozone pollution, time-varying pollution due to port activity is arguably a randomly determined event uncorrelated with factors related to health. Instrumental variable estimates are significantly larger than OLS estimates, indicating the importance of accounting for avoidance behavior and measurement error in understanding the full welfare effects from pollution. |
| JEL: | I12 I18 Q53 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14939&r=env |
| By: | Bazhanov, Andrei; Belyaev, Alexander |
| Abstract: | We compare the short- and the long-run consequences of Russia's Energy Strategy to 2020 and of the project of the Strategy to 2030 with a hypothetical scenario of the weak-sustainable oil extraction, starting from 2008 and providing asymptotically constant per capita consumption in the long run. The problem was examined by Andreeva, Bazhanov (2007) and Bazhanov, Tyukhov (2008) for the closed Dasgupta-Heal-Solow-Stiglitz model. In this paper, we show that the open-economy assumptions do not change the qualitative results of comparative analysis, which are not in favor of the Strategy in the long run. |
| Keywords: | weak sustainability; nonrenewable essential resource; Russia's Energy Strategy; open economy |
| JEL: | Q38 Q32 O22 Q01 O21 Q43 |
| Date: | 2009–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:15109&r=env |
| By: | Bhattacharjee, Subhra; Kling, Catherine L.; Herriges, Joseph A. |
| Abstract: | The paper examines the Kuhn Tucker model in the context of estimating recreation demand when the choice set it very large. It examines the temporal stability of parameter estimates using multiple years of data on trips to 127 lakes in Iowa made by households in Iowa. The study finds that for the given dataset, the estimates derived from a Kuhn-Tucker model are largely stable over time. |
| Keywords: | Recreation demand, Kuhn-Tucker, Temporal Stability, Environmental Economics and Policy, C2, Q2, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49408&r=env |
| By: | Wu, Feng; Guan, Zhengfei |
| Abstract: | One of the problems facing the cellulosic ethanol industry is the cellulose material supply. The U.S. forestlands have considerable potential to become one of the main sources of biomass to meet the 2022 renewable fuel target. Focusing on the land exiting the Conservation Reserve Program (CRP), the article finds that few landowners are willing to convert their land to forestland after the CRP contract is expired. Our econometric estimates show the choice decision is responsive to net returns of land use alternatives, especially cropland. Two policy initiatives are suggested to provide direct incentives for land use change. The nested logit estimates are used to simulate landownersâ responses to policy mechanism. The results show that subsidies can substantially increase forestland, although a spillover effect exists. |
| Keywords: | Cellulosic Ethanol, Biomass, Land Use, the CRP, Forestland, Environmental Economics and Policy, |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49451&r=env |
| By: | Templeton, Scott R.; Dumas, Christopher F.; Sessions, William T.; Victoria, Melanie |
| Abstract: | As North Carolinaâs economy has grown, the need to mitigate adverse impacts of land disturbance on aquatic ecosystems has also grown. When land disturbance adversely affects streams, a developer or the stateâs Department of Transportation can satisfy mitigation requirements through payment of fees to the stateâs Ecosystem Enhancement Program (EEP). EEP then manages a stream mitigation project on behalf of the responsible party. EEP has had regulatory authority to require stream mitigation for 10 years. The needs of EEP to reassess its mitigation fee and identify ways to reduce costs of the program have grown over the decade. The first objective of this study was to account for all EEP expenses of design-bid and design-bid-build projects. The second objective was to analyze the determinants of contractual expenses with a cost function. EEP has spent or committed to spend $46.34 million for 45 design-build or designbid-build projects to restore or enhance 191,374 ft. of streams. Expenses per foot have been $242.12. Given its mandate to cover expenses for stream mitigation, EEP must raise mitigation fees, especially those for urban projects, make changes to reduce project expenses, or do both. As the length of a restored or enhanced stream increases, the expenses per foot decrease. The decrease is more pronounced in undeveloped, rural areas. Thus, EEP could produce mitigation for less expense by financing fewer projects with longer reaches or by financing more projects in undeveloped, rural areas. Other states with in-lieu-fee programs for compensatory mitigation might also use these results to reduce contractual expenses. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49552&r=env |
| By: | Brady, Michael; Nickerson, Cynthia |
| Abstract: | Given that approximately half of all U.S. farmland is leased, absentee (non-operator) landowners have a significant role in agriculture. Because decisions about how to use farmland can be affected by ownership status, tenure can have far reaching implications for the production of food and fiber, as well as the extent to which environmentally sensitive farmland is cropped or is put into a conservation use. In order to better understand whether conservation participation decisions, and potential responses to factors such as commodity prices, may vary by tenure status, we exploit a unique dataset that identifies where participants associated with Conservation Reserve Program contracts live relative to the land enrolled. These data provide improved spatial information on tenure status relative to previous sources. This study seeks to improve our understanding of the extent and characteristics of absentee landowners in CRP. These findings can help improve policy by recognizing how the heterogeneity across landowners may lead participants to respond differently to changes in market or policy incentives. |
| Keywords: | Agricultural and Food Policy, Environmental Economics and Policy, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49369&r=env |
| By: | Domanski, Adam |
| Abstract: | Discrete choice models are widely used in studies of recreation demand. They have proven valuable when modeling situations where decision makers face large choice sets and site substitution is important. However, when the choice set faced by the individual becomes very large (on the order of hundreds or thousands of alternatives), computational limitations make estimation with the full choice set intractable. Sampling of alternatives in a conditional logit framework is an effective method to limit computational burdens while still producing consistent estimates. This method is allowed by the existence of the independence of irrelevant alternatives (IIA) assumption. More advanced mixed logit models account for unobserved preference heterogeneity and overcome the behavioral limitations of the IIA assumption, however in doing so, prohibit sampling of alternatives. A method is developed where a latent class (finite mixture) model is estimated via the expectations-maximization algorithm and in doing so, allows consistent sampling of alternatives in a mixed logit model. The method is tested and applied to a recreational demand Wisconsin fishing survey. |
| Keywords: | Sampling of alternatives, discrete choice, mixed logit, conditional logit, recreational demand, Wisconsin, fishing, microeconometrics, Environmental Economics and Policy, Research Methods/ Statistical Methods, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49413&r=env |
| By: | Chen, Min; Lupi, Frank |
| Abstract: | Different kinds of endogeneity problems in Random Utility Models of recreation demand have been studied in previous literature. Some site characteristics, like facilities, could be endogenous in an economic sense due to the interplay of supply and demand. That is, it may be that more popular recreation sites tend to have better site characteristics since managers with limited budgets would be more willing to invest in them. If recreation site improvements are more likely to occur at the more popular sites, then might this economic endogeneity cause problems for econometric models linking site demand to facilities. In this paper, we use Monte Carlo simulations to test whether this economic endogeneity will lead to statistical endogeneity. |
| Keywords: | Random Utility Models, Facilities, Endogeneity, Monte Carlo simulations, Environmental Economics and Policy, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49449&r=env |
| By: | Kim, Yoon Hyung; Sohngen, Brent |
| Abstract: | This paper analyzes the effect of uncertainty in several key parameters on the marginal costs of carbon sequestration in forests. These parameters include the land supply elasticity, which governs the conversion of land from agriculture to forests and vice versa; parameters of the forest biomass yield function; parameters of the forest carbon density function; and parameters of the costs functions for accessing inaccessible land. Monte Carlo techniques are thus used to turn the global forest model with no probability (e.g., Sohngen & Mendelsohn, 2003; 2007) into a proper probability model through Latin hypercube sampling. For this paper, we have restricted our analysis to consideration of probability distributions for only two of the parameters described above. Specifically, these are the parameters of the forest biomass yield function and the land supply elasticity. The importance index and the least square linearization are used to determine the relative contribution of input parameters to the model results. Five hundred model runs in one simulation were performed with covariability among the parameters. The Monte Carlo simulations indicated that most of the uncertainty in forest area in developed countries relates to uncertainty in parameters of the biomass function while in developing countries, where deforestation is more important (e.g., Brazil), the simulation showed the parameters of land supply elasticity to have the most important implications for carbon supply. These results are perhaps not too surprising but they do point to the need to empirically estimate land supply elasticities in regions like Brazil, where such estimates are not currently available in the literature. The results also provide information that can be used to estimate uncertainty intervals for carbon sequestration cost functions. |
| Keywords: | Uncertainty Analysis, Global Land Use Model, Carbon Sequestration, Monte Carlo simulations, Resource /Energy Economics and Policy, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49416&r=env |
| By: | Qiu, Feng; Goodwin, Barry K.; Gervais, Jean-Philippe |
| Abstract: | This study investigates the contribution of different farm programs to farmland rental contract choices under a principal-agent framework. It focuses on the existence and increasing use of hybrid contracts. An optimal contract will balance efficient risk sharing with appropriate incentives to curtail moral hazard, as well as divide the government program benefits between the landlord and the tenant operator. A multinomial logit model reveals that government support programs have significant impacts on a farmland contract choice. The effects differ substantially across programs and regions. Furthermore, the empirical results also show that risk attitudes and the tenantâs effort productivity have significant impacts on the contract choice. |
| Keywords: | rental contract choice, hybrid contract, decoupled program, coupled program, Agricultural and Food Policy, Environmental Economics and Policy, Industrial Organization, Institutional and Behavioral Economics, Land Economics/Use, Risk and Uncertainty, Q12, Q15, Q18, |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49242&r=env |
| By: | Xu, Wenchao; Wu, JunJie |
| Abstract: | Recent years have seen mass casualties and severe property damage caused by wildland fires. With increasing housing development in natural-amenity-rich fire-prone areas, human activities not only exert intense pressures on local ecosystems, but also increase difficulties for wildland fire suppression. To cope with wildland fire threats and protect life and property from wildfire, a new California Natural Hazard Disclosure Law (California Civil Code Sec. 1103) went into effect in 1998. Information disclosure required by Sec. 1103 and its related laws is expected to enhance the efficiency of market allocation of land and developments in hazardous areas, making land price and development pattern better reflect the benefit and risk of living in the natural hazard zones. However, Troy and Romm (2004) suggested that the California Natural Hazard Disclosure Law had no effect for the overall population of fire-zone houses and did not stop overdevelopment in wildfire hazardous areas. In this paper, we expand a classic urban economics model to explore the impact of wildland fire-zone designations on housing development patterns in both a general equilibrium framework and a quantifiable manner. We conduct simulation studies to characterize the changes in urban development patterns and spatial profiles in response to the dynamics of wildland fire regimes. Our model and simulation results reveal the behaviors of residents and local governments and help us understand why Sec. 1103 and its related laws fail to stop over-development in wildfire hazardous areas. |
| Keywords: | wildfire, land use, urban development pattern, income mix, natural amenity, Community/Rural/Urban Development, Land Economics/Use, Resource /Energy Economics and Policy, Risk and Uncertainty, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea09:49428&r=env |