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on Environmental Economics |
| By: | GRIMAUD, André (Toulouse School of Economics (IDEI and LERNA)); MAGNE, Bertrand (International Energy Agency); ROUGE, Luc (Université de Toulouse, Toulouse Business School) |
| JEL: | O32 O41 Q20 Q32 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:11187&r=env |
| By: | Swallow, Brent M.; van Noordwijk, Meine |
| Abstract: | Many opportunities exist for mitigating greenhouse gas (GHG) emissions through better management of trees and soils. There is potential for both direct mitigation through better management of carbon in agricultural landscapes and indirect mitigation through reduced pressure on carbon stored in forests, peatlands, and wetlands. Effectively harnessing these opportunities will take bold action in climate change negotiations. |
| Keywords: | Climate change, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:2020br:16(4)&r=env |
| By: | Nelson, Gerald C. |
| Abstract: | Table of Contents: •Overview by Gerald C. Nelson •Agricultural Science and Technology Needs for Climate Change Adaptation and Mitigation by Rudy Rabbinge •Reducing Methane Emissions from Irrigated Rice by Reiner Wassmann, Yasukazu Hosen, and Kay Sumfleth •Direct and Indirect Mitigation Through Tree and Soil Management by Brent M. Swallow and Meine van Noordwijk •The Potential for Soil Carbon Sequestration by Rattan Lal •Mitigating Greenhouse Gas Emissions from Livestock Systems by M. Herrero and P. K. Thornton •The Role of Nutrient Management in Mitigation by Helen C. Flynn •Monitoring, Reporting, and Verification Methodologies for Agriculture, Forestry, and Other Land Use by Sean Smukler and Cheryl Palm •Synergies Among Mitigation, Adaptation, and Sustainable Development by Pete Smith •The Importance of Property Rights in Climate Change Mitigation by Helen Markelova and Ruth Meinzen-Dick •The Important Role of Extension Systems by Kristin E. Davis •Adaptation to Climate Change: Household Impacts and Institutional Responses by Futoshi Yamauchi and Agnes Quisumbing •The Constructive Role of International Trade by Franz Fischler |
| Keywords: | Climate change, Copenhagen, Science and technology, rice, Soil fertility management, Greenhouse gas, Nutrients, Forestry resources, Land use, Sustainable development, International trade, extension activities, Household behavior, Institutional Impacts, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:2020fo:16&r=env |
| By: | Emilie Alberola (Mission Climat Caisse des Dépôts - Université Panthéon-Sorbonne - Paris I); Julien Chevallier (EconomiX - CNRS : UMR7166 - Université de Paris X - Nanterre); Benoît Chèze (EconomiX - CNRS : UMR7166 - Université de Paris X - Nanterre) |
| Abstract: | This chapter identifies the main price drivers of European Union Allowances (EUAs), valid for compliance under the European Union Emissions Trading Scheme (EU ETS) created in 2005 to regulate CO2 emissions of more than 10,000 high carbon-intensive installations across Member States. Based on key design features of the EU ETS, this chapter develops carbon pricing strategies based on allowances supply and demand, institutional decisions, and the influence of other energy markets and weather conditions. Finally, we discuss the likely effects on economic growth on CO2 emissions and carbon prices as a by product. The discussions developed in this chapter focus on Phase I (2005-2007) of the EU ETS, which may described as the “pilot” period for the future development of this environmental market scheme. |
| Keywords: | EU ETS; Cap-and-Trade Program; Climate Change Policy; CO2 Price; Energy Markets; Weather Influences; Institutional Influences; Energy Policy |
| Date: | 2009–05–30 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00389916_v1&r=env |
| By: | David Parker; Donna Goodman; Yoko Akachi |
| Abstract: | This paper reviews the published evidence of pathways and impacts of global climate change on child health. The review was occasioned by the recognition that most of the work to date on climate change and health lacks clear focus on the children's dimension, while the climate change and children literature tends to be brief or imprecise on the complex health aspects. <br /> Studies were identified by searching the PubMed database for articles published before April 2009. Publications by agencies (e.g., UNICEF, WHO, IPPC) were also included based upon review. A list of references was developed that provide evidence to the linkages between climate change and health outcomes, and on specific health outcomes for children. The analysis explores the hypothesis of disproportionate vulnerability of children’s health to environmental factors, specifically those most closely related to climate change.<br /> Based upon scientific and policy research conducted to date there is found to be substantial evidence of disproportionate vulnerability of children in response to climate change. The diseases likely to be potentiated by climate change are already the primary causes of child morbidity and mortality, including vector-borne diseases, water-borne diseases and air-borne diseases. For this reason further research, assessment and monitoring of child health in respect to climate change is critical. Proposals are made for governments to integrate environmental health indicators into data collection in order to accurately assess the state of child health in relation to other age groups and its sensitivity to climate change.<br /> |
| Keywords: | child health; environmental degradation; environmental effects; malnutrition; |
| JEL: | Q25 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ucf:indipa:indipa09/5&r=env |
| By: | Flynn, Helen C. |
| Abstract: | Nitrous oxide (N2O) emissions from soils are responsible for about 3 percent of greenhouse gas (GHG) emissions, which cause climate change, and contribute approximately one-third of non-CO2 agricultural GHG emissions. N2O is produced by microbial transformations of nitrogen in the soil, under both aerobic and anaerobic conditions. Therefore, emissions are often directly related to nutrients added to the soil in the form of mineral fertilizers and animal manure. These additions can be vital in maintaining soil fertility and crop production; about half of the world's population is dependent on food produced strictly because of mineral fertilizer inputs. However, the additions are also highly inefficient, leading to nitrogen losses via leaching, volatilization, and emissions to the atmosphere. By helping to maximize crop-nitrogen uptake, improved nutrient management has a significant and cost-effective role to play in mitigating GHG emissions from agriculture. Nutrient management can also help reduce methane (CH4) emissions from rice production and increase carbon sequestration in agricultural soils. |
| Keywords: | Climate change, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:2020br:16(7)&r=env |
| By: | Smith, Pete |
| Abstract: | There is very significant cost-effective greenhouse gas (GHG) mitigation potential in agriculture. The mitigation potential at a range of future carbon prices is similar to the potential in the industry, energy, transport, and forestry sectors. Using economic mitigation potentials from the Intergovernmental Panel on Climate Change's Fourth Assessment Report (IPCC AR4), the yearly mitigation potential in agriculture is estimated to be worth between US$32 billion and US$420 billion at carbon prices between US$20 and US$100 (t CO2-eq.-1).1 From both a mitigation perspective and an economic perspective, we cannot afford to miss out on this opportunity. But many mitigation options also offer the promise of facilitating adaptation to climate change and contributing to sustainable development more generally. In this brief, synergies between mitigation, adaptation, and sustainable development are described so that multiple policy goals can be identified when considering how to include agriculture in the climate change negotiations in Copenhagen. |
| Keywords: | Climate change, Copenhagen, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:2020br:16(9)&r=env |
| By: | Markelova, Helen; Meinzen-Dick, Ruth |
| Abstract: | Even with abundant evidence of the urgent need for action on climate change mitigation, there are still those who consider mitigation strategies a burden. In the agricultural sector, climate change mitigation calls for changing some agricultural and resource management practices and technologies and often requires additional investment. However, there is an opportunity in agriculture for net benefit streams from a variety of zero- or low-cost mitigation opportunities ranging from agroforestry practices and restoration of degraded soils to zero-till and other land-management practices. Momentum has been generated to incorporate agriculture into carbon markets, potentially allowing smallholder farmers to access benefit streams from such transactions. However, who will receive the benefits from mitigation funds by, for example, increasing carbon stocks or reducing greenhouse gas (GHG) emissions from land, will depend on the way different types of property rights are defined and dealt with in the upcoming climate change negotiations in Copenhagen. In many areas of the world, land tenure arrangements are complex. For example, in Africa, more than 90 percent of the land is formally claimed as state land, although millions of farming and pastoralist households use various customary and informal arrangements to access the land and other resources. Millions of hectares of forest and pastoral land in Asia and Latin America are similarly listed as state land, although used by communities, especially those of indigenous people or other marginalized ethnic groups. Often the same area may be under co-existing informal tenure systems, most of which are not recognized by formal land laws, but are instead accepted and enforced by the communities. Even where property rights are vested in a formal legal system with strong enforcement procedures, climate change mitigation measures raise new issues of who owns incremental carbon stocks and who should receive compensation for reductions in GHG emissions. |
| Keywords: | Climate change, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:2020br:16(10)&r=env |
| By: | Cemal Atici |
| Keywords: | OECD, Agricultural Policy, Environment, EPI |
| JEL: | Q18 Q56 F53 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:icr:wpicer:26-2008&r=env |
| By: | Herrero, M.; Thornton, P.K. |
| Abstract: | Livestock—poultry, small ruminants (such as goats and sheep), cattle, and pigs—provide many benefits for human well-being. Livestock production systems, especially in developing countries, are changing rapidly in response to population growth, urbanization, and growing demand for meat and milk. The need for action by all sectors to mitigate climate change adds additional complexity to the already considerable development challenges these systems face. Some livestock production systems use large quantities of natural resources and also produce significant amounts of greenhouse gas emissions (GHGs). Since the demand for meat and milk is increasing, the question is whether cost-effective mitigation options exist to meet them within equitably negotiated and sustainable GHG emission targets. In fact, emissions from livestock systems can be reduced significantly through technologies, policies, and the provision of adequate incentives for their implementation. The objective of this policy brief is to highlight options to mitigate GHGs from livestock industries and to suggest key negotiating outcomes for including livestock in the Copenhagen meetings. |
| Keywords: | Climate change, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:2020br:16(6)&r=env |
| By: | Smukler, Sean; Palm, Cheryl |
| Abstract: | Facilitating carbon sequestration in terrestrial ecosystems could provide a significant amount of atmospheric carbon dioxide (CO2) abatement, which is necessary to limit global temperature increases to only 2 degrees Celsius in the next century until more permanent mitigation strategies are instituted. With relatively small investments, greenhouse gas (GHG) emissions could be offset dramatically by management practices such as planting trees, reducing deforestation, midseason draining of irrigated rice, improving nitrogen fertilization efficiency, and increasing organic matter inputs to agricultural soils. Together these types of practices could add up to more than 25 percent of the combined near-term abatement strategies (including energy efficiency and low-carbon energy supply) required to stabilize emissions. While most terrestrial management potential is based on reduced deforestation and degradation (REDD), no one program can be effective in isolation. It is crucial to recognize that there are multiple competing uses for land and that maximizing GHG mitigation is not likely to be achieved with carbon-based financial incentives alone, particularly if incentives do not reach those most responsible for land management. Nearly 90 percent of the potential for terrestrial carbon capture can be found in the developing world, where land managers are largely poor farmers on small plots of land. It is imperative that these farmers be involved in carbon mitigation strategies, but dealing with numerous smallholders is an enormous challenge because planning, monitoring, reporting, and verifying mitigation creates transaction costs for carbon contracts that can be prohibitively expensive. It is therefore critical for the international community to immediately invest in the research and development of innovative methodologies to reduce transaction costs by increasing the effectiveness of monitoring, reporting, and verification for Agriculture, Forestry and Other Land Use (AFOLU) projects, particularly for smallholder agriculture in tropical regions. |
| Keywords: | Climate change, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:2020br:16(8)&r=env |
| By: | Fischler, Franz |
| Abstract: | An open and flexible global trading environment plays a constructive role in both climate change mitigation and adaptation. A new international climate change regime and global trade rules should ideally be mutually reinforceable. |
| Keywords: | Climate change, Copenhagen, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:2020br:16(13)&r=env |
| By: | Wassmann, Reiner; Hosen, Yasukazu; Sumfleth, Kay |
| Abstract: | Rice is grown on more than 140 million hectares worldwide and is the most heavily consumed staple food on earth. Ninety percent of the world's rice is produced and consumed in Asia, and 90 percent of rice land is—at least temporarily—flooded. The unique semiaquatic nature of the rice plant allows it to grow productively in places no other crop could exist, but it is also the reason for its emissions of the major greenhouse gas (GHG), methane. Methane emissions from rice fields are determined mainly by water regime and organic inputs, but they are also influenced by soil type, weather, tillage management, residues, fertilizers, and rice cultivar. Flooding of the soil is a prerequisite for sustained emissions of methane. Recent assessments of methane emissions from irrigated rice cultivation estimate global emissions for the year 2000 at a level corresponding to 625 million metric tons (mt) of carbon dioxide equivalent (CO2e). Midseason drainage (a common irrigation practice adopted in major rice growing regions of China and Japan) and intermittent irrigation (common in northwest India) greatly reduce methane emissions. Similarly, rice environments with an insecure supply of water, namely rainfed rice, have a lower emission potential than irrigated rice. Organic inputs stimulate methane emissions as long as fields remain flooded. Therefore, organic inputs should be applied to aerobic soil in an effort to reduce methane emission. In addition to management factors, methane emissions are also affected by soil parameters and climate. |
| Keywords: | Climate change, rice, Agricultural research, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:2020br:16(3)&r=env |
| By: | Cemal Atici |
| Abstract: | In this paper, a theoretical model was constructed to endogenously determine environmental weights in the agricultural sector. The conventional Political Preference Function was extended to include environmental weights. The model was applied to the wheat sector in the EU for the years 1990 and 2006. The results imply that designing protection levels that have small disparities between domestic and world prices and avoiding excess production cause a positive environmental surplus which leads to higher environmental weights. |
| Keywords: | Environmental Weights, Political Preference Functions, EU, Agriculture |
| JEL: | Q18 Q51 H23 |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:icr:wpicer:25-2008&r=env |
| By: | Davis, Kristin E. |
| Abstract: | Climate change will certainly affect agriculture, but agriculture can also be harnessed to mitigate greenhouse gas (GHG) emissions. A key element in supporting agriculture's role is information. The costs of adapting agriculture to climate change can be large and the methods not always well known. Mitigation efforts will require information, education, and technology transfer. Agricultural extension and advisory services, both public and private, thus have a major role to play in providing farmers with information, technologies, and education on how to cope with climate change and ways to contribute to GHG mitigation. This support is especially important for resource-scarce smallholders, who contribute little to climate change and yet will be among the most affected. Support from extension for farmers in dealing with climate change should focus on two areas: adaptation and mitigation, explained below. But first, it is important to define extension. |
| Keywords: | Climate change, Copenhagen, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:2020br:16(11)&r=env |
| By: | Regina Betz; Stefan Seifert; Peter Cramton (Economics Department, University of Maryland); Suzi Kerr |
| Abstract: | The allocation of permits is an important design aspect of an emissions trading scheme. Traditionally, governments have favoured a free allocation of greenhouse gas permits based on individual historical emissions (“grandfathering”) or industry benchmark data. As, particularly in the EU, the free allocation of permits has proven complex and inefficient and the distributional implications are politically difficult to justify, auctioning emissions permits has become more popular. The EU is now moving to auctioning more than 50% of all permits in 2013 and in the U.S. the Regional Greenhouse Gas Initiative (RGGI) has started with auctioning 100%. Another case in point is the Austra-lian proposal for a Carbon Pollution Reduction Schemes (CPRS) which provides for auctioning a significant share of total permits. This paper discusses some important theoretical and practical aspects of designing an auction for allocating emissions per-mits in Australia. The specific design details proposed here have been adopted by the Australian Government in their CRPS White Paper. Particularly interesting is the pro-posed structure of auctioning multiple emissions units of different vintages simultane-ously. |
| Keywords: | Auctions, carbon auctions, greenhouse gas auctions |
| JEL: | D44 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pcc:pccumd:09aghg&r=env |
| By: | Lal, Rattan |
| Abstract: | Of the five principal global carbon pools, the ocean pool is the largest at 38.4 trillion metric tons (mt) in the surface layer, followed by the fossil fuels (4.13 trillion mt), soils (2.5 trillion mt to a depth of one meter), biotic (620 billion mt), and atmospheric pools (800 billion mt). If the fluxes among terrestrial pools are combined, annual total carbon flows across the pools average around 60 billion mt, with managed ecosystems (croplands, grazing lands, and plantations) accounting for 57 percent of that total. Thus, land managers have custody of more annual carbon flows than any other group. |
| Keywords: | Climate change, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:2020br:16(5)&r=env |
| By: | Brita Bye and Karl Jacobsen (Statistics Norway) |
| Abstract: | We analyse welfare effects of supporting general versus emission saving technological development when carbon emissions are regulated by a carbon tax. We use a computable general equilibrium model with induced technological change (ITC). ITC is driven by two separate, economically motivated research and development (R&D) activities, one general and one emission saving specified as carbon capture and storage. We study public revenue neutral policy alternatives targeted towards general R&D and emission saving R&D. Support to general R&D is the welfare superior, independent of the level of international carbon price. However, the welfare gap between the two R&D policy alternatives is reduced if the carbon price increases. |
| Keywords: | Applied general equilibrium; Endogenous growth; Research and Development; Directed technological change; Carbon policy |
| JEL: | C68 E62 H32 O38 O41 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:584&r=env |
| By: | Johansson, Daniel J.A. (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | A range of alternatives to the Global Warming Potential (GWP) have been suggested in the scientific literature. One of these alternative metrics that has received significant attention is the cost-effective relative valuation of greenhouse gases. However, this metric is based on complex optimising integrated assessment models that are far from transparent to the general scientist or policymaker. Here we present a new analytic metric, the Cost-Effective Temperature Potential (CETP) which is based on an approximation of the cost-effective relative valuation. We show that this metric shares many similarities with the purely physical metric, Global Temperature change Potential (GTP), but that the CETP performs much better as an approximation to the cost-effective relative valuation.<p> |
| Keywords: | GWP; GTP; cost-effectiveness; stabilization; climate change |
| JEL: | Q54 Q58 |
| Date: | 2009–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0363&r=env |
| By: | Catalina M. Torres Figuerola (Centre de Recerca Econòmica (UIB · Sa Nostra)); Antoni Riera Font (Centre de Recerca Econòmica (UIB · Sa Nostra)) |
| Abstract: | After doing a CE literature review to examine the dominant trends around the definition of environmental attributes in terms of their identification as external benefits or costs, their description through qualitative or quantitative attribute level labels, their number of levels and their assumed relationship with utility (i.e. linear vs non-linear), three main conclusions have been drawn. First, definition of environmental attributes as external costs has been uncommon. Second, only one single parameter has been estimated for most of them, in which cases the number of quantitative and qualitative attributes has been similar. Third, nonlinear effects have been mainly depicted through use of qualitative attributes. In this context, this paper examines the policy relevance of defining the environmental attributes as external costs when the assessment of welfare losses induced by potential impacts from polluting activities is the issue. It shows how a cost-based attribute definition allows identifying the environmental attributes through impact pathway analyses not only enabling links between welfare estimates and actual impact magnitudes but also promoting the description of attribute levels in quantitative terms. |
| Keywords: | Choice experiments, environmental attributes, utility specification, external costs, impact pathway, eutrophication |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pdm:wpaper:2009/1&r=env |
| By: | Yamauchi, Futoshi; Quisumbing, Agnes |
| Abstract: | Climate change will bring with it increased frequency of two types of natural disasters that affect agriculture and rural households: droughts and floods. It will also alter rainfall patterns, thereby changing farming practices, household behavior, and welfare. Households all over the world use a variety of formal and informal mechanisms to manage risk and cope with unexpected events that negatively affect incomes, assets, or well-being. These mechanisms include both preparation for and responses to natural disasters. In low-income settings, where formal insurance and government supports are limited, households tend to rely on informal coping strategies, such as transfers from friends and neighbors, remittances, or investments in a diverse range of assets, from livestock to human capital. When disaster-related shock affects only a few households at a time, informal mechanisms can be quite effective in dealing with the situation. However, if the shock affects large areas simultaneously, small-scale coping mechanisms become ineffective. Research on several climate-related national disasters—the 1998 floods in Bangladesh, the 2001 drought in Ethiopia, and the 2001–02 failed maize harvest in Malawi—suggests that the upcoming negotiations in Copenhagen need to explicitly define, support, and expand policies that protect vulnerable populations from the expected increase in climate-change related weather events. |
| Keywords: | Climate change, Copenhagen, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:2020br:16(12)&r=env |
| By: | Rabbinge, Rudy |
| Abstract: | Higher temperatures, more variable precipitation, and changes in the frequency and severity of extreme climate events will have significant consequences for food production and food security. However, the frequency of heat stress, drought, and flooding are also expected to increase, even though they cannot be modeled satisfactorily with current climate models. They will undoubtedly have adverse effects on crops and agricultural productivity over and above the effects due to changes in mean variables alone. The impacts of climate change on agriculture are likely to be regionally distinct and highly heterogeneous spatially, requiring sophisticated understanding of causes and effects and careful design and dissemination of appropriate responses. These changes will challenge the livelihoods of farmers, fishers, and forest-dependent people who are already vulnerable and food insecure. Adapting to these changes, while continuing to feed a world of 9 billion people, requires the formation of a global partnership in science, technology development, and dissemination of results to millions of smallholder farmers, bringing together research workers and resource managers from many fields. To take an international approach to climate change, new partnerships must be forged, linking the agricultural research and climate science communities. |
| Keywords: | Climate change, Science and technology, Agricultural research, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:2020br:16(2)&r=env |
| By: | Mandell, Svante (Swedish National Road & Transport Research Institute (VTI)); Holt, Chrles (Department of Economics, University of Virginia); Myers, Erica (Resources for the Future); Burtraw, Dallas (Resources for the Future); Wråke, Markus (IVL Swedish Environmental Institute) |
| Abstract: | This paper describes an individual choice experiment that can be used to teach students how to correctly account for opportunity costs in production decisions. Students play the role of producers who require a fuel input and an emissions permit for production. Given fixed market prices, they make production quantity decisions on the basis of their costs. Permits have a constant price throughout the experiment. In one treatment, students have to purchase both a fuel input and an emissions permit for each production unit. In a second treatment, they receive permits for free, and any unused permits are sold on their behalf at the permit price. If students correctly incorporate opportunity costs, they will have the same supply function in both treatments. This experiment motivates classroom discussion of opportunity costs and emissions permit allocation under cap-and-trade schemes. The European Union Emissions Trading Scheme provides a relevant example for classroom discussion, as industry earned significant windfall profits from free allocation of emissions allowances in the early phases of the program. |
| Keywords: | opportunity cost; emissions permits; allowance allocation; classroom experiments |
| JEL: | A22 C90 Q52 |
| Date: | 2009–05–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:vtiwps:2009_006&r=env |
| By: | Fernando Brito Soares |
| Abstract: | Panel unit root tests are used to identify convergence of Green House Gas (GHG) emissions among the agr icultural sectors of the European Union 27 member states. Although a clear cut conclusion on the existence of convergence could not be established, it looks like there is some evidence of convergence for EU 27 during the entire 1973-2007 period. This same evidence exists for EU15 but only for the shorter 1996-2006 time period. If emissions are to converge, then it will be easier to make EU members to accept policy measures aimed at reducing the negative impact on environment. |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:icr:wpicer:07-2009&r=env |
| By: | Oded Hochman (Department of Economics, Ben Gurion University of the Negev); Gordon Rausser (University of California, Berkeley); Richard Arnott (Department of Economics, University of California Riverside) |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ucr:wpaper:200805&r=env |
| By: | Brad Stennes; Kurt Niquidet; G. Cornelis van Kooten |
| Abstract: | Energy has been produced from woody biomass in British Columbia for many decades, but it was used primarily within the pulp and paper sector, using residual streams from timber processing, to create heat and electricity for on-site use. More recently, there has been limited stand-alone electricity production and increasing capacity to produce wood pellets, with both using ‘waste’ from the sawmill sector. Hence, most of the low-cost feedstock sources associated with traditional timber processing is now fully employed. While previous studies model bioenergy production in isolation, we employ a transportation model of the BC forest sector with 24 regions to demonstrate that it is necessary to consider the interaction between utilization of woody feedstock for pellet production and electricity generation and its traditional uses (e.g., production of pulp, oriented strand board, etc). We find that, despite the availability of large areas of mountain pine beetle killed timber, this wood does not enter the energy mix. Further expansion of biofeedstock for energy is met by a combination of woody debris collected at harvesting sites and/or bidding away of fibre from existing users. |
| Keywords: | bioenergy production from wood fibre; mountain pine beetle; competition for fibre |
| JEL: | Q23 Q42 C61 Q54 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:rep:wpaper:2009-02&r=env |
| By: | Marius-Cristian Frunza (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Sagacarbon - Sagacarbon SA); Dominique Guegan (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | The aim of this work is to bring an econometric approach upon the CO2 market. We identify the specificities of this market, and regarding the carbon as a commodity. We investigate the econometric particularities of CO2 prices behavior and their result of the calibration. We apprehend and explain the reasons of the non-Gaussian behavior of this market focusing mainly upon jump diffusion and generalized hyperbolic distributions. We test these results for the risk modeling of a structured product specific to the carbon market, the swap between two carbon instruments : The European Union Allowances and the Certiified Emission Reductions. We estimate the counterparty risk for this kind of transaction and evaluate the impact of different models upon the risk measure and the allocated capital. |
| Keywords: | Carbon, Normal Inverse Gaussian, CER, EUA, swap. |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00390676_v1&r=env |
| By: | Julien CHEVALLIER; Benoît SEVI |
| Abstract: | The recent implementation of the EU Emissions Trading Scheme (EU ETS) in January 2005 created new financial risks for emitting firms. To deal with these risks, options are traded since October 2006. Because the EU ETS is a new market, the relevant underlying model for option pricing is still a controversial issue. This article improves our understanding of this issue by characterizing the conditional and unconditional distributions of the realized volatility for the 2008 futures contract in the European Climate Exchange (ECX), which is valid during Phase II (2008-2012) of the EU ETS. The realized volatility measures from naive, kernel-based and subsampling estimators are used to obtain inferences about the distributional and dynamic properties of the ECX emissions futures volatility. The distribution of the daily realized volatility in logarithmic form is shown to be close to normal. The mixture-of-distributions hypothesis is strongly rejected, as the returns standardized using daily measures of volatility clearly departs from normality. A simplified HAR-RV model (Corsi, 2009) with only a weekly component, which reproduces long memory properties of the series, is then used to model the volatility dynamics. Finally, the predictive accuracy of the HAR-RV model is tested against GARCH specifications using one-step-ahead forecasts, which confirms the HAR-RV superior ability. Our conclusions indicate that (i) the standard Brownian motion is not an adequate tool for option pricing in the EU ETS, and (ii) a jump component should be included in the stochastic process to price options, thus providing more efficient tools for risk-management activities. |
| Keywords: | CO2 price, realized volatility, HAR-RV, GARCH, futures trading, emissions markets, EU ETS, intraday data, forecasting |
| JEL: | C5 G1 Q4 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:mop:credwp:09.05.84&r=env |
| By: | Mourad Afif; Sandrine Spaeter |
| Abstract: | Dans cet article nous construisons un système de contrôle des émissions polluantes qui combine permis d’émission et taxes sur la base du modèle de Roberts et Spence (1976). Nous relâchons l’hypothèse de linéarité de la fonction de transferts monétaires entre le régulateur et les firmes. Le régulateur n’observe pas les technologies d’abattement des firmes. Chaque firme choisit son montant initial de permis et son niveau effectif d’émissions. Elles peuvent ensuite se tourner vers le régulateur pour solder leur demande nette excédentaire (positive ou négative). Nous montrons que le système combiné permis/taxe généralisé permet de répliquer parfaitement la fonction de dommage social estimée. Si l’estimation des coûts faite par le régulateur est parfaite, l’optimum social est atteint. Ce système apporte plus de souplesse au contrôle de la pollution et permet de réduire les coûts d’acquisition de l’information par le régulateur grâce à une autodifférenciation des firmes. Cette intervention du régulateur en dernier ressort constitue une soupape de sécurité contre une éventuelle demande (offre) élevée de permis. Il améliore la liquidité du marché des permis d’émission. |
| Keywords: | Taxes; Efficience; permis d’émission. |
| JEL: | H23 D82 Q52 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2009-20&r=env |
| By: | Marielle Brunette; Stéphane Couture (Laboratoire d'Economie Forestière, INRA - AgroParisTech); Eric Langlais (Laboratoire d'Economie Forestière, INRA - AgroParisTech) |
| Abstract: | The objective of the paper is to analyze the risk management behavior of a non-industrial private forest owner under uncertainty about timber production. Two types of hedging strategies with harvesting decisions are studied: a financial practice versus a physical one. We develop a two-period model of hedging and harvesting decisions when the forest owner values the amenity services of forest. We study the properties of optimal current and future harvesting and hedging decisions. We show that, except when both hedging instruments are perfect substitutes, the forest owner chooses a single tool, her/his choice depending on the rate of return of the hedging instrument. We also prove that the greater the marginal utility of amenity services, the smaller the harvesting amount. We provide a comparative statics analysis on current and future harvesting and on the hedging strategies. We are interested in the impact of an increase in initial stocks (wealth and timber), timber prices (periods 1 and 2), opportunity costs of the hedging instruments (rate of return for savings and cost of the regeneration process for physical practice) and expected risk. We show, for example, that an increase in expected risk has a negative impact on period 1 harvesting and the use of hedging tools for both strategies, while the impact on period 2 harvesting is positive for savings and null for physical practice. |
| Keywords: | Natura 2000, amenities, risk, forest management, hedging strategies, harvesting. |
| JEL: | D81 Q23 Q26 Q54 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:lef:wpaper:2009-01&r=env |