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on Environmental Economics |
| By: | Kumarappan, Subbu; Joshi, Satish |
| Abstract: | Presented at: Transition to a Bio Economy, Environmental and Rural Development Impacts Conference, October 15-16, 2008, St. Louis, Missouri |
| Keywords: | biofuels, ethanol, biodiesel, carbon trading, GHG emissions trading, methodology, CCX, CDM, maize, lignocellulosics, well to wheel, life cycle analysis, Agribusiness, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q42, D23, D4, |
| Date: | 2009–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:miscpa:51576&r=env |
| By: | Alfredo M. Pereira (Department of Economics, College of William and Mary); Rui Manuel Marvão Pereira (Thomas Jefferson Program in Public Policy, College of William and Mary) |
| Abstract: | The objective of this paper is to estimate the impact of carbon dioxide emissions from fossil fuel combustion activities on economic activity in Portugal in order to evaluate the economic costs of policies designed to reduce carbon dioxide emissions. We find that energy consumption has a significant impact on macroeconomic activity. In fact, a one ton of oil equivalent permanent reduction in aggregate energy consumption reduces output by €6,340 over the long term, an aggregate impact which hides a wide diversity of effects for different fuel types. More importantly, and since carbon dioxide emissions are linearly related to the amounts of fuel consumed, our results allow us to estimate the costs of reductions in carbon dioxide emissions from different energy sources. We estimate that marginal abatement costs for carbon dioxide are €45.62 per ton of carbon dioxide per year for coal, €66.52 for oil, €91.07 for gas, €191.13 for electricity and €254.23 for biomass. An important policy implication is that, once the overall economic costs of reducing carbon dioxide emissions are considered, fuel switching is a no-regrets environmental policy capable of reducing carbon dioxide emissions without jeopardizing economic activity and indeed with the potential for generating favorable economic outcomes. |
| Keywords: | carbon dioxide emissions, energy and the economy, environmental policy, fuel-switching, vector autoregressive model |
| JEL: | C32 O13 Q43 |
| Date: | 2009–08–03 |
| URL: | http://d.repec.org/n?u=RePEc:cwm:wpaper:87&r=env |
| By: | William D. Nordhaus (Cowles Foundation, Yale University) |
| Abstract: | The present study extends earlier research by presenting the results of a new and updated version of the RICE model (Regional Integrated model of Climate and the Economy), labeled the RICE-2009 model. The model is a regionalized, dynamic model that incorporates an end-to-end treatment of economic growth, emissions, climate change, damages, and emissions controls. The model allows projections of what will occur with no policies, what an efficient set of policies would be, and how nations can undertake policies to limit climate change (in the current runs to 2 degrees C). These new estimates indicate that coordinated international policies have a substantial economic benefit. The optimal carbon tax is estimated to be $54 per ton carbon ($16 per ton CO_2) for 2010 in 2005 prices. The economic optimum would limit global temperature rise to an average of 2.1 degrees C over 1900 levels for the 22nd and 23rd century. |
| Keywords: | Climate change economics, Environmental policy, Economic growth |
| JEL: | Q54 Q5 O4 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1716&r=env |
| By: | Fredrik Carlsson (Department of Economics, University of Gothenburg); Mitesh Kataria (Max Planck Institute of Economics, Strategic Interaction Group, Jena); Elina Lampi (Department of Economics, University of Gothenburg) |
| Abstract: | We investigate whether Swedish Environmental Protection Agency (EPA) administrator recommendations regarding improvements in environmental quality differ from citizen preferences. The scope and significance of the possible difference are assessed by conducting identical choice experiments on a random sample of Swedish citizens and a random sample of administrators working at the Swedish EPA. The experiment concerns two environmental quality objectives: a Balanced Marine Environment and Clean Air. The EPA administrators were asked to choose the alternatives they would recommend as a policy, while the citizens were asked to act as private persons. We find that the rankings of attributes differ between the two groups and that the willingness to pay (WTP) obtained from the choices made by the administrators is higher for five out of the seven attributes, and in some cases the difference between the WTPs is not only significant but also substantial. We also asked the administrators to motivate their choices in the experiment, and the main motive was ecological sustainability. |
| Keywords: | Choice experiment, environmental policy, administrators, citizens, environmental objectives. |
| JEL: | D61 Q51 Q58 |
| Date: | 2009–08–06 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2009-057&r=env |
| By: | Bryan K. Mignone; Matthew D. Hurteau; Yihsu Chen; Brent Sohngen |
| Abstract: | Background - One controversial issue in the larger cap-and-trade debate is the proper use and certification of carbon offsets related to changes in land management. Advocates of an expanded offset supply claim that inclusion of such activities would expand the scope of the program and lower overall compliance costs, while opponents claim that it would weaken the environmental integrity of the program by crediting activities that yield either nonexistent or merely temporary carbon sequestration benefits. Our study starts from the premise that offsets are neither perfect mitigation instruments nor useless "hot air." Results - We show that offsets provide a useful cost containment function, even when there is some threat of reversal, by injecting additional "when-flexibility" into the system. This allows market participants to shift their reduction requirements to periods of lower cost, thereby facilitating attainment of the least-cost time path without jeopardizing the cumulative environmental integrity of the system. By accounting for market conditions in conjunction with reversal risk, we develop a simple offset valuation methodology, taking into account the two most important factors that typically lead offsets to be overvalued or undervalued. Conclusions - The result of this paper is a quantitative "model rule" that could be included in future legislation or used as a basis for active management by a future "carbon fed" or other regulatory authority with jurisdiction over the US carbon market to actively manage allowance prices. |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:acb:camaaa:2009-19&r=env |
| By: | Keiko Aoki |
| Abstract: | This study investigates how consumers value carbon dioxide (CO2) emissions of food by conducting a choice experiment before an ecolabel is attached on some foods in Japan. Participants are asked to buy some Satsuma mandarin oranges based on price and CO2 emissions and take them home. The following results are obtained: (i) the willingness-to-pay (WTP) estimate for the reduction of 1 g CO2 emissions per 100 g of Satsuma mandarin oranges is 0.417 JPY; (ii) people below 30 years, who are significantly conscious about the environment, do not choose Satsuma mandarin oranges based on CO2 emissions and have less value for this; and (iii) people above 30 years, who are environmentally friendly, choose the oranges based on price and have more value for this, although this implies that they do not relate food to CO2 emissions. Thus, since whether or not people select food based on CO2 emissions differs across ages, each age group has a different approach to reducing the CO2 emissions of food. |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:dpr:wpaper:0749&r=env |
| By: | Hertel, Thomas; Golub, Alla; Jones, Andrew; O'Hare, Michael; Plevin, Richard; Kammen, Daniel |
| Abstract: | With the recent adoption by the California Air Resources Board of California’s Low Carbon Fuel Standard, and USEPA’s Energy Independence and Security Act, greenhouse gas releases from indirect land use change triggered by crop-based biofuels have taken center stage in the debate over the role of biofuels in climate policy and energy security. This paper presents an analysis of these releases for US maize ethanol. Our analysis highlights the key role of market-mediated responses to biofuels mandates. Factoring these into our analysis reduces cropland conversion by 72%. As a consequence the associated GHG release estimated in our framework is just 800 g CO2 MJ -1y (27 g MJ-1 for 30 years of ethanol production). This figure is a quarter of the one previously published value. However, it is still large enough to eliminate the global warming mitigation benefits of most corn ethanol. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:gta:workpp:3160&r=env |
| By: | Nitsch, Heike; Manale, Andrew; Osterburg, Bernhard |
| Abstract: | Presented to USDA Economists Group, Washington, DC |
| Keywords: | Wildlife, biodiversity, agriculture, cross compliance, Agricultural and Food Policy, Environmental Economics and Policy, Land Economics/Use, Q, |
| Date: | 2009–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:ags:usdags:51929&r=env |
| By: | Arik Levinson (Department of Economics, Georgetown University) |
| Abstract: | Two central topics in recent rounds of international trade negotiations have been environmental concerns, and services trade. While each is undoubtedly important, they are unrelated. In this paper I show that the services-environment link is small, for two reasons. First, services account for only a small fraction of overall pollution. For none of five major air pollutants does the service sector account for even four percent of total emissions; for three of the five services account for less than one percent. Second, those service industries that do pollute are the least likely to be traded internationally. Those services for which the U.S. collects and publishes international trade data - presumably those services that are traded internationally - are less polluting than services for which trade data do not exist - presumably because the services are not traded. Even if we limit attention to the services that are traded across borders, the service industries most intensively traded are the ones that pollute the least. The bottom line is simple. International services trade bears little relation to the environment, because services in general contribute relatively little to overall pollution, and those industries that are traded internationally are among the least polluting. Classification-JEL Codes: F18, D57, Q55, Q56 |
| Keywords: | pollution havens, input-output, pollution intensity, TEAM |
| Date: | 2009–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:geo:guwopa:gueconwpa~09-09-04&r=env |
| By: | Rinaldo Brau; C. Carraro |
| Abstract: | This paper analyses the conditions under which a group of firms is incentivised to sign a voluntary agreement (VA) to control polluting emissions even in the presence of free-riding by other firms in the industry. We consider a policy framework in which firms in a given industry decide whether or not to sign a VA proposed by an environmental regulator. We identify the features that a VA should possess in order to incentivize firms to participate in the VA and to enhance its economic and environmental effectiveness. Under very general conditions on the shape of the demand schedule, we obtain the following results. First, a VA does not belong to the equilibrium of the coalition game when benefits from voluntary emission abatement are a pure public good. Second, in the presence of partial spillovers – i.e. when signatories obtain more benefits from the VA than non-signatories – a VA belongs to the equilibrium only if a minimum participation rule is guaranteed. Third, a VA with a minimum participation rule and a minimum mandatory emission abatement may improve welfare (and even industry profits) compared to a VA in which firms are free to set their own profit maximising abatement level. |
| Keywords: | Voluntary agreement; voluntary approaches; new policy instruments; environmental regulation; coalition structures; emission standards |
| JEL: | D21 K32 Q28 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:200907&r=env |
| By: | Eliza M. Lis (WHU - Otto Beisheim School of Management, Chair of Macroeconomics, Burgplatz 2, D-56179 Vallendar, Germany.); Christiane Nickel (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.) |
| Abstract: | This paper explores implications of climate change for fiscal policy by assessing the impact of large scale extreme weather events on changes in public budgets. We apply alternative measures for large scale extreme weather events and conclude that the budgetary impact of such events ranges between 0.23% and 1.1% of GDP depending on the country group. Developing countries face a much larger effect on changes in budget balances following an extreme weather event than do advanced economies. Based on these findings, we discuss implications for fiscal policy and publicly-provided disaster insurance. Our policy conclusions point to the enhanced need to reach and maintain sound fiscal positions given that climate change is expected to cause an increase in the frequency and severity of natural disasters. JEL Classification: Q54, Q58, F59, H87. |
| Keywords: | Global warming, climate change, fiscal sustainability, disasters. |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20091055&r=env |
| By: | Lopez, Ramon E. |
| Abstract: | This paper examines how certain new structural factors have contributed to the latest great financial crisis and world recession of 2008-09. We focus on three of these structural factors: (i) the incorporation of highly populated countries into the growth process; (ii) The increasing scarcity of the environment and certain natural resources; (iii) the unprecedented concentration of wealth and income in the advanced economies over the last three decades. These structural changes have significantly tightened the links between world growth and commodity prices, have made the world commodity supply to become increasingly inelastic, and have made growth to become more dependent on lax monetary policies, respectively. All this may make the recovery from the current crisis much more difficult, implying a deeper and more protracted crisis than most previous crises. With this framework in mind we focus on the likely affect of the financial crisis upon the natural resources in the developing world, by drawing implications from the 1995 Mexico-originated Peso crisis and the 1998-99 Asia crises. We find that the impact of the current crisis is likely to degrade further the environmental resources and the tightening of environmental policies in response to such degradation may make the commodity supply curve of commodities even steeper in the future. |
| Keywords: | Demand and Price Analysis, Environmental Economics and Policy, International Development, Resource /Energy Economics and Policy, |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:umdrwp:51987&r=env |
| By: | Arik Levinson (Department of Economics, Georgetown University) |
| Abstract: | This paper describes and implements a method for estimating the average marginal value of a time-varying local public good: air quality. It uses the General Social Survey (GSS), which asks thousands of people in various U.S. locations how happy they are, along with other demographic and attitude questions. These data are matched with the Environmental Protection Agency's Air Quality System (AQS) to find the level of pollution in those locations on the dates the survey questions were asked. People with higher incomes in any given year and location report higher levels of happiness, and people interviewed on days when air pollution was worse than the local seasonal average report lower levels of happiness. Combining these two concepts, I derive the average marginal rate of substitution between income and air quality – a compensating variation for air pollution. Classification-JEL Codes: Q51, Q53, H41 |
| Keywords: | willingness to pay, stated well-being, pollution, compensating variation |
| Date: | 2009–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:geo:guwopa:gueconwpa~09-09-03&r=env |
| By: | David A. Hennessy (Center for Agricultural and Rural Development (CARD)) |
| Abstract: | The U.S. federal government implements environmental, biofuels and crop insurance programs that influence land use. They are not well integrated in that cost savings from crop insurance subsidies are not acknowledged when screening land for retirement or when calculating the cost of land retirement programs. We identify and evaluate an optimal benefit index for enrollment in a land retirement program that includes a sub-index to rank land according to insurance subsidy savings. All else equal, land ranked higher in the Lorenz stochastic order should be retired first. |
| Keywords: | agro-environmental policy, budget, Conservation Reserve Program, crop failure, Environmental Benefit Index, Lorenz order. |
| JEL: | Q18 Q28 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:09-wp495&r=env |
| By: | Arthur J. Caplan (Department of Applied Economics, Utah State University) |
| Abstract: | This paper makes two contributions to the carbon-sequestration literature. The first is the development of a theoretical framework in which sequestration and permit trading are analyzed jointly in the context of a competitive fringe model. The second is a numerical analysis demonstrating the role market structure, or market power, might play in the determination of an equilibrium sequestration allocation and carbon price. We present three comparative-static cases, the first two of which assess the impact of relative changes in the cost structures of the dominant firm and competitive fringe. For these two cases we find that the equilibrium allocation of sequestration aligns with a higher carbon price when the competitive fringe experiences an increase in its marginal cost parameter. Conversely, the carbon price falls when the dominant firm experiences a decrease in its marginal cost parameter. In a third case we evaluate the impact of stricter regulation on the abatement decisions of the polluting firm. Our results demonstrate the importance of incorporating into empirical supply-side models demand-side information that is reflective of an underlying market structure. |
| Keywords: | carbon sequestration; competitive fringe; abatement credits |
| JEL: | D43 L13 Q54 |
| Date: | 2009–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:usu:wpaper:2009-10&r=env |
| By: | Funk, Matt |
| Abstract: | The theory presented here was developed to address the problem of the long-term survival of the human species. This paper tables axioms which fruitfully model The Problem of Sustainable Economic Development, a theoretical framework which, reductio ad absurdum, falsifies many widely-held economic, evolutionary, and ecological principles, including the central thesis of ‘ecological economics’. This brief communiqué lays the foundation for an evolutionary stable, sustainable economic development strategy, and, thus, fosters national security, international cooperation, global threat mitigation, and, ultimately, survival of the human species. |
| Keywords: | Human survival; sustainable economic development; noncooperative games; problem of induction; natural selection; astrophysical and planetary phænomena; global threat mitigation; evolutionary stable strategy |
| JEL: | Q50 C20 Z10 |
| Date: | 2009–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:16534&r=env |
| By: | Gurung, Rajendra; Pa, Chung; Deng, Hugh |
| Abstract: | South Korea is a highly urbanized and industrialized country. Increased urbanization and greater specialization have led to rising incomes, and changes in food production and consumption patterns. Changes in consumption and increased production specialization have also resulted in changes in trading patterns, with South Korea emerging as a leading importer of agri-food products. South Korea places great importance on self-sufficiency in food staples, and achieving income parity between rural and urban households. To attain these goals, considerable support has been provided to its agriculture sector. South Korea's policy support to the agriculture sector ranks among the worlds' highest. Small holdings still persist, entry into the sector is difficult, and the farm population is aging rapidly. Demographics and resource scarcity are therefore likely to shape the sector's evolution in the coming decades. This note first provides an overview of South Korea's demographics and land resources, followed by a review of the evolution of South Korea's agricultural policies. South Korea's policy support measures are then described, and new policy and regulatory initiatives are discussed. |
| Keywords: | South Korea, agricultural policy, self-sufficiency, natural resources, demographics, Agricultural and Food Policy, Environmental Economics and Policy, Food Security and Poverty, Institutional and Behavioral Economics, International Development, Labor and Human Capital, Land Economics/Use, Public Economics, |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaacem:52051&r=env |
| By: | International Atomic Energy Agency IAEA |
| Abstract: | The spent fuel and radioactive waste management strategy sets out the means for achieving the goals and requirements set out in the national policy. It is normally established by the relevant waste owner or nuclear facility operator, or by government (institutional waste). A typical policy should include the following elements: defined safety and security objectives, arrangements for providing resources for spent fuel and radioactive waste management, identification of the main approaches for the management of the national spent fuel and radioactive waste categories, policy on export/import of radioactive waste, and provisions for public information and participation. |
| Keywords: | radioactive waste, policy, fuel management policy, national, strategy, atomic energy |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2151&r=env |
| By: | Beate Fischer (University of Heidelberg, Alfred-Weber-Institut); Frank Jöst (University of Heidelberg, Alfred-Weber-Institut); Bernd Klauer (Helmholtz Centre for Environmental Research – UFZ); Johannes Schiller (Helmholtz Centre for Environmental Research – UFZ) |
| Abstract: | Land is an essential but limited natural resource. We employ the concept of stocks to analyse driving forces for land-use conversion and to assess, whether the German political “30- hectares-goal” is feasible given the current institutional setting. In this paper major driving forces for land-use conversion are identified and underlying stocks and persistent institutional structures as well as their dynamics are investigated. It will be shown that meeting the 30- hectares-goal is unlikely. We further argue that due to persistent stocks and institutional structures land-use conversion from agricultural into urbanised land takes place on smaller time scales than its reconversion. We conclude that demographic change and regional migration processes may result in further land-use conversion even with declining population. Economic structural change as well as an increasing traffic volume will likewise contribute to further land-use conversion. |
| Keywords: | Sustainability, Land use, Stocks, Institutional Reform |
| JEL: | Q24 Q56 R14 R52 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0484&r=env |
| By: | Warwick J. McKibbin; Adele Morris; Peter J. Wilcoxen; Yiyong Cai |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:acb:camaaa:2009-18&r=env |
| By: | Katherine A. Kiel (Department of Economics, College of the Holy Cross); Victor Matheson (Department of Economics, College of the Holy Cross); Kevin Golembiewski (Department of Economics, College of the Holy Cross) |
| Abstract: | In 1980, Paul Ehrlich and Julian Simon placed a famous bet on whether the prices of a bundle of natural resources would rise or fall over the ensuing decade. Simon won the bet as the real price of the bundle fell significantly, and the result of this bet has been taken as proof that technological progress is likely overcome any Neo-Malthusian concerns about natural resource scarcity. Contrary to the popular perception, however, an examination of the price history of the identical bundle of goods from 1900-2007 shows that Ehrlich and not Simon would have won a majority of the bets over the past century and would have done so by a wide margin. |
| Keywords: | Natural resources, scarcity, Neo-Malthusian |
| JEL: | Q30 Q31 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:hcx:wpaper:0908&r=env |