nep-env New Economics Papers
on Environmental Economics
Issue of 2009‒08‒16
thirty-one papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. Impact Of Greenhouse Gas Abatement Targets On Agricultural Activity By Donnellan, Trevor; Gillespie, Patrick; Hanrahan, Kevin
  2. Marginal abatement cost curves for UK agriculture, forestry, land-use and land-use change sector out to 2022 By Moran, Dominic; MacLeod, Michael J.; Wall, Eileen; Eory, Vera; McVittie, Alistair; Barnes, Andrew; Rees, Bob; Smith, Pete; Moxey, Andrew
  3. Environmental Crises: Past, Present and Future By M. Scott Taylor
  4. New responsibilities of agriculture: structural differences in stakeholder networks and intentions towards climate change abatement strategies in peatland By Hubner, Rico; Kantelhardt, Jochen
  5. Linking biodiversity, land-use and incomes at the farm level: an interdisciplinary modelling approach By Acs, Szvetlana; Dallimer, Martin; Hanley, Nick; Gaston, Kevin J.; Armsworth, Paul R.
  6. The non-permanence of optimal soil carbon sequestration By Hediger, Werner
  7. Who Pays a Price on Carbon? By Corbett A. Grainger; Charles D. Kolstad
  8. The Role of Uncertainty and Learning for the Success of International Climate Agreements By Pintassilgo, Pedro; Finus, Michael
  9. Adverse Selection in the Environmental Stewardship Scheme: Does the Higher Level Entry Scheme Design Reduce Adverse Selection? By Quillerou, Emmanuelle; Fraser, Rob
  10. Prospects for climate friendly peatland management â Results of a socioeconomic case study in Germany By Schaller, Lena; Kantelhardt, Jochen
  11. Estimating the Marginal Costs of Greenhouse Gas Emissions Abatement using Irish Farm-Level Data By Breen, James; Donellan, Trevor
  12. Emission Abatement with Per Capita and Trade Considerations By Levy, Amnon; Livermore, Jonathon
  13. Measuring Weak Sustainability for the future: Calculating Genuine Saving with population change by an integrated assessment model By Koji, Tokimatsu; Takanobu, Kosugi; Atsushi , Kurosawa; Norihiro, Itsubo; Masaji, Sakagami
  14. Community Valuations of Environmental Qality in Coastal Lakes: Lake Illawarra Case Study By Hodgkinson, Ann; Valadkhani, Abbas
  15. Uncertain Outcomes and Climate Change Policy By Robert S. Pindyck
  16. Theoretical Implications of Endogenously Changing Carrying Capacity and Concern for the World’s Population and Environment By Levy, Amnon; Berck, Peter
  17. Enriching Stakeholder participation through Environmental Valuation; Eliciting Preferences for a National Park Designation in Northern Ireland By Rowan, Emma; Longo, Alberto
  18. The impact of changing agricultural policies on jointly used rough pastures in the Bavarian Pre-Alps - an economic and ecological scenario approach By Roeder, Norbert; Lederbogen, Dirk; Trautner, Juergen; Bergamini, Ariel; Stofer, Silvia; Scheidegger, Christoph
  19. Gaining from Improved Dairy Cow Nutrition: Economic, environmental and animal health benefits By Colman, David; Beever, David E.
  20. Environment By Cornelia Ohl; Bernd Hansjürgens
  21. How can marketing theory be applied to policy design to deliver on sustainable agriculture in England? By Barns, S.A.; Willoughby, B.E.; Kaine, G.; Lourey, R.; Murdoch, H.
  22. Hyperbolic Discounting Is Rational: Valuing the Far Future with Uncertain Discount Rates By J. Doyne Farmer; John Geanakoplos
  23. Transboundary Renewable Resource and International Trade By TAKARADA Yasuhiro
  24. Policy implementations for organic agriculture: A real options approach By Tzouramani, I.; Liontakis, A.; Sintori, A.; Alexopoulos, G.
  25. Carbon Sequestration in Agricultural Soils By Elizabeth Anne Wilman
  26. The usefulness of aggregate sustainability indicators for policy making: What do they say for Madagascar? By Ollivier, TO
  27. Modelling the mitigation mix: faecal microbes, economic constraints and sustainable land management By Butler, Allan; Oliver, David; Chadwick, Dave; Fish, Rob; Winter, Michael; Hodgson, Chris; Heathwaite, Louise
  28. Weathering the Storm: Measuring Household Willingness-to-Pay for Risk-Reduction in Post-Katrina New Orleans By Craig E. Landry; Paul Hindsley; Okmyung Bin; Jamie B. Kruse; John C. Whitehead; Kenneth R. Wilson
  29. Is Mozambican Growth Sustainable? A Comprehensive Wealth Accounting Prospect By Timothée, Ollivier
  30. Optimal Control of Spreading Biological Invasions: For How Long Should We Apply the Brake? By Carrascoa, Luis R.; MacLeod, Alan; Knight, John D.; Baker, Richard; Mumford, John D.
  31. El cambio climático y sus efectos en el Perú By Vargas, Paola

  1. By: Donnellan, Trevor; Gillespie, Patrick; Hanrahan, Kevin
    Abstract: As part of its continuing commitment to address the causes of climate change, the EU has agreed reduction targets for greenhouse gas (GHG) emissions to be achieved by 2020. In the case of Ireland the target is a reduction of 20 percent relative to the 2005 level. Agriculture is a major source of GHG emissions in Ireland, comprising 26.8 percent of total GHG emissions in 2007. Understanding the scale and cost of the decrease in agricultural production required to achieve this reduction in GHG emissions is particularly important, as is the comparison of the cost of this approach with a range of possible other means of achieving emissions reductions in the sector. This study finds that, even with reduced fertiliser usage and more extensive production practices, a very substantial decrease in the livestock population is required to meet the emission reduction targets by 2020. The paper concludes that a solution involving a mix of measures may ultimately be required
    Keywords: agriculture, policy analysis, partial equilibrium modelling, baseline, scenario analysis, GHG, Kyoto, climate, Ireland, FAPRI, EU Gold Model, abatements, Environmental Economics and Policy, Q11, Q17, Q18, Q54,
    Date: 2009–04–01
  2. By: Moran, Dominic; MacLeod, Michael J.; Wall, Eileen; Eory, Vera; McVittie, Alistair; Barnes, Andrew; Rees, Bob; Smith, Pete; Moxey, Andrew
    Abstract: Greenhouse gas emissions from agriculture, land use, land use change and forestry (ALULUCF) are a significant percentage of UK industrial emissions. The UK Government is committed to ambitious targets for reducing emissions and all significant industrial sources are coming under increasing scrutiny. The task of allocating shares of future reductions falls to the newly appointed Committee on Climate Change (CCC), which needs to consider efficient mitigation potential across a range of sectors. Marginal abatement cost curves are derived for a range of mitigation measures in the agriculture and forestry sectors over a range of adoption scenarios and for the years 2012, 2017 and 2022. The results indicate that in 2022 around 6.36 MtCO2e could be abated at negative or zero cost. Further, in same year over 17% of agricultural GHG emissions (7.85MtCO2e) could be abated at a cost of less than the 2022 Shadow Price of Carbon (£34tCO2e).
    Keywords: Environmental Economics and Policy,
    Date: 2009–04–01
  3. By: M. Scott Taylor
    Abstract: Environmental crises are distinguished by rapid and largely unexpected changes in environmental quality that are difficult if not impossible to reverse. Examples would be major extinctions and significant degradations of an ecosystem. I argue there are three preconditions for crisis: failures in governance, an ecological system exhibiting a tipping point, and an economy/environment interaction with positive feedbacks. I develop a simple model to illustrate how a crisis may arise, and draw on our knowledge of past and present crises to highlight the mechanisms involved. I then speculate as to whether climate change is indeed a crisis in the making.
    JEL: Q00 O1
    Date: 2009–01–14
  4. By: Hubner, Rico; Kantelhardt, Jochen
    Abstract: Agriculture is required to fulfil the needs and wants of society in a variety of fields: food supply, environmental services, landscape preservation and finally: climate mitigation. Using the example of land-use change in peatland in order to create possibilities for greenhouse-gas reduction, a survey about the intentions and future expectations of stakeholders was undertaken. The underlying network structure of these stakeholders in three representative peatland areas of Germany was determined and compared. The results show that considerable differences exist in the degree of knowledge about climate change and in the willingness to cooperate. Depending on the area studied, the most influential political entities are different and thus require different strategies for agenda setting. From the study it can be concluded, that the realisation of a political or societal goal, for example greenhouse-gas reduction, relies largely on the intentions among the stakeholders and structural differences in the stakeholder networks. Our example has shown that for these reasons, land-use change for climate protective reasons will be supported more in the study-area in the South of Germany in comparison to the case in the eastern part.
    Keywords: Land-use in peatland areas, network analysis, climate change mitigation., Land Economics/Use, D83, D85, L31, Q54.,
    Date: 2009–04–01
  5. By: Acs, Szvetlana; Dallimer, Martin; Hanley, Nick; Gaston, Kevin J.; Armsworth, Paul R.
    Abstract: Recent decades have witnessed substantial losses in biodiversity in Europe, partly driven by the ecological changes associated with intensification of agricultural production. These changes have particularly affected biodiversity in marginal areas, such as the uplands in UK, since habitat change has been greater than in lowland zones. Livestock farming is the main land use in these areas, and economic viability of farmers substantially relies on income coming from agricultural subsidies and agrienvironmental payments. The production decisions have an effect on biodiversity, although the precise links are subject of much debate. To assess the effects of policy changes on farm incomes and biodiversity, we developed ecological-economic models for three typical farm types in the Peak District National Park in UK. We analyse the effect of decoupling and agri-environment schemes on birds. The results show that the impact of these policies varies across farm types and across biodiversity indicator. This means that from a biodiversity point of view whatever future policy options are chosen will result in winners and losers.
    Keywords: decoupling, agri-environmental policy, ecological-economic model, biodiversity, Land Economics/Use,
    Date: 2009–04–01
  6. By: Hediger, Werner
    Abstract: Carbon sequestration in agricultural soils is considered as an option of greenhouse gas mitigation in many countries. But, the economic potential is limited by the dynamic process of saturation and the opportunity cost of land use change. In addition, this article shows that permanence cannot, in general, be achieved in the strict sense of maintaining the soil carbon stock on an increased equilibrium level. Rather, a cyclical pattern with periodical release of sequestered carbon can be economically optimal from both the farmersâ and societal point of view.
    Keywords: Agriculture, Climate policy, Carbon sequestration, Land use change, Economic analysis., Land Economics/Use, Q15, Q24, Q54.,
    Date: 2009–04–01
  7. By: Corbett A. Grainger; Charles D. Kolstad
    Abstract: We use the 2003 Consumer Expenditure Survey and emissions estimates from an input-output model to estimate the incidence of a price on carbon induced by a cap-and-trade program or carbon tax in the US context. We present results on how much difference income deciles pay for a carbon tax as well as which industries see the largest increase in costs due to a carbon tax. We illustrate the main determinant of the regressivity: consumption patterns for energy-intensive goods. We find that a policy targeting CO2 from energy consumption is more regressive than a price on all emissions. Furthermore, on a per-capita basis a carbon price is much more regressive than calculations at the household level. We discuss policy options to offset the adverse distributional effects of a carbon emissions policy.
    JEL: H22 Q43 Q5 Q52 Q53 Q54 Q58
    Date: 2009–08
  8. By: Pintassilgo, Pedro; Finus, Michael
    Abstract: Technological developments intensify linkages between nations, making unilateral policies less effective. Though transnational externalities (e.g. trade, contagious diseases and terrorism) warrants coordination and cooperation between governments, this proves some times difficult. This is particularly true for international environmental agreements. One reason for meager success is the public good character of environmental protection encouraging free-riding. Another reason one might suspect are the large uncertainties surrounding most environmental problems, and in particular climate change, providing sufficient excuse to remain inactive. Paradoxically, some recent papers have concluded just the opposite: the veil of uncertainty can be conducive to the success of international environmental cooperation. This sheds serious doubts on the benefits from research on better understanding environmental impacts. In this paper, we explain why and under which conditions such a pessimistic conclusion can be true. However, taking a broader view, we argue that these unfavorable conditions are rather an exception than the rule. Most important, we suggest a mechanism that mitigates the negative effect of learning and which may even turn it into a positive effect. Our results apply beyond the specifics of climate change to similar problems of cooperation in the presence of externalities.
    Keywords: learning; uncertainty; self-enforcing agreements; climate change; coop eration
    Date: 2009–08
  9. By: Quillerou, Emmanuelle; Fraser, Rob
    Abstract: The Environmental Stewardship Scheme provides payments to farmers for the provision of environmental services based on agricultural foregone income. This creates a potential incentive compatibility problem which, combined with an information asymmetry on farm land heterogeneity, could lead to adverse selection of farmers into the scheme. However, the Higher Level Scheme (HLS) design includes some features that potentially reduce adverse selection. This paper studies the adverse selection problem of the HLS using a principal agent framework at the regional level. It is found that, at the regional level, the enrolment of more land from lower payment regions for a given budget constraint has led to a greater overall contracted area (and thus potential environmental benefit) which has had the effect of reducing the adverse selection problem. In addition, for landscape regions with the same payment rate (i.e. of the same agricultural value), differential weighting of the public demand for environmental goods and services provided by agriculture (measured by weighting an environmental benefit function by the distance to main cities) appears to be reflected into the regulatorâs allocation of contracts, thereby also reducing the adverse selection problem.
    Keywords: Adverse selection, agri-environment, Environmental Stewardship, principal-agent, contract, Environmental Economics and Policy, D78, D82, H44, Q18, Q58,
    Date: 2009–04–01
  10. By: Schaller, Lena; Kantelhardt, Jochen
    Abstract: In the current debate on climate protection, agricultural production has become a focal point of interest. This study introduces the climate effectiveness of agricultural management of peat-soils. Agriculture on peatland demands a water-level drawdown that causes aerobe degradation of the soils. The resulting trace-gas emissions have a negative impact on the greenhouse-gas balance. In Germany more than 80% of peatland is used agriculturally; the resulting emissions account for 2.3 â 4.5% of Germanyâs overall emission. Climate-friendly peatland management strategies, however, demand enhanced groundwater tables and decreased land-use intensity. With regard to agricultural income, severe economic consequences are to be expected. Against this background we analyse opportunities to reorganise agricultural use of peatland. As it is assumed that the potential to reduce land-use intensity greatly depends on local socio-economic conditions which are likely to vary across different regions, six representative sample regions are surveyed. To analyse microeconomic effects with simultaneous consideration of local diversity, stakeholder workshops and extensive farm surveys were undertaken in all regions. First results indicate that a reorganisation of peatland use causes severe loss of agricultural income and necessitates financial compensation for farmers. However the results also show that the potential of rearrangement varies significantly according to regional conditions.
    Keywords: agricultural peatland use, reduction of greenhouse gases, farm survey, economic consequences, Land Economics/Use, Q24, Q54, R58,
    Date: 2009–04–01
  11. By: Breen, James; Donellan, Trevor
    Abstract: Agriculture in Ireland accounts for a higher proportion of greenhouse gas (GHG) emissions than in any other EU member state. Furthermore as part of the EUâs commitment to reduce emissions by 20 percent by 2020, Ireland is one of the few countries who will have to cuts its 2005 GHG emissions level by the full 20 percent. Given the magnitude of the cut in national emissions that is required and the size of agricultureâs contribution to Irelandâs total emissions, the agriculture sector has been identified by some parties as a sector that could make a significant contribution to achieving the national target. In order to evaluate the impact on Irish farmers of reducing GHG emissions it is necessary to first estimate the marginal cost of emissions abatement. This paper uses Irish farm-level data to construct a linear programming model which in turn is used to estimate the marginal abatement cost curve for GHG emissions on Irish farms and this is aggregated to estimate a marginal cost curve for the agriculture sector. The impact of an emissions tax in achieving targeted levels of GHG emissions will be measured under a baseline scenario of no policy change.
    Keywords: Keywords: Farm-Level, Greenhouse Gas Emissions, Marginal Abatement Cost Curve, Agricultural and Food Policy, Q12, Q18, Q52,
    Date: 2009–04–01
  12. By: Levy, Amnon (University of Wollongong); Livermore, Jonathon (University of Sydney)
    Abstract: In the absence of a comprehensive international agreement, each country unilaterally sets her abatement of greenhouse gas emissions at a level that possibly maximizes her expected net benefit. In addition to a cleaner and healthier domestic environment and a slower global warming, a country’s benefit from self emission-abatement may include improved image and, in turn, bilateral economic and political relations. This paper analyses a country’s cooperative and non-cooperative emission abatements within a cost-benefit framework that, for equality consideration, is centered on per capita emission and takes international rewards for commitment to be responsive to per capita income and output composition.
    Keywords: Emissions; Inequality; International Relations; Cooperative Abatement; Unilateral Abatement
    JEL: O24 F51 Q54 Q56
    Date: 2009
  13. By: Koji, Tokimatsu; Takanobu, Kosugi; Atsushi , Kurosawa; Norihiro, Itsubo; Masaji, Sakagami
    Abstract: This paper presents a future figure of Genuine Saving with population growth (GSn). This was enabled by using an integrated assessment model, similar to the RICE model by Nordhaus. The model consists of sub-models that evaluate various kinds of mineral resources and environmental impacts. Results indicates that GSn is positive i) in OECD during the 21st century, ii) in World and the former Soviet Union and East Europe after 2030, and iii) in Asia and the Middle East and Africa after 2050. GSn is negative in Latin America during the 21st century.
    Keywords: Genuine Saving; population change; sustainability; integrated assessment model; impact assessment model; growth model
    JEL: Q56 Q01
    Date: 2009–07–04
  14. By: Hodgkinson, Ann (University of Wollongong); Valadkhani, Abbas (University of Wollongong)
    Abstract: This study illustrates how the hedonic pricing method can measure the value of environmental assets in an urban setting. A HPM valuation, utilising relatively easily accessible secondary data, and a semi-logarithmic regression form, is used. The value achieved was substantially greater than either expenditures to date or the actuarial valuation of Lake Illawarra. The study demonstrates the applicability of the technique and recommends its further development and use for this type of public decision-making. A range of other data was also generated that adds to the usefulness of this approach for general planning purposes.
    Keywords: Hedonic pricing model; Environmental quality, evaluation; New South Wales (NSW); Australia
    JEL: C21 D12 Q51
    Date: 2009
  15. By: Robert S. Pindyck
    Abstract: Focusing on tail effects, I incorporate distributions for temperature change and its economic impact in an analysis of climate change policy. I estimate the fraction of consumption w*(tau) that society would be willing to sacrifice to ensure that any increase in temperature at a future point is limited to tau. Using information on the distributions for temperature change and economic impact from studies assembled by the IPCC and from “integrated assessment models†(IAMs), I fit displaced gamma distributions for these variables. Unlike existing IAMs, I model economic impact as a relationship between temperature change and the growth rate of GDP as opposed to its level, so that warming has a permanent impact on future GDP. The fitted distributions for temperature change and economic impact generally yield values of w*(tau) below 2%, even for small values of tau, unless one assumes extreme parameter values and/or substantial shifts in the temperature distribution. These results are consistent with moderate abatement policies.
    JEL: D81 Q5 Q54
    Date: 2009–08
  16. By: Levy, Amnon (University of Wollongong); Berck, Peter (University of California, Berkeley)
    Abstract: This paper derives some possible implications of changing carrying capacity and environmental concerns for human survival. It proposes that even in the absence of any further technological, healthcare, social and international progress, diminishing complacency embarks the global environment and its human population on a course leading to an interior steady state. Therefore, convergence to extinction is not a likely course for a population that, in addition to displaying diminishing complacency toward deteriorating environmental conditions, generates improvements in technology, healthcare and social and international affairs.
    Keywords: Environmental Concerns; Carrying Capacity; Survival
    JEL: O13 Q20
    Date: 2009
  17. By: Rowan, Emma; Longo, Alberto
    Abstract: This paper provides the theoretical framework and describes the preliminary steps for combining collaborative planning and non-market valuation techniques to improve the decision making process and stakeholder involvement in land use decisions. Combining components of Collaborative Planning (CP) â a Planning theory seeking to achieve the highest level of consensus possible amongst all stakeholders â with non-market valuation techniques (Travel Cost Method and Contingent Behaviour) - widely used in environmental economics â this study attempts to elicit the preferences of the Northern Ireland population which could be affected by the proposed designation of a National Park. The CP elements of public participation are first used as an aid to design the survey instrument and then explored as a means of the validation of results analysed from the survey. In a Contingent Behaviour survey, key attributes are set at varying levels to assess how respondentsâ welfare would be affected by hypothetical changes in the management and infrastructures of a recreational area.
    Keywords: travel cost, contingent behaviour, revealed preferences, stated preferences, national park designation, collaborative planning, stakeholder involvement, Environmental Economics and Policy,
    Date: 2009–04–01
  18. By: Roeder, Norbert; Lederbogen, Dirk; Trautner, Juergen; Bergamini, Ariel; Stofer, Silvia; Scheidegger, Christoph
    Abstract: The following paper assesses the impact of different policy options on the land use and associated biodiversity values of jointly organized low intensity grazing systems (âAllmendeâ) in Southern Bavaria. We use an integrated economic and ecological modelling approach to compare the results of the scenarios with a reference situation that reflects the Common Agricultural Policy prior to the Fischler Reform. The economic sub model is based on single farms which alter their land use in response to economic stimuli. Within the economic part, key factors like the farmâs endowment with machinery, quota and buildings but also the farmerâs attitude are regarded. Within the rule based ecological sub model we analyze three main parameters: (a) protected habitats according to the EC Habitats Directive, (b) biodiversity for selected taxonomic groups (plants, lichens, ground beetles) and (c) habitat quality of selected target species (plants, butterflies). An overall evaluation of the scenarios leads to the conclusion that the impact of the Fischler reform will be fairly limited in the study area, since at the observed level of intensity the lower product prices will be compensated by higher direct payments. If all payments were strictly targeted to agri-environmental measures and set to a level which guarantees a low input management of the grass land, the overall public expenses could be reduced by approx. 100 to 200 ⬠ha-1. In addition this setting will provide additional habitats for the target species. However, the number of agricultural employment opportunities and the agricultural value added decline severely. Regarding all indicators but the extent of protected habitats and the public costs, a scenario of complete market liberalization performs the worst.
    Keywords: CAP, agent based modelling, BioAssess, impact assessment, biodiversity, agriculture, target species, EC Habitats Directive, Land Economics/Use, Q18, Q57,
    Date: 2009–04–01
  19. By: Colman, David; Beever, David E.
    Abstract: A majority of UK dairy herds have the potential to increase profitability by improving the ration of their cows. This paper reports that gains averaging around £100 per cow have been made within one year of adopting the Keenan Hi-Fibre ration by 239 UK herds in 2006 and 2007. Larger gains have been made by herds in France. The key performance indicator underlying these gains is Feed Conversion Efficiency, whereby the same, or even a smaller amount of Dry Matter Intake generates higher yields per cow. Importantly, the gains are associated with large improvements in animal health and reductions in greenhouse gases per litre of milk produced.
    Keywords: Feed conversion efficiency, cattle nutrition, greenhouse gas emissions, animal health., Livestock Production/Industries,
    Date: 2009–04–01
  20. By: Cornelia Ohl; Bernd Hansjürgens
    Abstract: Many environmental problems are large scale in terms of geographical units and long-term with regard to time. We therefore find a coincidence of different causes and impacts that qualify the interplay between humans and nature as highly uncertain (“transparency challenge”). In consequence we see a need for innovative analytical methods and modelling approaches to supplement the traditional monitoring-based approach in environmental policy. This should allow capturing different degrees of uncertainty which in general is out of power of any monitoring activity. Moreover, with regard to the design of monitoring approaches it requires collecting and connecting data from different fields of social activities in regard of a divergence of natural and social systems’ boundaries. This requires the provision of sufficient, frequently huge data sets (“availability challenge”) that need to fit with each other (“compatibility challenge”). Even if these challenges are met data processing remains a very complex and time-consuming task which should be supported by a user-friendly infrastructure. We here see a comparative advantage in using the GIS technology and a nested structure for data provision supporting the up and down scaling of information and the access of data from different perspectives (“connectivity challenge”) - a polluters, a victims and a regulators point of view.
    Keywords: Coincidence of causes and impacts, transparency challenge, availability challenge, compatibility challenge, connectivity challenge, GIS technology, nested structure of data provision
    Date: 2009
  21. By: Barns, S.A.; Willoughby, B.E.; Kaine, G.; Lourey, R.; Murdoch, H.
    Abstract: Marketing theory was applied to develop a qualitative tool to predict levels of compliance based on involvement with the issue (policy objective) and involvement with the intervention (regulation). Based on an understanding farmer decision-making, the I3 Response Framework can help identify strategies that can strongly influence compliance, providing more efficient targeting of resources for policy. We report on further testing by application to the issue of water quality and the regulations around slurry storage as part of the Nitrate Pollution Prevention Regulations 2008 as applicable to dairy farmers in the Derwent catchment of North Yorkshire, England
    Keywords: Policy, I3 Response Framework, involvement, water quality, slurry storage, Nitrogen Vulnerable Zone, regulation, Nitrate Pollution Prevention Regulations 2008, NPPR2008, Agricultural and Food Policy,
    Date: 2009–04–01
  22. By: J. Doyne Farmer (Sante Fe Institute); John Geanakoplos (Cowles Foundation, Yale University)
    Abstract: Conventional economics supposes that agents value the present vs. the future using an exponential discounting function. In contrast, experiments with animals and humans suggest that agents are better described as hyperbolic discounters, whose discount function decays much more slowly at large times, as a power law. This is generally regarded as being time inconsistent or irrational. We show that when agents cannot be sure of their own future one-period discount rates, then hyperbolic discounting can become rational and exponential discounting irrational. This has important implications for environmental economics, as it implies a much larger weight for the far future.
    Keywords: Hyperbolic discounting, Environment, Time consistent, Exponential discounting, Geometric random walk, Term structure of interest rates
    JEL: D91 G12
    Date: 2009–08
  23. By: TAKARADA Yasuhiro
    Abstract: We develop a two-country, two-good model with a transboundary renewable resource. A transboundary renewable resource is an open-access resource that is shared by two countries. We characterize the autarkic steady state, then examine the patterns of trade and the post-trading steady-state utility levels. Although the resource stock is reduced by trade, both countries may still benefit from trade when they are specialized in production. We also show that the steady-state utility of a resource good importing country may be reduced by trade, even if it specializes in production of a non-resource good which we refer to as manufactures.
    Date: 2009–08
  24. By: Tzouramani, I.; Liontakis, A.; Sintori, A.; Alexopoulos, G.
    Abstract: Organic farming has experienced a vast increase within the EU, despite the fact that it implies greater risk and uncertainty than that of conventional farming. This is the result of the increased environmental concern and the rising demand for quality food, which led to the implementation of the organic policy scheme. Nevertheless, the production of organic fruits, including cherries, is still limited in the EU. Farmers will adopt this alternative farming system only if the support provided by the existing policy regime out weights the increased risk and uncertainty. This study explores the effectiveness of the current policy measures for the production of organic cherries in Greece, using the real options methodology. The framework of real options analysis is an appropriate form of analysis so as to examine the investmentâs profitability under risk and uncertainty and assess the economic incentives offered to organic farmers. The results indicate that the economic incentives provided by the existing policy regime, compensate for the risk and the uncertainty that farmers are undertaking. Furthermore, this study reveals that the profitability of the economic activity explored, lies mainly on the subsidies organic farmers receive.
    Keywords: Keywords: organic agriculture, real options, agriculture policy, uncertainty, Agricultural and Food Policy, D81, Q14, Q18,
    Date: 2009–04–01
  25. By: Elizabeth Anne Wilman
    Abstract: Carbon sequestration in agricultural soils can be promoted by practices such as no-tillage. Farmers’ decisions, related to tillage, are affected by its costs and benefits, and in turn influence changes in soil carbon. There has been research which models the farmer’s no-tillage adoption decision. It is recognized that the longer no-till is continued the greater the amount of carbon sequestered. But, the decision of how long to continue no-till has not received much attention. A model which the farmer chooses tillage frequency is presented. Payment policies, and other ways to encourage long term sequestration, are considered.
    JEL: Q15 Q27 Q54 Q57
    Date: 2009–01–30
  26. By: Ollivier, TO
    Abstract: In this paper we compare the practical policy implications that can be derived from the calculation of three aggregate sustainability indicators for Madagascar. The chosen indicators are: the Adjusted Net Saving, the Genuine Progress Indicator, and the Ecological Footprint. Our results are twofold. First, these indicators provide very different messages regarding the sustainability of Madagascar’s recent development. The first one indicates a development path that is not sustainable, whereas the latter two do not indicate anything to be alarmed about. Second, they yield a set of widely diverse policy implications which we do not see as complementary. The Ecological Footprint provides policy recommendations that are too general for poor countries rich in natural resources, such as Madagascar. The Genuine Progress Indicator highlights several social issues but its interpretation in terms of sustainability remains ambiguous as it is a mix between a present welfare and a sustainability indicator. In the end, we consider that the Adjusted Net Saving provides the most consistent information to decision makers regarding the sustainability of Madagascar’s recent development path.
    Keywords: Sustainable Development; Madagascar; Ecological Footprint; Adjusted Net Saving; Genuine Progress Indicator
    JEL: Q56 Q01
    Date: 2009–07–15
  27. By: Butler, Allan; Oliver, David; Chadwick, Dave; Fish, Rob; Winter, Michael; Hodgson, Chris; Heathwaite, Louise
    Abstract: Conventional livestock farming provides consumers with cheap and reliable sources of milk and meat. Yet the inevitable by-product, i.e. livestock faecal matter, represents a potential source of pathogenic microorganisms. This paper applies the Faecal Indicator Organisms Costing Assessment Tool (FIOCAT), which was designed as part of the RELU project âsustainable and holistic food chains for recycling livestock waste to landâ, to examine the costs associated with mitigation methods that may inhibit pathogenic transfers to water. FIO-CAT is comprised of three interrelated models: the economic dairy management (EDM) model, the farm business survey (FBS) model and the manure, infrastructure and environment (MIE) model. Specifically, it models dairy, and cattle and sheep farms in the River Taw catchment in South West England and determines the economic impact that mitigation methods have on farm businesses. However, the inherent complexity associated with heterogeneous landscapes confounds the likelihood that a single management strategy will provide complete protection of receiving waters from microbial contamination.
    Keywords: Cost mitigation, cost tool, microbial organisms, whole farm modelling, diffuse pollution, Land Economics/Use,
    Date: 2009–04–01
  28. By: Craig E. Landry; Paul Hindsley; Okmyung Bin; Jamie B. Kruse; John C. Whitehead; Kenneth R. Wilson
    Abstract: The city of New Orleans suffered extensive damage as a result of Hurricane Katrina. Katrina overwhelmed the natural and built environment, inundating the city. As rebuilding proceeds, decisions on investment in protective measures will include the choice of lines of defense and the storm severity that design criteria should meet. An exhaustive list of protective measures has been studied in planning documents such as the Louisiana Coastal Protection and Restoration Technical Report (2009), with public comment solicited in town hall meetings. In this study we employ a different approach to examine public sentiment towards the selection and investment in protective measures. Our study utilizes a stated choice experiment with a stratified sample to investigate individuals’ willingness-to-pay for rebuilding New Orleans’ man-made storm defenses, restoring natural storm protection, and improving evacuation options through a modernized transportation system. We target residents of the New Orleans metropolitan area as well as other US citizens. Our results indicate that individuals are willing-to-pay for increased storm protection for New Orleans, but the allocation of these resources differs among residents of the New Orleans metro area and other US citizens. Key Words: storm surge mitigation, conjoint analysis, willingness to pay, Hurricane Katrina, flood control, stated choice, rebuilding New Orleans, recovery
    JEL: H43 Q51 R53
    Date: 2009
  29. By: Timothée, Ollivier
    Abstract: We estimate the wealth of Mozambique in 2000 and 2005 in order to assess the sustainability of its development path. Our methodology builds on Arrow et al. (2007). We show that Mozambican growth is driven mainly by human and physical capital accumulation, while the pressure on natural capital remains low. Moreover, changes in knowledge and institutions significantly enhance the outcome of the different capital assets while population growth has a strong downward effect on wealth per capita. In the end, we conclude that Mozambique, unlike many other sub-Saharan countries, followed a sustainable growth path in recent times.
    Keywords: natural capital; sustainable development; Mozambique; comprehensive wealth accounting
    JEL: Q56 E01 Q01 E21
    Date: 2009–07
  30. By: Carrascoa, Luis R.; MacLeod, Alan; Knight, John D.; Baker, Richard; Mumford, John D.
    Abstract: Identifying the optimal switching point between different invasive alien species (IAS) management policies is a very complex task and policy makers are in need of modelling tools to assist them. In this paper we develop an optimal control bioeconomic model to estimate the type of optimal policy and switching point of control efforts against a spreading IAS. We apply the models to the case study of Colorado potato beetle in the UK. The results demonstrate that eradication is optimal for small initial sizes of invasion at discovery. High capacity of the agency to reduce spread velocity for several years leads to smaller total overall costs of invasion and makes eradication optimal for larger sizes of initial invasion. In many cases, it is optimal to switch from control to acceptance within the time horizon. The switching point depends on the capacity of the agency, initial size of invasion, spread velocity of the IAS and the ratio of unit cost of damage and removal. We encourage the integration of the dispersal patterns of the invader and the geometry of the invasion in the theoretical development of the economics of IAS invasion management.
    Keywords: barrier zone, biosecurity, dynamic optimization, eradication, Leptinotarsa decemlineata, pest risk analysis, reaction-diffusion., Risk and Uncertainty, Q1, Q28, Q57,
    Date: 2009–04–01
  31. By: Vargas, Paola (Banco Central de Reserva del Perú)
    Abstract: Existe extensa literatura que evidencia que el calentamiento del sistema climático es una realidad y que de no adoptar una política ambiental internacional rígida frente a este tema, se haría más inminente avanzar hacia escenarios extremos de más de 5° C de aumentos de temperatura para fin de siglo; lo que significaría pérdidas de hasta 20% del PBI mundial. Los impactos del cambio climático se distribuyen de manera heterogénea entre países siendo los menos afectados aquellos países con mayor participación en la acumulación de GEI, como China y USA. Entre las regiones más afectadas se encuentran las que tienen sistemas productivos más sensibles al clima como África, el Sur y Sur-Este de Asia y América Latina. Para el caso peruano se estima, basado en el marco teórico propuesto por Dell, et al (2008), que un aumento de 2°C en la temperatura máxima y 20% en la variabilidad de las precipitaciones al 2050, generaría una pérdida de 6% respecto al PBI potencial en el año 2030, mientras que en el año 2050 estas pérdidas serían superiores al 20%; reduciéndose estas pérdidas a menos de la tercera parte en caso se adopten políticas globales que estabilicen la variables climáticas al 2030.
    Date: 2009–06

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