nep-env New Economics Papers
on Environmental Economics
Issue of 2009‒09‒19
23 papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. Global energy and environmental scenarios: Implications for development policy By Willenbockel, Dirk
  2. Impact of different biofuel policy options on agricultural production and land use in Germany By Banse, Martin; Sorda, Giovanni
  3. Optimal Climate Change Policies When Governments Cannot Commit By Alistair Ulph; David Ulph
  4. Size, Energy Use and Economies of Scale: Modeling of Policy Instruments to Address Small Farmsâ Advantages if Energy Is Scarcer and Ecology Matters? By Nuppenau, Ernst-August
  5. Integrating biofuels into the DART model: Analysing the effects of the EU 10% biofuel target By Kretschmer, Bettina; Peterson, Sonja; Ignaciuk, Adriana
  6. The Pollution Game: A Classroom Exercise Demonstrating the Relative Effectiveness of Emissions Taxes and Tradable Permits By Jay R. Corrigan
  7. The environmental resource curse hypothesis: the forest case By Olivier Damette; Philippe Delacotte
  8. Differentiating emissions targets for individual developed countries: economics and equity By Reisinger, Andy
  9. Unintended Consequences from Nested State & Federal Regulations: The Case of the Pavley Greenhouse-Gas-per-Mile Limits By Lawrence H. Goulder; Mark R. Jacobsen; Arthur A. van Benthem
  10. On Spatial Heterogeneity in Environmental Compliance Costs By Randy Becker
  11. Nice guys with cold feet: The cost of responsible investing in the bond markets By Bastien Drut
  12. Fuelwood consumption, restrictions about resource availability and public policies: impacts on the French forest sector By Sylvain Caurla; Philippe Delacotte; Franck Lecocq; Ahmed Barkaoui
  13. Soil Erosion Control and Damage Costs in Nigerian Small Farms: Implications for Farm Growth and Sustainability By Okoye, Chukwuemeka U.
  14. Modelling regional maize market and transport distances for biogas production in Germany By Delzeit, Ruth; Britz, Wolfgang; Holm-Müller, Karin
  15. The wrath of god : macroeconomic costs of natural disasters By Raddatz, Claudio
  16. Global governance: the G20 and a global green new deal By Barbier, Edward B.
  17. Measuring the Willingness to Pay for Fresh Water Cave Diving By William L. Huth; O. Ashton Morgan
  18. Auswirkungen der Novellierung des EEG auf die Wettbewerbskraft der Biogasproduktion By Rauh, Stefan
  19. Diversity Management und diversitätsbasiertes Controlling: von der Diversity Scorecard zur Open Balanced Scorecard By Herrmann-Pillath, Carsten
  20. Farm Structure and the Effects of Agri-Environmental Programs: Results from a Matching Analysis for European Countries By Pufahl, Andrea; Weiss, Christoph R.
  21. L’évolution de la commercialisation des bois publics français : entre dépendance au chemin et rupture institutionnelle By Gérard Marty
  22. Politique pro-biocarburants et climatique américaines : impact sur les choix énergétiques et bilan carbone By CHAKRAVORTY Ujjayant; HUBERT Marie-Helene; MOREAUX Michel
  23. "Estimating the Impact of Whaling on Global Whale Watching" By Hsiao-I Kuo; Chi-Chung Chen; Michael McAleer

  1. By: Willenbockel, Dirk
    Abstract: As part of a wider review of existing scenario analyses in areas with direct relevance to the future of global development, this paper focuses on two major recent studies: the scenarios contained in the UN Millennium Ecosystem Assessment (MEA) and the scenarios developed by the International Energy Agency (IEA) in support of the G8 Gleneagles plan of action on climate change, clean energy and sustainable development. The paper offers a critical appraisal of these scenarios, examines the drivers of change that are considered to influence future developments, explores the implications of the scenarios for developing countries, and outlines what types of changes in development policy could be appropriate in light of the lessons learned from these scenario exercises.
    Keywords: Economic development; Low-carbon growth; Sustainable growth; Millennium development goals
    JEL: Q56 O13 Q57
    Date: 2009–06
  2. By: Banse, Martin; Sorda, Giovanni
    Keywords: biofuel, Environmental Economics and Policy, Resource /Energy Economics and Policy,
    Date: 2009–10
  3. By: Alistair Ulph (University of Manchester); David Ulph (University of St Andrews, Oxford University Centre for Business Taxation)
    Abstract: This paper examines the optimal design of climate change policies in the context where governments want to encourage the private sector to undertake significant immediate investment in developing cleaner technologies, but the carbon taxes and other environmental policies that could in principle stimulate such investment will be imposed over a very long future. The conventional claim by environmental economists is that environmental policies alone are sufficient to induce firms to undertake optimal investment. However this argument requires governments to be able to commit to these future taxes, and it is far from clear that governments have this degree of commitment. We assume instead that governments cannot commit, and so both they and the private sector have to contemplate the possibility of there being governments in power in the future that give different (relative) weights to the environment. We show that this lack of commitment has a significant asymmetric effect. Compared to the situation where governments can commit it increases the incentive of the current government to have the investment undertaken, but reduces the incentive of the private sector to invest. Consequently governments may need to use additional policy instruments – such as R&D subsidies – to stimulate the required investment.
    Date: 2009
  4. By: Nuppenau, Ernst-August
    Abstract: This paper contributes to the discussion on appropriate farm sizes as dependent on energy use and green house gas emission. Normally large farms use more energy than small farms and obtain higher labor productivity which is one of the reasons for their superiority. We presume energy includes a component of negative externality if fossil energy is used and carbon CO2 are counted. Moreover it can be intended to use farming for carbon sequestration. In the paper we will analyze, how a new pathway can be developed, that includes incentives (taxes and subsidies) to save energy and develop coexistence between large and small farms. In favoring small scale farming because of less emission, a contribution to global warming reduction is envisaged. The issue is how can we address farm size, make incentives visible, help to switch technologies and promote farmers who adopt CO2 saving technologies? The paper suggests a framework of linear programming and quadratic expositions of farm behavior to depict policy for optimal farm operation size and farm structures composed of large and small scale farms. A moderate position is taken with respect to sustainable farming and the question of farm size and energy use is given to policy instruments.
    Keywords: Energy use, farm size and agricultural policy, Agricultural and Food Policy, Environmental Economics and Policy, Land Economics/Use, Production Economics,
    Date: 2009–08–20
  5. By: Kretschmer, Bettina; Peterson, Sonja; Ignaciuk, Adriana
    Abstract: Biofuels and other forms of bioenergy have received increased attention in recent times: They have partly been acclaimed as an instrument to contribute to rural development, energy security and to fight global warming but have been increasingly come under attack for their potential to contribute to rising food prices. It has thus become clear that bioenergy cannot be evaluated independently of the rest of the economy and that national and international feedback effects are important. In this paper we describe how the CGE model DART is extended to include firstgeneration biofuel production technologies. DART can now be used to assess the efficiency of combined climate and bioenergy policies. As a first example the effects of a 10% biofuel target in the EU are analyzed.
    Keywords: biofuels, CGE model, EU climate policy, Environmental Economics and Policy, Resource /Energy Economics and Policy,
    Date: 2009–10
  6. By: Jay R. Corrigan
    Abstract: This classroom exercise illustrates the strengths and weaknesses of various regulatory frameworks aimed at internalizing negative externalities from pollution. Specifically, the exercise divides students into three groups—the government regulatory agency and two polluting firms—and allows them to work through a system of uniform command-and-control regulation, a tradable emissions permit framework, and an emissions tax. Students have the opportunity to observe how flexible, market-oriented regulatory frameworks can outperform inflexible command-and-control. More importantly given the ongoing debate about how best to regulate carbon dioxide emissions, students can also observe how the introduction of abatement-cost uncertainty can cause one market-oriented solution to outperform another.
    Keywords: classroom experiments, emissions taxes, pollution, tradable emissions permits
    Date: 2009–06
  7. By: Olivier Damette (BETA UMR CNRS (Bureau d'Économie Théorique et Appliquée), Faculté de Droit et de Sciences économiques); Philippe Delacotte (Laboratoire d'Economie Forestière, INRA - AgroParisTech)
    Abstract: The resource curse hypothesis relies on the resource-rich countries tendency to grow slower than resource-poor countries. Focusing on forest issues, this paper extends the resource curse hypothesis to environmental degradation: how do forest endowment and forest harvesting affect deforestation? Our empirical results show that countries with important forest cover and forestry sectors seem to deforest more than others, which supports the hypothesis of an environmental resource curse. Moreover, countries implied in important timber certification processes have lower deforestation levels.
    Keywords: resource curse, tropical forest, deforestation
    JEL: C21 O13 Q33
    Date: 2009–09
  8. By: Reisinger, Andy
    Abstract: A key challenge for a future climate change agreement is allocating emissions targets for individual developed countries that are perceived as equitable given differing national circumstances. Many economics-based frameworks for evaluating future targets use as a key criterion for individual country targets the notion that mitigation measures should result in similar costs (specifically, that the required mitigation actions relative to baseline emissions result in a similar percentage reduction of individual countries' GDP in the target year or period). Such an economic criterion provides a transparent and objective basis for comparison, but it does not necessarily mean that comparable targets for individual countries are also equitable. A set of thought experiments demonstrates that such an approach indeed does not reflect equity between countries. This is because future business-as-usual emissions, against which the costs of mitigation are assessed, depend on past policy choices and mitigation pathways. An approach that sets future emissions targets at a specific date based on comparable costs, without regard to past policy choices and commitments, would penalise countries that have taken early action and provides a disincentive for taking strong domestic mitigation actions in future. This analysis suggests that the choice of 'business-as-usual' emissions against which the future costs of mitigation are assessed needs to receive more attention if economic comparability is intended to also reflect equity of emissions targets over time.
    Keywords: Greenhouse gas mitigation,equity of emissions targets,comparability,economic impact,path-dependence,optimal policy design
    JEL: A13 F51 Q54
    Date: 2009
  9. By: Lawrence H. Goulder; Mark R. Jacobsen; Arthur A. van Benthem
    Abstract: Fourteen U.S. states recently pledged to adopt limits on greenhouse gases (GHGs) per mile of light-duty automobiles. Previous analyses predicted this action would significantly reduce emissions from new cars in these states, but ignored possible offsetting emissions increases from policy-induced adjustments in new car markets in other (non-adopting) states and in the used car market. Such offsets (or “leakageâ€) reflect the fact that the state-level effort interacts with the national corporate average fuel economy (CAFE) standard: the state-level initiative effectively loosens the national standard and gives automakers scope to profitably increase sales of high-emissions automobiles in non-adopting states. In addition, although the state-level effort may well spur the invention of fuel- and emissions-saving technologies, interactions with the federal CAFE standard limit the nationwide emissions reductions from such advances. Using a multi-period numerical simulation model, we find that 70-80 percent of the emissions reductions from new cars in adopting states are offset by emissions leakage. This research examines a particular instance of a general issue of policy significance – namely, problems from “nested†federal and state environmental regulations. Such nesting implies that similar leakage difficulties are likely to arise under several newly proposed state-level initiatives.
    JEL: H23 H77 Q52 Q58
    Date: 2009–09
  10. By: Randy Becker
    Abstract: This paper examines the extent of variation in regulatory stringency below the state level, using establishment-level data from the U.S. Census Bureau’s Pollution Abatement Costs and Expenditures (PACE) survey to estimate a county-level index of environmental compliance costs (ECC). County-level variation is found to explain 11-18 times more of the variation in ECC than state-level variation alone, and the range of ECC within a state is often large. At least 34% of U.S. counties have ECC that are statistically different from their states’. Results suggest that important spatial variation is lost in state-level studies of environmental regulation.
    Keywords: environmental costs, regulation, manufacturing, U.S. counties
    JEL: Q52 R52 H73
    Date: 2009–09
  11. By: Bastien Drut (Centre Emile Bernheim, Solvay Brussels School of Economics and Management, Université Libre de Bruxelles, Brussel, Credit Agricole Asset Management SGR and University of Paris Ouest, Paris.)
    Abstract: The aim of this paper is to measure the cost of investing responsibly for different risk aversion levels by taking the example of green sovereign bond portfolios. We show that for developed countries, the cost of being a nice guy is lower if you have cold feet while this is the contrary for emerging countries. It implies that managers of Socially Responsible Investment (SRI) funds should gauge investor’s risk aversion prior to evaluating the “SRI cost”, this cost being null in some cases.
    Keywords: Climate Change, Environmental Performance Index, Responsible Investing, Risk Aversion, Portfolio Selection, Socially Responsible Investment, Sovereign Bonds.
    JEL: G11 G15 Q59
    Date: 2009–09
  12. By: Sylvain Caurla (Laboratoire d'Economie Forestière, INRA - AgroParisTech); Philippe Delacotte (Laboratoire d'Economie Forestière, INRA - AgroParisTech); Franck Lecocq (Laboratoire d'Economie Forestière, INRA - AgroParisTech); Ahmed Barkaoui (Laboratoire d'Economie Forestière, INRA - AgroParisTech)
    Abstract: In the context of climate change and of increasing energy prices, the share of fuelwood in primary energy consumption may increase, especially in countries with large forest endowments. However, larger fuelwood consumption may have non-negligible impacts on forest sectors. This paper assesses those impacts for France using a new model of the French forest sector, and comparing four different policy options to boost fuelwood demand. First, supply- and demand-side policies yield very different outcomes, with a trade-off between trade balance and harvest intensity. Second, even a modest increase in fuelwood consumption leads to tensions over forest stock over time under pessimistic views about resource availability.
    Keywords: forest sector modeling, fuelwood, bioenergy, public incentives.
    JEL: Q23 Q28
    Date: 2009–08
  13. By: Okoye, Chukwuemeka U.
    Abstract: In Nigeria 90% of the agricultural primary produce is in the hands of small holders cultivating between 0.8-4 hectares. Farm size expansion is limited by population pressure, land fragmentation, poor market opportunities and lack of finance. This article presents estimates of soil erosion control(SEC) and soil erosion damage costs (SEDC) in small farmers' fields in Nigeria and examines the contents and direction of the countryâs agriculture and environment policies vis-à-vis the SEC among small farmers. It was found that 24% of the farmersâ spending on tillage/cultural practices was directed at the institution of SEC measures, and that SEC-related defensive expenditures was 3.7 times more than the estimated SEDCs. The capacity of small farmers to respond to soil degradation is severely limited. Most SEC measures deployed derive from non-tradable inputs blurred by incomplete/missing markets for environmental assets. Yet farm development and environmental policies in Nigeria have dwelt on supply-side interventions based on marketable inputs, and have been largely ineffective. Policy and institutional reforms are needed to increase and focus support to farmers to increase defensive expenditures for SEC.
    Keywords: Soil erosion, damage costs, farm growth, Environmental Economics and Policy, Production Economics,
    Date: 2009–08–27
  14. By: Delzeit, Ruth; Britz, Wolfgang; Holm-Müller, Karin
    Abstract: Our location model aims to simulate location decisions for biogas plants based on profit maximisation to generate regional demand functions for maize and corresponding plant size structure and transport distances. By linking it with an agricultural sector model we derived regional maize markets. Comparing results for the REA with a scenario applying uniform per unit subsidy and producing the same energy, we see higher subsidy costs with the REA but lower transportation distances.
    Keywords: Biogas, environmental effects, transport costs, choice of location, Agricultural Finance, Environmental Economics and Policy,
    Date: 2009–10
  15. By: Raddatz, Claudio
    Abstract: The process of global climate change has been associated with an increase in the frequency of climatic disasters. Yet, there is still little systematic evidence on the macroeconomic costs of these episodes. This paper uses panel time-series techniques to estimate the short and long-run impact of climatic and other disasters on a country's GDP. The results indicate that a climate related disaster reduces real GDP per capita by at least 0.6 percent. Therefore, the increased incidence of these disasters during recent decades entails important macroeconomic costs. Among climatic disasters, droughts have the largest average impact, with cumulative losses of 1 percent of GDP per capita. Across groups of countries, small states are more vulnerable than other countries to windstorms, but exhibit a similar response to other types of disasters; and low-income countries responds more strongly to climatic disasters, mainly because of their higher response to droughts. However, a country's level of external debt has no relation to the output impact of any type of disaster. The evidence also indicates that, historically, aid flows have done little to attenuate the output consequences of climatic disasters.
    Keywords: Natural Disasters,Disaster Management,Hazard Risk Management,Pollution Management&Control,Population Policies
    Date: 2009–09–01
  16. By: Barbier, Edward B.
    Abstract: In response to the world economic crisis, the international community should promote a mix of policies to sustain global recovery and create jobs through reducing carbon dependency, ecological degradation and poverty. Such a Global Green New Deal (GGND) requires implementation and coordination of green investments by the Group of 20 (G20), who should also adopt complementary pricing policies and foster international aid and other actions in support of the GGND. Developing economies should provide clean water and sanitation for the poor, create safety nets, invest in heath and education, and target energy and water poverty. Such a global strategy can revive economies, create jobs and improve the sustainability of world development.
    Keywords: Economic Recession,G20,global governance,Global Green New Deal,green stimulus,low-carbon economy,world economy
    JEL: F59 H87 O13 O19 Q01
    Date: 2009
  17. By: William L. Huth; O. Ashton Morgan
    Abstract: Fresh water springs are unique natural resources that are contained within public lands across the United States. Natural resource management on public lands generates many interesting policy issues as the competing goals of conservation, recreational opportunity provision, and revenue generation often clash. As demand for recreational cave diving sites increases, the paper provides natural resource site managers with the first statistical estimate of divers’ willingness to pay to dive fresh water cave and cavern systems. Using a contingent valuation model approach and correcting for hypothetical bias, we find that divers’ median willingness to pay for cave diving opportunities at the site of interest is approximately $68 per dive. Model results also provide evidence of diver sensitivity with respect to scope as individuals are willing to pay more for dives that are higher in quality. Key Words: Contingent Valuation Model; Willingness to Pay; Cave Diving; Scope Sensitivity
    JEL: Q26 Q51
    Date: 2009
  18. By: Rauh, Stefan
    Abstract: Im Zuge des Ausbaus der Biomasseproduktion für energetische Zwecke wurden zuerst insbe-sondere stillgelegte Flächen herangezogen. Doch mittlerweile sind quasi keine freien Flächen mehr verfügbar und besonders regional kommt es zu Konkurrenzen zwischen der Nahrungs-mittel- und der Energieproduktion. Welcher Bereich die notwendigen Agrarrohstoffe für sich beanspruchen darf, entscheidet der Markt. Die Fläche als Ursprung der Agrarrohstoffe ge-winnt demnach an Wert, was die Entwicklung auf dem Pachtmarkt zeigt. Zur Abschätzung welches Produktionsverfahren die höchste Entlohnung dieser knappen Ressource verspricht, dient die Bodenrente, also der Betrag, der nach Abzug aller Kosten noch zur Verfügung steht. Die erneute Novellierung des EEG im Jahr 2008 hat zu einer Erhöhung der Bodenrente und damit auch der Wettbewerbskraft der Biogasproduktion geführt. Besonders der Güllebonus erleichtert die Investition in kleinere Biogasanlagen. Unter den momentanen Rahmenbedin-gungen im Frühjahr 2009 mit relativ niedrigen Agrarrohstoffpreisen weist die Biogasproduk-tion einen Vorteil bei der Substratbeschaffung gegenüber konkurrierenden Verfahren auf. Hochpreisphasen wie 2007 können aber weiterhin die Rentabilität von Biogasanlagen mit Substratzukauf gefährden.
    Keywords: Wettbewerbskraft, Bodenrente, sunk costs, Biogasproduktion, Environmental Economics and Policy, Resource /Energy Economics and Policy,
    Date: 2009–10
  19. By: Herrmann-Pillath, Carsten
    Abstract: In recent years, diversity management has evolved from a perspective on human resources management toward a conception of strategic management. This implies the need to adapt a central management function, strategic controlling, in order to render the conception of diversity management in established categories of operative management. Starting out from the existing proposal of a diversity scorecard, this paper extends the DM approach into the notion of an open balanced scorecard. The open balanced scorecard results from the application of DM principles on this widely used management tool. The argument is based on an overview of existing approaches to DM and their critical evaluation.
    Keywords: Diversity management,cognitive diversity,balanced scorecard
    JEL: M12 M14
    Date: 2009
  20. By: Pufahl, Andrea; Weiss, Christoph R.
    Abstract: This paper extends previous research (Pufahl and Weiss, 2009) and applies a semi-parametric propensity score matching approach to evaluate the effects of agrienvironment (AE) programs on input use and farm output of individual farms in eight Member States of the European Union. We find substantial differences in treatment effects between countries. The analysis reveals significant effects of AE participation on production (Germany, France) and farm profits (France, Ireland, United Kingdom). AE participation sporadically reduces the intensity of land use as measured by the purchase of farm chemicals (fertilizer, pesticide) and grazing livestock densities. We also find differences in the treatment effect among farms with different farm size (heterogeneous treatment effects).
    Keywords: evaluation, agri-environment programs, propensity score matching, Germany, Italy, Spain, France, Portugal, United Kingdom, The Netherlands, EU-15, Agribusiness, Agricultural and Food Policy,
    Date: 2009–08–24
  21. By: Gérard Marty (Laboratoire d'Economie Forestière, INRA - AgroParisTech; Université Paris Sorbonne, Centre d’Etudes Sociologiques de la Sorbonne)
    Abstract: The evolution of the French Public Timber Sales Mechanisms: Between Path Dependence and Path Breaking This article suggests applying the “path dependence” and “path breaking” concepts to the study of merchant institutions through which timber is sold in France. The aim is to analyze the consequences of a new law on timber industry. First we remind, the features which led to the appearance of a path dependence situation around the auction. Then we describe the exogenous and endogeneous factors in favour of a change in the institutional trajectory, due to the raise of supply contracts sales by private agreements. Finally, we present all the arguments given by part of the timber industry to maintain the auction as the main sales method.
    Keywords: path dependence, public timber auction, institution, path-breaking, lock-in.
    JEL: B52 L73 Q13 Z13
    Date: 2009–03
  22. By: CHAKRAVORTY Ujjayant; HUBERT Marie-Helene; MOREAUX Michel
    Date: 2009–09
  23. By: Hsiao-I Kuo (Department of Senior Citizen Service Management Chaoyang University of Technology); Chi-Chung Chen (Department of Applied Economics, National Chung Hsing University); Michael McAleer (Econometric Institute, Erasmus School of Economics, Erasmus University Rotterdam and Tinbergen Institute and Center for International Research on the Japanese Economy (CIRJE), Faculty of Economics, University of Tokyo)
    Abstract: After the commercial whaling moratorium was enacted in 1986, whale watching became one of the fastest growing tourism industries worldwide. As whaling was regarded as an activity incompatible with whale watching, the possible resumption of commercial whaling caused an urgent need to investigate the potential negative effects of whaling on the whale-watching industry. We examine the potential impacts of whaling on the global whale-watching tourism industry using unbalanced panel data model. The empirical results indicate that the resumption of commercial whaling has the potential for a negative effect on the global whale-watching industry, especially for nations that are engaged in whaling.
    Date: 2009–08

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