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on Environmental Economics |
| By: | Britt Groosman; Nicholas Z. Muller; Erin O’Neill |
| Abstract: | This study investigates the benefits to human health that would occur in the United States (U.S.) due to reductions in local air pollutant emissions stemming from a federal policy to reduce greenhouse gas emissions (GHG). In order to measure the impacts of reduced emissions of local pollutants, this study considers a representative U.S. climate policy. Specifically, the climate policy modeled in this analysis is the Warner-Lieberman bill (S.2191) of 2008 and the paper considers the impacts of reduced emissions in the transport and electric power sectors. This analysis provides strong evidence that climate change policy in the U.S. will generate significant returns to society in excess of the benefits due to climate stabilization. The total health-related co-benefits associated with a representative climate policy over the years 2006 to 2030 range between $90 and $725 billion in present value terms depending on modeling assumptions. The majority of avoided damages are due to reduced emissions of SO2 from coal-fired power plants. Among the most important assumptions is whether remaining coal-fired generation capacity is permitted to “backslide” up to the Clean Air Interstate Rule (CAIR) cap on emissions. This analysis models two scenarios specifically related to this issue. Co-benefits increase from $90 billion, when the CAIR cap is met, to $256 billion if SO2 emissions are not permitted to exceed current emission rates. On a per ton basis, the co-benefit per ton of GHG emissions is projected to average between $2 and $14 ($2006). The per ton marginal abatement cost for the representative climate policy is estimated at $9 ($2006). |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:mdl:mdlpap:0920&r=env |
| By: | Carlos A. Flores (Department of Economics, University of Miami); Alfonso Flores-Lagunes (Food and Resource Economics Department, University of Florida and IZA, Bonn, Germany); Dimitrios Kapetanakis (Food and Resource Economics Department, Universty of Florida) |
| Abstract: | The environmental Kuznets curve (EKC) hypothesizes that the income-pollution rela- tionship has an inverted U shape: pollution increases with income up to a turning point beyond which it decreases. The empirical literature has concentrated on estimation of this relationship at the mean employing longitudinal data, with the typical ?nding supporting the inverted U shape. Conditional mean estimation, however, can mask heterogeneities present at higher and/or lower quantiles of the emissions?distribution, in addition to being more sensitive to the presence of outliers. We apply methods for conditional-quantile panel ?xed e¤ects models to the estimation of the income-pollution relationship on U.S. state-level data on NOx (nitrogen oxide) and SO2 (sulfur dioxide) pollutants over the period 1929- 1994. Our results indicate that conditional mean methods provide too optimistic estimates about emissions reduction of NOx, as conditional-quantile methods suggest that the turning point of the relationship occurs at higher values of income; while the opposite is found for SO2. Another important lesson drawn is that the income-pollution relationship is sensitive to the presence of outliers in the data. |
| Keywords: | Environmental Kuznets Curve, Panel Quantile Estimation, Income and the Environment |
| JEL: | Q56 C21 C23 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:mia:wpaper:2010-4&r=env |
| By: | Fang, Du; Feng, Hongli; Otto, Daniel |
| Abstract: | The Waxman-Markey Bill (HR2454 American Clean Energy and Security Act of 2009) reflects the goal of the Obama administration to address climate change issues. The global nature of Green House Gas (GHG) emissions and the mitigation efforts imply a multi-lateral approach to the issue. This paper discusses the policy strategies currently being considered by two major participants in the GHG reduction debate, the U.S. and China. |
| JEL: | Q5 |
| Date: | 2009–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:13129&r=env |
| By: | Bosetti, Valentina; Carraro, Carlo; Tavoni, Massimo |
| Abstract: | This paper builds on the assumption that OECD countries are (or will soon be) taking actions to reduce their greenhouse gas emissions. These actions, however, will not be sufficient to control global warming, unless developing countries also get involved in the cooperative effort to reduce GHG emissions. This paper investigates the best short-term strategies that emerging economies can adopt in reacting to OECD countries’ mitigation effort, given the common long-term goal to prevent excessive warming without hampering economic growth. Results indicate that developing countries would incur substantial economic losses by following a myopic strategy that disregards climate in the short-run, and that their optimal investment behaviour is to anticipate the implementation of a climate policy by roughly 10 years. Investing in innovation ahead of time is also found to be advantageous. The degree of policy anticipation is shown to be important in determining the financial transfers of an international carbon market meant to provide incentives for the participation of developing countries. This is especially relevant for China, whose recent and foreseeable trends of investments in innovation are consistent with the adoption of domestic emission reduction obligations in 2030. |
| Keywords: | Climate Policy; Developing Countries; Energy-economy modeling |
| JEL: | Q43 Q54 Q55 |
| Date: | 2009–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:7394&r=env |
| By: | Mariani, Fabio (Université Catholique de Louvain); Pérez-Barahona, Agustín (Ecole Polytechnique, Paris); Raffin, Natacha (University of Paris 1) |
| Abstract: | We present an OLG model in which life expectancy and environmental quality dynamics are jointly determined. Agents may invest in environmental care, depending on how much they expect to live. In turn, environmental conditions affect life expectancy. As a result, our model produces a positive correlation between longevity and environmental quality, both in the long-run and along the transition path. Eventually, multiple equilibria may also arise: some countries might be caught in a low-life-expectancy / low-environmental-quality trap. This outcome is consistent with stylized facts relating life expectancy and environmental performance measures. We also discuss the welfare and policy implications of the intergenerational externalities generated by individual choices. Finally, we show that our results are robust to the introduction of growth dynamics based on physical or human capital accumulation. |
| Keywords: | environmental quality, life expectancy, poverty traps, human capital |
| JEL: | J24 O11 O40 Q56 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4564&r=env |
| By: | Olivier Guéant; Roger Guesnerie; Jean-Michel Lasry |
| Abstract: | This article discusses the discount rate to be used in projects that aimed at improving the environment. The model has two different goods, one is the usual consumption good whose production may increase exponentially, the other is an environmental good whose quality remains limited. The stylized world we describe is fully determined by four parameters, reflecting basic preferences "ecological" and intergenerational concerns and feasibility constraints. We define an ecological discount rate and examine its connections with the usual interest rate and the optimized growth rate. We discuss, in this simple world, a variety of forms of the precautionary principle. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2009-47&r=env |
| By: | Richard S.J. Tol (Economic and Social Research Institute) |
| Abstract: | I define the rate of inequity aversion, distinguishing between the pure rate and the consumption rate. I measure the rate of aversion to inequality in consumption as expressed in the development aid given by rich countries to poor ones between 1965 and 2005. There is an ambiguous relationship between the pure rate of inequity aversion and the consumption rate, driven by the rate of risk aversion. However, for a reasonable choice of the rate of risk aversion, rich countries are shown to be inequity averse, and increasingly so over time. The social cost of carbon is very sensitive to equity weighting and assumptions about the rate of risk and inequity aversion. Estimates for the consumption rate of inequity aversion for recent data suggest that the equity-weighted social cost of carbon is less than 50% larger than the unweighted estimate. |
| Keywords: | Inequity aversion, risk aversion, income distribution, development aid, climate change, social cost of carbon |
| JEL: | D31 D63 Q54 |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:178&r=env |
| By: | Francisco Álvarez (Universidad Complutense de Madrid, Dto. Ftos. Analisis Economico II) |
| Abstract: | Presentamos evidencia empírica sobre convergencia en magnitudes medioambientales para países desarrollados y en vías de desarrollo. Además, partiendo de un modelo standard "putty-clay" de uso de energía, introducimos un stock de contaminación sobre el que se fija un objetivo de reducción de emisiones. El análisis teórico ofrece indicaciones sobre qué variables deberían ser objeto de futuros acuerdos de reducción de emisiones entre países heterogéneos. |
| Keywords: | economía medioambiental, convergencia, reducción de emisiones, environment economy, convergence, emission reductions. |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ucm:wpaper:12-09&r=env |
| By: | Funk, Matt |
| Abstract: | Darwin's "Origin" launched evolution into theoretical orbit and it continues to influence its course. This magnum opus detailed a tenable solution to the most fundamental problem of human existence, and although this Promethean vision contains sundry trivial flaws, there is, however, one nontrivial error which misguides several crucial developments – not only in the evolving structure of evolutionary theory, but across the entire spectrum of science, including politico-economics. This problem has led social and evolutionary theorists alike to mistakenly favour earth-based inputs over cosmic inputs, to over-emphasize biological evolution, and to under-emphasize stellar evolution. These methodological and logical errors have, in turn, emphasized the significance of the individual “struggle against competitors” over the cooperative “struggle against inclement environments”, and thus, as a result, fashionable theories relating to Global Warming, The Problem of Sustainable Economic Development, and The Tragedy of the Commons have been erected on a false foundations – and, moreover, point toward inherently unstable solutions. And to these salient points, in light of the theory presented here, we discover that the effective coordination of global threat mitigation efforts requires unprecedented levels of international politico-economic cooperation. |
| Keywords: | tragedy of the commons; sustainable economic development; global warming; mass extinctions; ecological economics; ideological environmentalism; stellar evolution; cosmic inputs; global threat mitigation; international cooperation |
| JEL: | Q51 Q54 Q57 |
| Date: | 2009–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:18807&r=env |