nep-env New Economics Papers
on Environmental Economics
Issue of 2009‒12‒05
ten papers chosen by
Francisco S.Ramos
Federal University of Pernambuco

  1. On the Dynamics of Competing Energy Sources By Tsur, Yacov; Zemel, Amos
  2. Climate change meets trade in promoting green growth: potential conflicts and synergies By Zhang, ZhongXiang
  4. Growth, Foreign Direct Investment and the Environment: Evidence From Chinese Cities By Matthew A Cole; Robert J R Elliott; Jing Zhang
  5. The Long-Lived Effects of Historic Climate on the Wealth of Nations By Bluedorn, John; Valentinyi, Akos; Vlassopoulos, Michael
  6. Water Allocation Among Multiple Uses Using Interactive Decision Maps By Rui Fragoso; Vladimir Bushenkov; Carlos Marques
  7. Evidence and Policy Lessons on the Links between Disaster Risk and Poverty in Latin America By Lopez-Calva, Luis Felipe; Ortiz-Juarez, Eduardo
  8. The Impact of Trade Barriers on Mandated Biofuel Consumption in Canada By Le Roy, Danny G.; Elobeid, Amani E.; Klein, K.K.
  9. Dirty Money: Is there a Wage Premium for Working in a Pollution Intensive Industry By Matthew A Cole; Robert J R Elliott; Joanne K Lindley
  10. Price Discovery, Causality and Volatility Spillovers in European Union Allowances Phase II: A High Frequency Analysis By Rittler, Daniel

  1. By: Tsur, Yacov; Zemel, Amos
    Keywords: fossil and solar energy, optimal processes, characteristic curves, price thresholds, environmental regulation., Resource /Energy Economics and Policy,
    Date: 2009–10
  2. By: Zhang, ZhongXiang
    Abstract: To date, border adjustment measures in the form of emissions allowance requirements (EAR) under the U.S. proposed cap-and-trade regime are the most concrete unilateral trade measure put forward on the table to level the carbon playing field. If improperly implemented, such measures could disturb the world trade order and trigger trade war. Because of these potentially far-reaching impacts, this paper focuses on this type of unilateral border adjustment that requires importers to acquire and surrender emissions allowances corresponding to the embedded carbon contents in their goods from countries that have not taken climate actions comparable to that of home country. Our discussion is mainly on the legality of unilateral EAR under the WTO rules. Given that the inclusion of border carbon adjustment measures is widely considered essential to secure passage of any U.S. legislation capping its greenhouse gas emissions, we argue that, on the U.S. side, in designing such trade measures, WTO rules need to be carefully scrutinised, and efforts need to be made early on to ensure that the proposed measures comply with them. After all, a conflict between the trade and climate regimes, if it breaks out, helps neither trade nor the global climate. The U.S. needs to explore with its trading partners cooperative sectoral approaches to advancing low-carbon technologies and/or concerted mitigation efforts in a given sector at an international level. Moreover, to increase the prospects for a successful WTO defence of the Waxman-Markey type of border adjustment provision, 1) there should be a period of good faith efforts to reach agreements among the countries concerned before imposing such trade measures; 2) WTO consistency also requires considering alternatives to trade provisions that could be reasonably expected to fulfill the same function but are not inconsistent or less inconsistent with the relevant WTO provisions; and 3) trade provisions can refer to the designated special international reserve allowance pool, but should allow importers to submit equivalent emission reduction units that are recognized by international treaties to cover the carbon contents of imported products. The paper concludes by arguing that the major developing countries being targeted by such border carbon adjustment measures should make the best use of the forums provided under the United Nations Framework Convention on Climate Change to effectively deal with the proposed border adjustment measures to their advantage.
    Keywords: Post-2012 climate negotiations; Border carbon adjustments; Carbon tariffs; Emissions allowance requirements; Cap-and-trade regime; Lieberman-Warner bill; Waxman-Markey bill; World Trade Organization; Kyoto Protocol; Developing countries; United States
    JEL: F18 Q48 Q56 Q54 Q58
    Date: 2009–07–15
  3. By: Rosetta Lombardo (Dipartimento di Economia e Statistica, Università della Calabria)
    Abstract: The relationship between firms and environment is complex. The impact that firms have on the environment include the use of primary resources to make products and the production of wastes and emissions. The impact of firms’ products on the environment, moreover, is not negligible. Environmental laws cannot, and should not, prescribe every decision taken by every business. Rather, consideration of environmental issues should be part of good business practice. Firms have, in fact, more than one reason for adopting environmentally responsible behaviour. This paper surveys the literature that analyze the circumstances under which firms can reconcile the apparently competing goals of increasing the expected value of their activity and internalizing external costs doing more than they are required to do under laws and regulations.
    Keywords: Environment, externalities, social responsibility
    JEL: O13 D21 D62
    Date: 2009–11
  4. By: Matthew A Cole; Robert J R Elliott; Jing Zhang
    Abstract: In this paper we investigate the relationship between economic growth and industrial pollution emissions in China using data for 112 major cities between 2001 and 2004. Using disaggregated data we separate FDI inflows from Hong Kong, Macao and Taiwan from those of other foreign economies. We examine two industrial water pollution indicators (wastewater and petroleum-like matter) and four industrial air pollution indicators (waste gas, sulphur dioxide, soot and dust). Our results suggest that most air and water emissions rise with increases in economic growth at current income levels. The share of output of domestic and foreign owned firms increases several pollutants in a statistically significant manner while output of firms from Hong Kong, Macao and Taiwan either reduces pollution or is statistically insignificant.
    Keywords: FDI, economic growth, pollution, cities
    Date: 2009–11
  5. By: Bluedorn, John; Valentinyi, Akos; Vlassopoulos, Michael
    Abstract: We investigate the long-run consequences of historic, climatic temperatures (1730-2000) for the modern cross-country income distribution. Using a newly constructed dataset of climatic temperatures stretching over three centuries (18th, 19th, and 20th), we estimate a robust and significant time-varying, non-monotonic effect of climatic temperature upon current incomes for a cross-section of 167 countries. We find a large, positive effect of 18th century climatic temperature and an even larger, negative effect of 19th century climatic temperature upon current incomes. When historic, climatic temperature is introduced, the effect of 20th century climatic temperature on current income is either weakly positive or insignificant. Our findings are robust to various sub-samples, additional geographic controls, and alternative income measures. The negative relationship between current, climatic temperature and current income that is commonly estimated appears to reflect the long-run effect of climatic variations in the 18th and 19th centuries.
    Keywords: climate; economic performance; geography; history; temperature
    JEL: N50 O11 O40 O50 O57
    Date: 2009–11
  6. By: Rui Fragoso (Universidade de Evora, Departamento de Gestão, ICAM/CEFAGE-UE); Vladimir Bushenkov (Universidade de Evora, Departamento de Matemática, CIMA); Carlos Marques (Universidade de Evora, Departamento de Gestão, CEFAGE-UE)
    Abstract: Alqueva dam in the Alentejo Region was developed to solve water scarcity in the South of Portugal and to ensure permanent availability of water for household and industrial consumption, irrigation, production of electric energy, and ecological and environmental purposes. Competition among some of these multiple water uses requires an integrated management framework. This paper uses Interactive Decision Maps (IDM) technique to explore and achieve efficient and equitable water allocation combinations taking into account those multiple goals and principles of good water governance.
    Keywords: Operations Research, Water Management, Multiple Criteria Decision Making, Interactive Decision Maps, Feasible Goal Method, Alqueva
    JEL: Q2 Q25 C6 C61
    Date: 2009
  7. By: Lopez-Calva, Luis Felipe; Ortiz-Juarez, Eduardo
    Abstract: Extreme climate-related events have a direct impact on the welfare of households. The frequency and magnitude of those shocks appear to be closely linked to increasing vulnerability of households and communities in developing countries. Yet, the link between natural disasters and living standards is complex and causality is difficult to capture empirically. Among other reasons, there is a two-way relationship between the vulnerability to natural disasters and poverty, and disentangling the direction of the causal impacts is rather challenging, especially in terms of the intensity of the effects of the events and not only their incidence. This paper pursued two main goals. First, the empirical analysis estimated the relation between natural events and social indicators at the local level, establishing a causal link whenever possible. Second, analysis was carried out at the household level in order to determine the potential role played by coping mechanisms to influence long-term impacts on welfare.
    Keywords: Natural hazards; Poverty; Well-being
    JEL: I30 O10 O54 Q54
    Date: 2009–01–20
  8. By: Le Roy, Danny G.; Elobeid, Amani E.; Klein, K.K.
    Abstract: In 2008 the Canadian government passed amendments to the Environmental Protection Act requiring five percent ethanol in transportation fuels sold in Canada by 2010 and two percent renewable content in diesel and heating fuels by 2012. Agricultural commodity and other groups have lobbied for further marketplace intervention that would ensure the biofuel needed to meet the legislated requirement be produced from domestic sources. Indeed, many of these special interests would like the biofuels content increased from five to ten percent and for the increase to be met by domestic firms only. The objective of this study is to compare the relative economic impacts in Canada of achieving a ten percent biofuel content either through increased imports or by substituting domestic production in place of increased imports.
    Keywords: biofuel trade policy ethanol canada, Demand and Price Analysis, International Relations/Trade,
    Date: 2009–10
  9. By: Matthew A Cole; Robert J R Elliott; Joanne K Lindley
    Abstract: Within a compensating wage differential framework we investigate whether there is a wage premium for working in a pollution intensive industry. Our results for the economy as a whole suggest a small wage premium of approximately one quarter of one percent associated with the risk of working in a dirty job. This premium rises to over fifteen percent for those individuals who work in one of the five dirtiest industries. We also find evidence of a fatal risk wage premium, providing estimates of the value of a statistical life of between £12 million and £19 million (2000 prices).
    Keywords: Compensating Wage Differentials, Pollution, Value of Statistical Life
    JEL: J28 J31 Q52
    Date: 2009–11
  10. By: Rittler, Daniel
    Abstract: This paper deals with the modeling of the relationship of European Union Allowance spot- and futures-prices within the second commitment period of the European Union Emission Trading Scheme. Based on high frequency data, we analyze causality in the first and the second conditional moments. To reveal long run price discovery we compute the common factor weights proposed by Schwarz and Szakmary (1994) and the information share proposed by Hasbrouck (1995) based on the estimated coefficients of a vector error correction model. To analyze the short run dynamics we perform Granger causalty tests. The GARCH-BEKK model introduced by Engle and Kroner (1995) is employed to analyze the volatility transmission structure. We identify the futures market to be the leader of the long run price discovery process whereas a bidirectional short run causality structure is observed. Furthermore we detect unidirectional volatility transmission from the futures to the spot market at highest frequencies.
    Keywords: CO2 Emission Allowances; Causality; Volatility Transmission; Spot Prices; Futures Prices
    Date: 2009–11–25

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