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on Environmental Economics |
| By: | Amigues, Jean-Pierre (Toulouse School of Economics); Chakravorty, Ujjayant (University of Alberta, Department of Economics); Moreaux, Michel (Toulouse School of Economics) |
| Abstract: | Regulation of environmental externalities like global warming from the burning of fossil fuels (e.g., coal and oil) is often done by capping both emission flows and stocks. For example, the European Union and states in the Northeastern United States have introduced caps on flows of carbon emissions while the stated goal of the Intergovernmental Panel on Climate Change (IPCC) which provides the science behind the current global climate negotiations is to stabilize the atmospheric stock of carbon. Flow regulation is often local or regional in nature, while stock regulation is global. How do these multiple pollution control efforts interact when a nonrenewable resource creates pollution? In this paper we show that local and global pollution control efforts, if uncoordinated, may exacerbate environmental externalities. For example, a stricter cap on emission flows may actually increase the global pollution stock and hasten the date when the global pollution cap is reached. |
| Keywords: | dynamics; environmental regulation; externalities; nonrenewable resources; pollution |
| JEL: | Q12 Q32 Q41 |
| Date: | 2009–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2010_002&r=env |
| By: | Peter Cramton (Economics Department, University of Maryland); Steven Stoft |
| Abstract: | Developing countries justifiably reject meaningful emission targets. This prevents the Kyoto Protocol from establishing a global price for greenhouse gas emissions, and leaves almost all new emissions unpriced. This paper proposes a new pair of commitments—a commitment to a binding carbon-price target and to a Green Fund financed by a form of carbon pricing. The result is global carbon pricing that neither requires developing countries to accept emission caps nor requires industrial countries to accept carbon taxes. The cost of complying with these commitments is subject to far less risk than the cost of an emissions cap, and the combined cost of a $30/ton price target and the Green Fund is only 23 cents per person per day for the United States and is negative for India. The combined advantages should significantly increase the chance that developing countries will commit to a substantial carbon price, and this should increase the chance of cap and trade passing the U.S. Senate. |
| Keywords: | Climate change, carbon pricing, cap and trade, carbon auctions |
| JEL: | Q54 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pcc:pccumd:10pbcc&r=env |
| By: | Strand, Jon |
| Abstract: | This paper develops a global model of climate policy, focusing on the choice between tax and cap-and-trade solutions. The analysis assumes that the world can be split into two regions, with two fuels that both lead to carbon emissions. Region A consumes all fuels, and is responsible for defining and implementing climate policy. Region B produces all of fuel 1 (oil), while fuel 2 (interpreted as coal, natural gas, or renewables) is both produced and consumed in region A. The paper studies three model variants. All involve full policy coordination in each country block, but no coordination across blocks; and all involve an optimal producer tax on fuel 1 by region B. In model 1, region A sets two fuel consumption taxes, one for each fuel. The optimal region A tax on fuel 1 then exceeds the Pigou level as defined by the region; the tax set on fuel 2 is Pigouvian. The presence of a second fuel in region A reduces region B’s optimal tax on fuel 1. In model 2, region A sets a common carbon tax, which is lower (higher) for fuel 1 (2) than in model 1. In model 3, region A sets a carbon emissions cap. This enhances region B’s strategic position via the trade-off between fuels 1 and 2 in region A, following from the cap. In realistic cases, this leaves region A strategically weaker under a cap policy than under a tax policy, more so the less carbon-intensive the local fuel (2) is. In conclusion, a fuel-consuming and importing region that determines a climate policy will typically prefer to set a carbon tax, instead of setting a carbon emissions cap. The main reason is that a tax is more efficient than a cap at extracting rent from fuel (oil) exporters. |
| Keywords: | Climate Change Mitigation and Green House Gases,Transport Economics Policy&Planning,Environment and Energy Efficiency,Energy and Environment,Climate Change Economics |
| Date: | 2010–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5171&r=env |
| By: | Peter Cramton (Economics Department, University of Maryland); Steven Stoft |
| Abstract: | Developing countries reject meaningful emission targets (recent intensity caps are no exception), while many industrialized countries insist that developing countries accept them. This impasse has prevented the Kyoto Protocol from establishing a global price for greenhouse gas emissions. This paper presents a solution to this dilemma—allow countries to commit to a binding global carbon-price target. This commitment could be met by cap and trade, a carbon tax, or any combination. This would allow developing countries to accept the same carbon price as the most advanced countries instead of accepting a cap that is as low as U.S. emissions in the 1800s. And it would allow the U.S. and the E.U. to keep their cap and trade schemes. The paper defines a carbon-price target, and shows how compliance could be induced using both carrots and sticks. We also demonstrate that carbon pricing can be guaranteed to be inexpensive under a carbon-price target. A Green Fund is suggested that reinforces rather than subverts cooperation on global carbon pricing. The combined cost of a $30/ton price target and the Green Fund is only 23 cents per person per day for the United States and is negative for India. Together, these advantages should greatly increase the chance that developing countries will commit to a substantial carbon price, and this should increase the chance of cap and trade passing the U.S. Senate. Such a policy would also reduce the world oil price. For China and the United States, this savings might well cover the full cost of the proposed initial climate agreement. |
| Keywords: | Climate change, carbon pricing, cap and trade, carbon auctions |
| JEL: | Q54 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pcc:pccumd:09gcp&r=env |
| By: | Marletto, Gerardo |
| Abstract: | Heterodox environmental economics is mainly based on non-mainstream economic theories; more precisely it refers to institutional and Schumpeterian economics. Starting from these theoretical foundations, heterodox environmental economics radically differs from the mainstream approach to environmental economics and policy. Three basic concepts are at the hearth of such a different vision: resource regimes, as institutional structures established to manage natural resources; environmental appraisals, as “value articulating” institutions conditioned by the incommensurability of conflicting values; transitions, as dynamic processes that are needed to unlock existing “socio-technical” systems. But a stable community of researchers defining themselves as ‘evolutionary/institutional environmental economists’ still does not exist. Time will tell if existing connections between some research groups will generate the social core of a nascent paradigm. |
| Keywords: | Environmental economics; Environmental policy; Institutional economics; Evolutionary theories of economic change |
| JEL: | Q50 B52 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:19933&r=env |
| By: | Thornton, Philip K.; Herrero, Mario |
| Abstract: | Livestock systems globally are changing rapidly in response to human population growth, urbanization, and growing incomes. This paper discusses the linkages between burgeoning demand for livestock products, growth in livestock production, and the impacts this may have on natural resources, and how these may both affect and be affected by climate change in the coming decades. Water and land scarcity will increasingly have the potential to constrain food production growth, with adverse impacts on food security and human well-being. Climate change will exacerbate many of these trends, with direct effects on agricultural yields, water availability, and production risk. In the transition to a carbon-constrained economy, livestock systems will have a key role to play in mitigating future emissions. At the same time, appropriate pricing of greenhouse gas emissions will modify livestock production costs and patterns. Health and ethical considerations can also be expected to play an increasing role in modifying consumption patterns of livestock products, particularly in more developed countries. Livestock systems are heterogeneous, and a highly differentiated approach needs to be taken to assessing impacts and options, particularly as they affect the resource-poor and those vulnerable to global change. Development of comprehensive frameworks that can be used for assessing impacts and analyzing trade-offs at both local and regional levels is needed for identifying and targeting production practices and policies that are locally appropriate and can contribute to environmental sustainability, poverty alleviation, and economic development. |
| Keywords: | Livestock&Animal Husbandry,Wetlands,Wildlife Resources,Agricultural Knowledge&Information Systems,Rural Development Knowledge&Information Systems |
| Date: | 2010–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5178&r=env |
| By: | Leiter, Andrea M. (Department of Economics and Statistics, University of Innsbruck); Parolini, Arno (Department of Economics and Statistics, University of Innsbruck); Winner, Hannes (University of Salzburg) |
| Abstract: | This paper contributes to the empirical literature on the relationship between environmental regulation and firm behavior. In particular, we ask whether and how strongly an industry's investment responds to stringency in environmental regulation. Environmental stringency is measured as (i) an industry's total current expenditure on environmental protection, and (ii) a country's revenue from environmental taxes. Focusing on European industry level data between 1995 and 2005, we estimate the dierential impact of environmental stringency on four types of investment: gross investment in tangible goods, in new buildings, in machinery, and in `productive' investment (investment in tangible goods minus investment in abatement technologies). Both environmental variables enter positively, and their quadratic terms exhibit signi cantly negative parameter estimates. This, in turn, indicates a positive but diminishing impact of environmental regulation on investment. |
| Keywords: | Investment; environmental regulation; pollution abatement costs; Europe. |
| JEL: | D92 H23 Q52 |
| Date: | 2010–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:ris:sbgwpe:2010_001&r=env |
| By: | ZhongXiang Zhang (East-West Center); ; |
| 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 to level the carbon playing field. If improperly implemented, such measures could disturb the world trade order and trigger a trade war. Because of these potentially far-reaching impacts, this paper focuses on this type of unilateral border adjustment, which 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. This 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, the paper argues 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, there should be: 1) a period of good faith efforts to reach agreements among the countries concerned before imposing such trade measures; 2) consideration of 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 that 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 and its Kyoto Protocol to effectively deal with the proposed border adjustment measures to their advantage. |
| JEL: | F18 Q48 Q54 Q56 Q58 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:ewc:wpaper:wp105&r=env |
| By: | Hallegatte, Stephane; Dumas, Patrice; Hourcade, Jean-Charles |
| Abstract: | This note highlights a major reason to limit climate change to the lowest possible levels. This reason follows from the large increase in uncertainty associated with high levels of warming. This uncertainty arises from three sources: the change in climate itself, the change’s impacts at the sector level, and their macroeconomic costs. First, the greater the difference between the future climate and the current one, the more difficult it is to predict how local climates will evolve, making it more difficult to anticipate adaptation actions. Second, the adaptive capacity of various economic sectors can already be observed for limited warming, but is largely unknown for larger changes. The larger the change in climate, therefore, the more uncertain is the final impact on economic sectors. Third, economic systems can efficiently cope with sectoral losses, but macroeconomic-level adaptive capacity is difficult to assess, especially when it involves more than marginal economic changes and when structural economic shifts are required. In particular, these shifts are difficult to model and involve thresholds beyond which the total macroeconomic cost would rise rapidly. The existence of such thresholds is supported by past experiences, including economic disruptions caused by natural disasters, observed difficulties funding needed infrastructure, and regional crises due to rapid economic shifts induced by new technologies or globalization. As a consequence, larger warming is associated with higher cost, but also with larger uncertainty about the cost. Because this uncertainty translates into risks and makes it more difficult to implement adaptation strategies, it represents an additional motive to mitigate climate change. |
| Keywords: | Climate Change Economics,Science of Climate Change,Climate Change Mitigation and Green House Gases,Adaptation to Climate Change,Transport Economics Policy&Planning |
| Date: | 2010–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5179&r=env |
| By: | Svitakova, Jirina; Kosina, Peir; La Rovers, Roberto |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ags:cimmis:56089&r=env |
| By: | Andersen, Lykke E.; Verner, Dorte |
| Abstract: | This paper uses municipality level data to estimate the general relationship between climate, income, and life expectancy in Chile. The analysis finds that incomes are negatively related to temperature, while life expectancy is not significantly related to average temperatures. Both incomes and life expectancy are greater in areas with either very little rain or a lot of rain. The authors use the estimated relationships to simulate the effects of both past (1958-08) and future (2008-58) climate change. The findings indicate that past climate change has been favorable for the central, and most populous, part of Chile, and it has contributed to reduced poverty and reduced inequality of health outcomes. Whereas temperatures in the past have shown a downward trend for most of the Chilean population, climate models suggest that they will increase in the future, and that there will be a reduction in precipitation in the central part of Chile. The analysis simulates the likely effects of these projected climate changes over the next 50 years. The findings suggest that expected future climate will tend to reduce incomes across the whole country, with an average reduction of about 7 percent, all other things equal. |
| Keywords: | Climate Change Mitigation and Green House Gases,Science of Climate Change,Climate Change Economics,Global Environment Facility,Regional Economic Development |
| Date: | 2010–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5170&r=env |
| By: | Mukherjee, Sacchidananda; Chakraborty, Debashis |
| Abstract: | The current study attempts to understand the relationships among Environmental Quality (EQ), Human Development (HD) and political and governance regime in a cross-country framework. The underlying hypothesis is that in addition to income, as reflected from the literature on Environmental Kuznets Curve (EKC) hypothesis, several other factors, including social and political ones, may influence environmental decision making, and thereby environmental sustainability, in a country. The EQ of the countries in the current study is denoted by their Environmental Performance Index (2008). Human development is represented by Human Development Index (2007) and Human Poverty Index (2006). Democracy Index (2008) and Corruption Perceptions Index (2008) are considered as proxies for political transparency in a country and its susceptibility to rent-seeking activities respectively. The regression results confirm the closer association between the socio-economic and socio-political factors in a country and its environmental performance. |
| Keywords: | environmental quality; human development; economic growth; democracy; corruption; environmental Kuznets curve (EKC) |
| JEL: | D73 O15 Q56 Q01 D72 O4 P28 |
| Date: | 2010–01–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:19968&r=env |
| By: | OECD |
| Abstract: | Debates exist between those who claim that environmental policy will impose additional burdens and costs on industries, thus impairing their competitiveness, and those who claim that improved environmental performance can spur competitiveness. These arguments often surface when new environmental policy regulation are considered, e.g. when the REACH Directive was introduced in Europe, or when a government is considering the introduction of a carbon tax.<p> The report develops a conceptual framework to shed some light on this difficult debate. Competitiveness impacts of environmental policies may derive from the policy itself, or from the improvements of the environmental performance that derives from the policy. These impacts can be analysed at either firm or industry levels; they may differ over the short and long term. Globalisation, with the increasing role of MNEs and mobile capital and labour, is adding more complexity.<p>This framework is used to decipher some of the messages that come out of empirical studies on these issues. Empirical evidence is mixed, and the paper identifies methodological and substantive reasons why empirical research fails to determine the relationship between environmental policy and competitiveness.<p>Lessons derive from this literature review. Typically, even when implementing the environmental policy is clearly in the overall interest of society, the costs and benefits of the policy are unlikely to be equally shared among economic agents. While some win, individual firms or industries may stand to lose. Policy design should make sure that the adverse competitiveness impacts are not unnecessarily large, for example by paying attention to predictability, transition periods, and transaction costs. Specific measures to support the losers in their adjustment can also be developed. Sometimes measures to mitigate the adverse competitiveness impacts of an environmental policy are necessary to achieve political support for the policy. In those instances, the planned measures should be carefully analysed from several angles to ensure that they do not inadvertently hurt the efficiency and effectiveness of the original policy. More work is required to further explore these issues, which are consequential for the design, the implementation and the enforcement of environmental policies.</p><BR>Il y a souvent débat entre ceux qui pensent que les politiques environnementales vont imposer des charges supplémentaires aux entreprises et ainsi détériorer leur compétitivité, et d’autres qui pensent qu’une meilleure performance environnementale est un facteur de compétitivité. Ces débats affleurent en particulier quand de nouvelles réglementations environnementales sont débattues, par exemple lorsque la directive REACH a été mise en œuvre en Europe, ou quand des gouvernements réfléchissent à l’introduction d’une taxe carbone.<p> Dans ce rapport, un cadre conceptuel est proposé, pour tirer des enseignements de ces débats. Les impacts d’une politique environnementale sur la compétitivité peuvent découler de la politique elle-même, ou des conséquences de la politique sur les performances environnementales. Ces impacts se mesurent au niveau des firmes ou des secteurs économiques ; ils peuvent être différents à court ou à long terme. La globalisation rend ces mécanismes encore plus complexes, avec le rôle accru des multinationales et la mobilité du capital et de l’emploi.<p> Le cadre conceptuel est utilisé pour donner un sens aux résultats des études empiriques sur ces thèmes. Ces résultats sont ambigus et le rapport propose des raisons à la fois méthodologiques et de fond qui expliquent pourquoi les recherches empiriques ne parviennent pas à comprendre la relation entre les politiques environnementales et la compétitivité.<p> L’analyse des sources documentaires fait ressortir quelques messages. Par exemple, même quand une politique environnementale a des effets positifs clairs sur l’ensemble de la collectivité, il est probable que les coûts et les bénéfices de cette politique soient inégalement répartis entre les agents économiques. Il se peut que certaines entreprises ou certains secteurs gagnent alors que d’autres perdent. La politique doit être conçue de sorte que les coûts ne soient pas indûment élevés, par exemple en annonçant à l’avance, en prévoyant des périodes de transition, et en étant attentifs aux coûts de transaction. Il est possible de prévoir des mesures dédiées aux perdants afin d’accompagner leurs ajustements. Dans certains cas, des mesures qui limitent les impacts négatifs d’une politique sur la compétitivité sont utiles pour susciter une adhésion à cette politique. Dans ces cas, les mesures envisagées doivent être analysées sous différents angles pour s’assurer qu’elles ne restreignent pas l’efficacité et l’efficience du projet initial. Des travaux complémentaires sont nécessaires pour étudier ces sujets qui sont importants pour la conception, la mise en œuvre et le respect des politiques environnementales.</p> |
| Keywords: | competitiveness, eco-innovation, environmental policy, globalisation, pollution haven, Porter hypothesis, resource efficiency, supply chain, circuits d’approvisionnement, compétitivité, éco-innovation, efficacité en ressources, hypothèse de Porter, mondialisation |
| JEL: | O31 O33 O38 |
| Date: | 2010–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaaa:13-en&r=env |
| By: | Ran Zhang (Department of Economics, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA); Kenneth Simons (Department of Economics, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA); David I. Stern (Division of Economics, Crawford School of Economics and Government, Australian National University, Canberra ACT 0200, Australia) |
| Abstract: | This paper incorporates EGARCH modeling in a financial event study relating firm value to negative environmental news. News media provide informal information channels unlike formal government disclosure programs. This paper improves on previous studies by using a larger sample than most studies, treating heteroskedasticity in the disturbance term with a hybrid method that allows EGARCH, and comparing stock market reactions across industries and event types. Both standard and hybrid methods reveal reductions in firms’ stock market valuations by on average 1.2% in response to negative environmental events. Significant negative market reactions to environmental news arise for all industry groups and event types analyzed. Accidents and complaints yield 2.0% mean reductions in stock market value, versus later lawsuits and court decisions with 1.5% and 0.8% reductions respectively. Firms in traditional polluting industries are most affected. These stock market impacts suggest that informal environmental information channels may financially incentivize firms’ self-regulation. |
| JEL: | Q50 G14 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:rpi:rpiwpe:1001&r=env |
| By: | Franckx , Laurent; Van Hyfte , Annick; Bogaert, Sarah; Vermoote, Stijn; Hunt , Alistair |
| Abstract: | In 2007-2008, ARCADIS has conducted a study on behalf of the Flemish government, with as main objectives a review and a critical analysis of the existing calculations of environmental health costs in Flanders. This study covers the effects on human health of air pollution due to particulates and tropospheric ozone. Despite the large uncertainty surrounding individual estimates, we can be confident about the order of magnitude of the yearly marginal “cost of illness” due to PM2.5, PM10 and ozone (a few dozens of millions EUR per 10µg/m³). If we also take into account the “subjective” health costs, our estimates run in the billion EUR. |
| Keywords: | air quality; health; cost-of-illness; PM2.5; PM10; ozone |
| JEL: | H51 I12 Q53 Q51 |
| Date: | 2009–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20048&r=env |
| By: | Rolf Golombek, Mads Greaker, Sverre A.C Kittelsen, Ole Røgeberg and Finn Roar Aune (Statistics Norway) |
| Abstract: | We examine the potential of Carbon Capture and Storage (CCS) technologies in the European electricity markets, assessing whether CCS technologies will reduce carbon emissions substantially in the absence of investment subsidies, and how the availability of CCS technologies may affect electricity prices and the amount of renewable electricity. To this end we augment a multi-market equilibrium model of the European energy markets with CCS electricity technologies. The CCS technologies are characterized by costs and technical efficiencies synthesized from a number of recent cost estimates and CCS technology reviews. Our simulations indicate that with realistic values for carbon prices, new CCS coal power plants become profitable, totally replacing non-CCS coal power investments and to a large extent replacing new wind power. New CCS gas power also becomes profitable, but does not replace non-CCS gas power fully. Substantially lower CCS costs, through subsidies on technological development or deployment, would be necessary to make CCS modification of old coal and gas power plants profitable. |
| Keywords: | Carbon capture and storage; fossil fuels; energy; carbon emissions; abatement. |
| JEL: | H23 Q40 Q54 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:603&r=env |
| By: | Brophy Haney, A.; Jones, I.W.; Pollitt, M.G. |
| Abstract: | More and more companies in the UK are developing strategies to address the challenges of climate change. We focus on the UK retail sector and explore the role of partnership in shaping the climate change commitments and actions taken by retail companies. We use a social capital approach to firstly measure best practice in the climate strategies of a sample of 60 companies. We then measure the differences in engagement with partner organisations across the same set of companies. Using our best practice and partnership indices, we investigate how committed companies are to climate strategies; how partnerships have an impact on best practice; and we try to understand the distinction between companies that are more and less highly engaged in partnering. We find that partnership has an important role to play; and specifically that higher levels of partner diversity and greater depth of engagement improve the impact of partnership on best practice. |
| Keywords: | Corporate Responsibility, Carbon Reduction Commitment, energy efficiency, social capital |
| JEL: | M14 Z13 |
| Date: | 2009–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:0950&r=env |
| By: | Addison, Tony; Arndt, Channing; Tarp, Finn |
| Abstract: | The global economy is passing through a period of profound change. The immediate concern is with the financial crisis, originating in the North. The South is affected via reduced demand and lower prices for their exports, reduced private financial flows, and falling remittances. This is the first crisis. Simultaneously, climate change remains unchecked, with the growth in greenhouse gas emissions exceeding previous estimates. This is the second crisis. Finally, malnutrition and hunger are on the rise, propelled by the recent inflation in global food prices. This constitutes the third crisis. These three crises interact to undermine the prosperity of present and future generations. Each has implications for international aid and underline the need for concerted action. |
| Keywords: | financial crisis, global food prices, climate change |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2010-01&r=env |
| By: | Kurt Kratena (Austrian Institute of Economic Research); Gerhard Streicher (Joanneum Research GmbH) |
| Abstract: | The aim of this paper is to compare a social welfare (SW) indicator for sustainability with the ecological footprint (EF) indicator for measuring spatial sustainability. The framework applied follows the line of a core-periphery model of "new economic geography" as put forward in Grazi, van den Bergh and Rietveld, EnvironResourceEcon, 2007, (38) with interregional trade, agglomeration advantages and resource (land) use or environmental externalities. Welfare or sustainability indicators rely on quantitative relations between economic welfare, externalities and the integrity of (global) natural capital. We argue that these relationships, in order to be comparable, should be specified in a similar way in both indicator concepts (SW function and EF). The main difference between the two indicators is that the EF concept works with a binding resource constraint ("biocapacity") and therefore exclusively represents strong sustainability, while the SW indicator can be specified in a way to represent strong as well as weak sustainability. If the SW function is specified and parameterised as an indicator for strong sustainability, we get similar results for the welfare ranking of different land use configurations. If the SW function is specified and parameterised as an indicator for weak sustainability, we replicate the results of Grazi, van den Bergh and Rietveld (2007) that EF and SW lead to completely different welfare rankings of different land use configurations. |
| Keywords: | ecological footprint, social welfare measures, weak and strong sustainability |
| Date: | 2009–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2009:i:349&r=env |
| By: | Kosnik, Lea; Lange, Ian |
| Abstract: | Policy shocks affect the rent distribution in long-term contracts, which can lead to such contracts being renegotiated. We seek an understanding of what aspects of contract design, in the face of a substantial policy shock, affect the propensity to renegotiate. We test our hypotheses using data on U.S. coal contracts after the policy shock of the 1990 Clean Air Act Amendments. This law altered the regulation of emissions of sulfur dioxide from coal-fired electric power plants, initiating a tradable permit system for a subset of coal-fired power plants which had previously been unregulated at the federal level. Contracts are divided into two categories, those that were renegotiated following the shock and those that were not and their characteristics are used to determine how they influence whether or not a contract was ultimately renegotiated. The number of years until the contract expires, a larger allowable sulfur content upper bound for plants regulated immediately by the tradable permit scheme, and the minimum quantity are all associated with a contract being renegotiated. |
| Keywords: | Acid Rain; Coal Contracts; Contract Renegotiation |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2009-25&r=env |
| By: | Mishra, SK |
| Abstract: | Ever-increasing population and ever-proliferating demand for variety and choice together with a marked preference in favor of deliberate under-utilization of resources as well as deprecation of thrift have exposed the available reserves of natural resources to the danger of depletion. The culture based on the market economy has made the people concerned only about producing and consuming more, with their eyes closed to the indiscriminate exploitation of resources and dumping of the obnoxious byproducts into the environment. There is now abundant scientific evidence that humanity is living unsustainably. The environment is gradually becoming more overstressed; trophic chains and various biogeochemical cycles in the nature are being interrupted; ecological services are becoming disturbed. People now are transforming ecosystems throughout the world at a faster and more extensive pace than any other time in human history. In this milieu, this paper observes that bringing human use of natural resources within sustainable limits will require a major collective effort. There is a need to sensitize the people, especially the supposed and potential ‘creative core’, to direct their efforts to a serious thinking and action to change our present preoccupation with an unsustainable development towards sustainable development. The roles of other stakeholders and volunteer-involving organizations are no less important. sustainable development requires changes in institutions, more specifically the habits of thought and action, to opt for and adopt the new paradigm of development, to change the taste and liking regarding consumption, to think of social priorities and obligation vis-à-vis the personal ones and so on. Attitudinal changes, the alteration of the world view and the habits of thought, are only possible by a proper and holistic educational planning and an efficient governance of the academia, the government departments and the law-making and law-protecting framework of our society. The paper highlights the role of the ‘creative core’ and good governance, but the intelligentsia, especially in the less developed nations where social consciousness is dominated by the myopic personal agenda, will not be effective unless the monitoring of the entire program of development is efficient. The people must, therefore, come forward. But, while social consciousness is weak and dormant, this requirement pushes us into the vicious circle. This vicious circle is the real trap and obstacle to sustainable development. |
| Keywords: | Natural resources; sustainable development; technology; wastage; cultural determinants; post-industrial society; creative class; creative core; red bio-technology; intelligentsia |
| JEL: | N50 Q56 Q01 P28 Q57 |
| Date: | 2010–01–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:19884&r=env |
| By: | Graves, Philip E. |
| Abstract: | For at least fifty years economists have argued that vertically-aggregated marginal willingness to pay, when set equal to marginal provision cost, will result in optimal public good provision levels. This methodological approach would be expected to yield an exact analog, in terms of optimal levels of public good provision, to efficient provision of private goods in a perfect market setting. There is, however, a potentially serious flaw in the approach as actually practiced, since initial incomes are implicitly–and wrongly–taken to be optimal. From a given income, the output demand revelation problem has long been recognized–that there will be difficulty inferring true demands for public goods at that income (the traditional ‘free rider’ problem). But what has failed to receive widespread recognition among theoreticians, and especially among practitioners, is that there will also be a concomitant ‘input demand revelation’ problem. In any situation where workers cannot individually increment a class of goods by increasing their income (e.g. public goods), they will have no incentive to generate the income that would have been devoted to that class of goods. They will only generate income that is optimal to pay the higher taxes or prices associated with whatever initial public goods levels are provided. As a consequence, the benefit-cost practitioner will, even if somehow able to accurately guess marginal willingness-to-pay out of current income, observe only one apparent optima. There are an infinite number of such optima, one for each level of free riding in input markets, where aggregated marginal willingness-to-pay will appear to equal marginal provision cost. The one true Samuelson ‘optimum optimorum’ occurs when there is free riding in neither output nor input markets (that is, when the ‘full’ demand revelation problem is solved). As a consequence, pure public goods, as well as other ‘non-incrementable’ goods and goods for which non-use values are of importance will be undervalued, hence under-provided. Evidence is presented that the problem raised here might be of importance, undermining the practical significance of the Coase theorem vis-a-vis Pigouvian taxation. |
| Keywords: | environmental economics; willingness-to-pay; willingness-to-accept; benefit-cost analysis; public goods; publicly-provided goods; efficiency |
| JEL: | D62 H0 A1 Q51 A2 H4 H42 Q5 C92 H43 N5 D61 D01 Q58 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:19928&r=env |
| By: | Oscar Molina (Universidad Privada Boliviana) |
| Abstract: | Bolivia es en uno de los países con mayor vulnerabilidad a enfermedades en Latinoamérica. De los 327 municipios que se tenían el 2003, gran parte de ellos presentaron altos grados de vulnerabilidad en lo que se refiere a las Enfermedades Diarreicas Agudas (EDA’s) e Infecciones Respiratorias Agudas (IRA’s) en el occidente del país y alta vulnerabilidad en Malaria y Dengue en los municipios del oriente. A partir de la construcción de una base de datos a nivel municipal, en este estudio se ha modelado la relación entre factores climáticos (temperatura promedio, precipitación promedio, variabilidad de temperaturas, variabilidad de precipitación) y el nivel de vulnerabilidad de las cuatro enfermedades mencionadas anteriormente, y se ha usado el modelo estimado para simular los efectos del cambio climático previsto por el modelo PRECIS hasta el 2100. La modelación se realizó a nivel municipal para poder tomar en cuenta la gran heterogeneidad de Bolivia. Los resultados de los modelos sugieren que los cambios climáticos previstos por el modelo PRECIS hasta el año 2100 y los cambios esperados en las variables socioeconómicas y demográficas tendrán impactos positivos sobre el grado de riesgo de las enfermedades analizadas; sin embargo, dichas impactos positivos no pueden atribuirse al cambio climático en el caso de las EDA’s y la Malaria, sino a mejoras en variables de orden socioeconómico y demográfico como son la tasa de urbanización y los años de educación que se esperan sucedan para el 2100. De hecho en el escenario sin cambio climático los resultados serían mucho más favorables para estas enfermedades. En lo que se refiere a las EDA’s, en el año base se tienen 99 municipios en Bolivia que tiene un nivel muy alto de vulnerabilidad. Los departamentos más vulnerables son Oruro, Potosí y La Paz, mientras que los menos vulnerables son Santa Cruz, Tarija y Beni. En el escenario sin cambio climático, solamente 11 municipios tendrían este nivel de vulnerabilidad el año 2100, mientras que en el escenario A2 con cambio climático, 89 tendrían un nivel muy alto de vulnerabilidad el año 2100. Esto muestra un efecto adverso del cambio climático sobre las EDAs a nivel nacional. Para el caso de las IRA’s, en el año base existen 103 municipios con un nivel muy alto de vulnerabilidad, para el 2100 sin cambio climático se esperaría que la situación se mantenga. Sin embargo en el escenario con cambio climático se tendrían 76 municipios, lo que sugiere que los cambios climáticos tendrán un efecto beneficioso sobre la vulnerabilidad de esta enfermedad, lo cual es atribuible a que estas enfermedades tienen mayor propensión en zonas frías, las cuales aumentarían su temperatura según el modelo PRECIS. En el caso del Dengue, en el año base se tienen 87 municipios que presentaron brotes de la enfermedad, concentrados principalmente en los departamentos de Santa Cruz y Beni. Los modelos predicen que los cambios climáticos disminuirán el riesgo de la enfermedad en estos departamentos, pero la incrementarán en los municipios que en el año base no presentaron casos. Por ejemplo, el Departamento de Cochabamba pasa de 2 municipios en el año base a 11 en el 2100. Esta situación puede ser atribuida al incremento en la temperatura en zonas frías y por el otro lado a que el excesivo calor de otras zonas provoquen que estas no sean las ideales para el desarrollo de la enfermedad. Finalmente, para la malaria en el año base se tienen 135 municipios de alta vulnerabilidad a la enfermedad, para el 2100 sin cambio climático se espera que sólo 1 municipio tenga vulnerabilidad alta (Presto en Chuquisaca). En el escenario A2 con cambio climático la situación sería exactamente lo mismo, lo que nos muestra que en general no son las variables climáticas que son importantes para la malaria, sino el desarrollo socio-económico de los municipios. En el documento también se estiman las pérdidas económicas que las poblaciones locales sufrirían por el incremento de estas enfermedades atribuible al cambio climático y se llega a la conclusión que los costos económicos sobre la salud son muy modestas. Finalmente se recomienda que aunque, aparentemente los cambios climáticos y los cambios en las variables socioeconómicas y demográficas muestran efectos relativamente positivos sobre la salud en Bolivia es esencial implementar políticas que estén enfocadas a la educación y a la implementación de servicios de salud (relacionadas a la urbanización) que cuando se hicieron presentes sobrepasaron los efectos negativos que pueden tener los cambios climáticos. |
| Keywords: | Bolivia, cambio climático, salud |
| JEL: | I18 Q54 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:adv:wpaper:200914&r=env |
| By: | Nunberg, Barbara; Barma, Naazneen; Abdollahian, Mark; Green, Amanda; Perlman, Deborah |
| Abstract: | Reform programs sometimes falter because they are politically infeasible. Policy change inevitably creates winners and losers, so those with vested interests strike bargains to determine how far and how quickly reform should advance. Understanding these micro political dynamics of reform can mean the difference between a successful intervention that gains political traction and a well-intentioned gambit that falls short of achieving its developmental objectives. Donors like the World Bank have been searching for ways to take these political factors more fully into account as they design programs to support country reforms. This initiative sought to introduce a rigorous and operationally usable political analysis tool that could be systematically integrated into the World Bank's country programming cycle. The East Asia and Pacific region carried out a multi-country pilot of the Agent-Based Stakeholder Model. This innovative analytical approach entails a quantitative simulation of the complex bargaining dynamics surrounding reform. The model anticipates stakeholder coalition formation and gauges the political feasibility of alternative proposed interventions. This paper provides a review of the Agent-Based Stakeholder Model pilot experience, exploring what sets this model apart from more traditional approaches, how it works, and how it fits into the Bank's operational cycle at various stages. An overview of the Mongolia, Philippines, and Timor-Leste country cases is followed by an examination of policy-related insights and lessons learned. Finally, the paper builds on this East Asian pilot experience, offering ideas on a potential way forward for organizations like the World Bank to deepen and extend their political analysis capabilities. The paper argues that the Agent-Based Stakeholder Model, utilized thoughtfully, offers a powerful addition to the practical political economy toolkit. |
| Keywords: | Banks&Banking Reform,Public Sector Corruption&Anticorruption Measures,Environmental Economics&Policies,Social Accountability,Corporate Law |
| Date: | 2010–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5176&r=env |
| By: | Carlos Gustavo Machicado (Institute for Advanced Development Studies) |
| Abstract: | El presente estudio analiza los efectos del cambio climático sobre el sector de energía eléctrica en Bolivia durante los próximos 100 años tomando como base las proyecciones realizadas por el Modelo de Equilibrio General Computable (MEGC) de Jemio y Andersen (2009). Este modelo provee los insumos necesarios en términos de tendencias y magnitudes de las variables a ser usadas en las proyecciones. Se parte de la hipótesis que el cambio climático afectará a la generación de energía hidroeléctrica a través del efecto sobre los caudales de los ríos que suministran agua a las centrales hidroeléctricas del Sistema Interconectado Nacional (SIN). Concretamente, se espera una disminución en las precipitaciones con la consecuente disminución en el caudal, lo que reduciría la oferta de energía hidroeléctrica. Inicialmente se proyecta la demanda de energía eléctrica para los próximos 100 años, en base a la información de consumo de energía por sectores del Balance Energético Nacional (BEN). A partir de los consumos de los sectores residencial, industrial, comercial, minería y otros se proyecta la demanda en base a las tasas de crecimiento del consumo provistas por el modelo MEGC. Se empleó el supuesto que este es un mercado que siempre esta en equilibrio, es decir oferta es igual a demanda. Asimismo, se supone que en el escenario base, mitad de la oferta de energía eléctrica es termoeléctrica y la otra mitad es hidroeléctrica, tal como sucedía el año 1999 que es el año base para las proyecciones. Luego se proyecta la oferta según los escenarios A2 y B2 explotando la relación caudal de agua y potencia efectiva, diferenciando entre centrales hidroeléctricas de pasada y de embalse. Para las centrales de pasada se emplea una relación lineal entre potencia y caudal, mientras que para las centrales de embalse se emplean estimaciones de Mínimos Cuadrados Ordinarios (MCO) usando información semanal que nos permite relacionar el volumen embalsado con el caudal y luego con la generación de energía. El impacto económico del cambio climático en el sector se lo estima como el costo de producir la energía termoeléctrica adicional necesaria para cubrir la brecha generada por una menor oferta de energía hidroeléctrica y que permita cubrir la demanda del escenario base. Los resultados indican que producto del cambio climático habrá una reducción de energía hidroeléctrica de 18% según el escenario A2 y de 20% según el escenario B2, hacia el año 2100. El costo de cubrir estas brechas con energía termoeléctrica será de 0.05% y 0.06% del PIB en el año 2100, según los escenarios A2 y B2 respectivamente. Potencial hidroeléctrico, Bolivia tiene de sobra, lo que hace falta es invertir en una mayor generación de energía hidroeléctrica, no solo para cubrir la demanda creciente, sino también para mitigar los efectos del cambio climático a través de la disminución de los caudales en el occidente del país. |
| Keywords: | Cambio Climático, Bolivia, Energía |
| JEL: | Q54 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:adv:wpaper:200912&r=env |