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on Environmental Economics |
| By: | Strand, Jon; Miller, Sebastian |
| Abstract: | Large and energy-intensive infrastructure investments with long life times have substantial implications for climate policy. This study focuses on options to scale down energy consumption and carbon emissions now and in the future, and on the costs of doing so. Two ways carbon emissions can be reduced post-investment include retrofitting the infrastructure, or closing it down. Generally, the presence of bulky infrastructure investments makes it more costly to reduce emissions later. Moreover, when expected energy and environmental costs are continually rising, inherent biases in the selection processes for infrastructure investments lead to excessive energy intensity in such investments. Thus great care must be taken when choosing the energy intensity of the infrastructure at the time of investment. Simulations indicate that optimally exercising the retrofit option, when it is available, reduces ex ante expected energy consumption relative to the no-option case. Total energy plus retrofit costs can also be substantially reduced, the more so the larger is ex ante cost uncertainty. However, the availability of the retrofit option also leads to a more energy intensive initial infrastructure choice; this offsets some, but usually not all, of the gains from options for subsequent retrofitting. |
| Keywords: | Energy Production and Transportation,Transport Economics Policy&Planning,Climate Change Mitigation and Green House Gases,Climate Change Economics,Environment and Energy Efficiency |
| Date: | 2010–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5208&r=env |
| By: | Thomas S. Lontzek; Daiju Narita |
| Abstract: | Degradation of ecosystem services may be a major component of climate change damage, and incorporation of this factor could significantly alter the significance of uncertainty in climate-economy modeling. However, this aspect has been little investigated by economic analyses of climate change and uncertainty. We apply standardized numerical techniques of stochastic optimization to this research question. The model results show that the effects of uncertainty are different with different levels of agent’s risk aversion. Also, uncertainty exhibits different effects on mitigation policy and capital investment according to the availability of ecosystem services. Importantly, both the risk aversion and the availability of ecosystem services can change the effects of uncertainty on mitigation not only in level but also in sign. In other words, mitigation could both increase and decrease with climatic uncertainty. The model would provide hints for policymaking in finding a balance between economic growth, climate protection, and the conservation of ecosystems |
| Keywords: | climate change, decision making under uncertainty, stochastic control, renewable resource, ecosystem services |
| JEL: | C63 Q54 D81 |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1593&r=env |
| By: | Sova, Robert; Stancu, Ion; Sova, Anamaria; Fratila, Lauretiu; Sava, Valentin |
| Abstract: | The aim of the present study is to shed some light on the framework for Understanding Environmental Policy in Romania, in contrast to the existing literature which mostly focuses on developed economies. Specifically, we use the Pigovian and Coasian Externality Theory. For the empirical analysis we use a survey data of the Romanian National Institute of Statistics and estimate Multilevel Regression Model (MRM) to investigate the determinants of environmental behaviour at plant level. Our results reveal some important differences vis-à-vis the developed countries, such as a less significant role for collective action and environmental taxes, which suggests some possible policy changes to achieve better environmental outcomes. |
| Keywords: | pollution abatement and control expenditure; transition economy; |
| JEL: | Q52 C23 |
| Date: | 2009–12–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:20630&r=env |
| By: | Duo Qin (Queen Mary, University of London) |
| Abstract: | This study examines the long-run relationship between industrial pollution and income in China using provincial panel data. Four types of pollutants are modelled: waste water, solid wastes, soot and SO<sub>2</sub> emission. Two types of income effects are considered: the scale and growth effects. The study finds little evidence of inverse U shape curves as postulated by EKC models; pollutant emissions may go positively or negatively with income irrespective of income levels whereas certain sign of alleviation in pollutant concentration due to income growth is discernible; trade is found to be insignificant while the hazardous nature of pollutants appears to be an important factor for heterogeneity in the income effect estimates; the heterogeneity cautions us against simple panel model specification. |
| Keywords: | Environmental Kuznets curve, Pollution, Economic growth, Trade, Heterogeneity |
| JEL: | C51 O53 Q53 Q56 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:qmw:qmwecw:wp659&r=env |
| By: | Robert S. Pindyck |
| Abstract: | Any economic analysis of climate change policy requires some model that describes the impact of warming on future GDP and consumption. Most integrated assessment models (IAMs) relate temperature to the level of real GDP and consumption, but there are theoretical and empirical reasons to expect temperature to affect the growth rate rather than level of GDP. Does this distinction matter in terms of implications for policy? And how does the answer depend on the nature and extent of uncertainty over future temperature change and its impact? I address these questions by estimating the fraction of consumption society would be willing to sacrifice to limit future increases in temperature, using probability distributions for temperature and impact inferred from studies assembled by the IPCC, and comparing estimates based on a direct versus growth rate impact of temperature on GDP. |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:1001&r=env |
| By: | Akpalu, Wisdom (Department of History, Economics and Politics (HEP), State University of New York-Farmingdale); Anders, Ekbom (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | Improvement in soil carbon through conservation agriculture in developing countries may generate some private benefits to farmers as well as sequester carbon emissions, which is a positive externality to society. Leaving crop residue on the farm has become an important option in conservation agriculture practice. However, in developing countries, using crop residue for conservation agriculture has the opportunity cost of say feed for livestock. In this paper, we model and develop an expression for an optimum economic incentive that is necessary to internalize the positive externality. A crude value of the tax is calculated using data from Kenya. We also empirically investigated the determinants of the crop residue left on the farm and found that it depends on cation exchange capacity (CEC) of the soil, the prices of maize, whether extension officers visit the plot or not, household size, the level of education of the household head and alternative cost of soil conservation.<p> |
| Keywords: | conservation agriculture; soil carbon; climate change; bioeconomics; Kenya |
| JEL: | C61 Q18 Q24 Q54 Q56 |
| Date: | 2010–02–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0431&r=env |
| By: | Sander Simonetti |
| Abstract: | The Kyoto Protocol has not only created carbon emission reduction obligations for industrialized countries, but also opportunities for the private sector to participate in its 'flexible mechanisms'. One of these mechanisms is Joint Implementation, which allows private legal entities to engage in international emission reduction projects that generate tradable emission rights. Private parties can act as verifiers of the emission reductions achieved by such projects, or as buyers of the generated emission rights (which can be used, e.g., for compliance under the European Union Emissions Trading Scheme). During the Joint Implementation project cycle, these private parties can become involved in several types of disputes with various counterparties. This paper explores the legal remedies available to such private parties. Long-term private sector investment and contribution to the objectives of the Kyoto Protocol are more likely to occur in a stable regulatory environment, which requires a certain degree of legal protection. This includes proper access to justice in case disputes arise. |
| Date: | 2010–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euirsc:p0230&r=env |
| By: | Carl Gaigné (INRA-ESR - Unité d'économie et de sociologie rurales - INRA); Stéphane Rioux (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines); Jacques-François Thisse (CORE - Université Catholique de Louvain) |
| Abstract: | There is a large consensus among international institutions and national governments to favor urban-containment policies - the compact city - as a way to reduce the ecological footprint of cities. This approach overlooks the following basic trade-off: the concentration of activities decreases the ecological footprint stemming from commodity shipping between cities, but it increases emissions of greenhouse gas by inducing longer worktrips. What matters for the ecological footprint of cities is the mix between urban density and the global pattern of activities. As expected, when both the intercity and intraurban distributions of activities are given, a higher urban density makes cities more environmentally friendly and raises global welfare. However, once we account for the fact that cities may be either monocentric or polycentric as well as for the relocation of activities between cities, the relationship between density and the ecological footprints appears to be much more involved. Indeed, because changes in urban density affect land rents and wages, firms are incited to relocate, thus leading to new commuting patterns. We show policies that favor the decentralization of jobs in big cities may reduce global pollution and improve global welfare. |
| Keywords: | greenhouse gas; commuting costs; transport costs; cities; urban containment policy |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00456610_v1&r=env |
| By: | Below, Till; Artner, Astrid; Siebert, Rosemarie; Sieber, Stefan |
| Abstract: | This paper discusses micro-level practices for adapting to climate change that are available to small-scale farmers in Africa. The analysis is based on a review of 17 studies about practices that boost small-scale farmers' resilience or reduce their vulnerability to observed or expected changes in climate; it includes data from more than 16 countries in Africa, the Americas, Europe, and Asia. The review shows that African smallholders are already using a wide variety of creative practices to deal with climate risks; these can be further adjusted to the challenge of climate change by planned adaptation programs. We found 104 different practices relevant to climate change adaptation and organized them in five categories: farm management and technology; farm financial management; diversification on and beyond the farm; government interventions in infrastructure, health, and risk reduction; and knowledge management, networks, and governance. We conclude that adaptation policies should complement farmers' autonomous response to climate change through the development of new drought-resistant varieties and improved weather forecasts, the provision of financial services, improvement of rural transportation infrastructure, investments in public healthcare and public welfare programs, and policies that improve local governance and coordinate donor activities. |
| Keywords: | Climate change, adaptation practices, content analysis, Small-scale farmers, climate risks, Farm management, diversification, risk reduction, government interventions, public welfare programs |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:953&r=env |
| By: | Georg Grüll; Luca Taschini |
| Abstract: | This paper examines the key design mechanisms of existing and proposed cap-and-trade markets. First, it is shown that the hybrid systems under investigation (safety-valve with offsets, price floor using a subsidy, price collar, allowance reserve, and options offered by the regulator) can be decomposed into a combination of an ordinary cap-and-trade scheme with European- or American-style call and put options. Then, we quantify and discuss the advantages and disadvantages of the proposed hybrid schemes by investigating whether pre-set objectives (enforcement of permit price bounds and reduction of potential costs for relevant companies) can be accomplished while maintaining the original environmental targets. |
| Date: | 2009–11 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:0919&r=env |
| By: | Stéphane Auray (Université Lille 3 (GREMARS), Université de Sherbrooke (GREDI) and CIRPÉE); Aurélien Eyquem (GATE, UMR 5824, Université de Lyon and Ecole Normale Supérieure Lettres et Sciences Humaines, France); Frédéric Jouneau-Sion (Universites Lille Nord de France) |
| Abstract: | Evidence from English real wages and real land rents for the period 1500-1800 are used to evaluate the impact of temperature and precipitations on under-developed economies. Estimating key parameters of an AK-growth model, we extract Total Factor Productivity (TFP hereafter) shocks and estimate the impact of temperature and extreme precipitation events (droughts and and flood) on TFP. We produce evidence that a two degree reduction of temperature lowers TFP by 0.1 (one standard deviation of TFP shocks). We also show that, conditionally on temperatures, the impact of floods on TFP is statistically significant while the impact of droughts is not. We consider these results as a useful benchmark to measure the impact of global warming and/or measures intended to contain it on developing economies. |
| Keywords: | Economic growth, Climate, Real wages, Land rents |
| JEL: | C22 N13 O41 O47 Q54 |
| Date: | 2010–01–04 |
| URL: | http://d.repec.org/n?u=RePEc:shr:wpaper:10-02&r=env |
| By: | Michel Damian (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : UMR5252 - Université Pierre Mendès-France - Grenoble II); Nathalie Rousset (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : UMR5252 - Université Pierre Mendès-France - Grenoble II) |
| Abstract: | La montée du grand capitalisme émergent qu'est la Chine est déterminante dans les négociations climatiques et la construction de l'architecture post-Kyoto sur quatre plans: 1) l'économie mondiale est en train de basculer à l'Est, et la géo-économie du carbone vers la Chine, 2) lëconomie chinoise demeurera fortement carbonée pour au moins le prochain demi-siècle, 3) la Chine est engagée dans une réduction conséquente de ses émissions de gaz à effet de serre, avec une volonté de s'inscrire dans les grandes orientations internationales en matière d'environnement, 4) le premier pas pour débloquer les négociations post-Kyoto passe nécessairement par un co-engagement Chine - États-Unis, qui pourrait être annoncé à Copenhague. De tels accords recentreraient la lutte contre les émissions de gaz à effet de serre sur les nations et les politiques nationales, ébranlant la pierre d'angle du protocole de Kyoto, c'est-à-dire la fixation d'un cap, d'une limite globale sur les émissions. |
| Keywords: | CHANGEMENT CLIMATIQUE ; APRES-KYOTO ; CHINE ; NEGOCIATION ; COP 15 COPENHAGUE |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00433514_v1&r=env |
| By: | Sebastian Schröer (Hamburgisches WeltWirtschaftsInstitut – HWWI); Ulrich Zierahn (Universität Kassel und Hamburgisches WeltWirtschaftsInstitut – HWWI) |
| Abstract: | The German Renewable Energy Law (EEG) has been a very successful instrument in raising the share of the renewable energies that are not yet competitive. However, a detrimental consequence of this policy is that, through specific feed-in tariffs, it hinders the competition among particular renewable energies. Within the framework of the “Lead Study 2008” the German Government set targets both for renewable energies and related technologies and hence affects the particular feed-in tariff. By means of a static model, we analyse in this article the efficiency of the targets for 2020 regarding renewable energies and show that they can be achieved at lower costs. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:mar:magkse:201003&r=env |
| By: | Knockaert, Jasper |
| Abstract: | Wegvervoer is een hoeksteen van het economisch systeem. De bijdrage die het levert aan het functioneren van de economie, en de daarmee verbonden maatschappelijke welvaart, is onbetwist. Door het wegvervoer veroorzaak te uitstoot brengt echter ongewenste schade toe aan de leefomgeving. Het beheersen van deze negatieve gevolgen is een integraal onderdeel van ve rkeersbeleid. Uit het verlangen om tot een effectief en efficiënt uitstootbeleid te ko men ontstaat de vraag naar modellen die aangeven wat de impact op uitsto ot en maatschappelijke kost is van technologische en andere maatregelen. Dergelijke modellen identificeren de belangrijkste met wegvervoer verbo nden gedragsdimensies, en waarderen de ermee verbonden impact op maatsch appij en leefomgeving. Het gepresenteerde onderzoek vertrekt uit bestaande modellen en geeft aa n hoe deze uitgebreid worden om uitstoot van het gebruik van nieuwe voer tuigtechnologieën te bestuderen. Vervolgens simuleren en analyseren we e en reeks vervoersscenarios. Met behulp van discrete keuzetheorie bestuderen we de voorkeuren van aut okopers voor nieuwe voertuigtechnologieën op basis van een stated prefer ence experiment. De analyse omvat een groot aantal gedragsvariabelen en technologieën en gebruikt daarvoor diverse gemengde logit specificaties. Vervolgens geven we aan hoe de geïdentificeerde keuzepatronen kunnen ver taald worden naar een genest logitmodel dat kan gebruikt worden voor sim ulatie van maatregelen. Bij het simuleren van scenarios voor autovervoer maken we een ondersche id tussen klimaatverandering en impact op de leefomgeving. Klimaatverand ering is nauw verbonden met brandstofefficiëntie (en CO2 uitstoot) terwi jl de impact op leefomgeving afhangt van de totale uitstoot. Deze uitsto ot is sterk afhankelijk van de gebruikte voertuigtechnologie. Als refere ntie voor een maatschappelijk verkiesbaar scenario maken we hierbij gebr uik van beprijzingsscenarios. Aansluitend simuleren we de bijdrage van openbaar busvervoer tot vermind ering van impact op de stedelijke leefomgeving. De beschouwde beleidsvar iabelen worden daartoe uitgebreid met het OV-aanbod. We bestuderen teven s hoe oudere voertuigen kunnen aangepast worden met het oog op afname va n uitstoot. De belangrijkste inzichten van het onderzoek duiden het verband tussen b estaande of vernieuwende beleidsinitiatieven voor afname van uitstoot en de vraag naar vervoersactiviteit en de daarmee gepaard gaande impact op leefomgeving en welvaart. |
| Date: | 2010–02–11 |
| URL: | http://d.repec.org/n?u=RePEc:ner:leuven:urn:hdl:123456789/249650&r=env |
| By: | Aragon, Fernando (London School of Economics and Political Science); Rud, Juan (University of London) |
| Abstract: | This paper studies the impact of Yanacocha, a large gold mine in Peru, on the local population. Using annual household data from 1997 to 2006, we nd robust evidence of a positive effect of the mine's demand of local inputs on real income. The effect, an average income increase of 1.7% per 10% additional mine's purchases, is only present in the mine's supply market and surrounding areas. We also nd evidence of improvements on measures of welfare and reduction of poverty. We examine and rule out that our results are driven by increased public expenditure associated to the mining revenue windfall. Using a spatial general equilibrium model, we interpret these results as evidence of net welfare gains generated by the mine's backward linkages and its multiplier effect. |
| Keywords: | Natural resources, mining, local development |
| JEL: | O13 O18 Q32 Q33 R20 |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:rbp:wpaper:2009-015&r=env |
| By: | G. Cornelis van Kooten |
| Keywords: | economics of elephant conservation, economics of ivory trade,trade bans |
| JEL: | Q57 Q27 O13 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:rep:wpaper:2010-02&r=env |
| By: | Georg Grüll; Luca Taschini |
| Abstract: | Equilibrium models have been proposed in literature with the aim of describing the evolution of the price of emission permits. This paper derives _rst estimation methods for the calibration of three competing equilibrium models. Second, it demonstrates how their reduced-form versions are inter-related. Third, by means of calibration to historical data, it is shown how these reduced-form models perform in the current price-evolution framework also with respect to standard continuous time stochastic models. |
| Date: | 2009–09 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:0918&r=env |